By Cassandra Chew

WHEN hotelier Raffles Holdings found it was paying high prices for daily consumables like soap and tissue paper, it sought the help of other hotels to cut costs.

A decade ago, they banded together and placed their orders in an online buying system created by the holding company, whose portfolio includes the iconic Raffles Hotel. Their combined orders gave them the clout to knock down prices, bringing savings of up to 15 per cent.

Yesterday, it was held up by Minister of State for Trade and Industry Lee Yi Shyan as a model of how small and medium-sized enterprises (SMEs) can join forces to raise productivity: 'In this case, the leadership of one company in the industry led to cost savings for all the players.'

To further drive home his message, he cited what industry associations can do.

For instance, the Textile and Fashion Federation took on the task of training a group of engineers to help develop more efficient production systems for its many members whom, he said, were not in a position to hire full-time engineers to do so.

But how can low-value activities gain from the Economic Strategies Committee recommendations, asks opposition MP Low Thia Khiang (Hougang).

Again, Mr Lee gave examples to underline the need for companies to 'upgrade, innovate and focus on value creation', or lose out to the competition.

He pointed out how Dempsey Road restaurant Tippling Club used food science technology to create unique choices like a cocktail drink based on local black coffee, served with eggs. Then there is homegrown luxury watch company Azimuth, which has built a reputation on its unconventional approach to design.

Among its unusual offerings: the world's first single-hand watch that goes anti-clockwise, and a watch with a functioning roulette wheel as a dial. Having carved a niche for itself, Azimuth can sell its pieces at between $5,000 and $120,000.

Said Mr Lee: 'If you were a start-up thinking of new areas to venture into, or a precision-engineering firm seeking new markets...which path would you take? Azimuth's approach is instructive.'

While the Government is always ready to help businesses advance, their success rests on 'their own drive, innovation and entrepreneurial effort', he added.

He recalled an incident in 1993 when Singapore furniture makers were told bluntly by a United States retailer: 'Let's be frank, for furniture of this standard, I can make that in my own garage!'

It jolted them. Today, furniture companies market their own brands, and at a recent fair in Germany, they garnered $14 million worth of sales on the spot and a potential $230 million in follow-up sales.