BIG companies have found Singapore an expensive place in which to manufacture for export - and have moved to cheaper production hubs like Vietnam and China.
But not Aalst Choc, a tiny chocolate maker that employs just 70 workers.
Started four years ago with money chipped in by family and friends, Aalst has stayed a home-based operation and sees room to grow here.
'We remain focused on expanding our local operations until we achieve optimum capacity,' says the company's co-founder and chief operating officer Connie Kwan.
While she doesn't say Singapore is a cheap place to run a business, she and Aalst's other founder Richard Lee do think it is 'one of the best business locations' - thanks to its duty-free regime, efficient port and transport systems, reliable energy supply, business-friendly government and fair labour laws.
Ms Kwan says the ingredients Aalst imports to make its chocolates are not subject to duty. 'Shipping lines are almost unlimited and transport from factory to port is very convenient,' she adds.
Aalst's 'heavy-duty' plant runs smoothly on an uninterrupted power supply, while government grants and preferential tax treatment under the Pioneer Status scheme help lighten operating costs.
But there is one inescapable constraint the company faces along with other homegrown businesses - a small domestic market.
And like them, its answer to the problem is to expand overseas. 'We export mainly, which accounts for about 90 per cent of our sales revenue,' says Ms Kwan.
She prefers to keep Aalst's turnover private, saying only that revenue has expanded six-fold since the company's first year.
Aalst is not ruling out having a direct presence outside Singapore. And while it has set no timetable to achieve this, it is 'looking out for the right opportunity'.
Aalst is not just seeing its profits eroded by a weakening US dollar, it is also beginning to sense its distance from its customers.
'We are not close enough to them,' says Ms Kwan.
But so far, Aalst has hit the right notes in reaching out to customers overseas, delivering the quality they demand at the right price at the right time.
'We continue to be innovative and keep up with product development,' Ms Kwan says.
'To stay ahead of the competition, we will expand our R&D by employing local and foreign talent.'
Aalst has also tapped International Enterprise Singapore's Intellectual Property for Internationalisation Programme, which offers training, consultation and financial incentives to beef up corporate intellectual property.
'The IP Programme has enabled the company to stand its ground against IP challenges by large companies,' Ms Kwan says.
'It has increased our management's understanding of the company's IP rights.'
In time, IP will be another weapon in Aalst's arsenal in its battle for overseas markets.
This article was first published in The Business Times on 17 July 2008.
