Johor-Singapore Cooperation in Enhancing Sustainable Food Value Chains (and their Special Economic Zone)

Johor-Singapore Cooperation in Enhancing Sustainable Food Value Chains (and their Special Economic Zone)

Published: 2025.03.07
Accepted: 2025.02.19
10
Associate/Lecturer
Singapore University of Social Sciences (SUSS)

ABSTRACT

Johor Chief Minister Datuk Onn Hafiz Ghazi is prioritizing the development of local fresh food production to enhance food supply security, drawing inspiration from Singapore’s successful model. Singapore sources over 90% of its food from more than 170 countries including Johor, particularly in commodities like fruits, chicken, and vegetables. Onn Hafiz seeks to learn from the integrated food security program of the Singapore Food Agency (SFA), including the “Three food baskets” strategy. Johor aims to diversify import sources, through Basket 1 while also focusing on local cultivation and international expansion via. Baskets 2 and 3, which emphasize innovations in farming technology, lab-grown meat, smart floating fish farms, and other measures to mitigate supply chain disruptions. Onn Hafiz is also keen to attract Singaporean food tech startups to Johor, with the backing of Malaysian PM Anwar Ibrahim. The bilateral Johor-Singapore Special Economic Zone (SEZ) plays a key role in fostering food value chains, particularly in food manufacturing and logistics across the Crossway, offering cost savings and access to new markets, including halal consuming segments. To enhance the SEZ’s appeal, private sector stakeholders are advocating for a standardized regulatory compliance checklist and tax harmonization to streamline operations. Johorean companies have also launched a tech-driven agrofood ecosystem, FarmByte Food Hub, which integrates agricultural activities through physical (actual) and digital (virtual) hubs, including a Collection Processing Packaging Centre (CPPC) and two new Collection Distribution Centres. If successful, the SEZ could serve as a model for replicating best practices and experiences in other Malaysian states or even other ASEAN countries.

Keywords: Johor, Singapore, SEZ, technology, Malaysia

BACKGROUND

Johor and Singapore aim to become a model for the food value chain in the Malay Peninsula and potentially across ASEAN (Association of Southeast Asian Nations) in Southeast Asia. Johor seeks to capitalize on its proximity to Singapore by offering “an investment-friendly atmosphere and infrastructure, as well as land dedicated to modern agriculture”, especially as sites for Singapore’s agri-tech startups (Bernama, 2023). There is political will on the Johorean side for this development.

Johor Chief Minister Datuk Onn Hafiz Ghazi said: “The issue of food security is one of the important issues in Johor, and I hope that the state can cooperate with Singapore in the production of local fresh food products, in addition to policies regarding the continuity of food supply. It is common knowledge that Singapore is ranked first in the world in the global food security index for the second consecutive year in 2019, although Singapore obtains more than 90% of its food from more than 170 countries and territories, including Malaysia, especially from Johor. Johor is also the main exporter of agricultural products to Singapore such as fruits, chicken, vegetables, and so on” (Bernama, 2023).

In February 2023, Onn Hafiz visited the National Centre for Food Science to learn more about the Singapore Food Agency (SFA)’s integrated food security program and was introduced to Singapore’s food security development strategy based on the “Three food baskets” of “diversify import sources, grow local, and grow overseas” (Bernama, 2023). Basket 1 is based on the diversification of food import sources to 170 countries to mitigate supply chain disruptions, which was helpful during the era of the COVID-19 coronavirus pandemic lockdown when Singapore was able to source Polish eggs, Egyptian oranges, Uruguay milk powder, and Saudi shrimps (SG101, 2025).

Baskets 2 and 3 encourage local cultivation in addition to food importation as a mitigation mechanism against supply chain disruptions as the then Agri-Food and Veterinary Authority of Singapore (AVA) started the Food Fund with S$5 million (US$3.69 million) for research and development in local food farming tech, improving local production capabilities (e.g. through lab-grown meat), and eventually meeting Singapore’s supply in eggs (locally-produced eggs make up 26% of overall supply), fish (10% of local supply through local smart floating fish farm armed with aquaculture tech), and leafy green vegetables (14% indigenously-supplied) by 2019 (SG101, 2025). Onn Hafiz also visited food producer Archisen and inspected its “grow local” program that manages indoor farms with the highest yield in Singapore with estimated harvests up to 100 tons of vegetables annually and he was keen to attract Singaporean companies like this to expand their operations in the state of Johor (Bernama, 2023).

Political support for closer Johor-Singaporean ties in the agro-tech industry also reaches the top of the Malaysian political hierarchy. Malaysian Prime Minister (PM) Datuk Seri Anwar Ibrahim articulated on 30 January 2023 that food security is a theme for working with on a win-win basis on his one-day trip to Singapore in the beginning of 2023: “This area (food security) that I think we would solicit support for Singapore to use Malaysia as a center for production, for the benefit of both countries” (Bernama, 2023). PM Anwar’s meeting in Singapore involved the participation of the direct major stakeholders in the food value chain sectors of both Johor and Singapore, with Johor Agriculture, Agro-Based Industry and Rural Development committee chairman Datuk Zahari Sarip, Johor Deputy State Secretary (Development) Datuk Mohammed Ridha Abd Kadir and Iskandar Regional Development Authority chief executive Datuk Badrul Hisham Kassim in attendance (Bernama, 2023).

JOHOR-SINGAPORE SPECIAL ECONOMIC ZONE (SEZ)

It is perhaps because of such strong political support that food value chains are included under the rubric of special economic zones (SEZs). The newest initiative between Singapore and Johor to draw closer and intertwine their economies is the Johor-Singapore Special Economic Zone (SEZ). As Singapore and Johor form a Special Economic Zone (SEZ), their companies in the food manufacturing and logistics industries are aiming for cost-savings and reaching new markets through the SEZ (Abdul Rohim and Tang, 2025). The Singaporean Food and Beverage (F&B) industry aims to yield benefits from the SEZ through seamless travel and logistics across the Causeway that connects Malaysia and Singapore (Abdul Rohim and Tang, 2025).

For example, South Korean bakery player, Paris Baguette, is manufacturing frozen versions of its pastries in its inaugural and only 16,000-sqm halal manufacturing facility in Johor and looking to further outreach to the Muslim halal consumer market (Abdul Rohim and Tang, 2025). These expansion plans are backed up by new investments by the company to scale up its operations in the SEZ as well as both Johor and Singapore, in addition to the wider 660-million strong ASEAN market with its young and growing populations. Paris Baguette is buying an additional 24,000 sqm of land next to this factory for more expansion as Hana Lee (CEO of Paris Baguette SEA) noted her wish list for the value supply chains of the SEZ: “One of the things that we also hope to see is a more standardized regulatory compliance checklist, maybe for the businesses operating within the SEZ zone. Maybe that will also help us to simplify some ongoing operations and allow us to focus on our growth, rather than all these more complex processes” (Abdul Rohim and Tang, 2025).

Besides Singapore-based processed food companies as well as agri-tech startups, Johorean companies also have ambitions of their own which they want to leverage on closer Johor and Singapore cooperation. Johor has built its own tech-driven agrofood ecosystem known as the FarmByte Food Hub to coordinate and strengthen the robustness of the state’s agrofood sector, augment agricultural output, and improve the lives of farmers (rural development) and other stakeholders (Asia Pacific Food Industry, undated).

JOHOREAN FOOD HUB

The FarmByte Food hub is the brain child of FarmByte Sdn Bhd (FarmByte, a subsidiary of the umbrella Kulim (Malaysia) Berhad (KULIM) group) that seeks to upgrade Johor’s agrofood sector through digitalization as a policy subset of Johor Corporation’s (JCorp) vision to strengthen food security for the state and the nation (Asia Pacific Food Industry, 2023). Sited in Ulu Tiram, the FarmByte Food Hub became operational in an opening ceremony officiated by the Chairman of the Agriculture, Agro-based Industry and Rural Development Committee and official representative of YAB Datuk Onn Hafiz Ghazi, Menteri Besar Johor, YB Dato’ Zahari Sarip (Asia Pacific Food Industry, undated).

Datuk Syed Mohamed Syed Ibrahim (President & Chief Executive of JCorp and Chairperson of FarmByte) articulated the vision of the Food Hub: “[the newly launched FarmByte Food Hub will further bolster Johor’s food supply chains and create a sustainable agrofood ecosystem that will contribute to the national and state food security agenda.] The FarmByte Food Hub will allow for the sustainable production of high-quality and high-value agrofood products. Through digitalisation and innovation, it will also help uplift the livelihoods and standards of living of our smallholder farmers, while encouraging the participation of the younger generation in the agrofood sector. It is a key part of the state’s strategy to develop a sustainable agrofood industry that can compete at the international level in terms of production and product efficiency and quality” (Asia Pacific Food Industry, undated).

In terms of mechanics, the FarmByte Food Hub consists of a fully networked ecosystem of farmers, processors, distributors, retailers, and wholesalers linked through a hybrid combination of physical (actual) and digital (virtual) hubs to coordinate the activities throughout the entire value chain from production to distribution while ensuring efficiencies, transparency, and trust (Asia Pacific Industry, undated). With projected higher food production, a Collection Processing Packaging Centre (CPPC) and two new Collection Distribution Centres are constructed by FarmByte that empowers farmers with digital tools like mobile apps sharing expert best farming practices, market intelligence (including personalized tailored advice and analytics), and real-time production schedules to operate the currently silo-ed agrofood sector seamlessly for economic growth (Asia Pacific Industry, undated).

Yusaini Ali, an experimental farmer in the Food Hub, operates 6.3 hectares in Felda Ulu Tebrau, want to overcome the complex agrofood business as a small company: “Until now, many smallholder farmers like me have relied on experience and the limited market knowledge we have as to what we produce for market and when it will be ready. Being part of the FarmByte, Food Hub will give us certainty about what to plant and when demand will be highest so we can get the best price. The tools and analytics provided will enable us to maximize our production and make our businesses more efficient. It will enhance our farming skills and knowledge and make us even better farmers” (Asia Pacific Food Industry, undated).

Overall, the goal of FarmByte is to utilize Industry 4.0 technology as an enabler for end-to-end solutions to all stakeholders in the Johorean and Malaysia agrofood ecosystem with the objectives of improving “national food security, production efficiency and product quality” (Asia Pacific Food Industry, undated). It is motivated to modernize and upgrade the Malaysian agrofood industry by cooperating with trusted partners and stakeholders in the food value chain to “create greater business and economic opportunities for the entire farm-to-fork ecosystem” (Asia Pacific Food Industry, undated).

CONCLUDING REMARKS: CHALLENGES AND OPPORTUNITIES AHEAD

Moving forward with closer economic and food value chain ties, the major challenge ahead in its latest Johor-Singapore SEZ project is to harmonize different tax rates between Singapore and Malaysia to ensure an integrated supply chain (including for food products), as Malaysia’s tax rate is currently 24% and Singapore is 17%, making business costs and the tax on profits different between the two countries (Abdul Rohim and Tang, 2025). Moreover, Malaysia is a larger country than Singapore and Johor is only one of the Malaysian states (Abdul Rohim and Tang, 2025), thus harmonization may have to be done within Malaysia too.

Other peripheral countries like Malaysia’s common land border with Thailand will demand similar preferential treatment on par with the Johor-Singapore SEZ as well and this must be taken into consideration (Abdul Rohim and Tang, 2025). There are, however, region-wide impacts as well that can benefit all players in the Southeast Asian region and beyond. If the SEZ succeeds, it can be a model for transplanting its best practices to other Malaysian states in addition to attracting foreign companies and investors from CJK (China, Japan, Korea) to build a more stable, diversified and efficient supply chain (Abdul Rohim and Tang, 2025).

What can Johor (or others) learn from Singapore? -  An Overview. Finally, more than 90% of food in Singapore are sourced from more than 170 countries (with close neighbour Johor as one of the sources), indicating that a sustainable food value chain in Singapore is critical to the Singaporean food security. Thus, it may be useful to touch on a policy review of policies and actions relevant to maintaining food value chain in Singapore. While it does not pretend to be comprehensive, it may carry some useful reference points as a learning model for countries and regions suffering from food insecurity, including Johor potentially.

For Malaysians observing Singapore's sustainable food value chain policies, they discerned the following successful policy features. Singapore applied the vertical model to urban agriculture with rooftop gardens and vertical farms to feed its population, dispensing funding for agriculture research and technology implementation, mobilizing community support for local farmers, space-planning and then implement as a single integrated policy (Mohd, 2022).

Singapore's business community has additional takes on Singapore's sustainable food value chain policies. They cited the use of digital technologies to navigate varying complex labelling and ingredient regulations when importing foods from all over the world, the implementation of virtual twin technologies to actualize innovation from R&D labs to test pilot and then scaling-up to the consumer market (Tan, 2023). This removes the need for physical experiments by utilizing simulations via virtual twin technology instead, savings time and costs; and all these developments are backed up by the Economic Development Board (EDB), Enterprise Singapore (ESG), A*STAR, JTC Corporation, and the Singapore Food Agency (SFA) working together (Tan, 2023).

The Singapore Institute of Food and Biotechnology Innovation (SIFBI) of A*STAR coordinates all of A*STAR’s existing capabilities in one stop, while Singapore Food Agency (SFA) simplifies regulations to assist companies to implement new technologies, spearhead business innovations through public-private sector collaboration, becoming a strategy of tech businesses providing the tools while state agencies provide the infrastructure (Tan, 2023).

REFERENCES

Abdul Rohim, Nasyrah and Louisa Tang. Interest rising among firms seeking to enter Johor-Singapore SEZ ahead of deal signing. CNA 6 Jan 2025. Retrieved from https://www.channelnewsasia.com/singapore/johor-singapore-sez-special-ec...

Asia Pacific Food Industry (APFoodonline). FarmByte Food Hub Set to Revolutionise Johor’s Agrofood Industry. Asia Pacific Food Industry undated. Retrieved from https://www.apfoodonline.com/farmbyte-food-hub-set-to-revolutionise-joho...

Bernama. Johor’s land an advantage for modern agriculture for S’pore companies: Onn Hafiz. Bernama/The Vibes 14 Feb 2023. Retrieved from https://www.thevibes.com/articles/news/85224/johors-land-an-advantage-fo...

Mohd, Noor Musa. Learn from Singapore how to revitalise our agricultural sector. New Straits Times (NST), 13 January 2022. Retrieved from https://www.nst.com.my/opinion/columnists/2022/01/762519/learn-singapore...

SG101. Digging Deeper: Case Studies. SG101 A Singapore Government Agency Website 9 January 2025. Retrieved from https://www.sg101.gov.sg/economy/case-studies/sg-food-challenge/Tan, Ken Chew. The role of digitalisation in futureproofing Singapore’s food supply chain. Singapore Business Review, 8 Feb 2023. Retrieved from https://sbr.com.sg/food-beverage/commentary/role-digitalisation-in-futur...

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