Singapore grapples with thorny and competitive orchid market

Singapore grapples with thorny and competitive orchid market

By Dean Visser

SINGAPORE (DPA): Orchid cultivation is just the kind of
industry that tiny, high-tech Singapore likes - clean, green and
exotic, a business where ingenuity and precision stand a fighting
chance against pure brute quantity.

But orchid exporters in the city-state - the world's second
largest supplier of the popular blooms - are grappling to keep
their place as costs rise and more players enter the quirky
market.

Singapore shipped out only S$23.5 million (US$15.6 million)
worth of orchids in 1996, the lowest figure in years and a
startling drop from US$27.52 million in 1995.

Government officials and flower growers said the drop-off was
partly caused by tight price competition from vastly larger
Thailand, which exports more orchids than any other country.

"Thailand has been able to market at sometimes half the price
of Singapore," said Toh Peng San, president of the Singapore
Orchid Exporters Association and managing director of Toh
Orchids.

There is little that can be done about this in Singapore, a
wealthy island republic of 647.5 square kilometers (259 square
miles) where owning land is an obsession and the standard of
living is by far the highest in Southeast Asia.

Singapore has a highly-trained, English-speaking labor force
whose average yearly income is 24,000 Singapore dollars, far more
than Thailand or any other country in the region.

Overcrowding is another problem, as boom times in the early
90s drew a lot of new players into Singapore's orchid business.
"If everyone jumps into the same pool, it's a bit difficult for
the best swimmers to move around," Toh said.

Singapore orchid growers are also keeping a wary eye on other
countries that are venturing into the industry.

"Trinidad and Costa Rica are going into the tropical
dendrobium market. This is a major variety exported by Singapore
and Thailand," Lee Siew Mooi, head of the Orchid and Ornamental
Plant Section at Singapore's government Primary Production
Department, said.

Countries in Singapore's own back yard are causing some
further concerns by venturing into orchid exporting. Malaysia,
Indonesia, India and even China have been taking steps toward
building up the industry.

The fickle nature of the orchid market is another problem for
exporters in Singapore, and around the region.

"The orchid industry is like the fashion industry," Lee said.
"People are always looking for new things."

Cultural and regional tastes come into play too. When Japan
was a growing market, excited growers in Singapore quickly
tailored their orchids to the Japanese aesthetic.

"A few years ago we discovered that the Japanese like pink
color," Toh said. "We developed in Singapore a pastel pink
orchid."

While the pink blooms were wildly popular in Japan, they
caused trouble elsewhere.

"We lost the German market," he said. "Germany at one time was
our biggest market, and the pink orchids are one reason we lost
it."

Germans and other European orchid fanciers "love the big,
strong-stemmed flowers", Toh said. "The Japanese love the more
delicate variety."

"We are far too reliant on the Japanese market where orchids
are concerned," Toh said. The Japanese bought 17.34 million
Singapore dollar's worth of the flowers in 1996, some 73 per cent
of Singapore's total orchid exports.

Australia comes in a remote second with only 1.46 million,
followed by Malaysia with 1.40 million and Greece and Switzerland
with 0.58 million each.

Despite the less-than-flowery outlook, Singaporean officials
and orchid dealers expressed their country's characteristic
determination and optimism, sticking to Singapore's oft-proven
"best, not most" recipe for success.

"We still have the lead," Lee said. "We have a lot more
variety (than competitors), and we have the lead in technology."

"We are focusing on marketing and on developing new varieties
for the market," Lee said. "Because of our space constraint, we
go for quality. We want to maintain premium prices for our
products."

"We have to go on probing that edge," Toh agreed. "We can keep
creating new varieties to meet the market requirements, whereas
the Thais just put what they have on the counter."

Singapore is quite secretive about new orchid markets it is
exploring, but China is known to be one. China's 40 per cent
import tax and 17 per cent value-added tax, however, would make
exporting to China "quite impossible", Toh said.

"We have to look for a location to grow the flowers there," he
said.

Toh said he and his company had already set up some operations
in Malaysia. "We are also looking at Vietnam, Myanmar and India,"
he said.

But he noted that Vietnam and especially Myanmar, while they
offer low costs, would need better infrastructure and air traffic
in order to be adequate hosts for Singapore's satellite orchid
farms.