Singapore food firms move muscle abroad, keep brains local

Yeo Hiap Seng Ltd. has consolidated can manufacturing in Malaysia, whilst QAF Ltd. said its Gardenia bakery business would move production to Johor Bahru, with its Pandan Loop factory closing on 30 June.

Le Jia Chong, CEO at FoodPlant Pte. Ltd., said manufacturers are responding to structural cost differences, market proximity, and the need for more resilient supply chains.

“High-volume manufacturing may be regionalised, but higher-value activities — product development, process design, and quality systems — continue to be anchored here,” she said in an emailed reply to questions.

Hugo Texier, a partner at Roland Berger Pte. Ltd., said Malaysia offers lower labour costs and more affordable industrial land, making it easier for manufacturers to expand production.

Singapore also faces structural challenges. Charoenwong said shorter industrial lease terms could discourage companies from making long-term automation investments because they face uncertainty over future rental costs.

Labour costs further widen the gap. Data from the Ministry of Manpower showed median monthly manufacturing wages reached $5,850 in 2024, compared with $788 (RM2,490) in Malaysia, according to the Department of Statistics Malaysia.

Texier expects more manufacturers to adopt dual-hub models over the next five years, keeping research, quality control, and commercial functions in Singapore whilst locating large-scale production elsewhere in the region.

Chong said Singapore’s competitive advantage would increasingly lie in innovation, advanced food manufacturing, and technical expertise rather than mass production.

“Companies that manage this balance well — retaining control of capability while optimising production — will be best positioned for the next phase of growth,” she said.