PIONEER INDUSTRIES

Mr Bernard Rodrigues asked the Minister for Finance (a) how many firms have been given pioneer status since 9th August, 1965, and how many firms which had been accorded pioneer status have closed down or terminated business since 9th August. 1965; and (b) why pioneer status has been given to many firms in the same industry, such as the four firms in the plywood industry, and whether this is not harmful to the promotion of local industries.

Dr Goh Keng Swee: Since Singapore Day on 9th August, 1965, 73 pioneer certificates were awarded to firms, making a total of 187 pioneer companies to date. 12 of these firms had to abandon their projects for various reasons. One because the owner fell seriously ill. Several others which are textile mills had to close down because of imposition of textile quotas by the U.K, and the U.S. Governments and the rest because the major shareholders could not agree among themselves.

The Government has in its industrial promotion efforts put particular emphasis on industries which show promise of high export performance. Thus, in a number of cases more than one pioneer certificate has been issued in the same industry. In most of these cases, a minimum export performance is a condition of the award of a pioneer certificate. In the case of the plywood industry, any one of the firms would be able to supply the entire local demand. However, the export potential of this industry is very great and, therefore, the Government has thought it fit to award more than one pioneer certificate in order to encourage this type of export-orientated industry. Ours is essentially a free enterprise economy and if there is no profit to be made in an industry, investors would not be prepared to risk their money in starting a factory when there is already another factory in production. If the investor is convinced that it is worthwhile for him to risk his money in an industry and if he can convince us that he has sufficient export possibilities, we are prepared to grant a pioneer certificate even if there are other firms in the industry.