By Smita Krishnaswamy

VENTURING overseas need not be as daunting as it sounds, thanks to a long-running programme set up specifically to make the move easier for local firms.

International Enterprise (IE) Singapore's International Partners (iPartners) scheme helps companies expand into foreign markets by pooling their resources and expertise.

A typical iPartners alliance consists of one anchor company and several alliance partners. The companies in the alliance form a business plan and contribute resources and management support to execute it.

The anchor company helps its alliance partners develop their capabilities and provides resources and market access.

The programme, which started in 2003, has helped form 35 consortiums among 170 companies, of which more than 80 per cent are SMEs.

They are projected to achieve a combined total of $3.23 billion in overseas sales by 2011, according to IE Singapore.

Mr Aliasgar Meccawala, the programme's manager, said the scheme's rationale was to encourage companies to take advantage of foreign opportunities.

He said that many opportunities were being lost because firms were unable take on large-scale projects or they lacked capability in other areas.

'Rather than banding with complementary partners, companies would just let the opportunities go,' he said.

Mr Meccawala said that in the past, consortiums mainly targeted the Chinese, Middle Eastern and Indian markets, but recently, more have been focusing on the United States and Europe.

Consortiums were initially formed for the infrastructure, environmental services and logistics industries, but the trend is moving towards lifestyle and consumer products, interactive digital media and automotive industries.

In the past two years, IE has seen more SMEs coming together without a larger anchor company while more consortiums are being formed during the recession.

Ten consortiums are on track to be formed this year.

'When times were good, SMEs would rather work alone, but now you see more working together,' he said.

Forming a consortium has many benefits, some of which may not be obvious.

In the automotive industry, for example, manufacturers often prefer to work with one-stop suppliers rather than with multiple companies.

When suppliers in an automotive consortium come together to manufacture one modular product, rather than individual components, it makes the product easier to sell, Mr Meccawala said.

Consortiums are usually formed in one of three ways.

The anchor company could approach IE Singapore with a business plan and request IE's help in finding alliance partners.

Or IE's overseas centre directors might identify an opportunity for Singapore companies to enter a niche market.

And sometimes companies come in having done their homework and with their alliance partners already selected.

Mr Meccawala cited good governance, careful selection of alliance partners sharing the same mission and vision and sound business planning as key factors in helping a consortuim succeed.

IE Singapore helps consortiums by subsidising 30 per cent to 70 per cent of the market and product development costs related to expanding into new countries.

These costs include the salary of a business development manager to seek out opportunities in the target market, product adaptation and localisation costs, ranging from manpower to equipment and marketing costs.

Costs are equally shared between participating companies. The amount funded varies by consortium and depends on the markets entered, IE said.

IE also provides non-financial assistance such as information on how to enter a market, marketing advice and conflict resolution.

As part of the Singapore Government's Budget 2009 Resilience Package, IE Singapore recently increased the number of months iPartners alliances can expect its support from 18 to 24. This extended support is available to companies until January 2011.

This article was first published in The Straits Times.