SINGAPORE – Siemens is building a new factory in Singapore for its industrial automation and digitalisation products that will create more than 400 jobs locally.
Estimated to cost €200 million (S$290 million), the German conglomerate’s plant will begin operation in 2025 or 2026, with Tuas as the likely location.
The facility, which will serve burgeoning demand in South-east Asia and strengthen the resilience of the firm’s supply chains, will be among Siemens’ most flexible and advanced automated factories globally, its chief executive for digital industries Cedrik Neike told The Straits Times in an exclusive interview on Thursday.
Adjustments can be made at the plant on demand to produce thousands of different types of sensors and electronic modules to better serve regional customers in sectors such as semiconductor, electric vehicle and food and beverage.
Existing factories in Germany and China that focus on high production volumes contribute 40 per cent each to Siemens’ output in the product segment. The factory here is expected to account for 10 per cent to 20 per cent, but has more flexibility to support spikes in demand.
A detailed virtual replica of the factory will be used to simulate the best way to build it and run manufacturing processes.
For such an advanced factory to reach its full potential requires talent in automation, artificial intelligence and data science to match, which is where Singapore’s advanced education system and workforce comes in, said Mr Neike.
“The factory of the future has much, much more qualified workers in general, and Singapore is the perfect place for that.”
Access to talent, together with proximity to rapidly growing South-east Asian markets, political and legal stability, free trade agreements with numerous countries and an emphasis on sustainability, made Singapore the right choice in the region, he added.
The factory is part of a €2 billion global strategy to expand the firm’s manufacturing capacity worldwide and build innovation labs, education centres and other facilities.
Siemens is also expected to increase its research and development spending for the 2023 fiscal year by €500 million to over €6 billion, said president and chief executive Roland Busch at a press conference at the firm’s MacPherson Road office on Thursday to announce the factory.
A memorandum of understanding between Siemens, the Economic Development Board (EDB) and JTC Corporation to facilitate the development of the new factory was also inked at the event. EDB managing director Jacqueline Poh, Dr Busch and Germany’s Ambassador to Singapore Norbert Riedel witnessed the signing.
Asked whether Singapore’s relatively higher labour costs were a deterrent to situating the plant here, Mr Neike told reporters that this was not a key factor.
“Actually, taking a country like Singapore and building one of the most efficient factories in the world is a proof point that the technology actually takes this labour element away,” he added.
Asked about the importance of maintaining business resilience amid a trade conflict between the United States and China, Dr Busch said trade interdependence remains essential to the world economy and is a stabilising factor.
Still, a lesson the company learnt from the Covid-19 pandemic was to diversify the sources it draws supplies from and the growth markets it does business in, rather than chase cost savings at the expense of over-dependence on a single source.
