Economy - Regional Role - Jurong 2.0 - Human Resources and the Environment - The Service Sector

There is a good reason why American states- of such a knowledgeable and communicative man Henry Kissinger sought out Prime Min- organization not only made our job easier for Dear ister Lee Kuan Yew’s counsel on China as he this report, but certainly makes constructing a engineered one of the greatest power realign- multibillion-dollar petrochemical plant easier ments in diplomatic history: can as well! readers, offer the world a unique perspective, one that In this regard, we would like to thank Eu- cannot be copied or imitated. Singapore has guene Leong, director of energy and chem- set itself apart as a nexus of East and West. icals, and his entire team at the EDB for their Four decades after Nixon’s visit to China, Sin- help and insight with our project. In the age gaporeans still have an unrivaled understand- where politics all too often comes before ing of how to see the West from the East’s per- good policymaking, it is truly remarkable to spective and vice-versa due to the country’s see an organization with such a long-term colonial past, mix of cultures and languages clarity of vision. Initiatives such as Jurong Is- and position as a business and transit hub for land v2.0 would not be possible without such the world. As economic linkages and, in some a committed and talented institution. As other cases, political-economic rivalries grow; an Southeast Asian countries seek to imitate Sin- understanding of others’ perspectives is cru- gapore’s success, the EDB is key to Singapore cial to succeed in the contemporary global remaining several steps ahead. economy. In an increasingly competitive Asian eco- Nowhere does this perspective have a more nomic environment, the description of Singa- pervasive presence than in Singapore’s world- pore as the Lion City is all too fitting. In the class public sector, often regarded as the most wild, the lioness is constantly seeking out new efficient, well-trained and uncorrupt bureau- opportunities that will nurture, grow, and cracy in the world. An innate understanding strengthen her pride. In much the same way, of different business cultures reverberates Singapore’s government and businesses are al- through the ranks of Singapore’s Economic ways searching for new opportunities to grow Development Board. As most of our readers in the country’s business reputation. This ability Singapore know well, the EDB is an invaluable to envision long-term benefits for the growth institution that is instrumental in facilitating of the country has enabled Singapore’s re- Singapore’s distinction from other countries. markable unparalleled economic rise over the Many countries are talented at selling their past half century and will allow it to continue country as a business friendly destination to succeed in the future. This central theme through attractive buzzwords and policies, presents itself in the following pages through yet the work of the EDB ensures that gov- dozens of interviews, extensive articles and ernment pledges to the business community expert analysis on Singapore’s chemical sector. are backed up by action. Although this may sound easy, the inability of policymakers to follow through on commitments is the single largest challenge that we hear from our inter- Andrew Mason & Vanessa Acuna Chapela viewees in reports worldwide. The existence Global Business Reports Analysis Viewpoints from the GBR on-the-ground team on the subjects of chemical investments and environmental issues in Singapore and the region, taken from our weekly newsletter the GBRoundup.

15, 78, 79 Expert Opinions Singapore’s industry leaders give their thoughts on regional importance of the country, issues of skill shortages, and environmental issues affecting the chemical sector.

2011 % 2009 S$BILL. % 2007 S$BILL. % 100 2005 S$BILL. 93.7 % 80.1 100 2003 S$BILL. 100 22.4 % 69.6 17.2 21.0 2001 S$BILL. 100 13.8 Outward FDI in Manufacturing by Type % 46.6 15.9 13.9 S$BILL. 100 11.1 13.0 33.0 16.3 19.5 21, 62, 71, 79, 86Source: Department of Statistics Singapore 100 7.6 15.7 13.1 23.4 12.2 26.4 5.7 17.4 16.3 4.4 16.6 10.5 22.5 3.5 9.2 SECTOR / INDUSTRY 4.4 12.4 8.7 8.2 24.8 8.6 8.5 27.8 5.4 11.5 6.8 7.8 Manufacturing 7.3 6.7 4.7 6.7 7.6 2.2 5.8 6.1 7.6 Food, beverages and tobacco 4.5 2.7 5.6 1.2 1.8 5.3 5.0 3.9 Computer, electornic and optical products 4.6 2.3 1.2 2.0 6.0 Transport equipment 1.2 4.5

Chemicals and chemicals products 2013 III Quantitative 2013 II Machinary and equipment 2013 I 2012 IV 2 425.1 2012 III 2 258.6 2012 II 4 098.5 2012 I 1 369.5 638.6 2011 IV 4 068.6 814.2 2011 III 4 610.7 1 435.2 Investment Commitments by Country (million2012 dollars) 5 959.0 155.5 1 786.5 2011 3 382.3 463.0 1 444.4 Source: Department of Statistics Singapore 865.9 2 663.3 2010 4 038.9 353.1 1 214.0 753.2 Data 2009 16 007.8 98.8 3 605.6 372.8 13 734.3 140.7 3 744.8 2 005.2 12 854.2 1 837.5 5 605.9 147.3 245.0 11 753.9 1 875.4 3 284.0 979.5 114.7 Total 2 069.6 3 898.2 1 961.0 109.4 14 170.3 2 566.7 203.4 701.7 3 368.3 11 858.9 1 176.1 224.0 681.8 The most relevant quantitative data Local 10 784.6 2 672.1 490.0 384.2 8 385.6 5 654.5 50.4 826.1 5 047.4 536.0 1 021.9 Foreign 3 311.4 355.1 769.9 86.6 4 191.0 967.8 516.4 275.1 995.0 756.3 164.5 USA 1 175.8 217.8 37.2 presented in the most easily accessible 1 032.2 3 134.3 1 380.2 Japan 2 131.9 523.9 4 819.0 815.6 2 472.4 2 466.8 653.2 Europe 4 413.7 3 684.6 format, allowing you to view economic 1 478.4 Asia Paci c 695.6 and Others 2 531.8 and market statistics, identify trends and 8 552.9 Investments Commitments in Petroleum and Chemical Product Manufacturers 11 550.0 ( Fixed Asset Investments in million USD) 2 810.7 1 595.9 visualize infrastructure. Source: Department of Statistics Singapore 2006 2 523.9 6 491.6 2007 2008 2009 2010 2011 2013 III 2013 II 2013 I 2012 2012 IV 2 425.1 2012 III 2 258.6 2012 II 4 098.5 2012 I 1 369.5 1 623.8 2011 IV 4 068.6 1 106.6 2011 III 4 610.7 2 852.7 Investment Commitments in Manufacturing2012 and Services by Industry5 959.0 Cluster (million dollars1 229.7) 436.5 2011 3 382.3 3 606.8 14.2 Source: Department of Statistics Singapore 4 115.4 2 052.8 2010 4 038.9 5 347.5 0.0 813.7 2009 16 007.8 2 520.6 474.3 13 734.3 2 800.9 2 822.1 544.9 12 854.2 3 345.9 896.7 847.8 11 753.9 14 299.4 1 403.6 969.0 11 274.3 883.3 176.6 Total 10 033.6 2 399.5 59.8 10 092.1 6 239.4 3 978.2 8.9 7 384.4 1187.8 52.7 Manifacturing 5 647.8 712.3 47.7 4 672.4 6 678.3 111.8 2 523.8 103.7 97.2 Electronics 1 651.4 50.2 209.3 3 055.6 23.0 90.9 Chemicals 315.9 65.3 100.9 9, 22, 44, 63, 85 196.6 87.5 99.8 426.3 105.9 325.3 Biomedical 141.4 128.3 1 041.9 109.0 135.6 Manifacturing 359.6 0.0 180.5 668.7 263.0 476.8 17.9 0.0 Preciosion 868.4 90.0 23.7 Engineering 579.1 26.9 423.7 4.2 92.7 Transport 1 480.5 30.2 801.3 337.6 0.0 1 152.0 0.0 1 245.8 Engineering 12.1 139.8 127.1 461.8 General 76.1 495.3 Final 350.8 611.5 581.9 Manufacturing 116.2 693.0 Industries 1 708.4 2 460.0 2 820.6 Services 1 661.8 Thoughts Clusters Thoughts on the future potential of the Brazilian chemical industry, the challenges it faces, the path it must take to overcome these, and the opportunities present, from leading businessmen and industry figures.

120, 121

Travel Useful information for the business traveller to Singapore, including a hotel guide with listings of the best hotels, tips of where to go, and airport information.

90, 91 Courtesy of EDB Global Business Reports Industry Explorations CONTENTS

50. Interview with Power Generation Overview LIM KONG PUAY, PRESIDENT & CEO Engineering Success The Modern City State 51. Interview with Croda The Services Supporting ARTHUR KNOX, MANAGING DIRECTOR Singapore’s Chemical 8. An Introduction to Singapore 52. Interview with Linde Gas Singapore A BRIEF OVERVIEW OF THE COUNTRY AND BERND EULITZ, MANAGING DIRECTOR SOUTH Industry ECONOMY AND EAST ASIA AND LIM SECK LUAN, MANAGING 10. Interview with the Economic Development DIRECTOR 94. Built for the Job Board (EDB) 54. Interview with Sembcorp Industries ENGINEERING, PROCUREMENT AND EUGENE LEONG, DIRECTOR OF ENERGY & NG MENG POH, EXECUTIVE VICE PRESIDENT AND CONSTRUCTION PROVIDERS CHEMICALS HEAD OF SINGAPORE AND ASEAN (UTILITIES) 96. Interview with Cape East 11. Chemicals in Singapore 56. Interview with PacificLight Energy D. RAMESH, OPERATIONS MANAGER A MODERN HUB IN AN ISLAND NATION AARON A. DOMINGO, MANAGING DIRECTOR AND YU 97. Interview with McConnell Dowell 13. Interview with the Singapore Chemical TAT MING, CEO MURRAY DUNDAS, MANAGING DIRECTOR Industry Council 58. Interview with Emerson Process 98. Interview with Hai Leck Engineering Management CHIEW NGUANG YONH, CHAIRMAN DON CHENG, MANAGING DIRECTOR 14. Interview with ExxonMobil Asia Pacific KENNETH TAN, GENERAL MANAGER AND 100. Interview with WH Marathon MATTHEW (MATT) J. AGUIAR, MANAGING DIRECTOR ANANTH NOCHUR, SENIOR MANAGER BUSINESS ALVIN LEONG, MANAGING DIRECTOR 15. Analysis DEVELOPMENT - CHEMICAL INDUSTRY 102. Interview with Tiong Woon Corporation 59. New Investments SINGAPORE HOSTS TITANIC INVESTMENTS IN Holding SPECIALTY CHEMICALS SPECIALTY CHEMICALS AND PETROCHEMICALS MICHAEL ANG, CHIEF OPERATING OFFICER 61. Interview with Mitsui Chemicals Asia Pacific 104. Interview with the Association of Process YASUSHI NAWA, MANAGING DIRECTOR & CEO Industry (ASPRI) 64. Interview with Lanxess Singapore LIM JIT SAY, EXECUTIVE DIRECTOR IAN WOOD, MANAGING DIRECTOR & COUNTRY 105. Interview with Retaining the Edge A Lion Amongst REPRESENTATIVE MAINTENANCE PROVIDERS FOR SINGAPORE’S 65. Interview with Sumitomo Chemical FACILITIES Tigers Singapore 107. Interview with Ad-Meth Mech-Field Singapore’s Chemical HIROKI SAKASAI, MANAGING DIRECTOR & HEAD, SHAUN PANG, GENERAL MANAGER CORPORAT BRANCH (SEA & PACIFIC) 108. Interview with Hertel Industry in a Regional 66. Interview with Jurong Aromatics MARINUS JACOMETTI, REGIONAL MANAGING Context Corporation DIRECTOR, ASIA AND AUSTRALIA DAI YU, CEO 109. Interview with Yokogawa Engineering Asia 18. The Neighbourhood 67. Interview with the Petrochemical MASATOSHI NAKAHARA, MANAGING DIRECTOR AND CROWDING OR COMPLEMENTING Corporation of Singapore ONG CHOON NAN, SENIOR MANAGER 20. Interview with ChemStationAsia AKIRA YONEMURA, MANAGING DIRECTOR 110. The Problem of Space DATO ANDREW NG, MANAGING DIRECTOR & CEO ADDRESSING LAND SCARCITY 23. Interview with Sasol Chemicals Pacific 112. Interview with Absotech GUY BESSENT, MANAGING DIRECTOR KELVIN SIM, MANAGING DIRECTOR AND OOI TIAT 24. Interview with Fortrec JIN, EXECUTIVE MANAGER MARK TINKLER, COMMERCIAL DIRECTOR Success Brings 113. Interview with Leschaco 26. Interview with Integra Petrochemicals KAI CHLADEK, MANAGING DIRECTOR GINA C. FYFFE, EXECUTIVE DIRECTOR Challenges 114. Interview with YCH Group 28. Looking Abroad Human Resources and the MICHAEL LEONG, VICE PRESIDENT OF SALES & ENHANCING SINGAPORE’S REGIONAL IDENTITY MARKETING 30. Interview with Unilite Chemicals Environment 115. Interview with Oiltanking BAY CHIN HAO, COMMERCIAL MANAGER, ASIA NICHOLAS LIM, MANAGING DIRECTOR 70. Innovation and a Sustainable Environment 33. Interview with Damco Asia Pacific PACIFIC GETTING MORE FROM LESS 117. Interview with BDP International HENNING MALMGREN, CHIEF COMMERCIAL 73. Interview with TÜV SÜD PSB OFFICER AND GÖTZ VON DRESKY, HEAD OF RICHARD STROLLO, MANAGING DIRECTOR – SOUTH CHONG WENG HOE, FORMER CEO & DIRECTOR ASIA CHEMICAL LOGISTICS 74. Interview with Asia Polyurethance 35. Interview with Brenntag Asia Pacific ERMAN TAN, CEO HENRI NEJADE, PRESIDENT & CEO 76. Interview with the Institute of Chemical and 36. Interview with Planet Asia Engineering Sciences (ICES) WILSON TAN, CEO; IRWANTO TJOTA, COO; AND KEITH CARPENTER, EXECUTIVE DIRECTOR MARTIN MULIA TAN, FINANCE DIRECTOR 77. Interview with Sulzer Chemtech 38. Interview with Jebsen & Jessen FABRICE BILLARD, SENIOR VICE PRESIDENT AND Appendix FRITZ GRAF VON DER SCHULENBURG, EXECUTIVE JUNE LAM, KEY ACCOUNTS MANAGER Into the Future VICE CHAIRMAN 78. Analysis 39. Interview with Dow Chemical Pacific THE ENVIRONMENT IN ASEAN 120. Final Thoughts SUINIATY BASIRUN, COUNTRY MANAGER FOR 80. Interview with McKinsey & Company SINGAPORE 122. Travel Guide MADS DÜHRKOP LAURITZEN, MANAGING PARTNER 124. Hotel Guide SOUTHEAST ASIA OPERATIONS PRACTICE 81. Interview with Veolia Water Solutions & 125. Index & Company Guide Technology 126. Credits Jurong 2.0 CARLO PATTERI, BUSINESS DEVELOPMENT DIRECTOR Singapore Keeps Ahead of the 82. Manpower Competition THE POLITICAL PARADOX OF SUCCESS 84. Interview with Brunel International SEA 42. The Development of JIv2.0 SIL HOEVE, GENERAL MANAGER AND JOB PROCTO, THE NEXT GENERATION BUSINESS DEVELOPMENT MANAGER 45. Interview with Evonik 88. Interview with Cyclect PETER MEINSHAUSEN, PRESIDENT OF SOUTHEAST MELVIN TAN, MANAGING DIRECTOR ASIA, AUSTRALIA, AND NEW ZEALAND 89. Interview with PEC 46. Interview with Nalco ROBERT DOMPELING, CEO This research has been conducted by DERIC BRYANT, GENERAL MANAGER – EASTERN 90. Interview with Spencer Stuart Southeast Vanessa Acuna Chapela and Andrew Mason HEMISPHERE, ENERGY SERVICES DIVISION Asia Edited by Barnaby Fletcher DOWNSTREAM MALINI VAIDYA, MANAGING DIRECTOR Graphic Design by Gonazalo Da Cunha A Global Business Reports Publication 48. Plug and Play 91. Interview with Aggreko For more information, contact [email protected], follow us on POWER AND INFRASTRUCTURE ON DEBAJIT DAS, PRESIDENT ASIA PACIFIC Twitter @GBReports or check out our blog at gbroundup.com.

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 5 The Modern City State: An Introduction to Singapore and its Chemical Industry

“Jurong Island has been at the heart of the chemicals industry in Singapore and will continue to be. That being said, it is no longer the only part of the story. Going forward, the growth of specialty chemicals is the future. Jurong will always be important, but the impact of the chemical industry on Singapore is greater than just the island itself.”

- Dr. Keith Carpenter, Executive Director, Institute of Chemical and Engineering Sciences (ICES) Source: Shutterstock Global Business Reports EXPLORATION Industry Explorations

An Introduction Sungai MALAYSIA to Singapore Woodlands Chong Pang Namazie A brief overview of the country and economy Estate

Kranji

Kampong Nee Soon Salabin Harbour

Choa Chu Kang Bulim Lam San Serangoon During Singapore’s half century of indepen- foreign investment has not necessarily wavered, In this report, GBR interviews a wide range of New Town Tambines dence, the city state has grown from an under- but must now compete with other concerns. the leaders of Singapore’s chemical industry and Jurong Singapore Changi West Jurong International Airport ohor East Bishan Bukit Somapah developed and largely impoverished former out- Popular opinion does not always equate to the islands principle investors who share their Shangi Timah Toe Payoh post of the British Empire to an ultra-modern sound economic policy and the rise of alter- views on why they continue to choose Singa- Jurong Selat J Jurong New Town Industrial Bedok metropolis that today ranks as the globe’s third native investment destinations in the region is pore as a center for business and investments Tuas Estate Clementi largest oil refining center, the third busiest port largely outside of the government’s control. and their hopes and concerns for the future. It Pasir Queenstown in terms of cargo tonnage, the seventh wealthiest While still host to one of the world’s most will be seen that unlike the despondency often Panjang country in the world in terms of GDP per capita, favourable business environments (Singapore associated with Europe, Singapore’s business and is a leading global financial center. is consistently top of the World Bank’s ‘Ease of men are confident in their ability to overcome Singapore’s rapid economic rise has caused Doing Business’ ranking and achieved this hon- and even benefit from the challenges that they other countries around the world to emulate our again in 2013), Singapore’s neighbours currently face and that the small state will con- Selat Pedan SINGAPORE its hybrid of neo-liberal economic policy and are emerging as increasingly viable alternatives tinue to play a vital role at the very centre of the Sebarok staunch decision-making. Yet none have man- for major investments. Hong Kong is ranked world’s most exciting trading area. Channel aged to achieve quite the same accelerated third- second and Malaysia and Thailand have both The country’s chemical industry illustrates the SingaporeN Strait

O world-to-first transformation. Yet at its core, the squeezed their way into the top twenty of the Singaporean story perfectly. Punching way above I

T A

principle found by former president Lee Kyan ranking, meanwhile, regional giant Indonesia its weight, boasting world class facilities of the C O

Yew and carried on by his ruling People’s Action offers a huge and appetising domestic market, world’s largest petrochemical companies, Singa- L Party (PAP) is quite simple: the unapologetic a cheap young labour force and ample land – all pore has for a long time been the undisputed prioritization of progress. of which Singapore lacks. Is Singapore getting champion of the South East Asian arena. New Teluk Jodah The departure of the visionary Lee Kuan Yew prematurely old and suffering the same debili- hubs in neighbouring countries are now how- Teluk from Singapore’s cabinet in 2011, however, tations as Europe? Certainly the Global Financial ever looking for a shot at the title. The power and Main Strait Tering

seemed to symbolically mark a slight clouding Crisis has not helped. the skills of Singapore are being put to the test. • 4km INDONESIA of the country’s clarity of vision. While the PAP still dominates parliament, holding 81 of the 87 Asia’s share of world growth Singapore at a Glance Domestic Population ASEAN GDP Growth Rates (%) seats, unprecedented losses in the 2011 election Source: Conference Board (2012), IMF (2012c), Maddison (2010) and Source: CIA World Factbook Treasury projections Source: CIA World Factbook, Various Source: IMF and a by-election loss earlier this year has forced WORLD ASIA BILLION USD 2012 2012-2016 the party to give weight to social concerns as 100 Indonesia 6.1 14.5 Literacy Rate (2007) Population: 5,460,302 (July 2013 est.) well as economic factors. 92.5% This is a necessary step. However, there is a sense Capital: Singapore Cambodia 6.2 10.3 Head of Government: President Toni Tan keng in which the PAP has become a victim of its 80 Yam Laos 8.4 9.3 own success. The almost unrestricted ability of GDP (official exchange rate): $276.5 billion Labor Force (2012 est.) 3.618 million companies to import both skilled and unskilled Growth Rate: 1.3% (2012 est) Vietnam 5.6 8.9 GDP per Capita: $61,400 (2012 est) labor has always been one of the country’s major 60 Economic Sector Breakdown: agriculture: 0%, Malaysia 4.4 8.1 attractions, yet resentment towards immigrants industry: 26.8%, services: 73.2% (2012 est) from Singapore’s population has led the PAP to Exports: $435.8 billion (2012): machinery Myanmar 6.0 7.4 approve new restrictions on migrant labor. Space and equipment (including electronics and Population 40 telecommunications), pharmaceuticals and other 5,460,302 (July 2013 est.) constraints in a country of just 274.2 square chemicals, refined petroleum products Philippines 4.2 7.1 Imports: $374.9 billion (2012): machinery and Ethnic groups miles, high expected salaries and environmental Chinese 76.8%, Malay 13.9%, equipment, mineral fuels, chemicals, foodstuffs, Indian 7.9%, Other 1.4% Thailand 5.5 7.0 concerns all raise costs for chemical manufactur- 20 consumer goods Major Trade Partners: Malaysia, China, Youth Unemployment Rate ers and are becoming even more pressing at a 6.7% Indonesia, USA, Japan, South Korea, Singapore 2.7 4.5 2005 2015 2025 time when Singapore’s regional peers are being Unemployment Rate (2012) increasingly viable places to do business. Asia Euro Area China 1.9% Brunei Darussalem 3.2 0.4 Rest of world North America Rest of Asia Singapore’s firm commitment to progress and Latin America and Caribbean India

8 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations FACTSHEET

Sungai Johor MALAYSIA

Sembawang

Woodlands Chong Pang Namazie Yishun Estate

Kranji

Kampong Nee Soon Punggol Salabin Serangoon Harbour Changi Bukit Panjang

Choa Ang Mo Kio Hougang Chu Kang Bulim Lam San Serangoon New Town Paya Lebar Tambines Jurong Singapore Changi West Jurong International Airport ohor East Bishan Bukit Somapah Boon Lay Shangi Timah Toe Payoh Bedok Jurong Selat J Jurong New Town Industrial Bedok Tuas Estate Clementi Katong Geylang

Pasir Queenstown Panjang

Telok Blangah

Selat Pedan SINGAPORE Sebarok Channel

SingaporeN Strait

O

I

T

A

C

O L

Teluk Jodah Teluk Main Strait Tering

4km INDONESIA

Asia’s share of world growth Domestic Population ASEAN GDP Growth Rates (%) Source: Conference Board (2012), IMF (2012c), Maddison (2010) and Treasury projections Source: CIA World Factbook, Various Source: IMF WORLD ASIA BILLION USD 2012 2012-2016 100 Indonesia 6.1 14.5 Literacy Rate (2007) 92.5% Cambodia 6.2 10.3

80 Laos 8.4 9.3 Labor Force 3.618 million Vietnam 5.6 8.9 60 Malaysia 4.4 8.1

Myanmar 6.0 7.4 Population 40 5,460,302 (July 2013 est.) Philippines 4.2 7.1 Ethnic groups Chinese 76.8%, Malay 13.9%, Indian 7.9%, Other 1.4% Thailand 5.5 7.0 20 Youth Unemployment Rate 6.7% Singapore 2.7 4.5 2005 2015 2025 Unemployment Rate (2012) Asia Euro Area China 1.9% Brunei Darussalem 3.2 0.4 Rest of world North America Rest of Asia Latin America and Caribbean India

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 9 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Eugene Leong

DIRECTOR OF ENERGY & CHEMICALS SINGAPORE ECONOMIC DEVELOPMENT BOARD

Can you introduce the Singapore Economic companies in the downstream petrochemical What is the horizon for the EDB and Singapore’s Development Board and its role within the in- and specialty chemical industries. These indus- chemical industry over the next few years? dustry? tries account for close to one third of the over- The outlook for Singapore’s chemicals indus- The Singapore Economic Development Board all manufacturing sector. Just as importantly, try is positive. Driven by the burgeoning Asian (EDB) is one of the government’s economic the industries create high-value jobs in Singa- markets, regional demand for petrochemicals is agencies. Its primary objectives are to grow the pore for Singaporeans. also growing strongly. Singapore has the right economy of Singapore by stimulating invest- A healthy number of global chemical leaders ingredients to continue to be an attractive in- ment, and to create jobs for Singaporeans. have made Singapore their home. Singapore vestment location for companies, as can be houses the world’s chemical heavyweights, all seen by the recent projects announced. Singapore’s current mandate to the interna- in one location, often working in collaboration That said, we believe continuous improvement tional community is “home for business”. Can with one another on Jurong Island. We believe and upgrading is necessary. One of the founda- you explain this directive and how it is being strongly in creating a favorable environment tions of our chemical industry that we continue fulfilled? which facilitates integration within the chem- to strengthen is our refining capability. Upgrad- Home for Business is one prong of Singapore’s ical industry. ing the complexity of our refineries will en- “Host to Home” strategy. The EDB sees Singa- hance the competitiveness of our crackers and pore as a critical node within the development What elements of your macroeconomic model the rest of the industry. Secondly, we are con- of the greater Asian economy, from India to for the chemical industry in Singapore are most stantly looking for new ways to extract more China. As markets in Asia become increasingly attractive to multinational players? from the existing base, such as moving into important for companies around the world, we Our highly developed upstream cracking ca- higher value-added derivatives and specialty see Singapore as a Home for Business; a place pabilities and their links to downstream spe- chemicals. Lastly, the EDB will continue to work from which companies can orchestrate their cialty chemical plants gives us an advantage in with the industry players on Jurong Island, to activities within the region, both in terms of attracting investments. The recent mega-cracker ensure its competitiveness and sustainability as strategic planning and execution. expansions of ExxonMobil and Shell, as well a chemical hub. Furthermore, the idea of ‘Home’ extends not as related downstream projects mean more Asia’s growth continues to excite the global only to the operations of multinationals, but opportunities for chemicals companies. We chemical community, and Singapore can play to their management of talent and innovation have seen a slate of new investments in high- a major role in supporting their operations as as well - the other two prongs of our Host to value downstream derivative and specialty a home for business, innovation, and talent. • Home strategy. As a Home for Talent, Singapore chemical manufacturing. Some of the projects becomes the place from which companies announced last year include Lanxess’ nd-PBR access, develop and deploy Asia-ready talent and butyl rubber plants, Sumitomo, Asahi Ka- to lead their companies’ growth in Asia. As a sei, and Zeon Chemicals’ S-SBR synthetic rub- Home for Innovation, the EDB engages inno- ber projects, as well as Chevron Oronite and vators within companies to develop and test Infinium’s lubricants and oil additives expan- new products and services in Asia, for Asia. To- sions. This is in line with our strategy to pro- day, there are already many examples of how mote downstream investments into specialty companies are using Singapore as a Home for chemicals. Business, Innovation and Talent. Beyond manufacturing, we have also put in a great deal of effort to build an environment What role does the chemical industry play in conducive to R&D. A number of specialty chem- Singapore and the EDB’s overall strategy for icals companies have set up facilities focused on growth? innovation and applications development. For Today, Singapore pursues an integrated strategy example, Evonik set up an applications lab, for of refining and chemical production to serve its TEGO resins and coatings additives line.

10 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations EDITORIAL

Chemicals in Singapore

A modern hub in an island nation

It all began when the global leaders in global petrochemicals identified Singapore as a desti- nation for large scale refining and processing. Shell first invested in an oil refinery just before the islands independence, in 1961. Already by the 1970’s, Singapore had become the world’s third largest refining centre and home to an important regional chemical hub.

Courtesy of Emerson Process Management Global Business Reports // SINGAPORE CHEMICALS 2013 11 Global Business Reports EXPLORATION Industry Explorations

The island’s location in the middle of the tracted investment in the sector and created and promoting sustainability. This strategy Malacca Straights, the world’s second busiest an array of supporting industries and the EDB seeks to exploit Singapore’s competitive ad- shipping lane which connects Asia with the plays a crucial role as a facilitator. At the heart vantages vis-à-vis potential competition in West, make the country a perfect shipping of this planning since the 1980s, has been the the region in order to attract and retain for- point for export and re-export. New crack- development of a world-class chemicals man- eign investment. Several recent developments ers that Shell and ExxonMobil completed ufacturing center of Jurong Island. “From oil show the strategy is achieving its desired in 2011, demonstrate that this strategic ad- majors to petrochemicals, Singapore houses effect, yet, as Singapore knows well, there is vantage remains true today. Beyond simple the world’s chemical heavyweights, all in always plenty of work to be done. geography, Singapore offers the technically one location, often working in collaboration Singapore is sitting higher up the value chain complex and often regulation heavy chemical with one another on Jurong Island, or within than ever before and, in order to compete industry a well-educated population, strong Singapore. We believe strongly in creating a with the lower cost producers that literally intellectual property protection and a clear, favorable environment, which facilitates in- surround the island, everything must be incorruptible bureaucratic process. “Today, tegration within the chemical industry. What about excellence. This applies not merely to Singapore pursues an integrated strategy of Jurong Island is today, was only made possi- the final product and the service provided, refining and chemical production to serve ble by a concerted effort by the Singaporean but to the manner in which this is achieved. companies in the downstream petrochem- government, in close collaboration with in- Higher costs means that processes must be ical and specialty chemical industries. These dustry,” says Leong. seamlessly efficient, they must be clean and industries are major contributors to our man- With new initiatives such as Jurong Island ver- sustainable, they must be safer, and the finan- ufacturing sector, accounting for close to one sion 2.0 (JIv2.0) and a raft of record-break- cial, political and legislative environments third of the overall manufacturing sector,” ing new investments, Singapore’s chemical must be stable and supportive. explains Eugene Leong, Director of Energy industry appears to be progressing along Singapore has succeeded in building just and Chemicals for the Singapore Economic much the same impressive trend as it always such a reputation for excellence and stability Development Board (EDB). has done. After investment in the sector fell and can trade on it. The rise of its neighbours The EDB itself is a good example of precisely flat in the immediate aftermath of the finan- will thus prove an opportunity rather than a what makes Singapore so special. This inte- cial crisis, the EDB has launched initiatives to threat as multinationals continue to flock to grated strategy of the chemical industry is revamp the industry through a focus on high Singapore to benefit from these growth mar- the result of careful, decades long planning value downstream and specialty chemicals kets using Singapore as a base from which by the government that has successfully at- production, further streamlining efficiencies to do so. •

Composition of Singapore’s Singapore’s Merchandise Exports and Imports (2003 - 2012) Merchandise Trade (2012) Source: Department of Statistics Singapore Source: Department of Statistics Singapore S$ BILLION 600

PORTS 4 IM 8% 500

400

300 EX % PORTS 52

200

100 Domestic Exports 56%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Re-exports 44%

Exports Imports

12 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Chiew Nguang Yong

CHAIRMAN SCIC

What is the mandate of the Singapore Chem- industry has been gathered by SCIC to set up a In addition, the chemical industry is highly ical Industry Council (SCIC) and some of the training program and impart their experience capital-intensive and it is sometimes difficult association’s major milestones? to the chemical community; the GHS educates for a SME to access the necessary financing, The SCIC is the body representing the chemi- SCIC members on what is required in order technology or talent as they strive to remain cal and petrochemical industries in Singapore; to meet international levels of compliance in competitive. In this area, it is encouraging it voices the interests of this incredibly diverse chemicals. that Singapore’s Ministry of Trade and Indus- manufacturing sector. The SCIC’s membership The Responsible Care program is the flagship try (MTI) is very proactive and offers many extends from multinationals such as Exxon- program of the SCIC; this program ensures incentives for SMEs operating in this market. Mobil, Shell, Sumitomo, Dow Chemical and that companies acknowledge a direct link be- Dupont to smaller regional and local SMEs. tween their own achievements and the pro- Despite the challenges, Singapore continues to This diversity grants the SCIC and its members tection of the local community and its health, be a major hub for investment in chemicals; the capability to leverage both the experience safety and environmental standards. Responsi- what makes this market ideal for the chemical of global MNCs and the perspective of smaller ble Care is also a means through which SCIC industry? players in order to promote higher standards Responsible Care members can signal their Singapore is fortunate to have a critical num- for health, safety and the environment. In commitment to the community and heighten bers of competitive advantages. Jurong Island, terms of growing the business of their mem- the confidence in this industry. for example, was arduously reclaimed for the bers, the main assets of SCIC are its regional Furthermore, the SCIC has a Regulatory Affairs sole purpose of building a downstream petro- and international connections; SCIC and Re- Committee (RAC) as a means to improve gov- chemical hub characterized by high levels sponsible Care members are a part of a cred- ernment-industry dialogue; this is especially of integration. The presence of major MNCs ible network of regional and multinational useful when the regulatory framework is be- has managed to attract investment from their companies with a certain degree of shared ing reviewed. For example, the National Envi- global downstream customers and add-value interests and goals. ronmental Agency (NEA) is currently working to the industry as a whole. Outside of Jurong Over the last few years, the SCIC has become with our SCIC’s RAC on several pertinent is- Island, the other main advantage of Singapore a preferred platform for addressing the indus- sues such as flaring. is the element of stability: the economic, po- try from the perspective of local regulatory litical, and regulatory environments are all bodies and government, an achievement it is What are some of the main challenges to Sin- very transparent and predictable. Lastly, the pleased with; the SCIC’s relationship with reg- gapore’s chemical industry as perceived by growth of markets in the region such as China ulators is extensively collaborative. SCIC and its members? make Singapore an ideal place to do business; The most discussed issue is the cost of en- a chemical company in Singapore is well posi- Can you outline the SCIC’s current initiatives ergy in Singapore. Since last year, the SCIC has tioned for growth. Indeed, Singapore’s model and activities within the chemical sector? begun engaging the JTC with regards to the is being replicated throughout the region. • The SCIC is self-funded and therefore we are infrastructure on Jurong Island in order to ad- able to work independently on behalf of the dress the issue of security of supply to energy, industry. Currently, the SCIC enjoys a small logistics capabilities, and other potential fu- full-time team to support its activities; this is ture challenges. Moreover, new limitations on in addition to its volunteer committees com- foreign talent and labour costs are also causing prising professionals from local companies concerns to MNCs. across the value-chain and the international For SMEs in the chemical industry in partic- community. A good example of a current SCIC ular, there are several additional challenges. initiative is the Global Harmonized System Understanding and compliance to the HSE (GHS); in this forum, the utilization of inter- standards is an area that SMEs often lack the national chemical standards for Singapore and hardware, experience and manpower to main- the region is discussed. A varied team from the tain the same standards as efficiently as a MNC.

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 13 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Matthew (Matt) J. Aguiar

MANAGING DIRECTOR EXXONMOBIL ASIA PACIFIC PTE LTD.

At the time of the initial commissioning of (Singapore petrochemical expansion) came How does your new expansion fit into the ExxonMobil’s new cracker in December 2012, as a way to build on this existing base and government’s vision? you commented that this expansion “demon- advantages. We built it to expand capacity of A significant amount of our capacity is now strates our [ExxonMobil’s] continued confi- existing products but also add new products, premium products as our expansion in- dence in Singapore”. What advantages does including a significant number of specialty cludes two polyethylene plants, a polypropy- Singapore provide that gives you this confi- products, again applying our latest technology. lene plant, a metallocene elastomers unit, an dence? When ExxonMobil makes an investment, it is oxo-alcohol unit and an aromatics expansion. To understand Singapore’s importance to on a 20- to 30-year time horizon. Our strategy is to have a competitive com- ExxonMobil it is necessary to look back on modity platform while also offering a number our past, as the company is celebrating its Many of our interviewees have cited high en- of specialty products where the value added is 120th anniversary in Singapore this year. We ergy costs as their main concern in Singapore. higher and are the products are less cyclical. began as a kerosene trading company in 1893 Is this a concern for ExxonMobil, given your and both Exxon and Mobil built refineries in expansion included a new 220MW cogener- What do you see as the priorities for Exxon- Singapore at the early days of independence in ation plant? Mobil Asia Pacific in the coming years? the 1960s. Our manufacturing capability has I would agree that energy costs are a chal- Our first priority is to have our new cracker grown with the country. Our chemical com- lenge, and we are working very cooperatively demonstrate all the capabilities and technolo- plex began with aromatics in the early 1990s with the Singapore government on some of gies we have invested in it. We see our Singa- and we developed some small specialty busi- the long-term solutions. For example, as part pore complex as a platform for future growth; nesses at this time as well. of the ongoing consultations on the LNG pro- we are interested in additional investments We made the decision in the early 1990s curement framework for Singapore, we have here, including specialty products to serve the that Singapore would serve as the Asia- Pa- been engaging closely with the Government high demand in Asia. • cific hub for the company as we thought it to support efforts to develop the next LNG was the country that offered the best strategic procurement framework. It is worth noting advantages in the region. It was very aligned that when you look at the long term history with the fundamentals we have as a com- in our business, we have seen times when pany: a business-friendly climate, pro-busi- different parts of the world or different feed- ness tax structure, transparent laws and reg- stocks or energy costs are advantaged over ulations, and a strong relationship with the others. ExxonMobil has a large, diverse global government. On top of all this, we saw the footprint where we are well represented in all government’s commitment to building the regions as well as feedstock types (gas or liq- infrastructure on Jurong Island which is re- uids) that provides good diversity where each markable and visionary, and a true model for configuration performs well in different sce- developing a petrochemical industry around narios. This global footprint is a competitive the world. advantage and also allows us to take a long- When we originally built petrochemicals pro- term view. duction on Jurong Island in the 1990s it was In Singapore, our 220MW cogeneration plant done to integrate with our existing refinery. adds to 140 MW of capacity we already have We were able to replicate what ExxonMobil at the complex. We are working with the gov- has successfully done around the world to ernment long-term on improving energy flex- build a complex integrated with our refinery, ibility as the future of gas evolves. with full feedstock advantage, and build the largest world-scale facilities in industry with Increasing specialty chemicals production is at our latest technology. The current expansion the center of the Jurong Island v2.0 initiative.

14 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations ANALYSIS

Singapore Hosts Titanic Investments in Specialty Chemicals

When seasoned executives fly into Singapore, dence generated therefrom that, for example, Singapore, is also set to begin construction on a they see more during their approach to Changi brought Lanxess’ largest international FAI to 300,000 tpa polyolefin facility with a price tag International Airport than a stunning view of date—a €400 million butyl rubber plant—to of $250 million, bringing Mitsui’s cumulative the Asian entrepôt; they garner a sense of the the country despite the beggarly investment FAI in Singapore to well over $1 billion. Not overall business environment: when the harbor climate of 2009. to be outdone, the feedstock and petrochemical is congested with ocean barges and container Singapore’s neighbours have been quick to manufacturers are also expanding their already ships, markets are not healthy; those vessels emulate its success, however: China is now the vast portfolios: Chevron Oronite is enhancing need to be moving products instead of idling. undisputed leader in terms of manufacturing its offering for additives; Royal Dutch Shell has Today, the traffic is nearly bumper-to-bumper output, and today there are a growing number confirmed a 100,000 tpa increase to its polyols in the straits of Malacca, for Singapore’s ex- of alternative petrochemical hubs throughout capabilities in addition to a $3 billion expan- ports levels have been slow to recover when the ASEAN and APAC regions in countries that sion of its ethylene cracker; ExxonMobil set compared to those of its sister ports in Asia. In do not suffer the same restrictive land, labor, the pace for 2013 by recently announcing the December of 2012, Singapore’s exports hit a and thus re-export limitations as tiny Singapore. largest expansion project in company history nadir lower than any experienced in the past The country has been forced to change tac in which will augment output levels at its ethylene 14 months as its currency climbed higher rel- courting new companies for its flagship indus- steam cracker by over 2,600,000 tpa of prod- ative to the dollar, its manpower became more try on a regular basis; currently Singapore is uct. Singapore’s chemical industry is certainly expensive in relative terms, and output from its filling its sails with new potential in the area at high tide. manufacturing sector continued to slow down. of specialty chemicals. Products such as syn- Before Singapore can take such staggering ac- To a large extent, however, these represent thetic rubber, feed additives, and coatings are tivity for granted, the government will have to the maturing pangs of a country that consis- low-volume, high-value chemicals that not only prove to more reluctant entrants that it can off- tently must bear the burdens of being ‘first’ compliment Singapore’s unique endowments, set the country’s inherent disadvantages in the in many industries throughout Asia; there are but also a rising demand across several target long-term: expensive land, labor, and utilities certain segments of Singapore’s economy that markets; in Asia alone, the specialty chemicals costs. Although these are perennial issues, they continue to gather momentum in the worst of industry is expected to reach an overall value of are becoming more acute: manpower is be- conditions, tasked with building a future from $360 billion by 2015. coming increasingly politicized as Singapore’s a modest endowment of materiel and an envi- When the EDB plots a course for growth, the ruling parting is losing unprecedented ground ronment that must cater to outside investment. world’s leading chemical players are sure to on issues such as immigration, and energy and Indeed, despite record drops in exports, the follow. To be sure, the crowning achievement feedstock prices continue to rise throughout Lion City-state still hosts record levels of capital of Singapore’s infrastructural offering to the the region. Furthermore, recent innovations expenditure; for 2012, Singapore managed to chemical community, the artificial manufactur- in hydraulic fracturing and the resultant nat- accumulate $13 billion in Fixed Asset Invest- ing zone known as Jurong Island, was a her- ural gas glut in North America are tempting ments (FAI), up by $2 billion from 2011 and culean project that finished a full 20 years ahead many producers to re-shore operations that rely poised to increase again for 2013. The Singa- of schedule. The EDB’s latest initiatives, dubbed on gas as both a feedstock and energy source. pore Economic Development Board (EDB), the Jurong Island 2.0, have reinvigorated Singa- Nevertheless, chemical manufacturers not pru- statutory board for the Ministry of Trade and pore’s chemical segment. Lanxess is crystalliz- dent enough to enter Asia by way of Singapore Industry, is the leading agency charged with ing its commitment to Singapore by developing dream of places like Jurong Island and govern- attracting investment into the country. The a €200 million Nd-PBR facility, the company’s ment agencies as attentive and exacting as the chemical and petrochemical industries have second largest investment and at 140,000 tpa EDB; the trite strategy of an undervalued cur- been a traditional focus of the EDB since 1984 the world’s largest polybutadiene rubber plant. rency and cheap labor, a characteristic of many when, in a joint venture with Sumitomo, they Evonik Industries, a multinational specialty countries in the region, must appear as a ship brought the country’s first ethylene cracker chemicals manufacturer, utilized the ground- sailing without ballast in comparison to the online in what is now Jurong Island. Since the breaking at its $500 million methionine com- consistency of Singapore’s economic planning. EDB has been at the helm, well over 30% of plex to herald the coming of a new polymer-12 In this context, a persistent decline in Singa- Singapore’s manufacturing activities have be- facility to the delight of the Minister for Trade pore’s exports from traditional levels, mostly come oriented towards chemicals. Singapore’s and Industry. Moreover, Evonik has earmarked in electronic and non-oil products, is less wor- strategy for developing the sector is based on Singapore for a further $500 million in capital risome given the value additions currently in three types of stability: economic, political, and expenditure; 50% of the company’s entire foot- development. Perhaps professionals should also infrastructural. It is the ability of Singapore to print in Asia will be housed on Jurong Island take notice of activity on Jurong Island the next sustain a low-risk environment and the confi- alone. Mitsui Asia Pacific, a longtime player in time they touch down in Singapore. •

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 15 A Lion Amongst Tigers: Singapore’s Chemical Industry in a Regional Context

“A decade ago, expanding Katoen Natie outside Europe was considered complimentary to our Europe operations. Now it is a necessity. Our growth is outside of Europe as the market consolidates as a result of the crisis. The United States, Latin America, Singapore and Thailand represent a new wave of focus for us. In Singapore and Thailand we have more than doubled our operations in the last three years.”

– Koen Cardon, CEO, Katoen Natie Singapore Courtesy of ExxonMobile Global Business Reports FACTSHEET Industry Explorations The Neighbourhood

Crowding or Complementing?

Over the last two years, the two countries of intent with Petronas to become involved there is a degree of competition involved in adjacent to Singapore have sought to attract in the complex. the creation of such a petrochemical triangle, world-scale investment in the petrochemicals Indonesia, the largest economy in ASEAN, Singapore stands to gain as it can serve as the sector, as Singapore’s neighbours are eager to has also sought to boost the profile of its im- top echelon of such a structure, dominating imitate the Lion City’s success. Although still port-dependent petrochemical industry. In high-value production while all three mem- in their early stages, investment plans in Jo- December 2012, Indonesia’s interior ministry bers compete for commodity production. hor Malaysia, which is directly linked to Sin- announced incentives to attract investment for “If you take these three countries [Malaysia, gapore via causeways, and Indonesia could several new petrochemical centers with a view Indonesia, and Singapore], one element of provide an alternative option for investment of reversing the sector’s adverse impact on the three is very established in terms of its as Southeast Asian markets show promising the country’s current account. South Korea’s market reputation [Singapore]. Then you have growth potential. Honam Petrochemicals has indicated an inter- two others with geopolitical, financial, and Gina C. Fyffe, executive director of Integra est in investing $5 billion in a petrochemical infrastructure issues… Fundamentally these Petrochemicals envisages these nascent de- complex. are three different markets and I do not see velopments as having the potential to create Singapore’s immediate neighbourhood could there being a more integrated, level produc- a complementary arrangement in the region: become the hotbed of Southeast Asian chemi- tion-base amongst these countries in the near “We see Southeast Asia as a very interesting cals growth as competition from new produc- future. Singapore will continue to lead and place for the next 10 years. There is talk tion centers in the area could serve as the cata- flourish as these new markets look to increase about new crackers in Indonesia; Petronas’s lyst for an evolutionary change in the regional their production capacity,” comments Mark RAPID project is gearing up to be built just trade network. Gina C. Fyffe sees the “petro- Tinkler, commercial director of Fortrec. across the causeway; Singapore is still devel- chemical triangle” as having implications that Much like in the 1990’s Singapore’s leadership oping with the Jurong Island v2.0 project influence trade patterns: “It is difficult to see role is most apparent in the development of its and has the new LNG caverns. There will be yet exactly how the product flows will work high-value production, which puts the coun- a petrochemical triangle in Southeast Asia.” and the petrochemical triangle will all fit try’s industry in an advantageous position to In Johor, the Integrated Petro- together since the different plant announce- meet future demand. As Dr. Dai Yu, CEO of Ju- leum Complex is looking to attract 170 ments are just beginning to become public… rong Aromatics Corporation comments, “the billion ringgit ($55.84 billion) of capital With Singapore’s crackers and downstream demand for specialty chemicals is bound to by the time it commences initial operations industries, products will be moving back and increase as living standards rise across Asia.” in 2017. As of writing, the final investment forward between the countries. Some of Sin- This observation is in stark contrast with decision has yet to be made on the project, gapore’s exports will go to Indonesia, while the comparative development of the Asian but high pedigree companies have shown some of its imports might come in from Growth Triangle in the 1990s. Two decades interest. Anchoring the development will Malaysia. It will be a wonderful opportunity ago, high value goods made in Southeast Asia be a 300,000 bpd, $19.4 billion refinery for transportation companies and shipping.” were viewed principally as exports to Western of state-owned heavyweight Petronas. This This idea parallels the realities of the early markets. Today, market dynamics are shifting. world-scale complex, dubbed the Refinery 1990s when the synergies between the three Goods, including chemicals, are increas- and Petrochemical Integrated Development countries were discussed as the Asian Growth ingly produced in Asia for Asian consumers. (RAPID), intends to supply feedstock to Triangle. During this time, Singapore was able This means goods are staying closer to their downstream chemical manufacturers. In Jan- to leverage its position as a center of special- production base as Southeast Asian countries uary 2013, Qatar’s sovereign wealth fund, ization and expertise in areas such as electron- become more affluent. “[A] growing middle Qatar Holdings, announced it intends to in- ics. Low value, labor-intensive production was class in Indonesia, the Philippines and Viet- vest $5 billion in the petrochemicals com- located in cheaper destinations like Malaysia nam is driving greater movements of goods plex over the next several years as part of a and Indonesia, while higher value processes within ASEAN” comments Henning Malm- $10 billion investment in Malaysia’s econ- such as R&D, final assembly, and distribution gren, chief commercial officer of DAMCO omy. Additionally, Evonik has signed a letter occurred in Singapore. Therefore, although Asia Pacific.

18 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations FACTSHEET

Neighbouring Indonesia, the fourth largest lenges. Although its neighbours may begin to Chemical Production Predicted country in the world by population, provides catch up in capabilities, the regional market Growth (2012-2020) a particularly exciting growth opportunity for is sure to create plenty of room for growth. Source: American Chemistry Council companies operating in the region. Accord- Recent projections from IHS expect ASEAN’s COUNTRY CHANGE, 2012 -2020 ing to a March 2013 report from the Boston nominal gross domestic product to more than Consulting Group, the size of the Indonesian double by 2020 from $2 trillion to $4.7 tril- North America 25% middle class is projected to double to 141 lion. As the Asian middle class continues to United States 25% million people by 2020. Although Indone- swell, the regional demand for chemicals will Canada 27% sia is actively looking to expand its chemi- continue at a high growth rate. Mexico 28% cal manufacturing capacities, keeping up Although there is room for chemical pro- Latin America 33% with the skyrocketing emerging middle class duction hubs to complement one another, Brazil 35% will be nearly impossible. “Indonesia is the the creation of a petrochemical triangle puts Other 31% largest market and over the last few years it more pressure on Singapore to decisively Western Europe 24% has proven to be a stable environment with address potential investment impediments Emerging Europe 35% a huge domestic consumption base with a if it wants to retain its undisputed position Africa & Middle East 40% growing middle class - Indonesia has really as the chemical hub of Southeast Asia. With been the star of Asian markets. Yet, in terms the development of Jurong Island version 2.0 Asia Paci c 46% of production capability the chemical in- (JIv2.0), Singapore is distinguishing itself Japan 22% dustry in Indonesia is still very basic.” says from its neighbours by reaffirming itself as China 66% Irwanto Tjota, chief operating officer of Sin- the destination for integrated efficiencies, ease India 59% gapore-based distributor Planet Asia. of doing business, and advanced capabilities. Australia 23% As the region grows Singapore will have a Nevertheless, Singapore’s drawbacks, namely Korea 35% key role regardless if the ambitious develop- high operating costs, space limitations, and Singapore 35% ments in Malaysia and Indonesia happen as an expensive, tightening labor pool, are be- Other 44% scheduled (Petronas recently announced a coming more apparent as its neighbours be- delay to the RAPID project.) The execution come viable alternative investment destina- of these grand plans is beyond Singapore’s tions. The Lion City has overcome challenges control. What the city-state can control is fur- against conventional wisdom before and is ther defining its regional role, building on its vigorously engaged in tackling the present Average and Minimum strengths, and innovatively tackling its chal- challenges. • Manifacturing Wages in ASEAN

Source: PwC

Imports and Local AVERAGE MINIMUM WAGE COUNTRY WAGE ( USD/MONTH ) ( USD/MONTH ) Production in Asia Pacific

Source: BASF, IHS Global Outlook Cambodia 101 43 Indonesia 182 132 Laos 45 64

2012 Malaysia 666 N/A Other local producers 67% Myanmar N/A 17 Formosa Chemicals 3% Philippines 212 181 Imports 24% Singapore 1 639 N/A Sinopec / PetroChina 4% Thailand 263 79 Mitsubishi Chemicals 2% Vietnam 107 49

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 19 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Dato Andrew Ng

MANAGING DIRECTOR AND CEO CHEMSTATIONASIA

Could you introduce Dovechem, as well as business has never owned sizeable assets in You have said that your goal is to transform ChemStationAsia, the new company that you Singapore. It has always operated in other the company from a trading company into a are transitioning into? countries. Even when our Logistics Division service company. What are your tangible tar- We are a global company with a presence in was listed on SGX, its assets were in China – gets and goals in this process? seven countries. We operate in four divisions: Shanghai and Shenzhen. Secondly, our prod- 2020 will be a very important year. We plan distribution, manufacturing, logistics, and ucts are raw materials to our customers and to have a presence in ten or more countries storage terminals. The distribution business as such the bulk of our customers are not in and to generate a turnover in excess of US$1 is our largest division – it contributes almost Singapore. It was always in other countries billion. 80% of our $500 million turnover. as Singapore’s economic direction is not in Our team is the most important part. This manufacturing but rather services. Therefore, country has an aging problem. All of the very How has ChemStationAsia’s operational strat- it is good to set our HQ in Singapore as Sin- qualified and experienced people are retiring. egy changed to respond to these new players gapore provides great infrastructures to facili- Now I am searching for talent. I encourage in the market that come from a multinational tate an effective and efficient control. our more experienced employees to stay on distribution culture? Our level of commitment to this country has to mentor and train our younger employees This is an open market and anyone can be in not changed. We are proud of the fact that our so that we can develop internal talent and ex- this industry as it has multi layers of sub-in- volume has not been significantly reduced perience. dustries. However, I must say that this indus- over the past few years. Exports are strong, We may go public again with our Distribution try is mature and is increasingly challenging but the domestic market is shrinking – our Division, but I still say that this is the people’s in view of product & service differentiation customers are shifting production to other company – it is not just a family business. If and cost advantage. countries due to increased costs and the small the family gives the people more opportuni- size of the local market. ties to contribute ideas to this platform, the What are the advantages of being a Singa- It is also noted that the local Singaporean la- entire company will benefit. porean based company? bor market is also notoriously difficult to nav- Right now the whole world is experiencing a Singapore has first class infrastructure and a igate. Workers generally do not want jobs that difficult time in the chemicals market. We are very efficient container port. Of course, we involve the “Three D’s”: difficult, dirty, and writing a new book and I believe the key to a pay for it with some increased costs. We have dangerous. Even at a very low level, finding new success story lies in successfully redefin- kept our headquarters in Singapore because the right people is extremely important to ing the role of the chemical distributor. These the government has been very supportive. our business. are very motivating and very exciting times. • Jurong Island is another big focus. Jurong is quite a unique chemical hub because of its Some companies have expressed a desire to complete integration. Even the transfer of the create a regional association of distributors raw material feedstock goes from pipeline who feel that the current channels of com- to pipeline. A company like us, however, can munication are ineffective. Do you share this pick up some of the smaller volume. I also sentiment? see a lot of opportunities on Jurong that are Well, the commodity chemical industry is beyond the scope of just our distribution very fragmented and has a low entry barrier. business. The sizes of existing players vary greatly. It is therefore not an easy task to form an associ- ChemstationAsia has plenty of assets outside ation for commodity chemicals distributors. of Singapore – are you moving away from the If some companies have interest in forming a country? What factors have contributed to regional association, I would rather ask them this shift? to spend the time developing a commodity I must clarify here. CSA since the day it started chemical exchange instead.

20 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations

Global Business Reports FACTSHEET Industry Explorations

Electricity Tariffs for Industry in ASEAN Source: Various VIETNAM Transformer capacity below 6 kV: a. Off-peak hour 767 VND/kWh b. Peak hour 2,185 VND/kWh c. Normal Period 1,216 VND/kWh Transformer capacity from 6 kV to 22 kV: MYANMAR a. Off-peak hour 727 VND/kWh Flat Rate 50.00 Kyat/kWh b. Peak hour 2,119 VND/kWh c. Normal Period 1,164 VND/kWh Transformer capacity from 22 kV tounder 110 kV: LAOS a. Off-peak hour 710 VND/kWh Low Voltage System Non - Residential 0.4 kV: LAK 591/kWH b. Peak hour 2,049 VND/kWh Medium Voltage System 22kV: LAK 502/kWh c. Normal Hour1,128 VND/kWh Transformer 110 kV and higher: a. Off-peak hour 683 VND/kWh THAILAND b. Peak hour 1,970 VND/kWh > 69 KV: 2.61 THB/kWh (Peak) and 1.17 THB/kWh (Off Peak c. Normal hour 1,102 VND/kWh 22 – 33 KV: 2.69 THB/kWh (Peak) and 1.19 THB/kWh (Off Peak) < 22 KV: 2.84 THB/kWh (Peak) and 1.22 THB/kWh (Off Peak) CAMBODIA For small industrial customers: Tariff rate = average cost of total electricity purchased in previous month + 3.6 US Cents/kWh For medium industrial customers: Tariff rate = average cost of total electricity purchased in previous month + 2.8 US Cents/kWh For big industrial customers: Tariff rate = average cost of total electricity purchased in previous month + 2.4 US Cents/kWh For industrial Customer who is directly connected to MV: Tariff rate = average cost of total electricity purchased in previous month + 2.0 US Cents/kWh

BRUNEI TARIFF B MALAYSIA First 10 units x kVA x B$0.20 cent per unit Tariff D - Low Voltage Industrial Tariff (TNB) Next 100 units x kVA x B$0.07 cent per unit For Overall Monthly Consumption Next 100 units x kVA x B$0.06 cent per unit Between 0-200 kWh/month (For all kWh): 34.5 Cent/kWh Remaining units x B$0.05 cent per unit For Overall Monthly Consumption More Than 200 kWh/month (For all kWh_From 1kWh onwards): 37.7 Cent/kWh Tariff E1 - Medium Voltage General Industrial Tariff (TNB) SINGAPORE For each kilowatt of maximum demand per month: 25.3 RM/kW High Tension Small (HTS) Supplies For all kWh: 28.8 Cent/kWh c. Peak period: 23.56 ¢/kWh Tariff E2 - Medium Voltage Peak/Off-Peak Industrial Tariff (TNB) d. Off-peak period: 14.48 ¢/kWh For each kilowatt of maximum demand per month (peak period): 31.7 RM/kW High Tension Large (HTL) Supplies For all kWh (peak period): 30.4 Cent/kWh c. Peak period: 23.40 ¢/kWh For all kWh (off-peak period): 18.7 Cent/kWh d. Off-peak period: 14.47 ¢/kWh Tariff E3 - High Voltage Peak/Off-Peak Industrial Tariff (TNB) Extra High Tension (EHT) Supplies For each kilowatt of maximum demand per month (peak period): 30.4 RM/kW c. Peak period: 22.33 ¢/kWh INDONESIA For all kWh (peak period): 28.8 Cent/kWh d. Off-peak period: 14.29 ¢/kWh < 450 VA: Rp. 485/kWh For all kWh (off-peak period): 17.3 Cent/kWh 900 VA: Rp. 600/kWh 1,300 VA: Rp. 765/kWh 2,200 VA: Rp. 790/kWh 3,500 VA – 14 kVA: Rp. 915/kWh

Chemical Production by Region (Excluding Pharmaceuticals)

Source: BASF

2010 2012 2020

TOTAL TOTAL TOTAL 2.2 2.4 3.2 USD TRILLION USD TRILLION USD TRILLION

Asia Paci c 40% Asia Paci c 42% Asia Paci c 50% North America 23% North America 22% North America 19% Europe 27% Europe 25% Europe 21% Rest of World 10% Rest of World 11% Rest of World 10%

22 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH

Electricity Tariffs for Industry in ASEAN Source: Various Guy VIETNAM Transformer capacity below 6 kV: a. Off-peak hour 767 VND/kWh b. Peak hour 2,185 VND/kWh c. Normal Period 1,216 VND/kWh Bessent Transformer capacity from 6 kV to 22 kV: MYANMAR a. Off-peak hour 727 VND/kWh Flat Rate 50.00 Kyat/kWh b. Peak hour 2,119 VND/kWh c. Normal Period 1,164 VND/kWh Transformer capacity from 22 kV tounder 110 kV: LAOS a. Off-peak hour 710 VND/kWh Low Voltage System Non - Residential 0.4 kV: LAK 591/kWH b. Peak hour 2,049 VND/kWh MANAGING DIRECTOR Medium Voltage System 22kV: LAK 502/kWh c. Normal Hour1,128 VND/kWh Transformer 110 kV and higher: SASOL CHEMICALS PACIFIC a. Off-peak hour 683 VND/kWh THAILAND b. Peak hour 1,970 VND/kWh > 69 KV: 2.61 THB/kWh (Peak) and 1.17 THB/kWh (Off Peak c. Normal hour 1,102 VND/kWh 22 – 33 KV: 2.69 THB/kWh (Peak) and 1.19 THB/kWh (Off Peak) < 22 KV: 2.84 THB/kWh (Peak) and 1.22 THB/kWh (Off Peak) CAMBODIA For small industrial customers: Tariff rate = average cost of total electricity purchased in previous month + 3.6 US Cents/kWh For medium industrial customers: Tariff rate = average cost of total electricity purchased in You have stated Asia will comprise 35% of partners to sell our products in these coun- Sasol is divesting its Iranian polymers facili- previous month + 2.8 US Cents/kWh For big industrial customers: chemical demand by 2020. How does Singa- tries. We are fully compliant and this is not ties, so polymer volumes coming into Asia Tariff rate = average cost of total electricity purchased in previous month + 2.4 US Cents/kWh For industrial Customer who is directly connected to MV: pore play into Sasol’s growth strategy? a matter of washing our hands of the prob- will decrease. However Sasol is currently in Tariff rate = average cost of total electricity purchased in previous month + 2.0 US Cents/kWh Most of our volumes today go to north Asia lems; our partners are experts in the locale and the FEED stage for a world-scale ethane cracker BRUNEI – Japan, Korea and China. With GDP growth know how to manage individual countries. in Louisiana in the U.S. Once this comes on TARIFF B MALAYSIA First 10 units x kVA x B$0.20 cent per unit projections, we expect this to continue, al- Rather than using multinational distributors stream, we will be able to supply polymers Tariff D - Low Voltage Industrial Tariff (TNB) Next 100 units x kVA x B$0.07 cent per unit For Overall Monthly Consumption Next 100 units x kVA x B$0.06 cent per unit though India is rising fast albeit from a low as we would in Europe, here we have tended to the Asian market. We hope there will be a Between 0-200 kWh/month (For all kWh): 34.5 Cent/kWh Remaining units x B$0.05 cent per unit For Overall Monthly Consumption More base. Singapore, however, still wins on ease to partner with local companies. reduction in the ” anti-foreigner” sentiment Than 200 kWh/month (For all kWh_From 1kWh onwards): 37.7 Cent/kWh Tariff E1 - Medium Voltage General Industrial Tariff (TNB) SINGAPORE of doing business; the only viable competitor in Singapore, and support the approach of the For each kilowatt of maximum demand per month: 25.3 RM/kW High Tension Small (HTS) Supplies is Hong Kong. For some companies it would You are also in charge of wax operations. Can government to balance open migration with For all kWh: 28.8 Cent/kWh c. Peak period: 23.56 ¢/kWh Tariff E2 - Medium Voltage Peak/Off-Peak Industrial Tariff (TNB) d. Off-peak period: 14.48 ¢/kWh make sense, but I would at this stage argue you give us an overview of this business in the sentiment of the local Singaporean popu- For each kilowatt of maximum demand per month (peak period): 31.7 RM/kW High Tension Large (HTL) Supplies For all kWh (peak period): 30.4 Cent/kWh c. Peak period: 23.40 ¢/kWh against putting Asian headquarters in China, the region? lation. Sasol Chemicals Pacific expects to keep For all kWh (off-peak period): 18.7 Cent/kWh d. Off-peak period: 14.47 ¢/kWh Tariff E3 - High Voltage Peak/Off-Peak Industrial Tariff (TNB) Extra High Tension (EHT) Supplies for various reasons: people, tax, risk of change Sasol Wax also works predominantly with dis- growing on the back of the Singapore Govern- For each kilowatt of maximum demand per month (peak period): 30.4 RM/kW c. Peak period: 22.33 ¢/kWh INDONESIA For all kWh (peak period): 28.8 Cent/kWh d. Off-peak period: 14.29 ¢/kWh < 450 VA: Rp. 485/kWh to policies, and the risk of becoming too Chi- tributors in this region. However, as the prod- ment’s proactive policies, but we are admit- For all kWh (off-peak period): 17.3 Cent/kWh 900 VA: Rp. 600/kWh 1,300 VA: Rp. 765/kWh na-centric. I like Singapore because, in addi- uct is more of a specialty product, it is handled tedly concerned at the regulations regarding 2,200 VA: Rp. 790/kWh 3,500 VA – 14 kVA: Rp. 915/kWh tion to its legal framework and transparency, slightly differently. We focus more on appli- quotas on foreign talent. Fortunately we cur- the country gives me a broader scope of the cation and the technical side of the product rently face few problems on the availability of region – it is too small a place to fixate us. than we do with solvents, where volumes and talent and have fairly low staff turnover. • Hong Kong’s closeness to China can influence efficient supply chains count and the scope strategy; Singapore’s neutrality gives it an for product application is fairly limited. Wax advantage. I, myself, became too focused on presents us with a good opportunity, simply Chemical Production by Region China after spending a decade there. When I because of the Asia-Pacific dynamics: a large (Excluding Pharmaceuticals) moved here I suddenly noticed neighbouring population with growing disposable income Source: BASF Indonesia with its 240 million people, plus and changing buying habits. We have no wax Vietnam, Myanmar, and India. production in Southeast Asia, due to feedstock price differentials, which does mean we are Many Asian markets lack the infrastructure for negatively impacted by import duties, except ISOtanks. How do you adapt your business in Singapore and Malaysia. model to deal with local factors like this? 2010 2012 2020 Singapore is one of our three global shipping What is your vision for the future of your TOTAL TOTAL TOTAL hubs, so for bulk shipments there are no prob- Asia-Pacific operation? 2.2 2.4 3.2 USD TRILLION USD TRILLION USD TRILLION lems. Storage occasionally becomes tight, but Sasol Wax is currently undergoing a billion the EBD is smart enough to notice problems dollar expansion in South Africa; much of the and tries to anticipate problems before they new capacity will reach Asia, where the de- occur by planning ahead and addressing the mand is strong. Globally, we are one of only supply situation. The surrounding countries, two producers of high grade Fischer-Tropsch with their different degrees of maturity, have wax product, for which consumption may questionable infrastructure: there are few is- grow by double the GDP rate per year in the Asia Paci c 40% Asia Paci c 42% Asia Paci c 50% sues in Malaysia and Thailand, while Vietnam Asia-Pacific region. Our other products will and Myanmar are toward the bottom of the be capacity-constrained until new capacity North America 23% North America 22% North America 19% scale. From a business perspective the main is built. This is a bit of a problem in a high- Europe 27% Europe 25% Europe 21% problems in Southeast Asia relate to credit risk, growth region, so we are focusing on margins Rest of World 10% Rest of World 11% Rest of World 10% safety and compliance. We generally employ rather than volumes. As publicly announced,

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INTERVIEW WITH Mark Tinkler

COMMERCIAL DIRECTOR FORTREC

Fortrec has a diverse service offering ranging number one destination for commodity trad- from trading to plant optimization. Could ing. Many reasons make Singapore attractive; you provide a brief overview of Fortrec for from tax incentives to strong intellectual our readers? property rights to an aggressive banking sec- First and foremost Fortrec is a home-grown tor made up of both Asian and Western banks. Singaporean company. We have been in the The aggressive nature of the banking sector is business for 12 years now and have 11 offices not just limited to the Western banks either; worldwide. We are expanding around our many of the Asian banks have increased their hub of Sıngapore with our offices being pre- service offerings for trade financing. dominantly in Asia , but we also have offices in Europe and South Africa. We are primarily As Singapore’s neighbours Malaysia and In- a trading company, but our approach is a bit donesia are looking to become more engaged different as our philosophy centers around in chemical manufacturing, what are the im- partners, not products. Our philosophy cen- plications for Singapore? ters around the idea that when we bring to- If you take these three countries [Malaysia, gether the various skills and expertise from Indonesia, and Singapore], one element of two different companies both sides will in- the three is very established in terms of its evitably become stronger and benefit. When market reputation [Singapore]. Then you have you have this understanding, the product is two others with geopolitical, financial, and almost secondary to this relationship. infrastructure issues. Indonesia is a challenge in terms of distribution across the Islands What are some of the advantages of being with its population of 250 million and huge located in Singapore? How would you char- demand for imports of gasoline and other fu- acterize the local trading environment in the els. From a trader’s point of view, we would Singaporean market? not like to see every market on the same level The advantages of being in Singapore come because we are looking to take advantage of through various schemes and support from differences in logistics, risks and infrastruc- the government through tax incentives and ture. Fundamentally these are three different government bodies like International Enter- markets and I do not see there being a more prise Singapore (IES). IES provides resources integrated, level production-base amongst through trade delegations etc. to promote Sin- these countries in the near future. Singapore gaporean companies in over twenty countries will continue to lead and flourish as these abroad. For Fortrec we could wait for busi- new markets look to increase their produc- ness to come to us because Singapore is such tion capacity. a hub, but what we look at, with the support of IES, is sustaining our growth through cre- From your perspective as a trader, how does ating business abroad. Whether this sustain- the availability of shale gas in the United ability is achieved through trading, supply States impact Asian markets? and distribution, acquiring assets or finance, There are going to be pros and cons [to shale it is essential for the company’s future to have gas in the United States] and we will still have a global basis. to see how things develop. Many of the Mid- Competition is a natural part of the business west producers in the United States are gearing and Singapore thrives on this making it the themselves towards China. China is projected

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to meet only 50% of its demand through do- Could you provide a brief overview of your global approach to the business with a spe- mestic production by 2020, so there is still a venture in China? cific focus on the southern hemisphere. We huge supply base present in China that the US Fortrec has a joint-venture with a local part- are building a storage facility in Malaysia for can service. Yet, over the next five to 10 years, ner, Hualun, at an aromatic solvents plant petrochemical distribution into the region, China is looking towards coal to olefins pro- in Jiangsu, China. The capacity at the plant which may have some opportunities to syn- duction to become more self-sufficient in this is currently 425,000 mt/y and services the ergize with the Singaporean market. In Viet- area and there are also significant reserves of domestic market. However, we have a goal nam, we are working with a refinery that pro- shale gas within China, although as yet, it is for the plant to export product as well. A top duces an aromatic rich, high-grade reformate not clear how practical or cost effective it will priority for us is finding the heavy aromatic product. Our column, next to their plant, will be to exploit those reserves. Another issue is feedstock for this plant. As plants upgrade extract the aromatics for use in our own sol- that, in Asia, butadiene demand is very big; their production technology the available vent production facility in China. In Sri Lanka, the growing market for rubber in car tires is feedstock we need reduces in volume. We are we are building a storage facility based on fueling this demand but shale derived ethane looking to become more involved in other infrastructure left from British installments is not a good producer of butadiene (C4) sustainable, long-term, asset-based projects used in World War II. Sri Lanka is an interest- compared to traditional naphtha based feed- to compensate for this reduction. ing opportunity given its unique geographic stock. As such Asian refineries may shift more location as a crossover between Asia, Africa, towards higher value butadiene, whereas the Besides optimizing your plant in China, what and the Middle East. From a cost optimiza- refineries in the United States are going to be do you see as your key priorities for Fortrec tion point of view, we believe Sri Lanka is the focused on other polymers derived from gas over the next three to five years? ideal location to bring bulk products from the ethane [to potentially export to Asia]. In addi- We want to continue our trading activities, Middle East and break them up into smaller tion, looking at this as specialists in aromatics, but we recognize that needs to involve some parcels for distribution in Southeast Asia such we do not see such an impact from shale gas more asset-based projects abroad in order to as Vietnam and Bangladesh. We are also look- as it not a viable alternative to Naphtha based trade around and sustain our business. We are ing into other projects in places such as Saudi feedstocks. a homegrown company, but we also have a Arabia and Madagascar. •

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INTERVIEW WITH Gina C. Fyffe

EXECUTIVE DIRECTOR INTEGRA PETROCHEMICALS PTE. LTD

How has Integra transitioned from a Euro- We see Southeast Asia as a very interesting place pean-based to a Singaporean-based company? for the next 10 years. There is talk about new When Integra was founded in 1989 it was a crackers in Indonesia; Petronas’s RAPID project European based company, but we were never is gearing up to be built just across the cause- confined to one region. Integra opened its first way; Singapore is still developing with the the US office around 1990, having set up opera- Jurong 2.0 project and has the new LNG cav- tions in Bejing and Seoul just before that. How- erns. There will be a petrochemical triangle in ever, many of our core beliefs – staff retention Southeast Asia. Integra is ideally situated here and ongoing training and staff welfare, as well to benefit from it and share that knowledge as local philanthropy – have remained quite and expertise with customers in other parts of Eurocentric. the world. 15 or 20 years ago the product flow in the Southeast Asian market became much more What do you regard as Singapore’s role in this active and interesting, from a trading point of petrochemical triangle, and what are its impli- view, with crackers built in Thailand and Singa- cations for the future? pore, petrochemical developments in Malaysia It is difficult to see yet exactly how the product and imports of petrochemical gases in the flows will work and the petrochemical triangle Philippines following one after the other. South will all fit together since the different plant an- East Asia as a region became too big to be nouncements are just beginning to come out managed from Europe or China and Korea. A to the public. The RAPID project and the In- regional hub in Singapore represented the op- donesian developments are both in their very portunity for further growth in Southeast Asia early stages. Singapore, however, has its LNG – you have to be here to feel it and engage with terminal and storage, and a great facility for the clients every day in their own time zones. trade and taking opportunities. It also has an At the same time we were working toward a good people skill sets and a very proactive and more efficient way of managing our business, easy to access support from the government and liked the idea of a global hub where we bodies. People have been attracted across the could centralize all paperwork, financing and border to work in Singapore, and now there is accounting and general back office operations, the possibility they will be re-exported to head leaving the other offices free to concentrate on up and join the new projects. There will be a operations and marketing. We decided there- transfer of knowledge and increases in regional fore to move everything to Singapore. employment opportunities and trade. With It has been a great success for us and we now Singapore’s crackers and downstream indus- see other companies doing the same thing. tries, product will be moving back and forward between the countries. Some of Singapore’s ex- Asia represents approximately 40% of your ports will go to Indonesia, while some of its sales. How has it grown in importance, and imports might come in from Malaysia. It will how do you envisage this changing in future? be wonderful opportunity for transportation Integra has been both a local and global com- companies and shipping. pany for a very long time; and it somehow Nothing as exciting as this petrochemical tri- seems right that we decided to choose a glob- angle has been seen since the Korean develop- ally focused city like Singapore as our head- ments 20-plus years ago. Eventually countries quarters. like Vietnam and the Philippines will enter the

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game. It will be interesting to see what Thai- try should be able to reindustrialize. Some con- some small, private European and Middle East- land does – it has an enormous amount of ex- tracts have already been signed for US propane, ern firms interested in Asia. People have been perience, and I expect to see it partnering with and these are just the tip of the iceberg. Shale too quick to write Europe off, but to survive Malaysia or Indonesia and moving outside of gas is going to be a game-changer in many its businesses must look to markets in the rest its borders into the surrounding countries, and different ways, although no-one understands of the world; if so, Integra can be a long term perhaps moving toward more specialties as exactly how it will influence product flows. It partner for some, either through joint ven- well as refining and bulk petrochemicals. Ko- will make the USA a raw material exporter as tures, long term contract or acquisitions. We rea, Japan and Taiwan are very focused on the well as a much more competitive region for are looking more and more into the logistics north today, but I expect them to move south plastics and related product production. Lo- and supply hub part of our business, because too. The Koreans are very creative and inven- gistics is the biggest concern. The US is not we are fascinated by shipping and how it pulls tive, so it will be interesting to see how they known for having the best logistical network all the trading and marketing opportunities to- take advantage of developments, having already in or out, but it is now considering new pipe- gether and we already do a lot of that type of purchased some plants in the triangle lines, terminals and facilities. business and see a big potential to do more.

With the shale gas developments in the US, Integra prioritizes long term partnerships over What would you like to accomplish for Integra could supply chains become more localized, short term opportunities. How are you posi- in the next three to five years? and what are the consequences for Asia? tioning your business in Southeast Asia? I would like to see us develop further in the The US has a once-in-a-50-or-100-year energy Integra has an interesting skill set and is present Middle East and India and increase our pres- opportunity – it is really exciting. If the gov- in all the world’s petrochemical regions. We are ence in the US and Canada. We are looking at ernment and population are willing, the coun- looking now and building partnerships with strengthening our supply chain facility. •

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Enhancing Singapore’s Regional Identity

Enhancing Singapore’s Regional Identity

In the post independence era, Singapore has pines, have warned they may not be ready has grown its chemicals distribution busi- successfully leveraged its geographic position for AFTA by 2015, the plan appears to be ness both through organic means and ac- and crystallized its position as a center of moving ahead near schedule. The formation quisitions. “I believe such a strategy can only global trade. However, as supply chains con- of AFTA will help increase pan-Asian trade be accomplished in Asia, given the current stantly evolve and new opportunities emerge, as countries such as China, India, New Zea- economic climates in other markets such as Singapore must continue leveraging its posi- land, Japan, South Korea and Australia have all Europe,” comments Fitz Graf von der Schu- tion in order to drive economic growth. In expressed interest in signing FTAs with the lenburg. 2010 the city-state was dealt a symbolic blow association. “I am not sure if ASEAN will be German-based global distribution heavy- as Shanghai eclipsed Singapore as the world’s fully integrated by the 2015 deadline, yet the weight Brenntag was largely absent during busiest port by cargo tonnage. Nevertheless, targets are established and the road map is the early 2000s as Asia became a focal point Singapore remains the world’s busiest port set, which gives me confidence we are mov- for the global chemicals industry. Since 2008 in terms of transshipments. As Southeast ing in the right direction,” says Graff. the company has changed tack and aggres- Asia experiences rapid economic growth Gina Fyffe of Integra envisages this coordina- sively expanded in Asia Pacific. After its ac- and increased affluence, Singapore will be tion as an unparalleled basis for new linkages quisition of Rhodia, the company made its an integral nerve center for global and local between the chemical industries of Asian na- presence felt through acquiring the Danish distribution, trading and logistics companies tions. It is still too early to see whether or East Asiatic Company in 2010. Currently, exploiting these markets. not these linkages come to full fruition, yet Brenntag has 44 logistics sites in the Asia As a founding member of the 10-nation the potential is certainly apparent and the Pacific region and recently completed a new Association of Southeast Asian Nations opportunities for logistics, distribution, and regional operations hub in Singapore as a (ASEAN), Singapore has been a supporter of trading firms are vast: “Nothing as exciting new base of operations. Despite only being increased regional integration. In 2007, the as this petrochemical triangle has been seen present in Asia for five years, the company member nations created a blueprint to form since the Korean developments 20 plus years achieved €750 million ($975 million) in the ASEAN Economic Community, AEC, with ago. Eventually countries like Vietnam and turnover in Asia Pacific last year. “We are ex- the goal of creating a regional free trade area the Philippines will enter the game. It will periencing healthy growth throughout the by 2015. The Asian Free Trade Area (AFTA) be interesting to see what Thailand does – it region, and we are currently in the process of will definitely be a boon to the logistics and has an enormous amount of experience, and integrating and consolidating our new net- distribution companies in the region that al- I expect to see it partnering with Malaysia or works,” explains Henri Nejade, president and ready are seeing increased regional activity as Indonesia and moving outside of its borders CEO of Brenntag Asia Pacific. economies continue to grow at some of the into the surrounding countries, and perhaps In the wake of the company’s IPO in 2010, fastest paces in the world. moving toward more specialties as well as re- Brenntag sees expanding its already impres- Fritz Graf von der Schulenburg, executive fining and bulk petrochemicals. Korea, Japan sive footprint in Asia as key to the company’s vice chairman of Jebsen & Jessen, sees the and Taiwan are very focused on the north continued success globally. “For the future, relative scale of Southeast Asia’s growth as today, but I expect them to move south too. we are actively seeking full product lines for an immense opportunity as economic inte- The Koreans are very creative and inventive, distribution to our existing customers in the gration occurs: “With a population of over so it will be interesting to see how they take region. Part of our strategy since becoming 600 million people and sustained regional advantage of developments, having already public is to expand our geographical pres- GDP growth of five to seven percent per year, purchased some plants in the triangle.” ence. This approach involves matching the ASEAN is on the way to becoming the largest In this light, Jebsen and Jessen, a Singapore- appropriate supply to better suit emerging integrated market in the world. We have an an-based diversified business group, has set markets, whose needs are quite distinct from intra-trade volume within Asia of $2.9 tril- ambitious targets for growth. In 2010, the one another,” says Nejade. lion, which is larger than the total exports in group launched its Double in Five Strategy As Asian markets continue to show sustained the European Union today.” to double its net profits before taxes in five economic growth, companies will use Sin- Although some countries, such as the Philip- years. As part of this strategy, the company gapore as a strategic base. Henning Malm-

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gren, chief commercial officer of DAMCO based on its decision-making capabilities and “The Singapore government is always look- Asia Pacific, believes Singapore’s role as an less so on its production capacity: “Singa- ing at ways to improve the infrastructure and executive hub will not be compromised pore’s economic direction is not in manu- transportation network, be it airports, road- even as production capacity grows in other facturing but rather services. Therefore, it is ways or ports.” markets: “Southeast Asia is the region in good to set our headquarters in Singapore The arrival of Singapore’s export-focused which DAMCO sees great potential for our as Singapore provides great infrastructures chemicals industry over the last three decades clients; a growing middle class in Indone- to facilitate an effective and efficient control. has lead to a shifting distribution landscape sia, the Philippines and Vietnam is driving Our level of commitment to this country has within the domestic market. Nicholas Lim, greater movements of goods within ASEAN. not changed. Exports are strong, but the do- managing director of locally-based Unilite In the context of chemicals, production may mestic market is shrinking – our customers explains the shift in the industry since his be moving to China, but decision-making are shifting production to other countries company’s founding 35 years ago: “Sin- power for the region remains in Singapore.” due to increased costs and the small size of gapore was what I would consider a small, DAMCO, a subsidiary of shipping giant AP the local market.” more traditional chemicals manufacturing Moller-MAERSK, sees its Singapore-based Singapore has not grown into a world-class market that one would expect to find in a control towers as a key for the company’s logistics, distribution, and trading hub developing country. At this time the govern- operations in Southeast Asia. These control through geographic default. Like most as- ment was encouraging smaller industrial de- towers centralize information and allow pects that give the country high rankings in velopments with a concentration on sectors customers to control shipments and specific business environment surveys, Singapore’s such as paints, coatings and inks. However, goods. "A supply chain should not be a nec- infrastructure and import/export regulations over the last decade the government has fo- essary evil in doing business, but a strategic are second to none. In May 2013, Singa- cused on making Singapore a petrochemicals weapon that our clients can use to beat the pore’s port won “Best Seaport in Asia” at the hub for high value products. Due to cost in- competition and improve their service offer- Asian Freight and Supply Chain Awards (AF- creases as the country developed, especially ing to the end-customer,” says Malmgren. SCA) for an unprecedented 25th time whilst in land costs, the smaller manufacturing Along the same lines, Dato Andrew Ng, man- Changi International Airport was named the companies are being phased out. Thus trad- aging director and CEO of ChemstationAsia best airport in the world by World Airport ing companies who had begun supplying (formerly known as Dovechem) believes Sin- Awards. Richard Strollo, managing director to more traditional industries have had to gapore’s reputation is becoming increasingly for South Asia at BDP International remarks: evolve accordingly to the market in terms of 31

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INTERVIEW WITH INTERVIEW WITH Nicholas Lim

MANAGING DIRECTOR UNILITE CHEMICALS

Could you provide us with a brief introduc- mand for distributors and logistics compa- attractive market. Singapore is getting ex- tion to Unilite Chemicals? nies to source and transport a larger array of pensive as a manufacturing base. If Singapore Unilite is a Singapore-based distribution products. and Malaysia can integrate into a common company that has been on the local market For Unilite, we are primarily working with market, then we may see a restructuring of for 35 years. Founded by my father, we are manufacturers, who do not find an economy manufacturing bases along this [rail] corri- a family company. We mainly represent mid- of scale to outsource their logistics. Many dor. The huge industries may still locate in sized, overseas principals, primarily from the prefer the flexibility that Unilite can provide the major cities, but the auxiliary services United States and Japan through our three di- over storage, sourcing and distribution. may be located outside. We have to be ready visions: food, industrial, and water. We con- when this happens. sidered Unilite a semi-specialty chemicals Singapore is a major hub for multinational Unfortunately we see a continued decrease in distributor to niche markets that fall between chemicals companies, however what do you traditional chemicals manufacturing activity bulk commodity chemicals and more techni- see as the role of SMEs in Singapore and what here in Singapore, thus we have to continue cally oriented specialty chemicals. Given our is the key for Unilite to compete as a SME? to look at new industries or manufactur- market, our customers demand high quality When Unilite entered the market 35 years ers in order to fuel any domestic growth. goods and a certain degree of expertise in ago, Singapore was what I would consider Many of our local competitors have had to product knowledge compared to a commod- a small, more traditional chemicals manu- exit the market because they were unable to ity distributor. facturing market that one would expect to adapt quickly enough to the changing envi- As a locally based company, approximately find in a developing country. At this time ronment. We are looking to find avenues for 60% of our turnover remains in the Singa- the government was encouraging smaller diversification and we have to channel our porean market, with 40% of our turnover industrial developments with a concentra- profits towards new businesses or a manu- coming from exports. We are a smaller, tion on sectors such as paints, coatings, and facturing partnership in order to stay com- nimble company compared to many of the inks. However, over the last decade the gov- petitive. As some of our larger competitors multinationals in the industry. In distribu- ernment has focused on making Singapore a have become more integrated, we are look- tion, this is very critical because we can make petrochemicals hub for high value products. ing at them to find new ways to improve our decisions on prices quickly and have more Due to cost increases as the country devel- capabilities while retaining the small, nimble leeway in setting price than a large distribu- oped, especially in land costs, the smaller nature of the company. • tor whose prices are set by corporate head- manufacturing companies are being phased quarters. out. Thus trading companies who had begun supplying to more traditional industries have Some of the manufacturers we have seen have had to evolve accordingly to the market in made it an objective to integrate their distri- terms of their product offerings. Thus, the bution networks as a way to cut costs. Do you ability to adapt and look for new products or think this a broader trend in the industry and new principals has become part of our ethos what are its implications? as a company because we have had to evolve This is a trend that is more prevalent amongst with the nature of the industry in Singapore. larger players, such as the petrochemical gi- Over the last 35 years I can say that our prod- ants on Jurong Island. These companies do uct mix has changed quite a lot. not necessarily want to create their own logistics and distribution departments in What are some of your near term objectives? house, rather they are looking to consolidate We have a warehouse and office in Malaysia, and streamline their networks. This means which we see as the key to our growth po- they want to outsource to fewer distributors tential. The planned high-speed rail link be- and logistics companies. Thus, there is de- tween Singapore and Malaysia makes it an

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29 their product offerings.” “We have seen in Europe, North America and South Unilite has established an office in Malaysia in order to take ad- America a consolidation of the chemicals distribution vantage of increased synergies between the two countries. “The industry. This is being driven by the regulatory planned high-speed rail link between Singapore and Malaysia requirements and, to a lesser extent, consolidation in chemicals manufacturing. The cost to adhere to makes it an attractive market. Singapore is getting expensive as a regulatory demands are not small and are going to manufacturing base. If Singapore and Malaysia can integrate into become more difficult as programs like REACH are a common market, then we may see a restructuring of manufac- used as a global model. We believe this trend will be turing bases along this [rail] corridor. The huge industries may a game-changer in Asia, as rising regulatory costs still be located in the major cities but the auxiliary services may will cause consolidation here as well. With that said, be located outside. We have to be ready when this happens,” says Connell Brothers is well positioned to manage these regulatory changes given our financial strength and Unilte’s managing director Nicholas Lim. experience in North America.” Singapore’s EPCs and distributors are generally in agreement that business is picking up in Singapore compared to a couple of - E. Scott Graddy, Vice President, Connell Bros. years ago, yet the degree of excitement in the local market varies. For many local companies, regional growth prospects for the medium term are best beyond Singapore’s shores. “Quite frankly, many big industrial projects in Singapore are now coming to “A decade ago, expanding Katoen Natie outside Europe was considered complimentary to our Europe an end, and companies are expanding more in other countries. operations. Now it is a necessity. Our growth is outside Business in Singapore looks very tough: any new projects will of Europe as the market consolidates as a result of the face high costs, and new entrants into the industry may not re- crisis. The United States, Latin America, Singapore alize quite how competitive it has become” says Alvin Leong, and Thailand represent a new wave of focus for us. In managing director of W H Marathon. Singapore and Thailand we have more than doubled Robert Dompeling of PEC echoes Leong’s sentiment on invest- our operations in the last three years.” ment in Singapore and its impact on the construction sector: “I - Koen Cardon, CEO, Katoen Natie Singapore think capital will shift from Singapore to Malaysia and Indonesia. The multinationals will continue to invest here [Singapore] in downstream and specialty chemicals, but not refineries. Singa- pore is a small country and you have to wonder how much more “We are orienting ourselves towards Asia everyday. land can be made available for this industry.” We started small in Singapore and have expanded Singaporean-based companies are well positioned to take advan- our network. Today, Asia represents about 30% of Eurotainer’s global business... Singapore is an tage of this growth abroad. As multinational operators expand important part of our business as approximately in new markets, they will look for companies they are familiar 1/3 of our Asia business comes out of Singapore with and with whom they have built relationships. Singaporean representing approximately 2000 tanks.” service providers have evolved to the standards multinational companies demand over decades of experience. - Claus Ringgaard, General Manager Asia Pacific, Credit not only belongs to multinational corporations, but also to Eurotainer Asia the Singaporean government. During his storied tenure as prime minister, Lee Kwan Yew successfully created a bureaucratic cul- ture that is both incorruptible and highly competent. This en- “The gas shipping industry in Asia will grow on the sures corners are not cut and the highest regulatory standards VLGC (very large gas carrier) side because of the are met in a timely fashion. According to Transparency Interna- developments of shale gas exports in the United tional’s Corruption Perception Index 2012, Singapore ranks as States. Shipping LNG from the United States and the fifth least corrupt country in the world. Only two other coun- from multimillion mt exports from the Middle East will result in an increased reliance on larger ships being tries in ASEAN, Brunei (46th) and Malaysia (51st), rank in the used. Furthermore, 15 years ago there were only top 100. As Singaporean companies expand regionally, they have two deepwater ports in China, now large ships can the obligation to export their high standards to markets where go virtually anywhere in Asia. The 10,000 DWT to corruption and poor regulatory regimes remain prevalent issues. 12,000 DWT ships used to dominate the Middle East Wilson K. L. Tan, chairman and CEO of locally based distributor to Southeast Asia route and the 10,000 DWT ships Planet Asia, believes that the image Singaporean companies have went from Southeast Asia to northern Asia, now you developed has helped his company secure business abroad and have the 20,000 DWT ships doing these routes. The volume, size and quality of ships have all increased. is an utmost principle that Singapore must diligently maintain: We have also seen more ship owners across the “Brought up in an environment of a progressive and ethical man- shipping value chain from Japan, Korea, Australia, and agement style of our government, Singaporean companies like India come to Singapore due to a targeted, favorable Planet Asia take a no nonsense approach to rules and regulation tax regime.” both at home and abroad. In this day and age people use the term integrity in a vey loose manner, but integrity is becoming a - Mark Mirosevic-Sorgo, Managing Director, Braemar Quincannon Singapore

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 31 Global Business Reports Industry Explorations

very rare commodity. People tend to want to For multinational companies, Singapore’s take shortcuts to get ahead, but Singaporean expertise and business environment offers companies have been successful in uphold- the strongest base in Asia. Eugene Leong ing their integrity abroad. For this reason, of the EDB comments: “As markets in Asia we notice that many countries do accord become increasingly important for compa- recognition of the Singapore branding and nies around the world, we see Singapore as reputation for reliability and professionalism, a Home for Business, a place from which making it much easier for us to close deals.” companies can orchestrate their activities Tiong Woon, a “local boy” specializing in within the region, both in terms of strategic heavy lift operations is one such company planning and execution.” that has symbiotically developed its standards When compared to Hong Kong or Shanghai, over the last 35 years with the help and as- many executives prefer having a regional sistance of multinationals and is now devel- headquarters or complementary base of op- oping its market both at home and abroad. erations in Singapore to being solely based “The impetus behind this decision [to ex- in China. Many believe APAC headquarters pand the company’s offering in 2005] really based in China tend to become too Sino-fo- speaks to how Singapore has developed its cused and fail to recognize the region’s vast worldwide brand. For example, when Tiong diversity and potential. As China’s rapid, Woon began its operations, safety regimes double-digit GDP growth appears to have were almost non-existent until the Ministry cooled off, ASEAN markets are viewed as of Manpower and the multinational refining increasingly important growth markets by companies really took steps to rapidly im- corporate boards. Thus, those companies prove the safety culture,” says Michael Ang, that have taken a less China-centric approach chief operating officer of Tiong Woon. stand to gain. For Tiong Woon, multinational companies South Africa’s Sasol is an example of that has not only brought standards with them, taken the approach of basing its Asia Pacific but also brought new business strategies. operations out of Singapore; despite the Michael Ang credits emulating these compa- fact northern Asian countries (Japan, China, nies as the key to Tiong Woon’s growth from and Korea) are their largest markets in the a crane rental company to a fully integrated region. Guy Bessant, managing director of heavy lift specialist with revenues over S$150 Sasol Chemicals Pacific, explains: “Singa- million ($120 million). “During the same pore… still wins on ease of doing business; time as multinational companies invested the only viable competitor is Hong Kong. For and brought new standards with them, we some companies it would make sense, but looked at what the multinational crane com- I would at this stage argue against putting panies were doing and saw them winning Asian headquarters in China, for various rea- some additional businesses through lead sons: people, tax, risk of change to policies, engineering. As a result, we moved into the and the risk of becoming too China-centric. engineering field as well in order to integrate I like Singapore because, in addition to its le- ourselves with what our customers need and gal framework and transparency, the country add value to our company,” says Ang. gives me a broader scope of the region – it The other component Singaporean compa- is too small a place to fixate us. Hong Kong’s nies can export to countries with expand- closeness to China can influence strategy; ing petrochemical industries is their know- Singapore’s neutrality gives it an advantage. how. Although, attracting and retaining Sumitomo, one of Singapore’s largest play- lower skilled or less experienced talent is a ers, sees Singapore’s small size as an ad- challenge in Singapore, EPCs have a dearth vantage because there is little worry of bal- of experienced workers that are extremely ancing the needs of domestic and foreign valuable, especially in markets abroad where markets. “Singapore is such a small country there is an acute shortage of expertise. “Sin- that we can focus almost solely on using it gapore’s vastly experienced skilled labor pool as a base for supplying external markets, so – especially at top and middle management it serves as a convenient hub from where levels – definitely gives companies here an we can serve anywhere in Asia,” according advantage when entering the neighbouring to Hiroki Sakasai, former managing director markets,” says Alvin Leong, managing direc- of Sumitomo’s Head Corporate Branch, SEA tor of W H Marathon. & Pacific. 34

Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Henning Malmgren & Götz von Dresky

HM: CHIEF COMMERCIAL OFFICER; GD: HEAD OF CHEMICAL LOGISTICS DAMCO ASIA PACIFIC

Can you briefly introduce DAMCO to our they operate to find more efficient ways to with our experience with REACH in Europe readers? bring their products to market and thus grow and regulatory frameworks elsewhere, HSSE HM: DAMCO is an independent company their business. It is this area in which DAMCO considerations are nothing new for DAMCO: within the AP Moller – Maersk Group, which has made the most inroads into the sector. we come from a company that specializes in includes other major energy, logistics and GD: To cite an example, DAMCO recently con- safety and we formalize our knowledge and shipping subsidiaries such as Maersk Tankers, cluded a contract with a global manufacturer experience into our solutions. Maersk Oil, Maersk Drilling, Maersk Supply whose supply chain in the region was seri- Services, Maersk Line and APM Terminals. We ously fragmented from India to Japan, with no Can you share DAMCO’s objectives for its op- are engaged in logistics services and supply centralized control. The solution we nowadays erations in Singapore and South East Asia? chain management; and chemicals are one of provide for this customer is a control tower HM: DAMCO’s focus is pinpoint-sharp; we do our focused verticals where we are actively from which they are managing every ship- not scatter our shots over a wide area. Based growing our business. DAMCO’s traditional ment that originates in Asia to the rest of the on our experience and unique skillset, we are vertical markets are in the retail, fashion, con- world, with our local offices lending support targeting new clients in chemicals and other sumer goods, mining, industrial, technology in every step to this end-to-end process. industries that we feel would have the most and lifestyle industries. Today, DAMCO is all HM: DAMCO’s control towers enable our to gain from a new partnership; large MNCs about emerging markets; of our 10,000 em- clients to isolate, pinpoint, track and control with a global reach. We are identifying com- ployees, over 70% of them are employed in an specific goods and shipments in a timely and panies who have made a conscious decision to emerging market. However, DAMCO recently precise manner; it is the one place where a change how they handle their supply chains acquired PacNet to expand its footprint in company can find all the information it needs for the better. In furnishing our solutions, Australia, where we consider ourselves as one to manage and optimize its supply-chain. DAMCO wants to be a part of the strategic of the market leaders in terms of providing DAMCO believes that a supply chain should decision-making process of our clients in the chemical logistics solutions. not be a necessary evil in doing business, but chemicals industry; this is a solid basis for a strategic weapon that our clients can use to fruitful long-term business relationships. • What role does DAMCO’s Singapore office beat the competition and improve their ser- play in its overall operations, and what are the vice offering to the end-customer. benefits of doing business here? GD: As our customers are in need of end- Companies increasingly focus on price when to-end solutions, they need to have a nerve managing their logistics: where can the added centre for their operations and supply chains. value of supply chain management (SCM) so- Singapore is very well suited to the function lutions trump the lowest bidder? of managing complex regional supply chains. HM: Where DAMCO and our SCM solutions For example, Singapore has a strong and di- have an advantage versus a cheaper local lo- verse workforce with many language skills. gistics provider is in our ability to cater to multinationals. For example, local logistics In terms of logistics, what are some of the companies do not sufficiently emphasize the new trends currently taking place in Singapore importance of Health, Safety, and Environ- and South East Asia’s chemical industry? mental (HSSE) protections in their services. HM: Increasingly, chemical companies are For MNCs with shareholders and a public looking for solutions not only to their basic image to maintain, HSSE compliance is very transportation needs, but also in managing important. DAMCO spends the appropriate their overall supply-chains; they are begin- amount of time obtaining certifications, train- ning to see supply-chains as supply-chains. ing, licensing and adhering to safety measures. Companies are re-thinking the ways in which As a part of AP Moller – Maersk Group, and

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 33 Courtesy of Eco Special Waste Manahhement

29

Huntsman is one such multinational that sion will take us to about five, so we need livering solutions for the ASEAN market. sees Singapore as a key component of its re- to think seriously about what to do with the “Southeast Asia needs different solutions gional strategy moving forward. “Five years rest. We have not developed them yet because [than China], and our model works well be- ago the best opportunities were in China and of market volatility, but the global economy cause Singapore is so well connected to these India, and we have now penetrated these is now starting to pick up,” comments De- markets – even up and coming countries like countries to a great extent. Huntsman Perfor- celis. Myanmar and Cambodia can easily be served mance Products has given a lower priority to Multinationals see Singapore as not only a from here. Cleaning in China, for example, ASEAN up to now due to available resources, manufacturing and distribution hub, but is not the same as cleaning in Indonesia; cli- but some of the countries in it have faster also a strong base for their research and de- mate and habits are different. Similarly, vary- growth than China and India, so the division velopment efforts. British specialty chemical ing levels of humidity affect the durability is looking very seriously at the ASEAN region manufacturer Croda has made its R&D efforts of paints and coatings,” explains Suiniaty now.” comments Albert Decelis vice-presi- a “key focus” for its regional headquarters in Basirun, country manager for Singapore at dent APAC at Huntsman Performance Prod- Singapore according to managing director Dow Chemical Pacific. ucts. Arthur Knox: “Innovation is one of Croda’s Tailoring solutions for specific markets and Huntsman has been manufacturing its JEF- key goals in Asia and Singapore is one of our climactic conditions is a key component to FAMINE polyetheramines product line in key hubs for innovation in the world. Our achieve valuable market share and brand-rep- Singpaore since 2007 and is considering an goal is to provide innovative ingredients de- utation with an emerging consumer class in additional $70 million investment on its Ju- veloped, manufactured and tested in Asia to ASEAN countries. Reaching these new con- rong Island site. “Huntsman has only used meet our customer’s needs in Asia.” sumers will take tailoring solutions as well, about two of the ten hectares of land it has Along the same lines, Dow’s Singapore-based Asian consumers are particularly discerning access to at Jurong [Island]; our next expan- R&D efforts are largely focused around de- of the brands they choose. •

34 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH INTERVIEW WITH Henri Nejade

PRESIDENT & CEO BRENNTAG ASIA PACIFIC PTE LTD

Can you provide a brief introduction to Bren- For a supplier looking to enter new markets to outsource those links in the supply chain. ntag Asia Pacific since its acquisition of its first with a preferred partner, what does Brenntag’s In Singapore, we completed our logistical hub, distribution network from Rhodia Singapore in service offering consist of in Asia in contrast to called Regional Operations Hub (ROH), in 2008? its traditional network? June 2012. Brenntag officially opened its doors in Asia in Typically, conducting distribution in emerging October of 2008 via the acquisition of Rhodia markets involves a mixture of agencies, traders, Brenntag was certainly the first global distribu- distribution network in South East Asia. At that distributors and others. Brenntag’s approach tor operating in Asia when we spoke with you time, Rhodia’s business was 150 people strong for Asia is to serve both the supplier and cus- in 2010, but given the massive levels of invest- and had a distribution sales €35 million per tomer concomitantly. First and foremost, Bren- ment and growth in Singapore and the region, year. By 2010, Brenntag completed a further ac- ntag is one of the leading investors in building can you still claim to be the only one? quisition of the East Asiatic Company (EAC), a health, safety, and environmental (HSE) com- Brenntag can absolutely still claim to be the Danish distributor that was approximately eight pliance in terms of distribution; we are huge only global distributor operating in Asia. Some times larger than Brenntag Asia Pacific at that proponents of the responsible care program, European specialty chemicals distributors are time. Most recently, Brenntag acquired the Chi- for example. This is not a surprise, in as much looking to invest in Asia Pacific, yet they are nese company Zhong Yung and International as Brenntag leads the industry in HSE capacity much smaller than Brenntag Group and have Sales & Marketing (ISM)’s specialty chemicals throughout the globe. a limited presence outside of their traditional group in Australia. After only four years, Bren- For suppliers in Asia, Brenntag develops exist- markets. They are developing their capabilities ntag now has total staff strength of 1,500 peo- ing channels or makes new inroads for clients in Asia, but they are nonetheless not active in ple, with over 600 staff devoted primarily to looking to enter or expand within the region. North America, Brenntag remains history’s sales and marketing and a turnover of nearly In Asia Pacific, Brenntag serves different busi- first global chemical distributor and the fastest €700 million in 2012 in Asia Pacific (APAC). ness units such as food, cleaning, coatings, growing player in Asia Pacific. Brenntag’s expansion is not only being achieved home and personal care, pharmaceutical, water by M&A, but also by organic means: we are ex- treatment, industrial and specialty chemicals. Since we last spoke with Brenntag in 2010, periencing healthy growth throughout the re- Our regional marketing team develops product the company has undergone a successful IPO; gion, and we are currently in the process of in- lines on behalf of our principals, and our local how has the Brenntag group’s strategy evolved tegrating and consolidating our new networks. sales teams provide direct connections to cus- both regionally and globally since becoming tomers. Furthermore, Brenntag is also engaged public? As a distributor, how can one leverage the ad- in packaging and technical support through Our initial offering in March 2010 was valued vantages of Singapore to facilitate one’s business our 19 applications laboratories; these facilities at €50 a share, and as of April 2013 our stock in APAC? add value for customers of modest size who had reached around €125 on the FWB. Bren- Singapore offers stability, a large logistics hub, do not have screening or testing capabilities in ntag Asia Pacific has contributed to this success a major financial center, a favorable business the region. story via our tremendous growth from 2008 to environment; and Singapore is a longstanding 2012. Choosing Singapore as our headquarters home for many of our chemical customers. As Can you outline Brenntag’s network and sup- for Asia Pacific enabled Brenntag to become the far as Brenntag is concerned, we are members ply chain capabilities in the Asia Pacific? first global chemicals distributor in the world. of the SCIC, the Singaporean association that In Asia Pacific, Brenntag has more than 50 sites For the future, we are actively seeking full represents the chemical industry and oversees in 14 countries in order to meet the demand product lines for distribution to our existing the Responsible Care program. If we were to of our 11,000 customers. Depending on the customers in the region. Part of our strategy be in want of anything, it would simply be a country, Brenntag may own assets in the sup- since becoming public is to expand our ge- distribution-oriented regional association to ply chain outright, or outsource them: in Thai- ographical presence. This approach involves pool our collective capabilities, much like the land, for example, we own trucks and other matching the appropriate supply to better suit National Association of Chemical Distributors logistical assets, whereas Australia’s infrastruc- emerging markets, whose needs are quite dis- in the US. ture is well developed, so it is more efficient tinct from one another. •

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 35 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Wilson Tan, Irwanto Tjota & Martin Mulia Tan WT: CEO IT: COO MMT: FINANCE DIRECTOR PLANET ASIA

Could you please provide us with a brief in- Tjota and Finance Director Martin Mulia Tan troduction to Planet Asia? How did some of were brought on board to help re-define the the company’s early struggles contribute to its direction and future of the company. For the success today? last two years we have been on the constant WT: After working for US-based Monsanto lookout for suitable acquisitions and possible Chemicals for 15 years, I established Planet joint ventures with other key players in the Asia in 1995. Prior to leaving Monsanto, I had specialty chemicals industry and building on served as the company’s country manager for the existing distribution business model. Singapore for about five years having respon- sibility for the full spectrum of Monsanto’s When you say you are on the lookout for a industrial chemicals and polymers business in suitable partner or acquisition what qualities Singapore. With my background, I continued are you looking for? distributing chemicals and polymers at Planet MMT: The fastest way to grow is through ac- WT Asia that were not in direct competition with quisition of companies. A smart acquisition my former employer. Shortly after setting up will change the profitability of the company Planet Asia, the Asian financial crisis exploded, we acquire, but we also have to be aware that bringing financial turmoil to the company and we may undergo negative cash flow in the it almost went belly up. One of the key lessons first year of an acquisition as we re-structure learnt from the early years of struggle is that the company. We are therefore looking to ei- I have come to realize most aggressive busi- ther partner or acquire a specialty chemicals nessmen like me, tend to see the bright side of company in Asia. The companies which we new business opportunities without fully in- hope to acquire are niche players instead of vestigating the pitfalls and risks involved and companies engaged in commodities trading. being overly optimistic; consequently learn- As for partnership arrangements, we are cur- ing through the hard way of picking up the rently in talks to enter into a joint venture pieces of failed ventures. Unfortunately being with an American company that supplies spe- a small start-up, we did have the resources to cialty polymers for the auto parts industry in

IT undertake costly market research and tended North America but are keen to enter Asia. to go with the gut feel and intuition. WT: Now that Planet Asia have established a Fortunately I was able to leverage on my old significant presence across Asia, with either contacts to get the business running. To be direct offices or partnership arrangements in frank, whatever success achieved was not most of the key countries in Asia, I feel that through any strategic planning; it was more we make an excellent potential partner for about finding gaps in the market and tak- any US or European conglomerate wishing ing advantage of niche opportunities when to have a rapid access into Asia. Besides this, money was on the table. After struggling for we pride ourselves for the manner in which almost four years, Planet Asia achieved a dra- we conduct our business. We firmly believe matic turnaround in June 1999. From then that integrity, honesty, transparency, trust, on sales revenue grew at a CAGR of over 20% trust-worthiness and mutual respect between over the past 13 years. Two years ago, a de- partners are essential elements for a success- cision was made to reinforce the company’s ful partnership. For this reason we are always top management to prepare for a new phase open to collaborating with global companies MMT of growth. Chief Operating Officer Irwanto who share these same values.

36 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

As Planet Asia is looking to expand, which the ability to adapt quicker and be more flexi- Indonesia. The bankers in Singapore support market in ASEAN do you see as having the ble than MNCs. At Planet Asia, all of our man- the growth of the companies here, often we best potential? agers have backgrounds in MNCs, so we have have visits from banks that we do not have a IT: In Southeast Asia, Indonesia is the largest learned the principles of these companies and relationship with because they want to help market and over the last few years it has can now adapt it to our company. small and medium companies. proven to be a stable environment with a WT: One of the problems for SMEs in Singa- huge domestic consumption base with a pore is structural unemployment as the gov- When we return to interview Planet Asia in growing middle class - Indonesia has really ernment tries to bring in higher value invest- three to five years time what will you hope been the star of Asian markets. Yet, in terms ments to the economy. The unfortunate aspect to accomplish? of production capability the chemical indus- of this is that the government will often see WT: Planet Asia is seriously looking to more try in Indonesia is still very basic. We there- the investment from a big-name multina- growth either through partnerships or direct fore see a huge upside for growth. Under the tional as value added and this comes at the investments or acquisition of companies. present political leadership we have also no- expense of SMEs. In some cases the govern- These ventures will strengthen our foothold ticed increased regulatory transparency in this ment has provided such large incentives for in areas in which we have started to build to country, which is good for us. As a specialty multinationals that they are paying almost no be a global player. In the next three to five distributor, we need to capitalize on these taxes, while SMEs pay taxes and contribute years, we are exploring to invest or acquire growth opportunities available, which is why substantially to the local economy. two to three small to medium size manufac- we are in the process of establishing a direct turing facilities in the region. We have been office in Indonesia. Singapore is often mentioned as in compe- growing by over 20% per annum over the WT: Indonesia is not an easy market, even for tition with Hong Kong as the financial cen- past 13 years; there is no turning back for us Singaporeans. Having Irwanto, an Indonesian, ter of Asia. What do you see as some of the and we want to accelerate this growth. Our as part of our team has given me enormous strengths of the banking sector here and how company has always practiced profit sharing insights into how the market works and the can it support Singaporean-based businesses? amongst all of our employees so any growth unique business environment there. MMT: Hong Kong is the financial center of in profit directly benefits everyone that works China, but in Singapore the focus is China for Planet Asia as well as the charitable causes How is Singapore a springboard into other plus [other Asian countries.] For example, we support. We believe such practices have the ASEAN markets? Indonesia is a huge market for Singapore’s fi- effect of motivating staff to buy into our fu- WT: Singapore has long been seen in South- nancial institutions and many have entities in ture plans and work hard to realize this goal. • east Asia as the most progressive and devel- oped country. These markets look to Singapore for leadership. Brought up in an environment of a progressive and ethical management style of our government, Singaporean com- panies like Planet Asia take a no nonsense ap- proach to rules and regulation both at home and abroad. In this day and age people use the term integrity in a vey loose manner, but integrity is becoming a very rare commod- ity. People tend to want to take shortcuts to get ahead, but Singaporean companies have been successful in upholding their integrity abroad. For this reason, we notice that many countries do accord recognition of the Sin- gapore branding and reputation for reliability and professionalism, making it much easier for us to close deals.

Singapore conjures the image of a market dominated by foreign multinational corpora- tions, MBCs. What do you see as the role of small and medium enterprises in Singapore? IT: The SMEs form the largest collective con- tribution to the Singaporean economy in terms of net value, employment, and innova- tion. The government has been really strong in supporting SMEs, whether they are local or from abroad. Also SMEs like Planet Asia have

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 37 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Fritz Graf von der Schulenburg

EXECUTIVE VICE CHAIRMAN JEBSEN & JESSEN

The chemicals unit is one of eight business economic climates in other markets such as What are the key strategic priorities over the units of the Jebsen & Jessen Group of Com- Europe such a strategy would be impossible. next three to five years for your chemicals di- panies. Could you provide a brief overview In terms of sales, the chemicals business is the vision? of the role chemicals plays in the Jebsen and largest business unit of Jebsen & Jessen (SEA) We have invested over the last few years and Jessen? and has an important factor in the Double- are ready to make further investments. We The Jebsen & Jessen group dates back to 1895 in-Five strategy. As part of Double-in-Five we see growth potential in our nutritional in- as a trading company based in Hong Kong. acquired a chemical distribution company in gredients sector as we see potential in food, That company, known as Jebsen & Co., still Thailand which was the daughter company feed, and pharmaceuticals. We are looking to trades luxury goods and chemicals in China. of the German company Helm. This intensi- expand into the agrochemicals sector as we In 1963, Jebsen & Jessen South East Asia was fied our focus on food ingredient chemicals see potential. Additionally, we are working to started, developing independently and differ- and we are investing in value added services optimize our regional supply chain to serve ently from the sister company in China. Today in order to create a one-stop solution for our our partners and customers better. For our we are a conglomerate of industrial, distribu- strategic partners throughout the ASEAN re- chemicals business unit, Double-in-Five is the tion, and engineering companies. As a group, gion. low limit, we believe there is enough poten- we have a presence in nine of the 10 ASEAN From a regional perspective, what do you tial for this business unit of ours to do more countries with 4,000 people working across see as the potential of the ASEAN market and than double. • eight different business units. what do you see as Singapore’s role in the re- The chemicals business has been part of the gion? Group since our founding in 1963 with a With a population of over 600 million people main focus on distribution and value added and sustained regional GDP growth of five to services of specialty chemicals such as coat- seven percent per year, ASEAN is on the way ings and resins, plastics and rubber, and to becoming the largest integrated market performance chemicals. Also, we supply nu- in the world. We have an intra-trade volume tritional ingredients to the food, feed, and within Asia of $2.9 trillion, which is larger pharmaceuticals industry. Over the years the than the total exports in the European Union chemicals sector of the company has grown today. I am not sure if ASEAN will be fully and we now have 250 people working in integrated by the 2015 deadline, yet the tar- this sector serving over 4000 customers. Our gets are established and the road map is set, company is positioned to serve the ASEAN which gives me confidence we are moving in market with our main suppliers and partners the right direction. being Evonik, Kronos, Kroma Floor, Orion Engineering, Solvay, and Huntsman. How would you characterize the distribu- tion market and what differentiates Jebsen & Jebsen & Jessen embarked on the Double-in- Jessen from some of its regional competitors? Five strategy. What role is the chemicals unit Jebsen & Jessen (SEA) differentiates itself be- playing in achieving this goal? cause we are at home in the ASEAN region. When I joined the executive board of the Our head office is not in Europe or the United company in 2010, we decided to launch this States; it is here in Singapore. We are comfort- Double-in-Five strategy with the goal of dou- able and familiar with our markets and rela- bling the company’s net profits before tax in tionships with our customers and suppliers five years and today we are on track to achiev- built up over decades. Our decades of expe- ing this goal. I believe such a strategy can only rience and expertise make us a leader in the be accomplished in Asia, given the current specialty chemicals market.

38 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Suiniaty Basirun

COUNTRY MANAGER FOR SINGAPORE DOW CHEMICAL PACIFIC

Could you provide an overview of Dow Chem- advantages. Our work in the plant is aligned tinue to expand regionally. We will continue to ical and its history in Singapore? to this strategy. focus on high-end growth markets, and those Dow Chemical entered Singapore in 1976. in most need of solutions, such as water. Sus- Our marketing, sales, financial, logistics and Who are your typical customers, end users tainability is part of what Dow does, but we supply chains offices here serve markets and development partners? need to understand what it really means for throughout the Asia-Pacific region, specifically Dow has the expertise and experience work- countries in this region at different stages of in South East Asia (SEA). Singapore also boasts ing in various regions with different brand development. a regional application technical center, Dow owners, both international and local. We re- Singapore’s economy does not top the regional Singapore Development Centre (DSDC), repre- main focused on creating solutions for our scales in terms of size, but has demonstrated senting most of Dow Chemical’s key business customers. We believe it is vital to understand strength in talent, thought leadership and ex- sectors. It complements our high-tech Shang- customer needs, and customize solutions with perience. Singapore continues to be an impor- hai Development Center; we don’t do basic our innovations, technologies and products tant part of Dow’s strategy. • research here, but customize solutions to meet to meet the market needs. With the growth of the needs defined by our customers’ cost-per- middle-income groups across Southeast Asia, formance targets; understanding these is the it is crucial that our solutions are specifically key to our success. For some segments, like tailored to meet the growing demands and plastics, the center even has pilot-scale equip- needs of the various countries. ment to run trials. In 2012, Dow effectively consolidated all nine of the businesses at DSDC You are on the board of directors at the SCIC. under one center, greatly strengthening our What is your role there, and how do your ac- team, and its ability to leverage technology. tivities reflect Dow Chemical’s initiatives? I joined the board of Singapore Chemical In- Singapore is taking initiatives to move itself dustry Council (SCIC) in October 2012. It is a up the value chain. Are these affecting Dow very well-run organization which advocates a Chemical in any way? number of issues and collaborates with Stan- We agree with the direction in which the EDB dards, Productivity and Innovation for Growth and Ministry of Manpower (MOM) want to (SPRING) Singapore on standards and speci- move Singapore. Their moves for reducing fications. The SCIC understands the chemical the number of work permits and employment industry’s concerns and presents them in a passes are designed to improve productivity. united voice to the relevant parties; hot topics include MOM’s labor policy and tariff harmo- What impact has the Rohm and Haas acquisi- nization. Our members include multinationals tion had on Dow Chemical in Singapore? as well as SMEs. As a key player in the chemi- Dow in Singapore now has a more market-fac- cal industry, it is imperative that Dow remains ing and differentiated portfolio, and an ad- close to the issues and concerns of the country. ditional technical center covering businesses Through my representation of Dow at SCIC, it such as coatings, electronic materials, con- reiterates our responsibility and firm commit- sumer and industrial solutions, and microbial ment to the industry. control. This is in addition to the Jurong Island site, which has worked hard to improve its ef- What is your vision for the future of the com- ficiencies; quite necessary given the expense pany? of operating in Singapore. Dow aims to move The Asia-Pacific region accounted for 18% of up the value chain where it has competitive Dow’s global sales in 2012. Our goal is to con-

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 39 Jurong 2.0: Singapore Keeps Ahead of the Competition

“Singapore represents an important link in the regional Chemical industry. Richland is continuously looking for ways to enhance its offering to customers utilizing Singapore for exports and inbound supplying industry here. The industry is definitely reflecting growth as investments in Jurong and Tuas come on line and this is great to see… The Singapore government has been instrumental in assisting us into this market and has been engaged in our expansion. We see a strong future for chemical logistics being centered here in Singapore.”

- Colin Peter Moran, Group Logistics Director, Richland Logistics Courtesy of CRODA Global Business Reports EXPLORATION Industry Explorations

The Development of JIv2.0

The next generation

When looking to discover “what works” in Sin- world” in part due to “remarkable and vision- with BG. However, the government is looking gapore, look no further than Jurong Island as a ary” actions from the government to develop to expand capacity and open the terminal up textbook case study of the Lion City leveraging Jurong Island. to new players as gas markets become more its seemingly limited comparative advantages. In recent years, multibillion-dollar mega-in- globalized. “The Singaporean government is In late 2010, the government announced a vestments from majors Exxon and Shell, fur- very forward-looking in building the new LNG plan for Jurong Island version 2.0 (JIv2.0) as ther bolstered the country’s position as a petro- terminal. The government has visions for this the latest push for Singapore’s for development chemicals hub by helping bring the country’s to expand in several steps starting,” says Matt in the chemicals sector. When viewed within ethylene cracking capacity to approximately 4 Aguiar of ExxonMobil. five decades of context, JIv2.0, which empha- million tpa, approximately 3% of world capac- Initially, the LNG will primarily serve Singa- sizes further integration of auxiliary services, ity [138 million tpa]. While this is already an pore’s gas dependent power generators, as all diversification of feedstocks and a focus on de- impressive figure for a country that contributes of Singapore’s major generators have arranged veloping specialty chemicals manufacturing, is just 0.3% to gross world product, the EDB aims distribution through SLNG to augment their just the latest element of a seemingly natural for cracking capacity to reach 6 million to 8 existing piped natural gas contracts from In- progression of the government’s strategy for million tpa over the coming decades. donesia and Malaysia. Yet, as plans for the ter- the industry. Although Singapore has impressively grown its minal’s expansion are being formed, the EDB In the post-World War II era, Singapore’s posi- ethylene cracking capacity, new refining capac- sees LNG as a significant feedstock source for tion in the logistics network of world petroleum ity coming online at both the source of hydro- Singapore’s petrochemical industry. “Feedstock markets became ingrained as a key pillar that carbon production in the Middle East and in diversification enhances Jurong Island’s com- Singapore could leverage growth off of through China has the potential to cut out one of Singa- petitiveness in several ways. One is obviously refining and related industries. In 1961, Shell pore’s traditional roles. “One of the foundations by providing flexibility - diversification gives established the Bukom refinery, setting off a of our chemical industry that we continue to companies the option to use different feedstock wave of investment in the country from players strengthen is our refining capability. Upgrading at different times, depending on which feed- like Esso, Singapore Refining Company, Sum- the complexity of our refineries will enhance stock is the most economical. Feedstock mar- itomo, and Mobil as the Singaporean govern- the competitiveness of our crackers and the kets tend to be cyclical, but not on the same ment designated the petrochemical sector as a rest of the industry. Secondly, we are constantly cycle, so if you can tap into LPG at one time key segment for industrial growth. Today, Sin- looking for new ways to extract more from the and naptha at another time, it helps ensure cost gapore’s position is heightened as a staggering existing base, such as moving into higher val- competitiveness. These options also introduce one third of global oil shipped by sea passes ue-added derivatives and specialty chemicals. robustness into the system - if operators have through the Malacca Strait in order to reach en- Lastly, the EDB will continue to work with the this flexibility with feedstock, it makes the sys- ergy hungry markets throughout Asia. industry players on Jurong Island, to ensure its tem stronger,” explains Eugene Leong of the In the 1990s, the government, through the JTC competitiveness and sustainability as a chemi- EDB. Corporation, began reclaiming additional land cal hub,” says Leong. Enhancing feedstock options though LNG is and installing infrastructure to establish what is The EDB sees new investments, both from the one of the five core areas of JIv2.0. As part of today Jurong Island. Presently home to nearly private sector and the government, and feed- the initiative, the EDB is reviewing energy, lo- 100 petroleum, petrochemical, and specialty stock flexibility as crucial if Singapore is to gistics and transportation, feedstock options, chemicals manufacturers, as well as a diverse enhance its chemical manufacturing capability environment and water in order to enhance array of auxiliary service companies support- and retain its prestigious status on the world operational efficiencies and improve the hub’s ing the island’s industries, Jurong has certainly stage. In May 2013 BG Group delivered its environmental sustainability. Addressing these earned its title as a chemicals hub. first shipment to a new LNG terminal built five core areas will empower Singapore to over- Matthew (Matt) J. Aguiar, chairman and man- and owned by the Energy Market Authority come some of the key challenges it faces. Indus- aging director of ExxonMobil Asia Pacific com- (EMA). The EMA’s Singapore LNG (SLNG) try-government frameworks such as JIv2.0 tend ments “[Singapore is] a true model for devel- terminal has initial capacity of 3 million tpa to be ambitious in announcement and short on oping a petrochemical industry around the supplied initially through an exclusive contract long-term action, yet an examination of the

42 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations EXPLORATION www.evonik.com

chemicals industry proves that government, operators, and auxiliary service providers are collaborating to turn policy into action. Many of the core tenets of JIv2.0 are already ingrained at the heart of Nalco Champion’s [an Ecolab company] service offering according to Deric Bryant, general manager Eastern Hemi- sphere Downstream: “Of the five objectives for Jurong [Island] v2.0, three are energy, water and environmental related. We will continue to be at the core of helping our clients solve these problems. Whether it is an oil and gas major or a food and beverage company, we help them in a very integrated way to make their operations more efficient and with an improved environ- mental footprint.” The company has recently bolstered its en- ergy services offering through its acquisition of Houston-based upstream and midstream specialty chemicals provider Champion Tech- nologies. Bryant sees the ever-expanding Ecolab We’re happy when our Group as well positioned to meet Asia’s future plastics solutions inspire petrochemical demands: “Our recent acquisi- you with new ideas. tion of Champion Technologies [in April 2013] makes our energy services unit 27% of Ecolab’s We love your problems. global revenue further enhancing energy’s role as a core piece of Ecolab’s strategy.” Part of this growth strategy is to increase the Evonik is Germany’s creative plastics specialist. emphasis on downstream services in locales We’ll surprise you with solutions before you such as Singapore. “We will continue to grow even noticed there’s a problem – from sandwich constructions for lightweight components, and expand not only in places where oil and through PLEXIGLAS® for sophisticated design gas is produced, but also where oil and gas and solutions all the way to high-performance polymers. We look forward to giving your petrochemicals are consumed,” says Bryant. business fresh energy with our innovations. Like many leaders in the industry, Peter Mein- shausen, Evonik’s president South East Asia, Australia and New Zealand, gives the EDB high marks for its clear vision for the industry in the face of Singapore’s constraints: “Initiatives like Jurong Island v2.0 with further integrated util- ity and feedstock grids will augment Evonik’s Achtung Lithozeile druckt nicht mit! Diese Datei ist ohne Überfüllungen angelegt! service offerings greatly. Ultimately, such initia- Farbton Offset-Druck 48c 100m 14359 03-035-4-2-A • Evonik Inselanzeige Englisch, Motiv Pleximaus • tives will serve to differentiate Singapore from 4c • Format: 122 x 186 mm, 5 mm Beschnitt • 24.04.13 • am OF other chemical hubs in Asia.” •

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 43 Global Business Reports FACTSHEET Industry Explorations

Singapore Chemical Sales Source: AlChE

SINGAPORE DOLLAR BILLIONS 120

100

80

60

40

20

2000-2002 2002-2004 2004-2006 2006-2008 2008-2010

Number of Chemical Chemical Manufacturing Value Add by Chemical Manufactures Output (in million USD) Manufacturers (in million USD)

Source: Department of Statistics Singapore Source: Department of Statistics Singapore Source: Department of Statistics Singapore

2005 264 2005 31,100.9 2005 3 945.3 2006 262 2006 33,746.2 2006 5 095.5 2007 259 2007 33,455.3 2007 2 141.0 2008 269 2008 26,221.1 2008 3 524.8 2009 283 2009 36,221.0 2009 4 759.4 2010 276 2010 40,404.9 2010 5 037.5 2011 42,155.2 2011 4.116.6

Selected Companies Operating on Jurong Island

Source: EDB

COUNTRY United States Air Products, Ceanese, Chemical Specialties, Chevron (JV partner in SRC), Chevron Oronite, Chevron Philips, DuPont™, Eastman Chemical, ExxonMobil, Huntsman, Invista, Rohm&Haas, Tate&Lyle Europe Akzo Nobel, BASF(JV partner in Ellba), Ciba, Coim, Croda, Faci, Infeneum, Katoen Natie, Linde, Lucite, Oiltnaking, Perstorp, RohMax Evonik, Shell, SOXAL, StoltNielson, Vopak Japan Asahi Kasei, Dainippon Ink&Chemicals, Denka, Mitsui Chemicals, Mitsubishi Gas (JV partner in Polyxlenol), Kuraray Asia Paci c Pte. Ltd, Simutomo Chemical, Sumitomo Seika, Teijin, Toagosei, Stella Chemifa, Unimatec Total companies <100

44 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Peter Meinshausen

PRESIDENT OF SOUTH EAST ASIA, AUSTRALIA, AND NEW ZEALAND EVONIK

Can you please provide an introduction to sustainable animal nutrition, on Jurong Is- as well as more difficulties in finding the right Evonik in Singapore? land. The manufacturing complex will come staff. Evonik is confident in the ability of the Evonik is a creative industrial group from on stream in 2014 and will have an annual ca- EDB to manage these increasingly complex Germany and a world leader in specialty pacity of 150,000 metric tons of DL-methion- issues hoping that these will not blur Singa- chemicals. Active in South East Asia, Australia ine. This investment will complement Evonik’s pore’s competitive environment. Nevertheless, & New Zealand (SEAANZ) since the 1920s, global positioning in this market as we will be Singapore remains an attractive location for we established our first legal entity in 1969. represented in all the key market regions. In expanding or creating new investments, de- Today, Singapore is home to Evonik’s regional addition, Evonik has announced a decision to spite costs related challenges. headquarter utilizing Singapore’s excellent ge- build a polyiamid 12 plant on Jurong Island. ographical position to run our operations in Looking beyond manufacturing, Singapore How has Singapore’s new infrastructural in- SEAANZ. also caters to Evonik’s innovation operations vestments served to add value to Evonik’s In Singapore, Evonik’s manufacturing activ- to strengthen our innovative capabilities fur- business in the region? ities center on Evonik Oil Additives, a lead- ther. In addition to our R&D center for coating Singapore’s excellent infrastructure strongly ing global supplier of high performance additives we are in the process of establishing benefits the chemical industry. Initiatives like VISCOPLEX® lubricant additives and VIS- a technical service center for polyurethane Jurong Island v2.0 with further integrated COBASE® synthetic base fluids for use in au- products and an analytical lab to support our utility and feedstock grids will augment tomotive and industrial lubricants. In 2011, amino acid business. Evonik’s service offerings greatly. Ultimately, Evonik opened its first Asian R&D center for For us, these are additional steps emphasizing such initiatives will serve to differentiate Sin- coating additives in Singapore developing the global character of Evonik. We strive to ac- gapore from other chemical hubs in Asia. custom tailored solutions for environmental company the growth of our key customers in friendly coating systems and solvent borne Asia through local production, local R&D and What is Evonik’s vision for Asia for the future? coatings. local services. Asia is already playing and will continue to Core activities in the region include among play an important role for Evonik. Already ac- others feed additives, lubricant additives, coat- How has Singapore’s Economic Development counting for 20% of our sales, Evonik is seek- ing additives, care and household specialties, Board (EDB) served the interests of Evonik ing to increase its sales in Asia to €4 billion as hydrogen peroxide, precipitated and fumed and the country’s chemical sector? well as its employees. With this, Evonik will silica, acrylic resins, performance and spe- When it comes to putting assets on the also increase turnover generated from manu- cialty monomers, molding compounds, and ground or to support R&D activities, the in- facturing in Asia. We will continue to expand high performance polymers. volvement of the EDB is essential: EDB opens our asset footprint by investing in produc- In terms of governance, Evonik in SEAANZ re- doors and facilitates networking across the tion sites and innovation facilities across Asia ports to Dr. Dahai Yu, Member of the Executive chemical industry. Singapore has created a safe to better accommodate the requirements of Board of Evonik responsible for Asia. environment for investments with regards to Asian markets and our Asian customers. • various aspects including IP protection, cor- How is Evonik’s asset portfolio expanding in ruption prevention, transparency, environ- terms of Singapore? mental, safety and health requirements. Also, Since 2009, we have been expanding our asset EDB is very proactive in increasing the educa- portfolio in Singapore and Singapore contin- tional level and skill set of Singapore’s work- ues to play a vital role in Evonik’s considera- force. Lately, EDB not only supports bringing tions for the future. investments into Singapore, EDB now empha- Regarding our manufacturing capacities, sizes activities that add value to the chemical Evonik is building a new manufacturing industry and Singapore as a whole. complex for the amino acid DL-methionine, However, the chemical industry is facing an an indispensable amino acid for healthy and increasing impact of energy and utilities costs

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 45 © 2013 Nalco Company Inc. All rights reserved.

Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Deric Bryant Together, we’re TM

GENERAL MANAGER - EASTERN HEMISPHERE, ENERGY SERVICES DIVISION DOWNSTREAM Taking Energy Further NALCO CHAMPION

Introducing Nalco Champion, an Ecolab company. Now, the strength and innovations of Nalco Energy Services, Champion Technologies and Corsitech flow together to bring you more service, more technologies and more solutions. Because together we have more Nalco and Ecolab merged in 2011, how did I am not sure I can answer that but will add unconventional, and often more complex to the merger impact the company’s operations that when I began at Nalco 18 years ago, the work with, the services Nalco provides be- ways to help you produce the world’s energy. We are taking energy further. in the Asia Pacific region? company felt like a western company that did come even more important. We will also see Visit nalcochampion.com to learn more. The obvious thought behind the merger was business globally. The biggest transformation changes in the global petrochemical markets that joining the two companies together could I have seen in the company is that today our with the US ethylene industry shifting to create a better combined company than had company is a truly global company with its shale gas for feedstock and adding capacity. existed separately. Nalco and Ecolab were seen roots in the West. We have 12 innovation cen- This will drive changes in product mix and as complementary, instead of competitors. We ters around the world including Singapore. result in more US export that will have to be now have a company that is based around four This means that new technology is no longer factored in. Shale oil and gas production will strategic pillars reflecting the megatrends in developed and commercialized first in the likely also become more significant in Asia Pa- the world: energy conservation, access to safe West and then gradually introduced to other cific as countries like China and others find 6,700 food, water scarcity and clean environments. markets, it is developed globally and intro- and evaluate the cost and competitiveness of We help industry meet these global chal- duced at a similar pace worldwide. producing this resource. Nalco will continue employees lenges and have put together an offering that to play an important role in improving the is unique in our marketplace and uniquely What is your strategy for growth within the performance and competitiveness of our cus- needed by industry. In AsiaPacific, this offer- region and what role can Singapore play in tomers through these changes. • ing is important today, but will become even your growth? more critical over the coming decades as more Ecolab Asia Pacific has an overall turnover 450+ pressure is put on these global megatrends. approaching $2 billion with approximately scientific experts As a company we have been present for 85 7,000 employees across Asia. Our recent ac- years and 33 years in Singapore. We go where quisition of Champion Technologies [in April our industries take us; we serve industries 2013] makes our energy services unit 27% from light to heavy. Singapore has served as a of Ecolab’s global revenue, further enhancing great hub for us and has grown into a location energy’s role as a core piece of Ecolab’s strat- 49 that serves as both a manufacturing location egy. We will continue to grow and expand not manufacturing facilities and regional headquarters with more than only in places where oil and gas is produced, 200 people based here focused both the Sin- but also where oil and gas and petrochemicals gaporean and regional markets. are consumed by bringing value to the cus- tomers we serve. Singapore, along with sev- As Jurong v2.0 is developed to go “beyond eral other strategic locations across Asia, will 12 plug and play,” what are some of the ways continue to play a key role in our future. Nalco works with clients to improve efficien- The development of shale oil and gas makes technology centers cies? this a particularly interesting time for the oil Of the five objectives for Jurong v2.0, three and gas sector, not just in North America, but are energy, water, and environmental related. also in markets worldwide. As US refiners We will continue to be at the core of helping continue to replace the current heavy, harder our clients solve these problems. to produce crudes currently being refined with shale oil, we could see many of these Another interviewee commented, “Inventions “opportunity” crudes moving to markets in are still coming from the US and Europe, but the East. Nalco brings significant technology innovation comes from Singapore.” How has and experience in helping refiners success- Nalco, a US based company, sought to take ad- fully process these heavier and more challeng- nalcochampion.com vantage of this idea? ing crudes. As feedstocks become increasingly

46 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations

Chemical Week - Full page 5-23-13 216 mm x 281 mm © 2013 Nalco Company Inc. All rights reserved.

Together, we’re Taking Energy FurtherTM

Introducing Nalco Champion, an Ecolab company. Now, the strength and innovations of Nalco Energy Services, Champion Technologies and Corsitech flow together to bring you more service, more technologies and more solutions. Because together we have more ways to help you produce the world’s energy. We are taking energy further. Visit nalcochampion.com to learn more.

6,700 employees

450+ scientific experts

49 manufacturing facilities

12 technology centers

nalcochampion.com

Chemical Week - Full page 5-23-13 216 mm x 281 mm Global Business Reports EXPLORATION Industry Explorations

Hydrogen SMR, Methane PSA and C02 recovery In such a market generating companies must unit using natural gas as a feedstock,” says Lim find an edge over their competitors through Plug and Seck Luan. increasing their operating efficiencies, finding Singapore’s integrated facilities are certainly innovative, new methods to utilize diversified world class. However, the truly impressive aspect feedstocks, and integrating services into a total Play of the integration is the way in which multiple package for their customers. Costs may be high, companies are able to cooperate and reach a max- but inefficiencies are not tolerated. imizing outcome. Competitors are often forced PacificLight Energy plans to commission their Power and infrastructure on Jurong Island to have some synergies with one another. Bay new S$600 million ($475 million) gas powered Chin Hao, regional commercial manager of Oil- asset on Jurong Island by the end of the year. The tanking points out that the close-quarters on Ju- company was formed in March 2013 as Philip- Further development of Singapore’s shared util- rong Island creates this dynamic: “in a sense, the pines-based power generator Meralco and Hong ity, raw materials and storage networks is crucial land shortage fosters close cooperation, bringing Kong-based First Pacific acquired 70% of a nearly to Singapore’s continued ability to attract world- together parties to jointly seek solutions instead complete asset. “As the new entrants into the scale investment. Once again the EDB and JTC of acting alone.” market with our facility expected to go online in are spearheading new initiatives that will address December 2013, we have adopted the most ad- constraints and attract investment. “As we map Power Enabling JIv2.0 vanced methods and technologies for the plant. out the future of the island, more infrastructural Thus, compared to the incumbent power gener- enhancements are in the works; projects that As Singapore has grown into a petrochemical ators already present on the market, we expect to will benefit the specialty chemicals and other hub over the last two decades, it has had to add gain a competitive advantage through technolog- value-added industries. The island’s new barge significant power generation capacity to keep up ically based efficiency,” says Yu Tat Ming, CEO of terminal is on track, and the second overland with the rise of manufacturing especially on Ju- PacificLight Energy. roadway remains under study... In the meantime, rong Island. In terms of power generation, the They will face stiff competition from existing the JTC is making enhancements to the current government heavily encouraged the development players on the market, namely Sembcorp Indus- causeway to ease traffic flow and enhance secu- of natural gas generation as the power sector tries and Tuas Power Generation, who have both rity,” says Eugene Leong of the EDB. deregulated in the early 2000s. Today, Singapore made integration the heart of everything they do Another key aspect of Singapore’s infrastructure relies on gas power plants for 78% of its gener- on Jurong Island. is its vast network of shared utility pipes that ation capacity. This single-fuel market buoyed by Ng Meng Poh, executive vice president and allow users to conveniently “plug in” to service high gas prices in Asia has put comparative pres- head of Singapore and ASEAN, for SembCorp providers. As a more diverse stream of products sure on generation costs as Singapore’s regional explains the company’s wide range of services will have to be used as Singapore further devel- neighbours have largely opted for cheaper coal to customers in the chemicals sector: “We offer ops its specialty chemicals industry, enhancing generation or enjoy subsidized fossil fuel prices chemical and petrochemical companies a full this pipeline network will be key for Singapore to control costs for their rapidly growing energy suite of services including power and process to maintain its leading reputation. “Common in- needs. steam, industrial wastewater treatment and on- frastructure such as pipeline racks that promote Presently, Singapore ranks as the third highest site logistics. Power and steam generation is the integration and linkages between companies are power costs in Asia behind Japan and the Philip- largest contributor to the business, while our critical for the long-term competitiveness and pines. As other locales try to emulate Jurong Is- water and wastewater treatment facilities which sustainability of operations in Singapore,” com- land’s success, industry leaders presently view can treat multiple streams of complex industrial ments Lim Seck Luan managing director, Linde this cost issue as a potential limiting factor for wastewater, and our onsite logistics infrastructure Gas Singapore. new investment in Singapore. “The most dis- which connects facilities on Jurong Island, also German-based Linde Group has a substantial cussed issue is the cost of energy in Singapore. play a crucial role in making the whole petro- presence in Singapore as it is the headquarters Chemical players consume a large proportion of chemical cluster more efficient.” of company’s South and East Asia Regional Busi- energy, and the associated costs have a very signif- SembCorp, a leader in developing Singapore’s ness Unit. The company’s Jurong Island facility icant impact on the industry’s competitiveness,” famous “plug and play” integrated infrastructure exemplifies the integrated nature of the island says Chiew Nguang Yong, chairman of the SCIC on Jurong Island, has committed an additional as Linde boasts a world-class gasifier, the largest and general manager of Shell Chemicals Seraya. S$1 billion ($800 million) to construct a new CO2 plant in Singapore, gaseous nitrogen pro- Although costs are relatively high, Singapore’s multi-utilities facility to service the Jurong Aro- duction capabilities, and a supply chain facility world-class infrastructure offers customers an matics Corporation’s new S$3billion ($2.4 bil- for distribution of specialty gases. Evonik’s recent unparalleled degree of stability, thus eliminating lion) complex. In its initial phase, the facilities partnership with Linde on its new $500 million many of the costs associated with risk in other, cogeneration plant will add 400 MW of power methionine manufacturing facility is utilizing the more emerging markets in Asia. “For power and 200 mt of steam per hour of capacity to Ju- innovative integrated services Singapore has built users, i.e. chemical manufacturers, Singapore has rong Island. a reputation on. “To meet the industrial gases a higher price of electricity, but this market also Sembcorp, the first power generator on Jurong feedstock requirements of Evonik’s new world- offers a more developed, efficient infrastructure Island, has long made sustainability a top prior- scale methionine production plant ‘Me5’, Linde that allows manufacturers to effectively and pre- ity. Ng believes that this commitment has given Gas Singapore is building a unique and highly dictably manufacture and transport their prod- Sembcorp a competitive edge in the market: customized gases plant on-site - the first ‘3-in- ucts for market,” says Aaron Domingo, managing “Because we invested early in green technology, 1’ integrated plant in Singapore comprising a director of PacificLight Energy. unlike some of our competitors who had to re-

48 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations

place their older facilities with more efficient new units, we have not had to retire or revamp our power plants. Also, in our combined cycle gas turbine cogeneration plants, we can often achieve a higher plant efficiency, so we use less fuel and can pass on the savings to customers.” In addition to conventional gas generation, SembCorp has also demonstrated its continued commitment to sustainability through investing S$300 million ($240 million) in an industrial waste to power generator and S$30 million ($24 million) in a wood chip boiler. Given Singapore’s land constraints, especially on Jurong Island, waste-to-energy facilities provide the integra- tion that will be crucial for the hub to maintain a competitive advantage over regional neighbours. Along the same lines, Tuas Power has established a solid foothold on Jurong Island through its Tembusu Multi-Utilities Complex (TMUC). “In 2006, Tuas Power secured the rights to develop utilities for the new cluster of petrochemical companies in Tembusu, Jurong Island. We started construction in late 2009 and the first phase of construction was completed in February 2013. We are currently supplying competitively priced utilities to our customers. When fully completed in 2017, the total investment of the Tembusu Multi-Utilities Complex will be about S$2 billion ($1.6 billion). The utilities business is expected to form a core part of the company's business diversification plan. The TMUC project is aligned with the government’s push to develop the petro- chemical industry in Singapore,” comments Lim Kong Puay, president and CEO of Tuas Power Gen- eration. In terms of generation, Tuas Power has decided to break the mold of gas generation in an effort to gain an advantage in the single-fuel dominant market. Their new facility uses diesel, coal, gas, and biomass for steam and electricity generation. According to Lim: “A multi-fuel strategy [is] a balanced approach to take for this market. Our Tembusu Multi-Utilities Complex is a model of fuel diversification that provides competitive util- ities to our customers on Jurong Island.” Although energy cost will remain an issue as JIv2.0 continues to develop, operators can be as- sured that Singapore’s utility providers are reaf- firming their commitment to the market through offering an unparalleled package of integrated, efficient services and forward thinking invest- ments. “Ultimately, efficiency is about transform- ing the cultural mindset of management. Energy prices are not likely to be low in the future; therefore, companies need to commit to scruti- nizing areas that can reduce operating expenses and energy consumption from the top-down,” says Lim. •

Industry Explorations Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Lim Kong Puay

PRESIDENT & CEO TUAS POWER GENERATION PTE LTD

Can you share Tuas Power’s history as one of tion plan. The TMUC project is aligned with the top three energy providers in Singapore? the government’s push to develop the petro- Tuas Power Generation Pte. Ltd. was estab- chemical industry in Singapore. lished in 1995, amidst the liberalization of the electricity industry in Singapore. We have Chemical manufacturers, like all the other built up to our licensed capacity of 2670MW, manufacturers, feel that energy costs in Singa- comprising two large-scale oil‐fired steam pore have become very prohibitive; how can plants and four highly efficient combined cy- the industry work with utilities companies to cle plants. increase their competitiveness? In recent years, Tuas Power has diversified A multi‐fuel strategy would be a balanced into related areas of the energy sector as a approach to take for this market. Our Tem- part of our growth strategy, leveraging on our busu Multi‐Utilities Complex is a model of expertise in the areas of power generation, fuel diversification that provides competitive steam production, water treatment and waste utilities to our customers in Jurong Island. water treatment. Tuas Power also offers consulting and man- We started with building large‐scale, on‐site agement solutions for customers looking tri-generation and cogeneration utility plants to increase energy efficiency. Better energy for clients in the pharmaceutical and chemi- management can be achieved through adopt- cal sectors, then provided utilities to support ing more efficient variable speed drives and Neste Oil's new NExBTL renewable diesel cooling systems, amongst others. Looking at plant, which is located next to Tuas Power Sta- ways of optimizing resources whilst ensuring tion. We are currently building a multi-utility environmental sustainability is another way complex in the Tembusu industrial area of Ju- that Tuas Power is working with customers to rong Island to provide an integrated suite of increase their competitiveness. Through TPGS multi-utility services to the new petrochem- Green Energy, a joint venture with Gas Sup- ical companies. ply Pte Ltd, Tuas Power introduced cogener- ation and trigeneration technologies to large Energy consumption from Singapore’s chem- manufacturing facilities such as pharmaceu- ical segment comprises about 40% of the en- tical and chemical plants in Singapore. These tire industrial sector, how important is this highly efficient technologies produce two or industry to Tuas Power? three types of utilities such as steam and elec- In 2006, Tuas Power secured the rights to de- tricity that are critical to the customers’ plant velop utilities for the new cluster of petro- processes, thus reducing their energy costs chemical companies in Tembusu, Jurong Is- and carbon footprint at the same time. By land. We started construction in late 2009 and building and managing the facility on a long- the first phase of construction was completed term basis, we effectively help them to focus in February 2013. We are currently supply- on their core business and channel valuable ing competitively priced utilities to our cus- resources for further growth. • tomers. When fully completed in 2017, the total investment of the Tembusu Multi‐Util- ities Complex will be about S$2 billion. The utilities business is expected to form a core part of the Company's business diversifica-

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INTERVIEW WITH Arthur Knox

MANAGING DIRECTOR CRODA

What role do your Singapore operations play We have an Enterprise Technology group that list for Jurong Island? in the context of Croda’s global operations? seeks new and more efficient processes to Energy is the big issue. The cost of energy has Our business is larger in other parts of the produce our ingredients. This team spans the increased considerably. The development of world than it is in Asia; currently Asia accounts globe and is very focused on more sustainable lower-cost, sustainable energy sources is criti- for about 18% of our turnover and it is be- approaches to produce our current and future cal for the future since chemical processing is coming an increasingly larger portion of our range of ingredients. energy intensive. global business. Singapore operations serve as our headquarters for Asia pacific, the gateway Do you feel that this system has limited Croda After doubling your output, what is your ex- to our fastest growing markets. from pursuing its usual sustainability prac- pansion plan? Innovation is one of Croda’s key goals in Asia tices? We will expand into new and innovative in- and Singapore is one of our hubs for innova- No, since we can find ways to bring sustain- gredient production. Currently we are plan- tion. Our goal is to provide innovative ingre- ability to our markets. Since Singapore is close ning to expand our Blue Technology produc- dients developed, manufactured and tested in to the largest regions for palm oil and deriv- tion in Singapore. Blue technology is a range Asia to meet our customer’s needs in Asia. We atives, Croda was able to link up quickly with of highly efficient ingredients that enables our have three business areas, including consumer its suppliers and is one of the first companies customers to process our ingredients at ambi- markets, performance technologies markets to be offering an entire range of mass bal- ent temperatures or what we like to refer to is and industrial chemicals. We have been very anced certified specialty palm oil derivatives. as cold processing. Our customers can pro- successful in the consumer markets with our We received recognition from the Corporate duce their products using less energy and thus innovative approach and we are using a sim- Knights as one of the 100 most sustainable increasing the sustainability of their products. ilar model for our performance technologies companies in the world (currently number The cold process batches also take less time markets which has also met with success. 25) and it is sustainability initiatives such as to manufacture so our customers are seeing Singapore is our regional headquarters and this that has enabled us to achieve this recog- increased throughput at their plants so this we are making large investments in several nition. Some of our other sustainability ini- chemistry increased sustainability and lowers functional areas with a key focus on R&D. tiatives include an investment of $6 million costs. • We are expanding our research, applications, to develop an energy source from a landfill to synthesis and product claims lab. Our new power a plant in Atlas Point Delaware. We also product claims lab will enable us to test our used wind energy at one of our plants in Eng- ingredients in our customers’ products so we land to provide power to our plant. can provide performance enhancements rec- ommendations to our customers. When GBR interviewed Croda Singapore for Croda’s main manufacturing sites in the re- our 2010 report, we were told that you were gion are in Singapore, India and Japan. Our looking to expand your capacity for surfac- Singapore plant is one of the largest and it has tants by 15-20% in Singapore, but at that kosher and halal certification, which is im- point in time there was a shortage of ethylene portant to many of our customers. We have oxide. How have you addressed that issue? sales offices throughout the region. Singapore More ethylene oxide is coming to the island; is still the preferred manufacturing location in we should be able to double our surfactants Asia due to the competitive pricing for petro- capacity and also bring more innovative chemicals and the nearness to the oleochemi- chemistries to the island. We have also in- cals from Indonesia and Malaysia. creased our ester capacity by 25-30%.

What are some of the ways Croda is innovat- You are one of the original tenants on Jurong ing to enhance production capabilities? Island. Does Croda have an infrastructure wish

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INTERVIEW WITH Bernd Eulitz & Lim Seck Luan

BE: MANAGING DIRECTOR, SOUTH AND EAST ASIA SL: MANAGING DIRECTOR LINDE GAS SINGAPORE

BE

Could you provide us with some general back- tomers through 3 operations bases – Jurong Is- company Evonik Methionine SEA Pte Ltd. To ground on The Linde Group and some of your land, Tuas and Woodlands (at a customer site). meet the industrial gases feedstock require- major milestones in Singapore? ments of Evonik’s new world-scale methionine BE: The Linde Group is a world-leading gases What is the status of your current asset portfo- production plant ‘Me5’, Linde Gas Singapore and engineering company with 62,000 em- lio on Jurong Island? What initiatives are you is building a unique and highly customised ployees working in more than 100 countries currently pursuing? gases plant on-site - the first “3-in-1” inte- worldwide. In the 2012 financial year, Linde SL: Linde is Singapore’s largest industrial gas grated plant in Singapore comprising a Hydro- generated revenue of EUR 15.280 bn. producer and supplier of three gases: hydro- gen SMR, Methane PSA and C02 recovery unit Singapore is the headquarters of The Linde gen, carbon monoxide and carbon dioxide. using natural gas as a feedstock. Group’s Regional Business Unit South & East We operate Linde’s largest and the most highly BE: Linde is committed to developing innova- Asia, which I am responsible for, and its Asia integrated HyCO (Hydrogen and Carbon tive technologies and in this spirit we have also Pacific headquarters, led by our Executive Monoxide) plant in Asia, on Jurong Island. recently setup a pilot plant in Jurong Island to Board Member Sanjiv Lamba. Mr Lamba over- Our Jurong Island site is in fact also the largest undertake a 2-year research programme on sees the Greater China, South & East Asia and and most technically complex gasifiers in this Linde’s proprietary acid gas removal tech- South Pacific regional business units, as well region, one of the few in the world which is nology, leveraging on the availability of ex- as Linde’s global electronics business which is able to take heavy feedstock, remove the im- perienced plant personnel and feed gas from also headquartered in Singapore. purities such as sulphur, gasify it, purify it and our gasification unit. Our experts are also SL: In Singapore, our operating unit is Linde separate it into hydrogen and carbon monox- currently working actively with the National Gas Singapore (LGS). Historically, the air ide to supply to customers. University of Singapore to develop a carbon gases, compressed gases and electronics gases In addition to the gasifier, our Jurong Island capture and sequestration (long term storage) part of LGS’ business has its roots in Singapore site also houses our carbon dioxide plant roadmap for Singapore. Likewise Linde would Oxygen (SOXAL), which was a 50-50 joint which is the largest CO2 plant in Singapore, be pleased to work with relevant government venture between the BOC Group and Air Liq- capable of producing 100 tons per day (tpd) agencies in Singapore to assess and develop uide. In September 2006, Linde AG acquired of liquid carbon dioxide. Our carbon dioxide solutions which can capture and transport car- the BOC Group, forming The Linde Group. As plant, which was built in 2009 with an invest- bon dioxide on a large scale, so that the carbon part of the merger, BOC had to divest its shares ment value of S$25 million, enables Singapore dioxide can be put it to commercial uses such in SOXAL. to be largely self-sufficient in this gas and to as enhanced oil recovery (EOR), or stored be- On the syngas (meaning Hydrogen and Car- serve a growing customer base. low the sea floor rather than released into the bon Monoxide) part of our business, Linde Our Jurong Island facility also produces atmosphere. entered Singapore in July 2004, when Linde gaseous nitrogen via pipeline to customers AG acquired the Singapore Syngas plant on on the island such as Oiltanking. We also Do you feel that the Jurong 2.0 initiative has Jurong Island from ChevronTexaco Corp and supply liquid oxygen, liquid nitrogen, argon made the island more competitive? renamed the company Linde SynGas Singapore and carbon dioxide in the merchant market to BE: The Singapore government is far-sighted Pte Ltd. Linde has invested heavily in improv- customers across Singapore. Our liquid car- and business-friendly, and the Jurong Island ing engineering and expanding operations at bon dioxide and liquid argon also serve other 2.0 initiative shows that the government its Jurong Island facility since 2004, turning Linde affiliates in the region. constantly assesses and ensures its regulatory it into a very successful asset and flagship for In addition, Linde has built a supply chain framework and policies continue to ensure a the company. facility on Jurong Island to serve as a distri- competitive landscape, not only for new com- In May 2008, Linde SynGas Singapore Pte bution and storage hub for electronic specialty panies entering Singapore but also companies Ltd was renamed Linde Gas Singapore Pte gases in view of the growing demand for such who have already made significant invest- Ltd (LGS). In 2010, we amalgamated Linde’s gases in Singapore and across the region. ments in Singapore. Specialty Gas business operating in Tuas into Last year, Linde Gas Singapore was awarded The start up of Singapore’s new LNG termi- Linde Gas Singapore Pte Ltd. Today, Linde Gas a major long term exclusive industrial gases nal and introduction of LNG into Singapore’s Singapore Pte Ltd serves our Singapore cus- supply contract by global specialty chemicals energy mix will hopefully bring down the

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cost of utilities such as steam and electricity participate and support the expansion of these wards clean, low sulphur fuels as emissions in Singapore – utility prices at the moment industries are very good. standards continue to become more stringent are very high especially when such plants are To prepare for growth in Singapore and the in Asia and globally. compared with other similar plants located in region we are continuing to invest to ex- Linde is a technology company, and we pride other petrochemical hubs such as Houston, pand our capabilities to support our existing ourselves on creating innovative gases solu- Shanghai Chemical Industrial Park or Lud- and potential customers as they move up the tions that truly add value to our customers’ wigshafen, and add significantly to the oper- value chain. For example in Singapore, Linde businesses. We want to be a leader in every as- ating cost base. supplies carbon monoxide to Lucite’s first pect of our business – in market share, safety, SL: I would also add that common infrastruc- world-scale plant producing MMA from their building a world-class professional team, al- ture such as pipeline racks that promote inte- Alpha-technology, which is the first such plant ways ensuring our foundational principles of gration and linkages between companies are in the world. Our hydrogen supplied to SRC safety, integrity, sustainability and respect un- critical for the long term competitiveness and continues to support the refinery’s push to- derpin all our decisions and actions. • sustainability of operations in Singapore. To- day, the cost of such infrastructure currently prohibits users from establishing pipeline networks more easily which would otherwise provide flexibility and robustness to the net- work.

Is limited manpower an issue for Linde Gas Sin- gapore? SL: Talent is a perennial challenge in the tight Singapore labour market. One of our competi- tive advantages at LGS is that we have recruited many of our people early on in their careers and invested heavily in their development, building up a solid team who have grown with Linde. Today we have very highly quali- fied and talented engineers and technicians in our Singapore operations, and they are highly sought after by new companies or projects starting up on Jurong Island and that does cause some pressure. BE: In fact, Singapore is a training hub for Linde, where employees from countries in the region come to Singapore for a few years and then return to their home country to take on additional responsibilities. We will continue to drive our people excellence agenda both in Singapore and across Asia, with a strong focus on Six Sigma methodology to further develop our bench strength as talented and profes- sional people are the key success factor behind our market leadership position in the region. Innovation is key for What is your long-term strategy for Singapore and the region? BE: Singapore is one of the largest energy and a successful global player. petrochemicals hubs in the world, and a very important market for The Linde Group. We ex- As a world-leading gases and engineering company, we develop innovative solutions that play a key pect that demand for clean fuels, petrochem- role in creating a sustainable future. Our Regional Business Unit South & East Asia spans 11 countries ical & specialty chemicals products, driven from Pakistan in the west to South Korea in the east and is headquartered in Singapore, where Linde by rising affluence and population growth in runs the largest and most complex integrated carbon monoxide and hydrogen facility in the region as well as the largest carbon dioxide plant in the country. Singapore is also the global headquarters for Asia, will continue to attract MNCs to invest Linde’s electronics business and the regional distribution hub for Linde’s electronic specialty gases. and add capacities in Asia to serve this mar- ket. With the government’s continued efforts Linde – Ideas become solutions www.linde.com.sg to develop the chemicals and refining sector, we believe the prospects for Linde to further

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INTERVIEW WITH Ng Meng Poh

EXECUTIVE VICE PRESIDENT AND HEAD OF SINGAPORE AND ASEAN (UTILITIES) SEMBCORP INDUSTRIES

Please provide a brief overview of Sembcorp In- wastewater treatment and on-site logistics. tion centre for applied R&D in energy, water and dustries? Power and steam generation is the largest con- industrial wastewater treatment. This centre will Sembcorp Industries has a market capitalisation tributor to the business, while our water and support our operations and house Sembcorp re- of approximately S$9 billion and has three main wastewater treatment facilities which can treat searchers and specialists who will run test beds business units: Utilities, Marine, and Urban multiple streams of complex industrial waste- for emerging technologies relevant to the com- Development. Globally, the Sembcorp Group is water, and our onsite logistics infrastructure pany’s business, with the objective of achieving present in 16 countries across six continents. which connects facilities on Jurong Island, also further improvements in efficiency, cost and en- About 80% of our business lies within a flight play a crucial role in making the whole petro- vironmental sustainability. radius of between seven and nine hours from chemical cluster more efficient. Furthermore, we’re also leading the way in help- Singapore. With the rising global demand for There are several reasons why we are the best ing our customers reduce their environmental our areas of business - energy, water and other utilities partner for Jurong Island companies. impact through introducing renewable energy essential urban solutions - we are well posi- We were the first to pioneer the outsourced util- to the island. Last year, we opened the first re- tioned to grow in a number of fast-developing ities model. There is no other company which newable energy plant on Jurong Island: a S$30 emerging markets. In particular, we have taken has built up over 15 years’ experience in serving million woodchip boiler producing process steps in recent years to expand our footprint sig- the utilities needs of companies here. Our asset steam. We are already building an expansion nificantly in China, India, the Middle East, and base of nearly S$3 billion on the island, and our to this facility to double its capacity, and plan ASEAN. reach and range of products and services are un- to complete later this year. The next investment Our Utilities business has grown very rapidly. rivalled. Importantly, we have built up a deep we are planning is another steam generation As at the end of the last financial year, the busi- understanding of our customers’ needs over all facility that will run on industrial and com- ness’ 10-year compounded annual growth rate these years of developing specialised solutions mercial waste. Instead of this waste being sent was 20% and it was the top contributor to the for them. to the incineration plant, we will be using it to Group. The business has over 5,800 MW in- produce steam for our customers on Jurong Is- stalled power capacity. We also have over 7 mil- As Jurong version 2.0 comes online, how has land. This facility will be particularly important lion cubic metres per day of water and waste- ‘plug and play’ evolved and what new invest- for Singapore in helping to extract value from water treatment capacity worldwide, making us ments from Sembcorp fit into this philosophy? waste generated by the local population. It will Singapore’s largest water company. The Jurong Island version 2.0 initiatives aims to also be important for us, in helping us make our Furthermore, Sembcorp is a pioneer and world enhance the site’s competitiveness through areas steam supply more environmentally friendly and leader in the outsourced supply of multi-utilities such as alternative feedstock, better logistics and strengthening our ability to offer our customers to energy-intensive customers, such as chemi- transportation, environmental conservation, wa- the best competitive solutions amid high fossil cal and petrochemical manufacturers. Without ter, and enhanced integration. fuel prices. centralised utilities, industrial companies would Last year Sembcorp made the commitment to in- Where integration is concerned, Sembcorp have to build and operate facilities to generate vest another S$1 billion in Jurong Island to add provides access to an entire “service corridor” the various utilities they needed to support their to our existing portfolio. pipeline network spanning one end of Jurong operations. But by outsourcing their utilities For instance, this newr cluster of facilities in- Island to the other and connecting companies supply to us, industrial manufacturers have the cludes a S$40 million industrial wastewater and transporting feedstock sources throughout opportunity to save time and money and are treatment plant capable of treating multiple the island. We have invested in expanding the freed to concentrate on their core business. They sources of industrial wastewater. Also included reach of this network to accommodate new en- also enjoy convenient, one-stop source and de- is a new facility under construction applying trants onto the island. So if a company is setting livery of their various utilities and services. efficient, environmentally-friendly cogeneration up new operations and they want to connect to We have played a key role in Jurong Island’s technology, which will have a 400MW power their feedstock provider elsewhere on the island, unique “plug-and-play” environment since the capacity and be capable of producing 200 mt they can simply connect their new facilities to site’s inception. We offer chemical and petro- per hour of steam for supply to JAC’s upcoming our existing pipeline infrastructure and gain in- chemical companies a full suite of services in- S$3 billion aromatics complex nearby. We are stant connectivity, allowing them to come on- cluding power and process steam, industrial also developing a new technology and innova- stream sooner. •

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Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Aaron A. Domingo & Yu Tat Ming

AAD: MANAGING DIRECTOR YTM: CEO PACIFICLIGHT ENERGY

In March 2013 FPM Power Holdings, a joint AAD: At Meralco we conducted a compara- venture between Hong Kong-based First Pacific tive study of the power pricing across Asian and Manila-based Meralco, acquired a 70% stake markets. Our study found that the Philippines in GMR Energy (Singapore) Pte Ltd. Why was ranks as the highest prices in Asia, then Japan the asset on Jurong Island an attractive invest- and third Singapore. These markets are the only ment? fully priced markets in Asia as opposed to the AAD: Any investment decision Meralco makes other markets which are semi-subsidized by the has to be taken in the context of our strategy and government through tariffs or a fuel subsidy, etc. vision in other areas as well. Most of our projects Thus, when we analyzed all the costs between are in the Philippines and are predominantly the fully priced markets and the semi-subsidized green field developments. Thus we wanted to markets, the differences are apparent. For power front-load the cash flow of the company by ac- users, i.e. chemical manufacturers, Singapore has quiring operational or near operational assets. a higher price of electricity, but this market also AAD The asset we purchased in Singapore fits this offers a more developed, efficient infrastructure profile as it is scheduled to come online at the that allows manufacturers to effectively and pre- end of 2013. Singapore was an attractive mar- dictably manufacture and transport their prod- ket for investment because it offers a transpar- ucts for market. ent, single-fuel market, based on gas feedstock. Therefore it is easy for us to analyze and under- The asset you purchased represents a S$600 mil- stand where we stand in the market vis-à-vis lion investment on Jurong Island. What are some other players in the sector especially compared of the differentiating capabilities of the plant and to our home market in the Philippines, which what will it add to the market? is a multiple fuel market with less a less de- YTM: The fully priced, single fuel model en- fined regulatory regime. Lastly, the enforcement courages companies to find a competitive advan- mechanisms in Singapore are firmly in place. You tage through increased efficiency at their plants. can have the best-defined rules in the world, but There is little price differentiation in terms of they mean nothing if the proper enforcement the price of fuel (gas). As the new entrants into regime is not in place. the market with our facility expected to go on- YTM YTM: A key aspect that differentiates Singapore line in December 2013, we have adopted the from most Southeast Asian countries is that there most advanced methods and technologies for is no subsidy of the power sector at any stage the plant. Thus, compared to the incumbent in the value chain. The government provides a power generators already present on the mar- robust and transparent regulatory framework for ket, we expect to gain a competitive advantage the power industry, thus encouraging the mar- through technologically based efficiency. ket to achieve efficient utilization of resources. This means generating companies can expect a Singapore’s chemicals sector accounts for 40% level playing field and return based on market of the country’s manufacturing sector’s power dynamics. usage. How important will this sector be in terms of customer base for your new plant? The process industry in Singapore raises con- YTM: Although we are a city-state with lim- cerns that the price of electricity in Singapore is ited space, manufacturing is still a major driver too high. How does it compare to other markets for growth in our economy and drives robust in the region? growth in the demand for electricity. Although

56 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations

Singapore’s GDP growth was only 1.2% in 2012, we still witnessed demand for electricity increas- ing by approximately 2.4%. AAD: One reason having customers in process manufacturing, such as the chemicals industry, is attractive for a power generation company is that the 24/7 operation of these process plants flatten the load patterns on the power plants. Our combined cycle plant is designed for high utilization, thus we want to keep it running as close to capacity as possible on a consistent bases rather than have peaks of usage at certain times of the day. Attracting customers in the process industry allows us to achieve this goal and in exchange the buyer receives preferential pricing compared to a buyer from the less stable retail market.

How will the new plant be integrated into Ju- rong’s “plug-and-play” infrastructure? YTM: The chemical industry potentially pro- vides us with an additional revenue source from our plant as a chemical manufacturer located nearby could use the steam we generate for their process operations. Our location on Jurong Is- land means there is a good chance a chemical plant could be placed next door to our plant, thus providing a mutually beneficial arrange- ment. AAD: The process industries require gas, steam, and power for their own operations. Aggregat- ing them in one area like they are on Jurong is the best possible arrangement because the infra- structure is all there. So the location builds up on itself, as the logistical challenges usually asso- ciated with ancillary services are already present and ready to be utilized on Jurong.

Given your new plant and several other players recently completing or nearly completing new investments, how will the market develop over the next three to five years? Will there be the same level of investment in new power plants? YTM: I believe with the new capacity coming on-stream both this year and next year, there will be a period of consolidation. Through the LNG vesting scheme, the government has incen- tivized the initial uptake of LNG in order to pro- vide a base load for the LNG terminal that Sin- gapore has recently brought on-stream. This has led to a flurry of investment in power generation that may not be repeated. As a land scarce coun- try, it has become increasingly difficult to find a suitable sea front site to build new plants. On the demand side, we are still predicting 3-4% long-term annual increases in tandem with the economic growth of Singapore. •

Industry Explorations Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Kenneth Tan & Ananth Nochur

KT: GENERAL MANAGER AN: SENIOR BUSINESS DEVELOPMENT MANAGER EMERSON PROCESS MANAGEMENT

Can you provide a brief overview of Emerson Singapore is often portrayed as the pinnacle Process Management in Singapore and what of efficiency and is ranked number one by the role does your process management division World Bank for the ease of doing business. Do play within your global operations? you agree with this statement or do you think Emerson is a global technology leader with there is room for improvement? sales in 2012 exceeding US$24 billion. Obviously, there is always room for improve- Process Management constitutes 24% of ment. Many of our customers face challenges Emerson’s portfolio. The Singapore office was such as the scarcity of land, resources and established in 1965, which coincided with high-energy costs. This means that businesses the emergence of the first oil refineries and have to cooperate more and companies need later the growth of petrochemical industry. to find innovative cost-saving measures. For Today, we are proud to say that we serve the example, Singapore does not have its own majority of chemical companies on Jurong energy resources – fossil or renewable – and KT Island. Acting as a regional hub, Singapore is looking towards energy efficiency as a key represents our Asia-Pacific headquarters with driver to address issues around energy secu- several manufacturing facilities that sup- rity and its vision to be a leader in sustain- ply customers worldwide. We have a broad ability. We see that in the immediate future, process automation portfolio, which we clas- there will be a significant push to improve ef- sify into three major areas: measurement and ficiency, reliability and sustainability. Emerson analytical, valves and actuators and systems & Process Management will continue to provide solutions. companies with cutting-edge solutions that will help our customers overcome these chal- What are some examples you have seen of lenges. Emerson Process Management using new in- novations in the chemical industry or utiliz- What do you see as the strategic priorities for ing new technologies for the first time? Emerson in the next three to five years? Emerson Process Management follows Sin- Emerson is well positioned to drive the adop- gapore’s path of continuous innovations and tion of game changing technology from all improvement. For example, on Jurong Island, facets of control and instrumentation in the one of the key challenges our clients are fac- process industry. Our strategic priority is to ing is the competition from refineries open- help our customers embrace such technology ing in the Middle East and China. In order to to improve safety and optimize their plants. stay competitive our customers need to be- For example, Emerson Smart Wireless applica- come more cost-efficient and Emerson offers tion is a very reliable and secure technology, a wide range of solutions to help overcome which has been proven and adopted by the these challenges. For example, our Smart chemical industry worldwide. Furthermore, Wireless technologies allow chemical plants we also have a state-of-the-art Service Center to monitor critical assets, improve efficiency based in Singapore that supports our chemical and reduce unplanned downtime. Effectively, customers around the clock. This Service Cen- this extends predictive intelligence into areas ter also addresses the manpower challenge in that were previously out of reach and opens Singapore because customers here are increas- new possibilities in process improvement ingly relying on automation providers like us with ease of use and implementation. to help them bridge the gap. •

58 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations EDITORIAL

New Investments

Specialty chemicals and petrochemicals

Recent activity shows that the EDB’s efforts to promote investment in specialty chemicals are paying off handsomely. A number of compa- nies such as Lanxess, Evonik, Clariant, Mitsui, Croda, Asahi Kasai, Sumitomo, Jurong Aro- matics Corporation and Zeon Chemicals have bought into the government’s development of JIv2.0. In 2012 Singapore’s Fixed Asset Invest- ment reached S$16 billion ($12.7 billion), an increase of 16% from 2011. In June 2013, German specialty chemicals heavyweight Lanxess commissioned its largest single investment in company history in Sin- gapore. Even before the completion of this €400 million ($517 million) butyl rubber plant, Lanxess broke ground on a €200 mil- lion ($258 million) neodymium-based per- formance butadiene rubber (Nd-PBR) facility, the company’s second largest investment to date and, at 140,000 tpa, the world’s largest polybutadiene rubber plant.

Courtesy of Hai Leck Global Business Reports // SINGAPORE CHEMICALS 2013 59 Global Business Reports EXPLORATION Industry Explorations

With these investments, LANXESS has shown 150,000 tpa methionine plant by August the things they do here will be handled in the a firm belief that Singapore will play a critical 2014 and has recently selected Jurong Island strictest of confidence… We do recognize that role in bolstering the company’s global earn- as the site of a new polyamide 12 plant. As Singapore is quite small, and we really cannot ings. “The establishment of global and regional the company seeks to double its 2010 sales compete on the same scale as China and India offices here, along with production sites, ce- figure in Asia to €4 ($5.17) billion by 2015, in terms of manufacturing. Consequently, we ments the focus on Singapore as a key element Peter Meinshausen, president of Southeast focus on how to make the best of what we have to the global growth story of LANXESS… With Asia, Australia, and New Zealand for Evonik, and try to compete in those areas where we these two major rubber investments in Singa- explains Singapore’s importance to the com- know that innovation and a strong IP frame- pore, the site on Jurong Island will play a key pany’s position in Asia: “Since 2009, we have work can actually make a difference. Singa- role in LANXESS achieving its mid-term earn- been expanding our asset portfolio in Singa- pore’s strong IP framework supports our work ings goal of €1.4 billion ($1.8 billion) and pore and Singapore continues to play a vital and makes us happy to be here,” says Dr. Keith €1.8 billion ($2.33 billion) EBITDA pre-ex- role in Evonik’s considerations for the future. Carpenter, executive director of the Institute of ceptionals in 2014 and 2018,” says Ian Wood, We will continue to expand our asset footprint Chemical and Engineering Sciences (ICES). managing director and country representative by investing in production sites and innovation for Lanxess Singapore. facilities across Asia to better accommodate the Petrochemicals Re-up the Ante Lanxess is not the only company building syn- requirements of Asian markets and our Asian thetic rubber production on Jurong Island; customers.” Not to be outdone by the specialty chemicals three Japanese companies; Zeon Chemicals, Yasushi Nawa, managing director and CEO of manufacturers, Singapore’s major petrochem- Sumitomo Chemicals, and Asahi Kasai are all Mitsui Chemicals Asia Pacific, explains why ical players are continually upgrading their in the construction phase of their own produc- Singapore is such an ideal destination for for- portfolios to both expand their capacities tion facilities. eign chemical companies: “To summarize Sin- and enhance their capabilities in the specialty Zeon Chemicals has invested S$240 million gapore’s allure in one word: stability. There is chemical sector as well. Chevron Oronite is en- ($200 million) in a solution polymerized very little country-risk here, both in terms of hancing its offering for additives, while both styrene-butadiene rubber (S-SBR) and is political and geographical uncertainty. Com- Royal Dutch Shell and ExxonMobil have un- scheduled to commence the first phase of its pared to peers with similar chemical hubs dertaken wave after wave of new investments operations in 2013, with a second phase com- like China, Vietnam, and Philippines, few of to further enhance their world-leading facili- ing online in 2016. Once fully operational the them inspire the same levels of investment ties and move them further downstream, and plant will have up to 80,000 tpa of production confidence among Mitsui’s leadership as Sin- Jurong Aromatics Corporation is progressing capacity. According to Zeon’s managing direc- gapore.” with construction on its new integrated facil- tor, Yuki Hirakawa, raw material limitations in A longtime player in Singapore, Mitsui Asia Pa- ities. Japan caused the company to look elsewhere cific is set to begin construction on a 300,000 In Q42012 Shell announced an upgrade to its for synthetic rubber manufacturing. “After tpa polyolefin facility with a price tag of S$250 ethylene cracker complex on Bukom Island, studying several options, Singapore was a million ($200 million), bringing Mitsui’s cu- which will expand the cracking capacity at good investment because of the government’s mulative FAI in Singapore to well over S$1 the Shell Eastern Petrochemical Complex from support and the ability to sign long-term bu- billion ($800 million). Given its well-estab- 800,000 tpa to 1 million tpa. Shell also has tadiene feedstock supply agreements with rep- lished investment commitment to the country, announced it will augment its polyols produc- utable local manufacturers.” the company is looking to move “further up tion by 100,000 tpa. On top of this, in April Sumitomo Chemicals, a long-established man- the value chain by way of specialized coating 2013 the final investment decision was made ufacturer in Singapore, broke ground on its compounds and polyolefin products. We are to increase high-purity ethylene oxide and $120 million S-SBR plant in February 2012. continually growing and diversifying our as- ethoxylation production by 140,000 tpa each Once completed, the plant will have a capacity set portfolio in Singapore in order to capture at Shell’s Jurong Island facilities. In a statement, of approximately 40,000 tpa. This will add to a larger share of the titanic Asian market for Chiew Nguang Yong, chairman of the Singa- Sumitomo’s massive $7 billion revenue stream specialty chemicals,” says Yasushi Nawa. pore Chemicals Industry Council (SCIC) and in Singapore, which includes its leading stake Nawa’s comments summarize why corporate general manager of Shell Chemicals Seraya, in the Petrochemical Corporation of Singapore. boards continue to choose Singapore as an in- comments: “Shell has the right asset base on Asahi Kasai Chemical Corporation’s S-SBR pro- vestment destination despite the relatively high Jurong Island to capture growth opportunities duction facility will be the second complex cost vis-à-vis other Asian countries: investment in the region. Customers will clearly benefit for the Japanese plant on Jurong Island, as the confidence and strategic location. One key pil- from our investment as we can now produce company’s subsidiary Asahi Kasei Plastics Sin- lar of this confidence is Singapore’s strong IP the products they need more sustainably and gapore already operates a $200 million world- protection regime. The inherent risk of com- efficiently.” scale polyphenyl ethers (PPE) facility. Once promised IP that many innovative multina- In May 2013 ExxonMobil’s new ethylene fully operational in 2015, Asahi Kasai’s S-SBR tional companies encounter from doing busi- steam cracker began producing ethylene at the facility will have a capacity of 100,000 tpa. ness in other parts of Asia is not a concern in company’s Singapore petrochemical complex. German specialty chemical manufacturer, Singapore. “The IP framework is definitely one This upgrade represents the final component Evonik, is currently within budget and on of the main reasons that many of our chemical of a multibillion-dollar investment over a 15- schedule to complete its $500 million, collaborators come to Singapore, knowing that year period, making the complex the largest

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INTERVIEW WITH Yasushi Nawa

MANAGING DIRECTOR AND CEO MITSUI CHEMICALS ASIA PACIFIC PTE LTD

Can you briefly introduce Mitsui Chemicals products. We are continually growing and American petrochemical companies are of- Asia Pacific? diversifying our asset portfolio in Singapore ten pushed to re-shore some of their man- Mitsui Chemicals Asia Pacific is ultimately in order to capture a larger share of the ti- ufacturing in the US where the harvesting the product of a merger between Mitsui tanic Asian market for specialty chemicals. of shale gas has reduced production costs and one of its petrochemical subsidiaries in Our assets have been operating at full capac- considerably. Overall, the EDB is aware of 1997, although the company can trace its ity since we doubled output for our vari- our concerns and is actively and analytically history back over 100 years to 1912; Mit- ous products in 2009, and our business still addressing these challenges. sui celebrated its centennial only last year. continues to grow. For 2013 and beyond, we Mitsui Asia Pacific’s strategy for remaining In the late 1990s, Mitsui established a new are looking to add another polyolefin plant cost-competitive in this context is to cre- company in Singapore to develop assets for capable of 300,000 mt/y for a pricetag of ate large growth margins through specialty the production of phenols and bisuphenol. approximately $250 million. Construction technology and a commitment to research After a couple years, several new lines were will begin in June of this year and is sched- and development; this will allow us to be- added to our offering, and by 2004 our uled to finish by the end of 2014. Singapore come less sensitive to feedstock and other existing plants were incorporated together will be a home for our business for a long fixed-cost concerns. For example, Mitsui into Mitsui Phenols Singapore (MPS); those time; it is essential to Mitsui Chemical’s op- currently has the only proprietary technol- plants are still in operation on Jurong Island erations in Asia. ogy for bio ethylene production in Asia. The today. In terms of polymers, Mitsui entered As one of the first to do so, why would a business environment is still favourable, but the industry in Singapore in 2001 and our chemical company elect to set up shop in we are constantly being pressed to adapt. first elastomer plant, which manufactures Singapore and what advice would you have products for the automotive industry under for an enterprise considering the decision? What is Mitsui Chemical’s outlook for the fu- the brand name of TAFMER, came online To summarize Singapore’s allure in one ture? in 2003. The company that manages elas- word: stability. There is very little coun- Mitsui’s primary concerns for the future are tomers production for Singapore is called try-risk here, both in terms of political and tied to the markets of Asia. Our goals there Mitsui Elastomers Singapore. Mitsui is one geographical uncertainty. will be met with heavy marketing activities of the top three manufacturers for such elas- Likewise, the Singapore Economic Develop- and investment into the region, and our tomers worldwide. Our capacity on Jurong ment Board (EDB) is an immense resource operations in Singapore act as a bridge to Island, exceeds 300,000 mt/y of TAFMER. for potential entries to this market; it is their these countries. Singapore is where Mitsui Along with regional marketing activities, six mission to welcome new companies into Chemicals group has built itself a platform entities are integrated under the umbrella the local industry. The EDB is very cooper- for all of our products; from here we will of Mitsui Chemicals Asia Pacific in Singa- ative and Mitsui has benefitted greatly from consolidate our respective businesses in Asia pore. Regionally, our operations here stand their many incentives for taxation, exemp- and continue to grow as a company. • among 20 peer subsidiaries, but we make tion, and frontier innovation. Singapore, on up a significant portion of Mitsui’s business account of bodies like the EDB, may well be in Asia. Mitsui Chemical Asia Pacific can take the world’s easiest country to invest in. credit for accumulated fixed-asset invest- ments into Singapore well in excess of $1 What are some of the unique challenges that billion. manufacturers face when operating in this re- gion? What developments is Mitsui undertaking to Cost-competitiveness is the current chal- enrich Singapore’s chemical sector today? lenge to long-term sustainability. Labour, Mitsui Asia Pacific is moving the industry feedstock, and energy pricing are the main further up the value chain by way of spe- culprit, and these costs are restructuring cialized coating compounds and polyolefin the whole industry. To give an example,

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 61 Global Business Reports EXPLORATION Industry Explorations

“The profile of [chemical] investments has changed over the last three to integrated refining and petrochemical facility four years. The new wave of investments is focused on specialty chemicals, for the super major worldwide. The upgrades which involves more hazardous, unique and proprietary processes. From to the complex will add 2.6 million tpa of fin- our perspective as a training center, we have to expand our offering to meet ished capacity, more than doubling the current the needs of the new profile of companies. Some of the skill sets that these site’s capabilities and caps off the largest chem- specialty chemicals manufacturers require are of a higher level and require ical expansion project in ExxonMobil’s history. more specialized training. Singapore continues to evolve, for us it is about Matt Aguiar, chairman and managing direc- staying ahead of the curve and prepositioning ourselves to the training and manpower needs to these new investments.” tor of ExxonMobil Asia Pacific, sees this lat- est commissioning as the culmination of two decades of work. “We made the decision in the - Lee Wing Kit, Business Development Manager, 1990s that Singapore would serve as the Asia- Petrofac Training Institute Pacific hub for the company as we thought it was the country that offered the best strategic advantages in the region... When ExxonMobil makes an investment, it is on a 20- to 30-year “Singapore has one of the highest methanol consumption rates per capita in time horizon.” the world. Methanol is a bit too expensive to produce in Singapore because Another ongoing project of note is the Jurong of high gas prices, but several chemical manufacturers in the country make Aromatics Corporation. Held by a consortium sophisticated downstream products in processes, which are methanol- of investors led by South Korea’s SK Group and intensive. This high consumption reflects Singapore’s drive for more value- China’s Jiangsu Sanfangxiang Group, the $2.4 added businesses, and this drive has drawn methanol to the market.” billion complex is scheduled for completion in 2014 following a two-year delay attributed to - Mark A. Berggren, Managing Director, tight credit markets in the wake of the financial Methanol Market Services Asia crisis. The project will be complemented with a S$1 billion ($800 million) onsite cogen- eration plant from Singaporean-based Sem- bCorp. Once fully operational, the complex is expected to bring online an additional 1.44 “According to SPRING Singapore, small to medium enterprises (SMEs) million tpa of aromatics as well as 2.47 million comprise 99% of enterprises here and bolster economic resilience, provide tpa of oil products. essential infrastructure for larger companies and bring in fresh perspectives. The capital flowing into Singapore creates the The government is thus trying to grow SMEs like Matex International into image of confidence in the market and high- globally competitive companies. Companies need ideally to be financially lights the favorable market environment for strong to grow to the next level and form Singaporean multinational corporations for the future. As Matex continues its multinational expansion multinational investments. According to Chiew footprints, one of the ongoing key challenges faced is translating ideas from Nguang Yong of SCIC and Shell: “Singapore is Singapore to our international offices and to our customers. ” fortunate to have a critical number of compet- itive advantages. Jurong Island, for example, was arduously reclaimed for the sole purpose - Tan Guan Liang, Executive Director, of building a downstream petrochemical hub Matex International characterized by high levels of integration. The presence of major MNCs has managed to at- tract investment from their global downstream customers and add-value to the industry as a “Alstern, like many other labor-intensive enterprises, has been negatively whole. This environment also creates oppor- affected by the shortage of manpower in Singapore. We have worked tunities for SMEs and allows expertise to flow to overcome this problem by increasing efficiency and fostering close from MNCs to other SMEs and players in the partnerships with subcontractors. industry. Outside of Jurong Island, the other In recent years, health, safety, and environment (HSE) standards, as practiced by the many MNCs in Singapore, have dramatically increased; main advantage of Singapore is the element of prompting service providers throughout the sector to build their capabilities. stability: the economic, political, and regula- While there is always room for future improvement, we are proud to have tory environments are all very transparent and greatly enhanced our level of compliance. Alstern Technologies is committed predictable. Lastly, the growth of markets in to investing sufficient time, effort and money to ensure that the company runs the region, such as China, makes Singapore an in compliance with the highest HSE standards.” ideal place to do business; a chemical company in Singapore is well positioned for growth. In- - Sam Cheok Whai, International Sales Director, deed, Singapore’s model is being replicated Alstern Technologies Singapore Pte Ltd throughout the region.” •

62 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations FACTSHEET

Outward FDI in Manufacturing by Type

Source: Department of Statistics Singapore

2001 2003 2005 2007 2009 2011 SECTOR / INDUSTRY S$BILL. % S$BILL. % S$BILL. % S$BILL. % S$BILL. % S$BILL. % Manufacturing 26.4 100 33.0 100 46.6 100 69.6 100 80.1 100 93.7 100 Food, beverages and tobacco 4.4 16.6 5.7 17.4 7.6 16.3 11.1 15.9 13.8 17.2 21.0 22.4 Computer, electornic and optical products 7.3 27.8 8.2 24.8 10.5 22.5 16.3 23.4 15.7 19.5 13.0 13.9 Transport equipment 1.2 4.5 2.2 6.7 5.4 11.5 8.6 12.4 3.5 4.4 12.2 13.1 Chemicals and chemicals products 1.2 4.6 1.8 5.3 2.7 5.8 4.7 6.7 6.8 8.5 8.7 9.2 Machinary and equipment 1.2 4.5 2.0 6.0 2.3 5.0 3.9 5.6 6.1 7.6 7.6 7.8

Investment Commitments by Country (million dollars)

Source: Department of Statistics Singapore

2009 2010 2011 2012 2011 III 2011 IV 2012 I 2012 II 2012 III 2012 IV 2013 I 2013 II 2013 III Total 11 753.9 12 854.2 13 734.3 16 007.8 4 038.9 3 382.3 5 959.0 4 610.7 4 068.6 1 369.5 4 098.5 2 258.6 2 425.1 Local 3 368.3 2 069.6 1 875.4 1 837.5 140.7 98.8 353.1 865.9 463.0 155.5 1 435.2 814.2 638.6 Foreign 8 385.6 10 784.6 11 858.9 14 170.3 3 898.2 3 284.0 5 605.9 3 744.8 3 605.6 1 214.0 2 663.3 1 444.4 1 786.5 USA 4 191.0 3 311.4 5 047.4 5 654.5 2 672.1 1 176.1 2 566.7 1 961.0 979.5 147.3 2 005.2 372.8 753.2 Japan 1 032.2 1 175.8 995.0 967.8 355.1 536.0 50.4 490.0 224.0 203.4 109.4 114.7 245.0

Europe 2 466.8 4 819.0 2 131.9 3 134.3 217.8 756.3 516.4 769.9 1 021.9 826.1 384.2 681.8 701.7 Asia Paci c and Others 695.6 1 478.4 3 684.6 4 413.7 653.2 815.6 2 472.4 523.9 1 380.2 37.2 164.5 275.1 86.6

Investments Commitments in Petroleum and Chemical Product Manufacturers ( Fixed Asset Investments in million USD)

Source: Department of Statistics Singapore 2006 2 531.8 2007 8 552.9 2008 11 550.0 2009 2 810.7 2010 1 595.9 2011 2 523.9 2012 6 491.6

Investment Commitments in Manufacturing and Services by Industry Cluster (million dollars)

Source: Department of Statistics Singapore

2009 2010 2011 2012 2011 III 2011 IV 2012 I 2012 II 2012 III 2012 IV 2013 I 2013 II 2013 III Total 11 753.9 12 854.2 13 734.3 16 007.8 4 038.9 3 382.3 5 959.0 4 610.7 4 068.6 1 369.5 4 098.5 2 258.6 2 425.1 Manifacturing 10 092.1 10 033.6 11 274.3 14 299.4 3 345.9 2 800.9 5 347.5 4 115.4 3 606.8 1 229.7 2 852.7 1 106.6 1 623.8 Electronics 4 672.4 5 647.8 7 384.4 6 239.4 2 399.5 1 403.6 896.7 2 822.1 2 520.6 0.0 2 052.8 14.2 436.5 Chemicals 3 055.6 1 651.4 2 523.8 6 678.3 712.3 1187.8 3 978.2 883.3 969.0 847.8 544.9 474.3 813.7 Biomedical Manifacturing 1 041.9 426.3 196.6 315.9 23.0 50.2 103.7 111.8 47.7 52.7 8.9 59.8 176.6 Preciosion Engineering 868.4 476.8 668.7 359.6 109.0 141.4 105.9 87.5 65.3 100.9 90.9 209.3 97.2 Transport Engineering 337.6 1 480.5 423.7 579.1 90.0 17.9 263.0 180.5 0.0 135.6 128.3 325.3 99.8 General Manufacturing Industries 116.2 350.8 76.1 127.1 12.1 0.0 0.0 30.2 4.2 92.7 26.9 23.7 0.0 Services Clusters 1 661.8 2 820.6 2 460.0 1 708.4 693.0 581.9 611.5 495.3 461.8 139.8 1 245.8 1 152.0 801.3

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 63 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Ian Wood

MANAGING DIRECTOR AND COUNTRY REPRESENTATIVE LANXESS SINGAPORE

Can you provide a brief introduction to The country has an ideal environment for new undertook master classes, study tours and LANXESS in Singapore? technology and innovation, driven by a high- concert performances with world-class musi- Our history with Singapore dates back to the ly-educated workforce and supported by a cians. The programme, which is the largest of 1920s when we were part of the Bayer group. business-friendly government infrastructure. its kind in Singapore, was a resounding suc- We began our formal business relationship Jurong Island, where our two plants are lo- cess and we recently took the natural step of with the country in 2004 when we became cated, is a world-class petrochemical hub extending it for another three years till 2015. a separate operating entity on a global scale; which provides an excellent integration in- July 1st, 2004 was LANXESS’ official birthdate frastructure of raw materials supply, logistics What is LANXESS’ future outlook for Singa- in Singapore. In late January 2005, Lanxess network and utility services, all of which will pore? went public as a company and become wholly optimize our plant operations. We expect the global megatrends of urbaniza- distinct from our parent company. LANXESS’ single largest investment to date, tion and mobility to continue driving growth Since then, our milestones in the region in- the €400 million butyl rubber plant, is cur- in the emerging ASEAN markets. Singapore clude the establishment of a LANXESS Singa- rently in the commissioning phase and com- will continue to play a key role as a hub from pore representative office in Ho Chi Minh City, mercial production is expected in the third which we manage regional operations for our Vietnam in 2005; the move of the Asia-Pacific quarter of 2013. Likewise, our Nd-PBR plant business units. (APAC) headquarters of LANXESS’ leather started its construction phase in September The establishment of Singapore as a regional chemicals business unit from Hong Kong 2012; that asset will come onstream in 2015, production hub puts us in good stead to sup- to Singapore in 2008, and the relocation of and at €200 million is the one of the com- ply the demand for synthetic rubber in sur- our global headquarters of the butyl rubber pany’s largest plant investments. rounding markets for the foreseeable future. business unit from Switzerland to Singapore With these two major rubber investments in Our focus in the near term is to ensure the in 2010. Singapore, the site on Jurong Island will play upcoming butyl rubber and Nd-PBR plants Singapore, together with Shanghai is a pivotal a key role in LANXESS achieving its mid-term remain on schedule, in order to meet the de- hub for LANXESS’ operations in APAC. The earnings goal of 1.4 and 1.8 billion euro mand for high-performance rubber from the country is also home to two of the company’s EBITDA pre exceptionals in 2014 and 2018. growing regional tyre markets. • largest production plants – the butyl rubber and neodymium-based performance butadi- How does LANXESS demonstrate its commit- ene rubber (Nd-PBR) plants on Jurong Island. ment to Singapore’s chemical industry and the LANXESS currently employees over 370 em- country as a whole? ployees in Singapore, this number will more We also believe strongly in doing our part for than double by 2015 when the plants are in the local community, and we are focused on full operation. nurturing young talent through cultural ex- change. To this end, we have developed var- How does LANXESS’ footprint in APAC and ious initiatives on a global scale that involve Singapore cater to its overall strategy? our youth and music. For instance, LANXESS Singapore is the hub of our Southeast Asian has organised the bi-national LANXESS Young operations, and the Asian pillar of our global Euro Classic concert series in China, Japan, In- synthetic rubber production. dia, Russia and Brazil, and sponsors the Saito The geographical location of Singapore makes Kinen Music Festival in Japan. it an ideal place from which to engage our Singapore is no different. In 2010, we initi- key customers. Its good infrastructure, in- ated a partnership with the Singapore National cluding IT connectivity, shipping & logistics Youth Orchestra - a three-year programme and transportation services, translates to high comprising activities that aid the development efficiency levels in our business operations. of budding musical talents – young musicians

64 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Hiroki Sakasai

MANAGING DIRECTOR & HEAD CORPORATE BRANCH (SEA & PACIFIC) SUMITOMO CHEMICAL SINGAPORE PTE LTD

Could we begin with a brief history of Sumit- cause we were already familiar with this coun- we are speaking with the EDB to acquire more omo Chemical’s presence in Singapore? try due to our experience with PCS and be- land on Jurong Island for high value petro- Sumitomo Chemical group has had a pres- cause of the strong support we received from chemicals facilities. There is scarce space on ence in Singapore since the 1970s, as Sum- the EDB. Jurong Island, so any new investment will itomo Chemical was integral in establishing have to be made very carefully. the Petrochemical Corporation of Singapore What about Singapore makes it an ideal mar- (PCS), Singapore’s first petrochemicals plant. ket to produce specialty chemicals? What are your key priorities for Sumitomo This S$2 billion investment was a joint ven- The EDB’s invitation through the creation of Chemical over the next three to five years? ture between the Singapore government and Jurong Island has been the key to attracting Our first goal is to enhance our research and a consortium of Japanese companies led investment from both Sumitomo Chemical development capabilities in order to make our by Sumitomo Chemical. This was comple- and other multinational corporations. For MMA production more competitive. Our next mented by the construction of phase two of Sumitomo Chemical, Singapore is such a small goal is to increase sophistication of process at PCS. Completed in 1997, Phase 2 represents country that we can focus almost solely on us- our existing plants in order to minimize high S$3.4 billion of investment and the total ca- ing it as a base for supplying external markets, operating costs. Lastly we want to establish pacity of the plant is now 965,000 1,100,000 so it serves as a convenient hub from where Singapore as a regional headquarters for Sum- mt/y of Ethylene, 480,000 645,000 mt/y of we can serve anywhere in Asia. itomo Chemical. • propylene, 730,000 mt/y of polyethylene, and 310,000 mt/y of polypropylene. In 1998 What are some of the challenges facing Singa- Sumitomo Chemical moved downstream in pore’s chemicals manufacturers? Singapore through the commissioning of our Of course, the operating costs in Singapore is S$300 million SMAG project, which produces much higher than other countries in South- methyl methacrylate monomer (MMA), poly- east Asia, especially the utilities costs. This is an methyl methacrylates (PMMA), acrylic acid, issue we constantly bring up with the EDB and acrylic esters and super absorbent polymer. we are studying the feasibility of cogeneration This downstream project represented Sumit- in an effort to reduce costs. omo Chemical’s first MMA production facil- Although Jurong Island is an excellent hub for ity outside Japan. Today, Sumitomo Chemical the chemicals sector, it only has one bridge group and affiliated companies in Singapore connecting it to the mainland. This can create have annual sales of US$7 billion and employs a road shipment bottleneck on the island that approximately 1,200 people. needs to be addressed through the construc- tion of a second bridge. Why did Sumitomo Chemical choose Singa- pore to be its first location for MMA produc- What other areas of Sumitomo Chemical’s tion outside Japan? business in Southeast Asia are you excited After Japan’s phenomenal economic success in about? the 1980s, Sumitomo Chemical was looking Sumitomo Chemical group company, Sum- to diversify where it produced chemicals in itomo Chemical Asia, has exclusive rights to the 1990s. The company decided to choose sell the products from our joint venture with Singapore because of the accessibility it of- Saudi Aramco except for the Middle East. Sin- fered to markets throughout Asia and because gapore serves as an ideal base for distribution at this time Sumitomo Chemical did not have of petrochemicals from the Middle East into many overseas operations outside Japan. We Southeast Asia and China. felt comfortable investing in Singapore be- Although talks are still in the very early stages,

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 65 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Dai Yu

CEO JURONG AROMATICS CORPORATION

Jurong Aromatics Corporation (JAC) will use of the best automation technology in pro- pore’s government is currently promoting the be one of the largest aromatics plants in the duction processing. Our organization will have specialty chemicals industry. Specialty chem- world when it comes online in 2014. Could few hierarchies to make information-flow and icals, at the high end of petrochemical value you provide some background on the project? decision-making fast and efficient, and we use chain, normally have special purposes and The Jurong Aromatics complex was started to more IT automation and ERP in our manage- specific processing technologies, niche mar- ride the fast growing demand for energy and ment than most chemical plants. kets, which makes them less cyclical and more petrochemical products in Asia by produc- profitable. The specialty chemicals business is ing and selling competitive aromatics and oil Demand for aromatics is strong, particularly not easy, however; it has high technological, R products into the market. The construction of in Asia. Do you foresee the opportunity to ex- and D and logistical requirements. Producers our plant on Jurong Island started in August pand your complex in future, and would there should be located in the right geographical lo- 2011. Upon completion, it will be a highly be physical space to do so? cation and ensure they have access to reliable integrated, world scale complex with the lat- There are some areas on our current site and competitive feedstock supply – preferably est high efficiency technology and processing reserved for potential expansion. At this over the fence, and good logistics conditions facilities that will process 4.5 million mty of moment we are more focused on the con- to serve the markets. Jurong Island benefits condensate, to produce 1.44 million mt/y struction, commissioning and startup of the from its integrated industry, excellent supply of aromatics, consisting of 800 kilotons of project, but we are also doing initial assessing distribution facilities and location and R and paraxylene, 200 kilotons of other xylene and work for the future. D centers. The demand for specialty chemicals 440 kilotons of benzene. In addition, it will is bound to increase as living standards rise also produce 2.5 million mt/y of oil products, What are your strategic priorities for JAC over across Asia, and JAC’s production will contrib- mostly jet fuel and diesel. The shareholders in- the next five years? ute substantially to the balance of Singapore’s clude SK Group, Glencore, Jiangsu Sanfangx- Our first priority is to have a successful project petrochemical portfolio, to the booming of iang Group, Shefford Investments, Arovin of completion and a flawless start-up of our op- specialty chemicals industry in Singapore. • Vinmar Group, UVM, EDBi, and ESSAR Group. erations. Following which, JAC will have to achieve overall operational excellence across Operating costs are a difficulty for produc- the organization and achieve first quartile per- ers in Singapore as they attempt to compete formance within the industry. Our goal is to against companies from China and other achieve satisfactory returns to our lenders and countries. What are you doing to minimize shareholders and to build JAC into a company yours? with a high-performance culture and good Existing producers in Singapore have been industry reputation. JAC will also tap on the operating for many years, however the busi- best practices from the industry including our ness environment has changed rapidly and shareholders, some of which are strong aro- operating costs has been a challenge to all matics producers, while simultaneously main- the players. JAC understands this challenge taining our independence as a company. In the and has on the onset taken actions to address long term, we want to be the industry leader. this. Our approach is twofold. We will use the latest high-efficiency technology to minimize Do you have a final message for the readers of production loss and utilities consumption. We Chemical Week? will also maximize operational efficiencies In the recent decade, low-cost products from through simplified and standardized man- the Middle East have impacted the whole agement structures, training to improve staff commodity petrochemical industry, and in competencies, optimization of supply chains future shale gas may be an additional threat to and plant utilization and operation, and the the commodity petrochemical industry. Singa-

66 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Akira Yonemura

MANAGING DIRECTOR PETROCHEMICAL CORPORATION OF SINGAPORE PTE LTD

The Petrochemical Corporation of Singapore are working on strategies on how to further working to reduce its C02 emissions. This is (PCS) has evolved considerably since becom- outperform our competitors, and this is a big just one among many efforts we are working ing the first petrochemical facility in Singapore. change for us. Even though we have been suc- on in conjunction with the government to Can you give us a brief overview of the history cessful thus far, we need to continue pushing promote sustainable practices. One of our core of the company and some of your achieve- ourselves to stay on top. The entire industry is values is to maintain high standards in HSE ments? changing and we need to continue to adjust protection, and we would like to eventually see PCS' main purpose is to produce basic mate- accordingly. We have to manage our increasing these standards expanded to our competitors rials for petrochemical products and supply costs while upholding our quality standards. as well. companies with the same. At the same time, Over the years, PCS has adopted a strategy of we also provide some utility and infrastructural diversification, both in terms of feedstock and Where would you like to see PCS in three to services to our downstream clients at the Sin- products. five years time? gapore Petrochemical Complex. These are used We do not have immediate plans to further PCS would like to remain one of the most by us as well as by our customers in their op- expand our production capacity except for competitive producers of petrochemicals in erations. One of the benefits in offering these the on­ going new BD plant project, but we are this region. We have the experience and the services is our competitive pricing, especially trying to introduce variety into the products drive to continue to do so. Additionally, we given how expensive utilities have become. that we offer. PCS is trying to harness the va- would like to expand our operation whenever PCS was established in 1977 started as a joint riety of hydrocarbon streams produced by the possible. Singapore continues to be a good venture between the Singaporean government cracking process more efficiently. These include location for the petrochemical business, es- and a consortium of Japanese companies led propylene, acetylene and benzene, as well as pecially regarding high value ­added chemical by Sumitomo Chemical. In 1989, Shell ac- toluene and xylene, which are exported to the products. PCS has and always will strive to keep quired a large share in the company and took Southeast Asia region a nd beyond for further our products competitive and of an extremely over the interests of the Singaporean govern- processing. Some of the other streams a re not high quality. • ment; PCS then became a joint venture be- fully value added, so we are working on en- tween Shell and the Japanese business consor- hancing the conditions. tium. After 2009, Shell sold half of its shares to QPI, but still remains involved in the company ExxonMobil and Shell are both consistently with a 25% stake. and considerably enhancing their respective petrochemical assets. How does that affect your One of the industry's main concerns are rising business at PCS? production costs, particularly with the price of We are the pioneers in this field and so their feedstocks. What is PCS' strategy for addressing business models are a bit different. They are these challenges? integrating this with their refineries. The key In Singapore, doing business is not cheap. Sin- issue is that our market is not Singapore but gapore's priorities include value-added con- instead all of Asia. In a sense, these companies siderations such as health, safety and environ- do not pose a problem because we are mostly mental protections (HSE), which is why we competing together with other petrochemical continue to have excellent safety performance. hubs in neighbouring countries. For PCS specifically, one of our current chal- lenges is how to enhance our competitiveness How has PCS contributed to long-term sustain- within the region. When we started our oper- ability initiatives in Singapore and the region? ations, we were the only complex of its kind We are participating in various initiatives in Southeast Asia. Now competition is every- around sustainability including the Energy Effi- where in the region, including Singapore. We ciency Movement. Moreover, PCS is constantly

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 67 Success Brings Challenges: Human Resources and the Environment

“We actually find that by being committed to sustainability makes us more competitive. Sembcorp was an early investor in green technology and sustainability and has been well positioned to deliver cost-effective sustainable solutions vis-à-vis other competitors. For example, in our water business we have built up years of unique know-how in applying various technologies and operating facilities treating complex industrial wastewater. This includes wastewater with a chemical oxygen demand far higher than regular municipal wastewater, and high-salinity wastewater. We were among the earliest in Singapore’s industrial wastewater treatment scene and today, our expertise in this area has become a core competency of the business and a key competitive edge. This expertise is also very much in demand even overseas in markets like China.”

- NG Meng Poh, EVP and Head of Singapore and ASEAN (Utilities), Sembcorp Industries Courtesy of TÜV SÜD Global Business Reports EXPLORATION Industry Explorations

Innovation and a Sustainable Environment

Getting more from less

One of the most common complaints heard the long term: “Many companies have at- pore, where the government has steadfastly from Singapore’s’ manufacturers is the cost tempted to transform their companies to be focused on long-term investment, many of power. In a region where rivals can rely more energy efficient. However McKinsey companies would be behooved to do the on indigenous hydrocarbons and subsi- research shows that 90% of energy transfor- same in their long-term investment in en- dized electricity tariffs, Singaporean energy mations fail after four years – mainly due to ergy efficiency and sustainability. In a glob- bills are a real challenge to the city’s ability non-technical issues. The role of the Green alized business world where driving costs to compete. Used to dealing with a lack of Campus is to help companies achieve lasting down is limited by local factors, driving resources, which is the case whatever the change.” down energy costs and adapting environ- endeavor, Singapore offers solutions. These Another company at the forefront of sustain- mentally friendly policies now are likely to come largely from efficiency, quality and ability is testing and certification services pay off in the long run. clever management that might even add an provider Tüv Süd PSB. CEO Chong Weng Erman Tan, CEO of Singapore-based pro- edge to Singaporean industry that its energy Hoe believes that when it comes to envi- ducer Asia Polyurethane, sees cost increases guzzeling neighbours may come to envy. ronmentally friendly products and energy as a perpetual issue in such a worldwide-in- The EDB is working on new ways to help efficiency, companies are finally starting to terconnected market. Limited by economic operators achieve greater energy efficiency enact permanent changes: “Companies are conditions and present in a fast-changing “from the top-down.” In addition to work- getting better at assessing the environmen- market, the company has to adjust its busi- ing with the mega projects like ExxonMobil tal impact of their purchasing habits. We ness to stay ahead of its competitors. “Price and JAC on cogeneration plants, the EDB has notice that companies are more and more pressures are coming from everywhere. also spearheaded several studies and initia- willing to spend on green products. On the Inflation is prevalent. Learning to be more tives to engage all relevant parties in order other hand, the prices of green materials are cost-effective than your competitors is one to streamline efficiencies. also coming down. As these forces affect the of the survival skills that you must learn to One such initiative is the Green Campus, price level of green products, the sustain- succeed in the tough market conditions. a collaborative effort between consultants ability of our industry will continue to im- Whether you are in the chemical, oil and McKinsey&Company, the EDB, and the Na- prove… The green initiative requires many gas, automotive industry etc., costs are ris- tional Environment Agency to inform the different supporters to succeed. We are one ing and will continue to do so. Continued sector of ways to achieve energy saving component of a larger effort.” innovation is our strategy to combat these measures: “The Green Campus is about Once a government agency in Singapore, rising costs and to achieve superiority, we helping corporations turn energy efficiency PSB was privatized in 1996 and subse- must be able to drive the costs out of the into a competitive advantage. It is about quently acquired by German based Tüv Süd system,” says Tan. seeing energy not as a burden but rather in 2007. The company has grown by 150% Asia Polyurethane exports its polyurethane as a business opportunity and a point of over the last six years and has set ambitious resins and blended components to Asia-Pa- differentiation that can increase overall growth targets for the medium term. At the cific and African markets for use primarily in performance. The Green Campus will offer heart of this growth strategy is a desire to the insulation and automotive sectors. The companies a hands-on opportunity to drive facilitate their client’s optimization through company is looking to become more dy- an end-to-end energy transformation by their full suite of services. “As the global namic in the face of shifting market condi- providing experiential learning opportuni- population continues to grow, the challenge tions, as specialty chemicals of yesterday be- ties in a live process plant,” says Dr. Mads is to create a sustainable living environment come contemporary commodity chemicals. Dührkop Lauritzen, managing partner of powered by energy efficient necessities and “Realizing that new technology can quickly McKinsey&Company’s Southeast Asia Oper- cost efficient clean energy” says Chong. become outdated and commoditized, we ations Practice. Energy efficiency and sustainability should focus on developing innovative materials to Dr. Lauritzen comments that companies at- no longer be buzzwords on an annual share- add value to our customers’ products and tempt to address inefficiencies, but in most holders report; the concepts make business processes. To ensure that the latest technol- cases these initiatives are not upheld in sense and must be treated as such. In Singa- ogy is being adopted, we source our raw

70 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations EXPLORATION

“The project market will slowly tail off over the next 10 years as Jurong Island fills up. The emphasis will need to change towards sustainable and responsible maintenance. The island is very integrated, and everyone needs to be concerned about safety standards, as well as providing value for money, now that the original facilities are ageing. The quality of maintenance is highly relevant to these concerns, so PEC is well-positioned to play an even greater role as a one-stop engineering service provider. The multinationals need to change their contracting strategies – rather than picking the cheapest providers, they should think more about long-term partnerships. This is especially important especially with the recent changes to foreign workers policy it is no longer possible to bring in such workers on a job-by-job basis. Companies here must be able to attract good people, train them in a variety of skills and retain them. The government recognizes that such moves will raise the industry’s standards.”

- Robert Dompeling, CEO, PEC Ltd

“We are one of the first independent system houses in the world to be awarded all the three international quality and safety certifications: ISO14001, ISO9001, and OHSAS 18001. We constantly work towards enhancing our internal control to ensure that our employees are properly trained. In Singapore, we have received the 4-in-1 Business Excellence Certifications for our commitment and efforts in achieving innovations and quality in our processes, people development, leadership, customer satisfaction since 2005. We were also being awarded the ‘bizSAFE STAR’ certification for the demonstration of our commitment towards acquiring risk management capabilities and implementing a Workplace Safety and Health management system. The ardent support for the need of greener products have enabled us to be awarded the ‘Green Label’ and ‘Green Mark’ certifications.”

- Erman Tan, CEO, Asia Polyurethane

materials and technology partners throughout Asia, USA and Europe. Our primary market is in Asia but we have also extended our reach into the Middle East, Europe and Africa,” says Tan. In Singapore there is neither a miracle solution to im- proving processes, nor are constraints such as energy costs or land scarcity going to disappear overnight. How- ever, the attitude that puts innovation at the forefront contributes to the notion that Singapore’s chemicals in- Your expert quality dustry has not reached its peak. “In my view when you & safety partner look at Singapore’s role more globally, inventions are still Chemical plant owners and operators are under coming from the United States and Europe, but innova- increasing pressure to reduce operating costs, maintain and improve output quality and comply tions are coming from Singapore. This attracts chemicals with environmental legislation. manufacturers to invest here,” comments Fritz Graf von In this competitive and stringent legislative der Schulenburg, executive vice president of Jebsen & landscape, TÜV SÜD PSB is working side by side with the chemical, petrochemical and Jessen. process industry, providing one-stop service solutions to ensure that chemical plants and Given the amount of integration and efficiency already infrastructure, products and processes are present, success in improving efficiencies through inno- optimized and comply with safety quality and environmental standards. vation will likely be measured in inches not miles. Never- theless, these small gains can eventually add up and rein- Reduce costs and inefficiencies, increase productivity, maximize profit, improve your force the competitive advantages most companies already international brand reach and market access with TÜV SÜD PSB today. enjoy in Singapore. Dr. Carpenter, executive director of the Institute of Chemical and Engineering Sciences be- Contact us at [email protected]. lieves these gains will be the key to Singapore’s future growth: “Really, it is about increasing productivity. There is massive investment here, but you can see that the land itself is fairly limited, so the opportunities for growth are not associated with just continuing to attract new invest- TÜV SÜD PSB Pte. Ltd. 1 Science Park Drive Singapore 118221 ment. Going forward, it will be a matter of increasing Tel: +65 6778 7777 Email: [email protected] www.tuv-sud-psb.sg output through increasing productivity.” •

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 71 Courtesy of EDB Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Chong Weng Hoe

FORMER CEO AND DIRECTOR TÜV SÜD PSB

Could you provide a brief history of TÜV SÜD nities and aim to increase our investment in include advisory on international compliance PSB? ASEAN over the next three to five years. requirements, design and test data compli- TÜV SÜD began in Germany over 145 years ance reviews, and local representation to help ago. In Singapore, TÜV SÜD PSB has been Which of your services is in the highest de- foreign manufacturers submit applications. serving the testing and certification needs of mand by the chemical industry in the region? We also provide post-submission follow-ups local companies for over forty years. In 1996, Currently about 25% of our business is related to ensure minimal delays to certification. We the Singapore government decided to priva- to the chemical industry, but we are quite also work closely with national regulatory tize PSB and received a lot of international well-balanced. For a new plant, the first few bodies and update customers with first hand interest in the company. TÜV SÜD valued the stages of service will typically involve design information on any changes to regulations PSB brand and acquired PSB. In Singapore and review, quality assurance/ quality control and support them with re-certification if such ASEAN, TÜV SÜD companies operate as TÜV (QA/QC) during procurement for manufac- changes dictate it. SÜD PSB. turing of equipment, material, component as well as during site construction supervision. What is your perspective on sustainability How did the TÜV SÜD acquisition affect your After the building phase, we can provide in the region? How can TÜV SÜD enhance a business and offerings? maintenance and safety inspection services company’s sustainability? Being part of the TÜV SÜD family has helped which also include a risk based assessment of I think that companies are getting better at our business in many ways. Prior to the acqui- the plant. For more mature companies, we can assessing the environmental impact of their sition, we focused on serving local industries. perform safety evaluations and inspections on purchasing habits. We notice that compa- With the acquisition by TÜV SÜD, it propelled an annual basis to ensure the integrity of tanks nies are more and more willing to spend on us into the global arena, making us an interna- and pipelines. We also have a dedicated failure green products. On the other hand, the prices tional player overnight. Some of the new ser- analysis team who are able to look into any of green materials are also coming down. As vices which we could offer included industry potential safety concerns and offer solutions. these forces affect the price level of green services for petrochemicals, renewable energy We work with companies both on an ongoing products, the sustainability of our industry and the leisure industry. and a project-by-project basis. will continue to improve. We are one of the first few companies capable You described Singapore as a hub for your Singapore hosts many international players of certifying green products. We work closely other services. How do you leverage your po- that target a variety of markets and it seems as with Singapore agencies like SGBC, NEA and sition in Singapore throughout Asia? though the industry is ahead of the regulatory BCA, who are some of the earliest propo- We are present in six countries in ASEAN: Sin- environment. How you can help companies to nents of green products. The green initiative gapore, Malaysia, Thailand, Indonesia, Philip- commercialize goods for global markets? requires many different supporters to succeed. pines, and Vietnam. Singapore is the hub of Our certification services can be classified We are one component of a larger effort. • our technical operations in the region. We generally into two types: product certification have more than seven hundred technical staff and system certification. In Singapore we are in ASEAN, of which, about four hundred and active in both areas. TÜV SÜD globally oper- fifty are based at our laboratory facilities in ates only two major certification bodies – one Singapore. We have chemical labs in Singa- of these is in Singapore. Our laboratories are pore, Thailand, Vietnam and Indonesia. We are ISO 17025 accredited and we are also accred- investing in laboratories, structures and hu- ited as a certification body. man resources throughout the Southeast Asian With our international compliance manage- region. In Indonesia, we are looking at provid- ment (ICM) service, we help manufacturers ing testing services for the textile industry and gain global market entry conveniently and we are also expanding into food chemicals. cost effectively. Our professional ICM team We are always looking at long-term opportu- provides one stop compliance solutions that

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 73 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Erman Tan

CEO ASIA POLYURETHANE

What are your current activities? customer satisfaction since 2005. We were of the box and constantly seek new ways of The majority of our customers are in the oil also being awarded the “bizSAFE STAR” cer- doing things. and gas, insulation and automotive industries. tification for the demonstration of our com- In the oil and gas industry, our products are mitment towards acquiring risk management What role do you see for APU as the Singapore being used in chemical storage tanks, LPG capabilities and implementing a Workplace market becomes more focused on specialty tankers, risers and buoys, just to name a few. Safety and Health management system. The products? We have supplied PU for several oil projects ardent support for the need of greener prod- Singapore is an international logistics hub such as Maersk Oil, Pearl Oil, Liwan and South ucts has enabled us to be awarded the “Green with good linkages to different parts of the Belut. Label” and “Green Mark” certifications. world. In this sense, the WORLD is our mar- APU has a fully equipped laboratory in Singa- ket. In the chemical industry, companies ei- pore to carry out a wide range of full scale val- Part of Singapore’s new strategy is to become a ther stay close to upstream suppliers or stay idation testing, chemical analysis and physical hub for innovation. To what extent does your close to the customers. In Singapore on Jurong property determination. The availability of the geographic location help you innovate? Island, we are close to both our suppliers and facilities enable us to benefit our customers Our research is very market focused and customers – it is a very efficient production with shorter delivery lead-time which in driven by customer needs and requests. Un- base. Other strategic advantages for Singapore, turns help keep warehouse cost low and facil- like a big company which may do research on like being a free port and the conclusion of itate better cash flow and maximize the dollars academic issues and IP, we do not. We tie our numerous free trade agreements create the of the material value. The flexibility of partial research to Returns of Investment. Our exten- flexibility and further enhance our ability to delivery also ensures that the customers are sive partners’ networks allow us to gain ex- put our company on the world stage. We aim getting “fresh materials” which are able give posures to the different markets and equip us to be an icon of the Singapore Chemical Man- optimal performance. with the knowledge of the different cultures ufacturers in the near future. • For example, many of us may enjoy the “new to innovate and better tailor our offerings to car smell” which is common in all new cars. the customers. We also rotate our staff to take However, such odours are actually bad for our on different functions within the organisation health. APU is working with the automotive so that they can better understand the struc- industry players to develop materials that are ture and processes. odourless and safe for use. We also aim for the Innovation, in our view, should not just be materials to be zero-ODP and zero-GWP. focusing on the products. We need to be able to encourage our people to be innovative and How have you improved your facilities to also to be able to develop and nurture the al- meet the stringent standards of the larger ready innovative ones to ensure sustainability. companies that you work with? Singapore, though small in size, is a global We are one of the first independent system meeting place for many businesses and peo- houses in the world to be awarded all the 3 ple. These present the opportunities for inter- international quality and safety certifications action and the development of creative ideas. - ISO14001, ISO9001, and OHSAS 18001. We emphasize human capital development We constantly work towards enhancing our because the chemical market is very volatile internal control to ensure that our employees and we need people who are capable of mak- are properly trained. In Singapore, we have ing good and quick decisions to meet the received the 4-in-1 Business Excellence Cer- changing market conditions. Within APU, we tifications for our commitment and efforts promote an innovative culture and a set of in achieving innovations and quality in our forward-looking value systems. Employees are processes, people development, leadership, highly empowered, encouraged to think out

74 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations

Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Keith Carpenter

EXECUTIVE DIRECTOR INSTITUTE OF CHEMICAL AND ENGINEERING SCIENCES (ICES)

Can you give an overview of ICES and its ma- agricultural waste like lignocellulose—found we are currently in collaboration with one of jor milestones? in palm oil, rice, or cassava starch products. the pharmaceuticals majors in developing an At ICES, we are tasked with creating an R&D Bioethanol is another option; Singapore does emerging markets business. platform for Singapore’s chemical industry: not produce it, but we do have the facilities Jurong Island has been at the heart of the this platform is charged with the supply of to import it in large volumes. The real sci- chemicals industry in Singapore and will talented people; the fostering of a scientific entific breakthroughs have to do with inte- continue to be. That being said, it is no longer culture and environment; and the provision grating catalysis engineering with biology, as the only part of the story. Going forward, the of advanced facilities to develop new tech- you need all of those disciplines to develop a growth of specialty chemicals is the future. nologies and solutions. The ICES was estab- process that is sustainable and can match cur- Jurong will always be important, but the im- lished in 2002, at a time when the chemicals rent processes on cost. pact of the chemical industry on Singapore is industry was already significant in Singapore, In a sense, that is an issue the ICES been greater than just the island itself. • yet there were not any institutionalized R&D looking at for many years already. Really, it is centers to serve it. Our first major milestones about increasing productivity. There is mas- were the moving ICES to Jurong Island from sive investment here, but you can see that the the mainland in 2004 and the establishment land itself is fairly limited, so the opportuni- of a set of credible laboratories. We reached ties for growth are not associated with just our target manpower levels around 2007, and continuing to attract new investment. Go- have continued to evolve and grow since that ing forward, it will be a matter of increas- time. Currently, our staff consists of about 300 ing output through increasing productivity. scientists and engineers, about half of which Feedstock costs are definitely a weakness for hold PhDs. Our focuses include chemistry, us here, but that also means that we have an process engineering, solids handling, crystal- opportunity because to develop high-yield, lization formulation, industrial biotechnol- low-waste-generating processes. ogy—using biology to make chemical feed- stocks and chemical materials—polymers, What is on the horizon for the ICES? and catalysis. Our next wish is to start new programs in new areas of research. Looking at oil field What can you say about the relationship be- chemicals, for example, one of the issues is tween innovation and Singapore’s framework about being able to get at oil deposits in a for IP protection? sustainable way. There is a lot of potential While not the only reason, the IP framework harm in the chemicals used in enhanced oil is definitely one of the main reasons that recovery, so we want to know how we can many of our chemical collaborators come to have enhanced oil recovery without causing Singapore, knowing that the things they do major problems. There are also major pro- here will be handled in the strictest of con- grams in personal care: one of the major is- fidence. sues facing the pharmaceuticals industry is how to deal with the fact that there are not Can you elaborate on what research programs any more big blockbuster innovations in de- ICES has that involve diversifying feedstocks velopment. Conducting research in personal and making the use thereof more efficient? care builds upon our strengths in pharmaceu- Some of the alternatives we are looking at in- ticals because of the formulations involved, as clude C1 chemistry, which can be synthesized well as link to our biology-oriented sister in- from biomass sources and converted from stitutions that understand skin and hair care;

76 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Fabrice Billard & June Lam

FB: SENIOR VICE PRESIDENT JL: KEY ACCOUNTS MANAGER SINGAPORE MARKET, SULZER CHEMTECH MASS TRANSFER TECHNOLOGY BUSINESS UNIT

Could we begin with a brief discussion on certainly resonates with us! The EDB is more multiple distillation columns in a plant our Sulzer Chemtech’s operations in Singapore like a business partner than a government bu- heat pumps allow you to reuse energy rather within the context of the company’s global reaucracy. Additionally, we already had a large than injecting new energy into the system in operations? operation here and many big customers are distillation columns. FB: Sulzer has four divisions, three of which on the doorstep. are present in Singapore: Sulzer Pumps, Many plants in Singapore are over two Sulzer Turbo Machinery Services and Sulzer One of our interviewees commented: “Inven- decades old. To what extent is maintenance of Chemtech. Sulzer Chemtech has been present tions come from the United States and Eu- existing plants a portion of your business and in Singapore for over 25 years. Year after rope, but innovation is increasingly coming do you see this growing in Asia? year since we entered Singapore our chem- from places like Singapore.” Is this reflected FB: The direction is clearly towards increasing ical sector business has grown. In the early in Sulzer’s operations here? our maintenance and upkeep services in Asia. 2000s Singapore became Sulzer Chemtech’s FB: There is a degree of truth to this statement For example, in the United States, the most regional headquarters and, as of March 2013, at Sulzer. Our R&D center is in Switzerland as mature market, more than half of our busi- Singapore is the new global headquarters for this is where we have the highest depth of ness is focused on these services while in Asia Sulzer Chemtech’s largest business unit, Mass expertise, but we are also increasingly wit- it is less than 20%. One of our key strategic Transfer Technology, which I am leading. nessing more innovation in terms of devel- objectives over the next five years is to grow opment in China and Singapore. Our people these services in Asia so that they make up While Singapore has been an important part here [in Asia] are thinking and moving so fast 30% to 40% of our business. of Sulzer for over 25 years, what was the im- that they are often developing on-the-spot so- petus of moving the Mass Transfer Technol- lutions to meet the customers’ needs. When What do you see as your key strategic objec- ogy’s global headquarters from Switzerland considering increasing R&D capabilities in tives for Sulzer Chemtech Mass Transfer Tech- to Singapore? Why was Singapore chosen Asia, Singapore is a place of choice due to its nology in Singapore in the coming years? over other potential cities in Asia? strong intellectual property protection. FB: Internally, we want to continue to build FB: Several aspects contributed to the deci- up our global capabilities in Singapore by sion [to move from Switzerland to Asia]. First, When we speak to plant operators in Sin- developing application know-how. Exter- slightly more than half of the Mass Transfer gapore rising costs are their main concern. nally, we are focused on building up our Technology business unit’s revenue is in the Which areas is Sulzer focused on to reduce turnaround services as plants mature in the Asian region, including India and the Middle costs in this market? region. Our goal is to achieve around 10% to East. Asia is where we see the most growth FB: The aspect we see the most acute cost re- 15% per annum organic growth rate in the and we want our headquarters closer to our duction is energy saving. This is an area that coming years. • customers. Additionally, our biggest factories customers in Europe may have attacked sev- are in India and China, so being close to these eral years ago, but we are increasingly seeing locations is important as well. We want to customers in Singapore recognize the benefits further develop the Sulzer expertise and cul- of saving energy. We get a number of inquiries ture in Asia and having a headquarters located from clients who want to reduce energy us- here makes this easier as well. age and we can provide solutions that can be When we decided we wanted to move our applied to help them reduce costs. Mass Transfer Technology business unit head- JL: We can offer our services to introduce heat quarters to Asia we looked at several cities: pumps on the distillation column. Typically, Shanghai, Mumbai and Singapore. We ulti- the distillation column is the highest energy mately selected Singapore because of its busi- consumer in a chemical plant. If a column is ness friendliness; people call Singapore the equipped with Conventional Trays, we can re- Switzerland of Asia. As a Swiss company, this vamp it with structured packing. If there are

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 77 Global Business Reports ANALYSIS Industry Explorations

The Environment in ASEAN

Structural Issues at Fault

In late June this year Singaporeans found anisms within the organization vary widely their typically green and clean city trans- in sophistication and vigor. Despite impres- formed into something more akin to noto- sive achievements in other areas, public and riously polluted cities like Beijing: a thick business consciousness of environmental blanket of brown haze had enveloped the impact remains low across the developing skies of the Lion City. Pharmacies quickly region. “In Southeast Asia, the environment sold out of breathing masks as the three- only counts in Singapore… Unfortunately, hour Pollution Standards Index (PSI) read- there is little regard for the environment [ev- ing skyrocketed a record level of 401 on 21 erywhere else],” says Ruprecht Latterman, June: any reading over 300 on the 500 point president and CEO of MWM Southeast Asia. scale is classified as hazardous. This is perhaps most aptly illustrated by the Despite its position as a petroleum refining failure to exploit renewable energy opportu- and chemicals hub, Singapore typically en- nities: one area where Southeast Asia clearly joys low levels of air pollution. The culprit lags behind the rest of the world. Only one of this smog was not the industrial facilities ASEAN country (Thailand) registers on Ernst of Jurong Island or the oil tankers docked and Young’s Renewable Energy Country At- in Singapore’s port, but man-made forest tractiveness Index, which ranks the top 40 fires on the neighbouring Indonesian island countries in the world and factors in govern- of Sumatra as palm oil farmers made space ment incentives for the sector. to plant new fields. Singapore was not the In many cases the blame lies at the top; gov- only country affected: Malaysia, Brunei and ernment policy sets a culture of waste that Thailand all experienced higher than normal exacerbates environmental degradation. pollution levels. While many Southeast Asian countries have This phenomenon is nothing new to South- set lofty goals for the developing their re- east Asia, where farmers annually use detri- newables sector, in most cases government mental slash and burn techniques to clear policy structurally fails to create a level play- land. However, the extremity of this year’s ing field. haze meant it had a particularly strong eco- The single largest impediment for renewable nomic impact on Singapore’s economy as energy investments, however, is fuel subsi- everyone from construction workers to tour dization. Of ASEAN’s six largest economies bus operators were forced to suspend work. (Indonesia, Malaysia, Singapore, Indonesia With the renewal of the Kyoto Protocol cur- and Thailand) only Singapore and the Philip- rently stalled, international cooperation on pines have no subsidy. “Fossil fuel subsidies climate change issues ranging from defor- in Southeast Asia absolutely harm the feasi- estation to renewable energy seems to have bility of renewable projects in the region. faded from the agenda for governments They distort the price of fuel and allow com- across the world. In the ASEAN region, the panies to sell electricity below the true cost haze serves as an opportunity to reinvigorate of production. How can renewables compete broader awareness surrounding trans-border in this environment? They have a very good pollution. chance where the full cost of electricity is Just as the ASEAN region is home to a wide charged,” says Kavita Gandhi, executive di- diversity of economic development, envi- rector of the Sustainable Energy Association Courtesy of EnviroSolutions ronmental regimes and enforcement mech- of Singapore.

78 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations ANALYSIS

“We actually find that by being committed to sustainability makes us more competitive. Sembcorp was an early investor in green technology and sustainability and has been well positioned to deliver cost-effective sustainable solutions vis-à-vis other competitors. For example, in our water business we have built up years of unique know-how in applying various technologies and operating facilities treating complex industrial wastewater. This includes wastewater with a chemical oxygen demand far higher than regular municipal wastewater, and high-salinity wastewater. We were among the earliest in Singapore’s industrial wastewater treatment scene and today, our expertise Not only do fuel subsidies crowd out renew- in this area has become a core competency of the business and a key ables, they also encourage inefficient use of competitive edge. This expertise is also very much in demand even overseas fuel in conventional power production. Gen- in markets like China.” erators have less incentive to adapt more ef- ficient, cleaner technology if they are paying - NG Meng Poh, EVP and Head of Singapore and ASEAN (Utilities), below market price for fuel. Sembcorp Industries Fuel subsidies represent the quintessential case of sound policy versus popular will: al- though the economic and environmental ben- efits are evident, ending subsidization results “In recent years, health, safety, and environment (HSE) standards, as practiced by the many MNCs in Singapore, have dramatically increased; prompting in higher electricity costs. In developing coun- service providers throughout the sector to build their capabilities. While tries, this can have a particularly major impact there is always room for future improvement, we are proud to have greatly on spending habits and standard of living. enhanced our level of compliance. AlsternTechnologies is committed to Therefore, ending fuel subsidization in South- investing sufficient time, effort and money to ensure that the company runs in east Asia will not be a simple task; the popu- compliance with the highest HSE standards.” lace often takes to the streets and, if necessary, the ballot box to express discontent when the - Sam Cheok Whai, International Sales Director, issue is put on the table by the government. Alstern Technologies Singapore Pte Ltd If ASEAN countries are serious about renew- able energy and the environment, then gov- ernments need to redouble their efforts and create consensus to end fuel subsidization “Under JI v2.0, many ongoing projects focus on enhancing energy efficiency, across the region. Indonesia, the culprit of the both at the individual company level, and at a systems level, which spans plants and even companies. Some companies with larger plants or campuses haze, is taking an encouraging yet controver- have already invested in efficiency projects such as co-generation plants. One sial step in the right direction. The same day example of a systems-level energy efficiency project arose from an opportunity Singapore’s PSI reading hit an all time high, presented by the upcoming Liquefied Natural Gas (LNG) terminal. We are Indonesia’s government agreed to significant exploring how the ‘cold’ from LNG can be utilized in companies’ manufacturing cuts to its fuel subsidy, which raised petro- processes. With the high global energy costs, energy efficiency enhances both leum prices by 44%. Protesters took to the the competitiveness and sustainability of Jurong Island.” streets of Jakarta, yet thus far the government has thus far held firm in its stance. - Eugene Leong, Director of Energy & Chemicals, However, the protests and subsequent clashes Singapore Economic Development Board with police in Indonesia reveal the difficult path that lay ahead for all the region’s govern- ments. Solidarity on an ASEAN level may hold part of the solution. Regional cooperation may “Performance Products considers the Asian market to be very important. We want to expand the industrial specialty part of our business, and APAC is one also draw the praises and even assistance of of the fastest growing markets in the world. In the last five years Huntsman countries outside the region, making the pill Performance Products has started putting significant resource into Asia. Five of higher electricity prices a bit less difficult to years ago the best opportunities were in China and India, and we have now swallow. And recent events may have provided penetrated these countries to a great extent. Huntsman Performance Products the motivation necessary. “The haze initiated has given a lower priority to ASEAN up to now due to available resources, but proper talks from government officials on the some of the countries in it have faster growth than China and India, so the environment,” says Sri Thirumagan, executive division is looking very seriously at the ASEAN region now. India has issues with ethics and compliance, which are also present in ASEAN but not to the director of Asian Carbon Global. Leaders from same extent; and the governments of these countries are doing more to resolve across the region have come together to dis- them.” cuss a broad range of environmental issues beyond the haze. Creating a regional consen- sus for ending fuel subsidies should be on the - Albert Decelis, Vice President, Asia-Pacific, agenda. • Huntsman Performance Products

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 79 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Mads Dührkop Lauritzen

MANAGING PARTNER SOUTHEAST ASIA OPERATIONS PRACTICE MCKINSEY&COMPANY

What capabilities and services does the Green twenty technical and twenty soft manage- because increasingly companies are trying to Campus offer? ment modules. This setup takes participants compress the period it takes to build a facility. At McKinsey&Company we believe that through transformation scenarios and role- Furthermore, we are interested in becoming “green is the next lean” and the best way to plays, which teaches them how to implement more involved in the field of lead process de- address energy problems is by launching in- energy cost-saving measures within their re- sign. This field addresses the productivity of novation initiatives in collaboration with both spective companies. a plant and the operational efficiency of its the public and private sectors. This is what we We essentially try to empower the manage- equipment. have done with the Green Campus; a unique, ment of corporations to go out and identify strategic partnership between Singapore’s waste scenarios across plant processes. To ac- What are your future goals for the Green EDB, the National Environment Agency (NEA) complish this, there are numerous technical Campus? and McKinsey & Company. tools. However, to actually minimize waste Naturally, our primary goal is to make our The Green Campus is about helping corpora- you need to be able to convince the people clients successful. For McKinsey&Company, tions turn energy efficiency into a competitive within the company that it is a good idea and success means building lasting and distinc- advantage. It is about seeing energy not as a this requires good negotiation or soft skills. tive energy efficiency capabilities, while at the burden but rather as a business opportunity At our Green Campus we provide companies same time moving into fields of clean pro- and a point of differentiation that can increase with technical waste identification methods cesses and clean capacity investments. To do so overall performance. plus enhanced communication techniques to we need to continue to offer the best capabil- The Green Campus will offer companies a successfully implement and sustain energy ef- ities and the most talented faculty. In the end, hands-on opportunity to drive an end-to-end ficiency measures. it all boils down to the fact that sustainability energy transformation by providing experi- is the same as continuous improvement. You ential learning opportunities in a live process Why did McKinsey&Company choose Singa- need to be able to continuously make your plant. pore for this initiative and how has the chem- business more lean and get more value out of With a focus on practical experience, the ical sector responded to the Green campus? your processes and your people. Green Campus trains executives and front line As you are already aware, the Economic Devel- Finally, we have launched this Green Campus operations managers across a range of core opment Board has played a major role in turn- to help corporations turn energy efficiency operations issues. It will give participants an ing Singapore into a hub of excellence for Asia into a real competitive advantage because opportunity to learn energy-efficient pro- and particularly, promoting energy efficiency. we believe that this is going to be one of the cesses across six live learning stations – from In addition to the Singapore’s government’s hottest topics in the next one or two decades. • a water cooling system to an operational fur- strong commitment to innovation, Singapore nace. The center also offers world class train- has a high concentration of multinational and ing programs led by McKinsey experts from regional corporations, so it is a strategic lo- Singapore and around the world. cation for us to provide McKinsey&Company In short, the Green Campus helps corpora- services to clients that need our cutting edge tions build two types of skills: technical skills solutions. and soft skills, which in combination help drive lasting change. What sort of capabilities would you like to ex- pand in the future? Could you give us an overview of the type of Capacity investments are a massive balance training modules you offer? sheet driver for most corporations and if Studies have shown that experiential facili- you can influence this then you have another ties allow adults to learn; meaning we learn source of competitive advantage. We call this by doing. This is why McKinsey decided to lean construction or lean capacity investments create a Green Campus where we have about and we are looking to expand into this area

80 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Carlo ities, many smaller companies are unable to compete with us. Our main competitors here, Patteri while international, are relatively small players who tend to focus on one or two markets or specific applications. Unlike Veolia, virtually BUSINESS DEVELOPMENT DIRECTOR none of them can operate across all markets. VEOLIA WATER SOLUTIONS & TECHNOLOGIES (SEA) PTE LTD While this is a clearly a competitive advantage, it is also a challenge because it requires Veolia to have the ability to deal with every different type of wastewater across different industries. Furthermore, Veolia’ s advantage over a pure Can you provide an introduction to Veolia Wa- company would have to spend on disposal, re- consulting company is that it not only has the ter Solutions & Technologies (SEA) and some covery, shutdowns or other health and safety technologies to conduct studies but also the of the company’s major milestones? related matters. capabilities to implement the proposed solu- Veolia is the worlds largest environmental tions. This is an important advantage, which I services company with head offices in both How important is Veolia’s Zero Liquid Dis- believe none of our competitors can do. Paris and New York. The company operates charge technology for the Singaporean mar- globally through three main divisions: water, ket? What do you see as Veolia’s top three strategic energy and environmental services. The water If I had to mention a technology that I believe priorities over the next three to five years? division is the largest as it originated from will shape the future it would be Zero Liquid The first priority is to strengthen Veolia’s posi- the founding company “Générale des Eaux”, Discharge (ZLD) technology. ZLD means that tion in the petrochemical wastewater industry which was the main water treatment company you are not allowed to dispose of any liquid in Asia. We are the industry leader in Europe, in France 150 years ago. Today, Veolia provides that is not fully cleaned up and wastewater the Americas and the Middle East but we have a fully integrated service offering that satisfies needs to be recycled. This policy is very im- not reached our full potential in Asia. The any client needs within the water industry ad portant in Singapore because the city wants second strategic priority, is to strengthening beyond. to be as autonomous as possible and does not Veolia’s overall positioning in the municipal want to keep importing water from Malaysia. market, which is particularly difficult in Eu- What are the major challenges in the market Furthermore, unlike its neighbours, Singapore rope where governments are heavily regulated and how do you convince clients to adopt a has a limited amount of land, so practices and lacking financial resources. Finally, within more long-term vision? such as free dumping or wastewater ponds are the industrial arena, we want to expand be- The main challenge is that Asian countries simply not sustainable in the long-term. Once yond our markets of comfort. Veolia has cer- have wanted to grow rapidly and with little again, this is where Veolia steps in to help find tain markets where we are traditionally strong, care for the environment. Fortunately, this and implement a suitable solution. such as in the upstream oil and gas or the mindset is changing and we are seeing coun- pharmaceutical sector. It is will be important tries implementing measures to protect the Do you think Singapore’s goal of being both a to branch out into new markets which have environment. As we can see in Singapore, green hub and a chemical investment destina- not been targeted in the past, which includes Asian countries are finally trying to strike tion is achievable? the chemical industry. a balance between being heavy industry fo- I am confident that Singapore will be able to cused and committed to addressing corporate strike a balance because the caliber of com- For Veolia, how much more complex is work- responsibility concerns. panies it attracts is quite high. Major multi- ing in chemicals in comparison to its tradi- Veolia is by far the most advanced company national petrochemical players have global tional markets such as oil and gas, pharmaceu- providing the most cutting edge environmen- reputations to maintain, and are therefore ticals or even electronics? tal solutions to its clients. Thinking up to 10 required to find responsible ways of operat- Among these given markets, chemicals are by yeas into he future, we often struggle to ex- ing. Overall in Singapore, public and private far the most complicated industry due to the plain the true cost of water to our costumers. environmental concerns seem to be becoming highly complex wastewater compounds dis- Some multinational companies, which show a more aligned. The government has to be care- charged. In the oil and gas sector wastewater particularly high level of environmental sensi- ful when setting in place new requirements can be harmful but it remains constant. For tivity, have started to become receptive to our but companies are realizing the benefits of ad- example, oil refineries or microelectronics idea that it is not just about the price you pay hering to stricter environmental policies. factories always produce the same types of for water but rather how you can reuse it and waste streams. The further downstream you save money. How does Veolia differentiate itself from its go the more complex the situation becomes. It always boils down to the fact that Veolia has competitors? Within the chemical industry there are many to show its clients the value of water in terms Due to Veolia’s large size and the financial sub sectors and therefore, many different of savings per year in comparison to what the resources it has to invest in non-profit activ- complex types of wastewater discharged. •

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 81 Global Business Reports EXPLORATION Industry Explorations Manpower

The Political Paradox of Success

From a business-friendliness perspective, posing the White Paper, the largest public ernment is now providing more funding no issue threatens Singapore’s near spotless demonstration of dissent since Singapore’s programs and other initiatives to prop up image more than the debate currently sur- independence in 1965. The PAP, still trying SMEs; however, it is not a one-size-fits-all rounding foreign labor in the country. For to define its identity and regain credibility model.” most of its short history, the Singaporean after losses in the 2011 election, reacted Although the government has tried to pro- government has kept its borders open to by announcing new restrictions on foreign mote more automation and efficient busi- a large foreign workforce, both to attract workers 10 days later. ness practices through organizations such highly sought after foreign experts and to These new restrictions, expected to take full as SPRING (Standard, Productivity, and In- bring in the mass of lower skilled workers effect in 2015, impact not only lower skilled novation Board), the gains to be made in necessary to build and provide services in Work Pass holders, but also mid-skilled and labor-intensive industries are minimal. As a modern economy. However, recent dissi- high-skilled S and Employment Pass hold- the government seeks to raise productivity dence against the continuation of this long- ers. The changes raise levies on lower skilled in the workforce, Don Cheng of Hai Leck term government policy has coincided with Work Pass holders by an average of S$50 Engineering points out that there are only announcement of new restrictions on for- ($40) per month for workers in the man- so many gains that can be made in the eign labor. ufacturing sector and S$160 ($125) per EPC industry: “Hai Leck Engineering has According to the Ministry of Manpower, month for those in the construction sector, implemented automation in some of its Singapore’s 1,268,300 foreign workers while raising the qualifying salary for low to processes… Hai Leck’s strategy is to con- presently account for one third of the coun- mid-level professionals and specialists with tinue to invest in capital and technologies try’s labor force. Of this foreign workforce, S and Q-1 employment passes. In announc- that increase productivity, reduce operating over three quarters (952,100) are Work Pass ing these new restrictions, the government costs, and lower the number of man-hours holders. This means they are considered cited a need to raise the productivity of required on projects. The extent to which lower-skilled workers and that the sponsor all workers in Singapore. “Recent changes a company like Hai Leck can automate its company must pay a foreign worker levy of governmental policies concerning for- operations is limited, however, and we are based on the nature of the worker’s work, eign worker’s permits have hurt small to nevertheless in a labor-intensive industry.” the skill set the worker brings, and the per- medium sized service providers. However, The changes to the labor regime will hurt centage of foreign workers in the company’s the government has acted very proactively businesses looking to hire low and semi- total domestic workforce. in providing means and incentives to help skilled workers as foreign workers make up The controversy behind immigration came these companies overcome this struggle,” 43% of the non-professional, managerial, to light when the government announced remarks Lim Jit Say, executive director, Asso- executive, and technician workforce ac- its “White Paper on Population” in Febru- ciation of Process Industry cording to the Ministry of Manpower. Dato ary 2013, which sought to raise Singapore’s Ooi Tiat Jin, executive manager of locally Andrew Ng, managing director and CEO of population from 5.1 million to 6.9 million based distributor Absotech explains how ChemstationAsia points out that the hardest by 2030 largely through immigration. The SMEs can take advantage of new government positions to fill are low-skilled jobs: “The government’s intention was to keep the incentives in the wake of these changes to local Singaporean labor market is… notori- population and thus the economy growing the manpower regime: “If one looks at the ously difficult to navigate. Workers generally at a healthy pace. However, the public re- Singaporean government as a whole, labor do not want jobs that involve the three D’s: acted negatively to the announcement set- restrictions are being offset by many new difficult, dirty, and dangerous.” ting off a firestorm of popular backlash by incentives to help SMEs become both more Small businesses, many of them reliant on Singaporean standards. People claimed that competitive and productive. Whereas a local low and semiskilled Work Pass holders, are such a wave of immigration would adversely SME in the past might have built up its man- feeling the pinch. Chow Wai Leun, manager impact the employment prospects for Sin- power, the government today is promoting of process plant maintenance and service gaporeans. On February 16, approximately investment into technology and capital that provider Hong Heng Iron Works, sees the 4,000 people staged a peaceful protest op- decreases reliance on man-hours. The gov- levy increase as just the latest employment

82 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations EXPLORATION

related cost increase for his locally-based SME: “Even before levy increases, the cost of labor has perpetually risen in Singapore. The proposal being discussed now means that the levy may increase by 30%. This is definitely something that will adversely im- pact our business. On top of levy increases it is now commonplace for workers to de- mand 10% wage raises across the board…. As a small company, wage pressures could completely wipe out our profit margin. This pressure on wages will hurt smaller, local businesses more than multinational com- panies, who can easily transfer workers be- tween countries or cut down on staffing if necessary.” As new policies squeeze the labor pool further, pressure on wages is certain to in- crease. Melvin Tan, managing director of Cyclect, echoes the sentiments of many in- dustry leaders who are looking to hire as in- vestment increases in the chemicals sector: “Cyclect’s goal is to expand its operations in the area of chemicals; it is a key space for growth. In order to do this, we need to attract talented people to Cyclect; there is no shortage of business, but there is a shortage of manpower in Singapore and it is becom- ing increasingly difficult to bring people in from overseas.” The cheap, relatively inexperienced, labor- ers, that many EPCs relied on to fill their ranks before the financial crisis, are quickly becoming a relic of the past. Instead, EPCs are now more focused on employing work- ers on a longer-term basis. “It is no longer possible to bring in such workers on a job- by-job basis. Companies here must be able to attract good people, train them in a va- riety of skills and retain them. The govern- ment recognizes that such moves will raise the industry’s standards,” says Robert Dom- peling of PEC.

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 83 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Sil Hoeve & Jon Proctor

SH: GENERAL MANAGER JP: BUSINESS DEVELOPMENT MANAGER BRUNEL INTERNATIONAL SEA PTE LTD

SH

What is the history of Brunel International quality, and other performance indicators. may involve opening new offices in key mar- SEA Pte Ltd in Singapore? Given our global reach, Brunel is able to offer kets such as China and Myanmar. We have also SH: Brunel International came to Southeast clients the highest internationally recognized invested heavily in our global IT system which Asia (SEA) in 1996 via the acquisition of Oil standards in these areas, which sets us apart keeps all Brunel employees connected with Tool Engineering, which had three offices in from many of our competitors. countless recruitment tools and market intel- operation in Singapore, Malaysia, and Indone- ligence. This system will further enable Brunel sia. Since then, Brunel has grown significantly Limited manpower is viewed by the chem- to focus on specific clients, including those in and become very successful in the region. In ical industry as a continuous inhibitor of chemical and petrochemical industries. Singapore, Brunel employs approximately 360 cost-competitiveness in the region; to what JP: Considering how many new manpower people for its clients. degree is manpower a ‘perennial problem’ for agencies have appeared in Singapore over JP: On Jurong Island, Brunel contributed Singapore? the past few years, part of Brunel’s focus is over 60 staff of various disciplines, primarily JP: Manpower may indeed be an acute cost in reclaiming lost market share. This will be project management professionals and we will Singapore, but this is true everywhere. Work- achieved by our ability to provide multifac- be actively involved in supporting the upcom- force is a function of quality and price, and eted services, high-levels of support, and ing ethylene cracker expansion in Singapore with the amount of activity coming to the sec- stringent health, safety and quality compli- commencing later this year. tor there is a great opportunity for companies ance standards that are specifically tailored to like Brunel to handle that equation. Singa- chemical and petrochemical clients. • As a proportion of your overall business, how pore’s quota system is in place to promote lo- important is the chemical sector to Brunel in cal employment: for every expatriate brought Singapore? in on a project, a company must also employ JP: A few years ago, petrochemical projects a certain number of Singaporeans. Brunel em- accounted for approximately half of the talent ploys a substantial number of locals, which that we were providing in Singapore. Today, means we are able to bring in enough spe- our manning levels have decreased; how- cially skilled professionals into Singapore to ever, there are a great many chemical projects satisfy our biggest clients. and contracts about to be awarded, and we SH: Companies here are concerned about the have high hopes for being involved in those quality of workers, and on the other hand projects. In other words, the proportion of our they are constantly putting pressure on price. overall business from the chemical commu- It is quite difficult to balance. Nevertheless, for nity is poised to rise by Q3 of 2013. In terms contracts in the chemical industry, the focus is of EPCs operating here, we typically work less about price and more about quality, ser- with the biggest names in this market. vice and meeting deadlines. Some companies From a cost standpoint, many clients are not may experience bureaucratic issues in attract- only looking for professionals with the right ing talent, but Brunel is able to move quickly skills, but those who also have experience in to fill roles. Singapore, and Brunel’s network is expansive enough to meet this requirement. One thing Can you share Brunel’s near-term objectives that Brunel provides that other agencies may for its chemical and petrochemical clients? not is our BTS (Brunel Technical Services) di- SH: For SEA, Brunel is focusing on meeting vision, which focuses on construction-level the needs of the industry on Jurong Island, talent. and to work more effectively for our main Our clients are also putting a premium on clients. We want to be more proactive than our compliance with regards to health, safety, clients themselves, and part of that initiative

84 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations FACTSHEET

Percentage of Employers having Difficulty Filling Jobs

Source: Manpower Group

% 100

80

70

60

50

40

30

20

10

100 .S. UK Italy U Peru India Brazil Israel Spain Chin a reec e Japa n orwa y Irelan d Franc e Polan d ungary Turkey Austri a Finlan d Taiwan G omani a Mexico Canada ermany N Bulgaria Panama Slovakia rgentina Belgiu m Sweden Sloveni a H Australi a R G Colombia ong Kon g A Singapor e etherlands Costa Rica Guatemala H ew Zealand Switzerlan d N South Africa N Global Average Czech Republic

Changes in Employment by Sector

Source: Department of Statistics Singapore

2011 2012 2013 2013

2009 2010 2011 2012 IIIIVIII IIIIVIII IIIp Compared To The Previous Period TOTAL 37.600115.900 122.600 129.100 31.90037.60027.20031.70026.20044.00028.90033.70028.100 Goods Producing Industries -21.000 3.300 26.50052.10010.8007.400 11.40014.40013.50012.8007.800 10.90014.100 Manufacturing -43.900 -800 3.400 11.4003.900 -1.400 2.000 4.7003.700 900-1.200 2.300 3.000 Construction 24.0003.400 22.00039.1006.700 8.400 8.700 9.7009.700 11.1008.400 8.500 10.600 Others -1.100 7001.100 1.500 200400 7000100800 500200 600 Services Producing Industries 58.600112.600 96.10077.00021.20030.20015.80017.30012.70031.20021.10022.70014.000 Wholesale & Retail Trade 5.700 14.50015.90010.1002.900 7.900 7002.000 1007.300 2.600 -1.100 2.200 Transportation & Storage -2.400 6.200 6.700 8.600 1.6001.200 2.200 2.2001.500 2.800 2.500 3.600 1.300 Accommodation & Food Services 3.200 12.7009.200 8.000 3.1006.200 -500 -900 1.500 7.900 -100 2.200 -400 Information & Communications 2.900 8.800 8.000 9002.000 700-100 500400 1001.500 4.600 1.000 Financial & Insurance Services 2.200 11.40010.9006.500 3.0002.100 01.800 2.900 1.700 1.900 -1.300 2.500 Business Services 15.10025.00021.10022.5003.600 4.200 4.900 8.7004.900 4.000 6.300 9.900 4.200 Other Services Industries 31.90034.00024.30020.4005.100 8.000 8.800 3.0001.400 7.300 6.300 5.000 3.200

Labor Productivity by Sector

Source: Department of Statistics Singapore 2011 2012 2013 2013 2009 2010 2011 2012 IIIIVI II IIIIVI II III Percentage Change Over Corresponding Period Of Previous Year TOTAL -3,4 11,1 1,3-2,61,8 -0,4 -2,2 -1,6 -3,8 -2,5 -3,6 0,21,6 Total (excluding Construction) -2,9 11,6 1,1-2,21,5 -0,5 -2,2 -1,4 -3,4 -1,9 -3,1 0,82,4 Goods Producing Industries -2,3 24,5 6,0-3,27,1 6,2-2,90,5 -5,0 -5,1 -9,3 -2,7 0,6 Manufacturing 1,532,27,9 -1,4 8,68,8 -1,8 2,5-3,2-3,1-8,0-0,14,4 Construction 4,20,5 3,3-0,26,6 3,82,7 3,0-2,4-3,5-4,0-2,1-3,4 Services Producing Industries -4,1 6,1-0,4-2,4-0,2-2,8-2,0-2,7-3,3-1,7-0,81,9 2,4 Wholesale & Retail Trade -5,6 11,0 -2,0 -3,5 -3,9 -1,2 -3,6 -3,7 -2,7 -3,9 -2,1 3,45,5 Transportation & Storage -10,15,2 0,2-0,80,2 -1,7 0,9-1,6-1,6-0,9-4,9-2,20,5 Accommodation & Food Services -5,8 9,22,2 -1,0 1,8-1,8-0,1-1,4-1,2-1,4-1,7-2,2-1,9 Information & Communications -0,4 1,0-6,7-0,7-5,6-7,1-2,7-2,2-0,52,8 1,4-1,1-1,7 Finance & Insurance -0,4 5,61,3 -3,7 5,7-6,4-4,3-3,5-6,4-0,46,6 10,6 7,6 Business Services -1,6 2,1-2,4-1,0-2,0-2,4-1,20,1 -1,1 -1,9 -1,7 -1,7 -1,4 Other Services Industries -0,1 8,42,2 -3,3 0,2-2,2-0,7-4,5-5,6-2,1-4,5-0,80,2

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 85 Global Business Reports EXPLORATION Industry Explorations

“We want to replicate the European or American recruiting model across the The problem of upskilling workers is not lim- globe, but it depends on the maturity of the country. In the West people do ited to the low skilled labor pool; EPCs are not mind working three months on and three months off, whereas Asians do having difficulty attracting local entry-level not want temporary work; the salaries for temporary work are lower and they workers. Alvin Leong, managing director of see little value in it.” W H Marathon, explains that EPCs are often forced to look overseas for entry-level engi- - Mark Hall, Vice President and Country General Manager, neers, despite Singapore’s world-class edu- Kelly Services cation system. This is a particularly alarming problem as it could eventually lead to a local skills gap of mid-level and high-level engi- neers and executives in the coming decades. “Most MNCs have much stronger EHS protocols than would be required by Singapore in terms of what’s enforced locally. Nevertheless, many “In the past, young engineers would be very companies active in Singapore operate at lower levels of EHS compliance proud of their profession, but these days here than they would under other regulatory frameworks elsewhere in the most of Generation-Y want the comfort of world for many reasons; cost-competitiveness being chief among them. The the air-con room and to stay out of the sun local government is focused on industries such as chemicals, but given – they have forgotten someone has to build the country’s size, there is a perceived lack of knowledge and a credible the buildings they sit in and that hard work shortage of manpower inhibiting Singapore from the challenge of meeting is what pays. Young people should remember EHS standards as robust as those in Europe or North America. MNCs such as ExxonMobil are blessed with more manpower and expertise globally that most CEOs in the oil and gas industry are than may be available in the entirety of Singapore. A common issue is the engineers. Singapore has a lot of talented new introduction new products that have never previously entered Singapore; the graduates, but not enough of them are engi- government and the local industry are simply not aware of the risks to EHS neers,” says Alvin Leong. from these new chemicals. As environmental risk regulations become tighter, Increased reliance on specialized recruitment companies on Jurong Island will be faced with real planning challenges; the and staffing agencies provides a possible so- island is densely populated and incidents have the potential to affect more players and thus become more costly.” lution for companies trying to grow their ranks in the wake of these new restrictions on foreign labor. Given the rapid development - Andrew Young, Managing Director, of Singapore’s economy and its traditional re- EnviroSolutions & Consulting Pte Ltd liance on foreign workers, the market is home to a host of staffing agencies working in the chemicals sector including executive recruit- “In 2011 Zeon Chemicals broke ground our new Solution Polymerized ment firm Spencer Stuart, and staffing agen- Styrene-Butadiene Rubber (SSBR) plant. This is our first construction cies Brunel International and Kelly Services. experience in Singapore, although we have previously acquired companies Despite the new restrictions, Brunel Interna- here. We were not familiar with the process and day-by-day we struggled tional is well positioned from a regulatory with new issues. Of course, we received assistance from the EDB and each contractor and consultant. Singapore has good consultants. If we make another investment in Singapore, our experience will make the process easier.”

- Yuki Hirakawa, Managing Director, Zeon Chemicals Singapore

“It is very costly for a foreign company like Leschaco to acquire land in Singapore. Nevertheless, due to the strong local demand for chemical warehousing, Leschaco is considering opening its own warehousing facilities in Singapore by the end of this year. Another challenge in Singapore is that the government heavily regulates the property acquisition process. This challenging cost environment has made us contemplate moving our operations to Malaysia. However, relocating to Malaysia would entail new risks and disadvantages. Unlike most neighbouring countries, our business in Singapore benefits from easy costumes clearances, favorable trade agreements with Europe and the Americas and a robust infrastructure.”

- Kai Chladek, Managing Director, Leschaco

86 Global Business Reports // SINGAPORE CHEMICALS 2013 Global Business Reports Industry Explorations

compliance standpoint to handle new busi- ness. “Singapore’s quota system is in place to promote local employment: for every expatri- ate brought in on a project, a company must also employ a certain number of Singapore- ans. Brunel employs a substantial number of locals, which means we are able to bring in about 750 foreign workers into Singapore—a number that would satisfy our biggest clients,” says Jon Proctor, business development man- ager, Brunel International S.E.A. Brunel has grown considerably in SEA since entering the region through an acquisition in 1996. The company has played a major role in staffing key projects as new refineries and petrochemical complexes were built. “Brunel usually follows the investment and construc- tion trends taking place in Singapore and Ju- rong Island. If one looks at our past projects, Brunel accounted for a major share of the provided workforce, especially in terms of white-collar expatriates,” says Sil Hoeve, gen- eral manager of Brunel. Despite the challenge it poses businesses look- ing to hire workers, the government appears set in its course. Although manpower will re- main an issue for Singapore, it is also an en- couraging sign for growth as businesses are having issues finding enough staff for their ranks. The labor pool is expected to remain constrained in Singapore, making it harder for labor-intensive businesses to operate. Whether or not this will have a measurable impact on final investment decision for new chemical projects remains to be seen. •

Courtesy of Fortrec Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Melvin Tan

MANAGING DIRECTOR CYCLECT

As Cyclect’s third-generation leadership, how both on and off Jurong Island, with our me- the realm of co-generation in Singapore. Cy- has the company evolved since it was first es- chanical, electrical and instrumentation solu- clect was the main contractor, in partnership tablished? tions experiencing the highest demand from with Tuas Power and Gas Supply (TPGS), on Founded in 1943, Cyclect has been in the the sector. Cyclect's typical clients include the first co-generation plant in Singapore. business of providing technical services and ExxonMobil, Royal Dutch Shell, TPC, PCS, This was a turnkey project led by us. The ob- solutions for 70 years. We began as a modest Sumitomo, Mitsui, Evonik, the Singapore jective of this project was to develop a pilot repair and maintenance facility focused on the Refining Company, OilTanking, and Vopak 10MW tri-generation plant for MSD Singa- marine industry in Singapore. As Cyclect pro- Terminals, not to mention some of the key pore (previously Schering Plough). Since gressed, we entered into project development contracting firms in Singapore. inception, the plant has saved MSD millions as the needs of our customers became more in energy costs. This technology is extremely sophisticated; we built skillsets in onshore as What makes Cyclect’s service offering portable; issues of scale, space and balancing well as offshore industries. When Singapore’s unique? a facility’s need for steam, chilled water and electrical, manufacturing, and petrochemical In serving chemical companies, we utilize power are the only variables from plant to sectors grew, Cyclect expanded its capabilities products and technology such as instrumen- plant. in line with new trends; whatever the EDB tation and absorption chillers from quality Furthermore, Cyclect is currently conduct- brought to our shores Cyclect sought to stay suppliers from around the world. An absorp- ing R&D to develop our own proprietary ahead of the curve with its involvement. In tion chillers synthesizes heat into chilled wa- adsorption chiller systems that recover low- the context of the chemical and petrochem- ter as a means to efficiently utilize otherwise grade waste heat from chemical plants. If ex- ical sectors, Cyclect entered the industry in wasted heat as coolant from a plant. We find traneous heat is 80 °C or greater, it can be the late 1990s, offering repair, maintenance, that clients make an easy return on their in- absorbed for coolant or heated further and engineering, and construction services. vestments from such solutions. harnessed for co-generation; however, tem- Despite breaking the $100 million turnover In terms of reach, Cyclect is capable of ex- peratures below that threshold are typically threshold in 2010, Cyclect remains a private porting its knowledge and solutions gained discarded. Cyclect is looking for innova- family-owned company in order to maintain in Singapore out to chemical clients op- tive ways to optimize this lower-grade heat; flexibility. erating in other markets. We send out con- squeezing every bit of energy from a plant’s struction, management, and EPC teams to processes and thus making it more efficient What is the state of Cyclect today in terms undertake projects in line with international in terms of energy consumption. Our second of its dealings with the chemical industry in standards and certifications all across Asia. major technology project relates to heat to Singapore? Clients who are comfortable with Cyclect in power conversion. The Organic Rankin Cycle Cyclect has three major business units: ma- Singapore can utilize our services throughout converts heat to electricity. We are undergo- rine and offshore, infrastructure, and energy the region and increasingly the globe; we are ing research presently and we believe we have solutions. Cyclect’s infrastructure division, seen as good long-term partners. patentable practical technology. however, is the most relevant business unit for the chemicals sector. Our infrastructural The EDB consistently cites co-generation and What are Cyclect’s goals within the chemicals unit serves chemicals clients mainly on Ju- sustainability as answers to the chemical in- sector over the next several years? rong Island; namely niche plant operations, dustry’s concern for high energy and utility Cyclect’s goal is to expand its operations in maintenance, engineering, procurement, and costs: how does Cyclect play its role in foster- the area of chemicals; it is a key space for construction (EPC) services. Our specialists ing these solutions? growth. In order to do this, we need to at- and technicians can design anything from When compared to land and manpower tract talented people to Cyclect; there is no tailored tanking and storage solutions to costs, energy, along with water consumption, shortage of projects, but there is a shortage of emergency and safety equipment. is one of the easiest areas in which a chemical manpower in Singapore and it is becoming About 30% of Cyclect’s overall business is manufacturer can control costs. We were one increasingly difficult to bring people in from derived from Singapore’s chemical industry of the first engineering companies to enter overseas. •

88 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Robert Dompeling

CEO PEC LTD.

Please provide an overview of PEC and its You have been CEO for six years, during assistance for companies intending to branch service offerings in Singapore. What are which time PEC transformed into a public out overseas. some of the latest developments since we company in 2009. What were some of your interviewed PEC in 2011? How is the mar- original goals and how have they had to What are the main opportunities you see for ket changing? evolve with the market? PEC over the next three to five years? We are the largest maintenance provider Whether we like it or not, capital investment Opportunities will return. There will be an in Singapore. Since we last spoke, PEC has in the industry has tapered off somewhat. upturn, like any cycle. We have gone through gained new contracts with ExxonMobil’s The global economic crisis hit the petro- a few years of down-cycle, so hopefully we expanded petrochemical facilities and an chemical sector, which in turn also impacted will see several years of up-cycle after that. I integrated engineering and maintenance job us. Our growth has been curtailed and our believe this is the lowest point in the market for the still-under-construction Jurong Aro- margins have been squeezed, in particular and by 2015 there will be new investments. matics Complex. Market trends are chang- because costs in Singapore have been increas- I am excited about the Refinery and Petro- ing; there will be future investments in Sin- ing rapidly. Our maintenance contracts are chemical Integrated Development (RAPID) gapore’s petrochemical industry, but it will locked in for three to five years. The whole project by Petronas in neighbouring Johor be very selective. The EDB will continue to environment is pretty tough. Five years ago, in Malaysia – hopefully with PEC’s expertise collaborate with MNCs, who will get big- there were many projects but few contrac- and experience we can secure some con- ger, but there will no longer be efforts to tors, but now it is the other way around. To- tracts. Myanmar is starting to look promising bring in new ones – it is too expensive for day, there is a great deal of emphasis on qual- and I am increasingly enthusiastic about the companies to start from scratch. The project ity of service – if PEC fails to excel at what it Vietnamese market. In Singapore, we need market will slowly tail off over the next ten does best, we will be in trouble. We continue the cooperation of both multinationals and years as Jurong Island fills up. The empha- to invest in tools & equipment to improve the government to make the industry more sis will need to change towards sustainable efficiency and reduce reliance on manpower, sustainable over the long term; and profes- and responsible maintenance. The island is without comprising on safety. sionalize the industry to increase its attrac- very integrated, and everyone needs to be tiveness. • concerned about safety standards, as well Are you concerned about the impact of new as providing value for money, now that the labor regulations on the petrochemical in- original facilities are ageing. The quality of dustry? maintenance is highly relevant to these con- In order for PEC to expand abroad, we use cerns, so PEC is well-positioned to play an Singapore as our training and development even greater role as a one-stop engineering hub, but it is a challenge to bring in talented service provider. The multinationals need to people from overseas. In the past, PEC has change their contracting strategies – rather recruited good Filipino welders and fitters, than picking the cheapest providers, they who worked their way up over the years, should think more about long-term partner- gaining invaluable experience along the way. ships. This is especially important especially Now we have to let them go because of the with the recent changes to foreign workers policy changes. We then have to recruit new policy it is no longer possible to bring in inexperienced employees and train them all such workers on a job-by-job basis. Com- over again. The new rules and regulations panies here must be able to attract good have hurt productivity and even put safety at people, train them in a variety of skills and risk. Fortunately there is now a dialogue be- retain them. The government recognizes that tween the EDB and the petrochemical indus- such moves will raise the industry’s stan- try to examine these issues. In every sector, dards. the Singapore government should offer more

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 89 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH INTERVIEW WITH Malini Vaidya

MANAGING DIRECTOR SPENCER STUART, SOUTHEAST ASIA

Does Singapore attract talent and how would Additionally, multinationals are particularly very busy lately and therefore we are adding you describe the Singapore’s workforce? attracted to Singapore because of its outstand- new members to our own team at the senior At the leadership level, Singapore is probably ing infrastructure and its continuous political level. one of the most attractive locations for execu- stability. Given that Singapore is equidistant tives. Due to its location and good reputation, from China and India, the city is strategically Can smaller local companies successfully Singapore has never had a problem attract- and conveniently located for attracting leader- compete with the multinationals and what ing talent. Speaking as a proud Singaporean, ship roles. Furthermore, executives and their are the differences between them? I would say that the Economic Development families can enjoy an exceptionally safe and Spencer Stuart has worked with a good mix Board (EDB) has made an outstanding effort comfortable standard of living in Singapore, of both multinational and local players. From to reinvent the country and ensure that it re- which they could probably not find else- our experience, I can say that both types of mains an interesting hub for all types of in- where. companies have done extremely well with re- dustries, including the chemical sector. As a cruiting new talent. While small to medium result, we see a constant inflow of talent to How important is executive leadership in the sized companies often appear below the supply both multinationals and regional play- chemical industry? radar, the EDB has helped make it a level play- ers. The chemicals industry is very complicated ing field and enhanced the competition so Singapore has a well-balanced mix of local with many different end-users and signif- that all parties regardless of their size can have and international talent across industries. icant safety concerns. In this complex envi- a voice and learn from each other. This is due to two reasons. On the one had, ronment, having the right senior leadership multinationals tend to cycle their top exec- becomes very critical. Simply having good Do you believe Singapore will continue to be utives through Asia in order to give them a people working on the ground does not suf- an investment destination? new perspective before they return home to fice. The leadership needs to have a macro-ap- Singapore has an exceptional economic phi- become more senior executives. On the other proach of managing the orchestra otherwise losophy, so I am confident that the country hand, there are efforts to strengthen the local the company cannot succeed. If smaller com- will continue to reinvent itself.. It is con- workforce and promote Singaporeans within panies strive to become global leaders they stantly seeking to improve and innovate and organizations. require talent that can take care of a wide this mindset has attracted investment and it range of issues including crisis management will continue to do so in the future. • Why is Singapore considered a knowledge and safety issues. Hence, it is very important hub and do you see the country losing to have an experienced and diverse leadership ground to more lucrative markets? profile with a bird’s eye view that can lead Over the past five to ten years, whilst Singa- companies through different phases. pore did lose some ground to Shanghai as the regional headquarter for the chemical indus- What are Spencer’s Stuart’s near term future try, the pendulum is shifting back as the com- objectives in terms of capabilities or reach? petitive advantage of China is resulting in a One of the most important goals for the next rethink and relocation. three to five years is to continue to be the The benefit of having regional headquarters leader at C-Suite level recruitment. Following in Singapore, instead of in China or in India, our past success, our continued strategy is to is that it lets companies keep their headquar- find strong Asian talent for advisory board or ters separate from their main manufacturing C-level roles. sites. This allows leaders to distinctively man- Spencer Stuart is growing rapidly and we are age their operations by having an external constantly investing in new talent but we will perspective from Singapore alongside their never be a firm with large numbers. Never- local mindset. theless, we are conscious that we have been

90 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations INTERVIEW

INTERVIEW WITH Debajit Das

PRESIDENT ASIA PACIFIC, AGGREKO

Can you provide an introduction to Aggreko? chain such as Shell. In general, Aggreko’s off- growth within our Local business division: Aggreko is the global leader in providing in- shore applications and temperature control Aggreko has created more headroom for lo- terim power and cooling solutions, with a his- solutions for processes related to energy and cal operations in APAC. Regional expansion in tory that spans over 50 years. We conduct our production efficiency are in the highest de- Southeast Asia is one of our primary goals over business under two distinct models: Power mand from our chemical and petrochemical the next five years. Power projects in emerging projects and Local business. Power is simple: clients. markets are also earmarked for growth given we generate and sell energy on shorter-term the gap between demand and current supply IPP tenders according to market requirements. Part of the mission of the Singaporean Eco- levels as these economies continue to grow. In terms of Local business, Aggreko provides nomic Development Board (EDB) is to create Aggreko’s power solutions will serve the mar- a wide range of services and applications to an environment where chemical companies gins created by unanticipated but nonetheless local companies on a project-by-project basis can focus on their core operations and rely welcome growth in Asia, where actual de- with power generation and temperature con- on third-party players for peripheral support. mand often outpaces forecasted demand. Ag- trol at the core of our Local business. Where does Aggreko lie on this vision for Sin- greko will continue to be a round-the-clock Aggreko entered the Asia Pacific (APAC) re- gapore’s value-chain? business that has the ability to serve customers gion and the local market in Singapore in The proposition of the EDB and Aggreko are across all industries with its critical applica- 1989 by way of an acquisition. From our base one and the same, regardless of location and tions, solutions that we have perfected over a here, we manage not only Singapore, but also industry. Irrespective of the industry, Aggreko 50-year history. • the entire APAC region. This area stretches enables its clients to focus on their core busi- from India to Japan. Since 2008, Aggreko ness by taking care of their interim power or has witnessed phenomenal success in the temperature control needs with our rental so- region driven by growth in markets such as lutions. Power generation, expertise and tem- Indonesia, Malaysia, and the Philippines. Our perature control are auxiliary support services services have also been mobilised in response that Aggreko can handle to meet the special to natural calamities: Aggreko and its power needs of a short or longer-term project and solutions were a part of the restoration and increase overall efficiency. response efforts for the tsunami in Japan. In sum, both our Power Projects and Local busi- Manpower limitations continue to trouble ness divisions have experienced growth in Singapore’s manufacturing sector; as an ESP, APAC and this trend is very encouraging for how does the labor environment affect your Aggreko worldwide. business? Retention of workforce is a challenge in any What role do the chemical and petrochemical market; however, Aggreko Singapore main- industries play for Aggreko in the region? tains a strong balance of both foreign nation- All of our chemical and petrochemical clients als and local talent for our operations. We are are a critical component of our business in fortunate to have a strong roster of what we APAC because they challenge us in terms of at Aggreko call “orange-blooded” people: ex- the applications and solutions we provide. For patriates and locals who form the core of our example, a petrochemical refinery may re- solutions in Singapore and the region. quire Aggreko to employ nearly all of its ser- vice offerings for the client, from energy gen- What is Aggreko Singapore’s vision for the eration to process solutions. Our client profile future? in the region for chemicals is quite extensive; Aggreko evaluates its strategic decisions on a we have served major players across the value five-year basis. Currently, we foresee strong

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 91 Engineering Success: The Services Supporting Singapore’s Chemical Industry

“With new technologies, we must look at how we can integrate new inventions into something that can handle the industry’s requirements as well as the market’s needs. We are always on our toes to look out for new technologies that are cost effective for the disposal of hazardous waste.”

- Benjamin Tan Chee Hian, Director- Revenue, Eco Special Waste Management Courtesy of Brunel Global Business Reports EXPLORATION Industry Explorations Built for the Job

Engineering, procurement and construction providers

The landscape of Singapore’s engineering, of notable players including locally based have created a race to the bottom in terms of procurement and construction providers Hiap Seng, Rotary, PEC, Hai Leck, Cyclect, pricing: “Local companies have responded to (EPCs) has deteriorated considerably since the Tiong Woon, W H Marathon and Mun Siong this [more competitive marketplace] by slash- pre-crisis highs that huge new investments and multinationals such as Cape, McConnell ing prices.” engendered. Today the general sentiment is Dowell, and Hertel. These companies can at- This slashing of prices is not healthy for the that Singapore’s EPC market is in the depth tribute a significant amount of their growth EPC industry as it leads to lower standards of a trough and doing what it can to survive and success to the development of Singapore’s and squeezed margins. According to Robert until the next anticipated wave of contracts chemicals industry. Dompeling of PEC, it is up to the clients to lifts them out of it. This has given Singapore’s Nevertheless, Singapore was certainly not recognize that just because a cheaper ten- EPC companies time for some introspection. immune to the global financial crisis, and der helps their bottom line, it may hurt the Tomorrow will be different in many ways; Singapore’s EPC’s faced a rather rough envi- quality of the industry in the long run. “The the next wave of investment will require dif- ronment as projects such as the $2.4 billion multinationals need to change their contract- ferent skill sets. No longer able or eager to Jurong Aromatics Corporation complex were ing strategies; rather than picking the cheap- compete on price, safety and quality are the put on hold due to the credit crunch. A market est providers, they should think more about new mantras. New labor laws are an especially that had boomed became uber-competitive as long-term partnerships. This is especially im- tough blow for an industry so dependent on the number of new contracts decreased in the portant in view of labor restrictions which do manpower and basic skills that have always aftermath of the downturn. “Five years ago, not allow for workers to come in on a job by formerly been imported. The restrictions on there were many projects but few contractors, job basis.” foreign workers will effect productivity, price but now it is the other way around,” com- The EPC market with regards to the chemicals and even safety. EPC companies are being ments Robert Dompeling, CEO of PEC. sector is currently oversaturated in the wake of forced to radically rethink the way that they With the new wave of specialty chemicals in- the commissioning of the ExxonMobil cracker do business and adapt to a more difficult en- vestment, many process industry leaders see upgrades which have created a gap. The multi- vironment. Looking further ahead, many see their prospects as strong in the near-term. billion-dollar investment represented a boon their destiny beyond the shores of the island “From our perspective, and that of our mem- to those in the process industry contracted on to developing markets where their experience, bers, the future looks very bright. The EDB has the project and the projects in the pipeline skills and reputation will serve them well. As done an excellent job in attracting new invest- do not equate to its magnitude. “The nature Singapore’s mega projects are completed and ments into Singapore and promoting the city of our business is quite cyclical and with the new land harder and harder to come by, there as an international business hub,” says Lim Jit completion of the ExxonMobil project, the will be less Greenfield projects and EPC’s Say, executive director of Singapore’s Associa- market will be very competitive due to less should expect more maintenance contracts as tion of Process Industry (ASPRI). volume of work,” says Ramesh of Cape East. their future staple diet. Although there is a general consensus that the Cape East, a non-mechanical service provider Singapore’s EPC industry is more diverse than demand for EPC services has picked up again that has 90% of its Singaporean business com- the chemical and related industries that it after a few years of stalled growth, companies ing from oil, gas and petrochemical services, serves. While the chemicals industry is largely do not expect the huge workload they experi- is looking to revitalize its Singaporean oper- made up of investments from large multi- enced before the crash. “At the moment, there ations as the megaproject is completed. The nationals, the process industry is composed is more activity in the industry than there was issue for the company will be the scale of new of both multinational and domestic players, a few years ago, but it is not at the level it was projects as mega investments in integrated which vary dramatically in size, capability and before the financial crisis and I am not sure it cracking facilities become fewer. “On smaller niches. As investment flowed into Singapore, will recover to that level any time soon,” says projects, we face competition from mechan- a complex web of contractors and subcon- Murray Dundas, managing director of Mc- ical service providers who are able to offer tractors has developed to meet the needs of Connell Dowell. non-mechanical solutions as well. However a growing country and world-class chemicals D. Ramesh, operations manager of Cape East on larger developments, like the ExxonMobil industry. Amongst this network is a handful explains how the fewer available contracts project, we are one of the only companies

94 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations

with the expertise to handle such a compli- cated project from the non-mechanical side,” says Ramesh. As activity in the sector picks up, companies will continue to face stiff competition in the market still hungry for new business and new staff. “The chemical and petrochemical in- dustries are upgrading and expanding their current assets to cater to increased demand from Asia and stricter emissions standards in Europe. Singapore’s current economic con- ditions have made pricing very competitive for EPCs: we face a great deal of competition from foreign peers in the market, moreover manpower shortages have made growth diffi- cult for contractors overall,” according to Don Cheng, managing director of Hai Leck Engi- neering. Despite rising construction costs in Singapore, Murray Dundas of McConnell Dowell believes the market is still price competitive because of Singapore’s transparent regulatory regime, expertise and world-class efficiency. While less developed markets may encounter build stalls due to logistical issues or an opaque in- spection process, Singaporean projects have a reputation for going up quickly. “Looking at Singapore in comparison to other countries, construction costs are extremely competitive here; it is a good environment for initial in- vestment because of the relatively short build time,” says Dundas. Melvin Tan, managing director of Cyclect sees the EDB’s recent investment in high-value specialty chemicals manufacturing as an ex- citing growth opportunity: “A more sophis- ticated chemical industry creates a gap of ex- pertise, and at Cyclect our goal is to enhance our skill set and fill these gaps for our cus- tomers. Our current niche is in heat recovery, co-generation, MNEs and instrumentation, where Cyclect is very competitive. There is great potential within the chemical industry to reduce cost and drive profits through the implementation of co-generation and other cutting-edge energy technologies.” The privately held, locally-based company has grown substantially over its 70-year his- tory, reaching S$100 million ($80 million) in revenue in 2010 with the chemicals sec- tor contributing 35% to 40% of that business. According to Tan, one of the key strategies for Cyclect’s growth is to closely align its agenda with national priorities: “Whatever the EDB brought to our shores, Cyclect sought to stay ahead of the curve with its involvement.” •

Industry Explorations Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH

companies with the expertise to handle such a per project-based formula, so to keep workers in D. complicated project from the non-mechanical the country and employed with the same com- side. pany in a fluid and cyclical market environment As an international company, we have a repu- is a major challenge. We want to keep people Ramesh tation and proved track record of safety and working with us as much as possible because quality. In terms of safety, our present project we can better ensure our standards are met and has reached 80 million man-hours without a our workers gain a sense of loyalty and pride in lost time incident (LTI) from which our branch their work. We are not here to manage people; OPERATIONS MANAGER in Singapore contribution is 14.6 million man- we want to give people the tools to do their jobs CAPE EAST PTE LTD. hours. In terms of quality our Cape Manage- in a self-disciplined and efficient way. ment System is ISO 9,000 and OHSAS 18,000 What are your objectives for Cape East in Singa- certified to ensure we are consistent in our work pore over the next three to five years? across the globe. We are currently bidding on several major Unlike manufacturing, where each day is basi- projects on Jurong Island and mainland. The Can you provide a brief introduction of Cape’s cally the same and issues are therefore easy to dynamic of Singapore has changed in the last operations in Singapore in the context of the spot, our business requires adaptability each and couple years as more Korean companies have company’s global operations? every day because every project brings with it a invested and entered the market both on the As part of our UK-based parent company’s new challenge. To remain consistent and safe in process and industrial services side. This has global strategy, Cape has entered 30 countries this environment is extremely difficult, but our created even more competition amongst ser- worldwide through using large contracts from team takes pride in accomplishing this everyday. vice providers, as opportunities for new con- leading companies as a means of entering a tracts have been limited. Local companies have new country. Cape has approximately 21,000 What are some of your strategies for dealing responded to this by slashing prices, but as a employees worldwide with 1.4 billion SGD of with an increasingly limited foreign less-skilled global, publically traded company it does not turnover. Established in 1990, Cape Singapore is labor pool? make sense for us to follow suit and slash prices a regional office for the company in Asia and As a labor-intensive industry, we do our best to here in Singapore. Thus we must continue to we run both our Singaporean and Malaysian maintain the same workforce within the coun- use our quality work to uphold our reputation operations out of this office. Malaysia has tra- try as much as possible. The government allo- in the coming years and this will bring us new ditionally been a rather small market for us, but cates foreign labor allowances on man-hours business. • we are seeing demand in this market increase significantly as new, major projects are be- coming more prevalent. In Singapore, we have worked on some of the largest projects in the country including our recently completed work with ExxonMobil. Over the last three years our turnover in Singapore has averaged around 70 million SGD annually, however the nature of our business is quite cyclical and with the comple- tion of the ExxonMobil project, the market will be very competitive due to less volume of work. Despite this downturn, we have kept a strong core team onboard and we are confident we can get revenues to previous levels.

What role do the chemical and petrochemical industries play for Cape in the region? How can Cape differentiate itself from others in a crowded marketplace? As a non-mechanical industrial service provider, the importance of chemicals and related indus- tries varies as we work on a project-to-project basis across several different sectors. Neverthe- less given our recent projects, we have about 90% of our business coming from oil and gas and petrochemicals. On smaller projects, we face competition from mechanical service providers who are able to offer non-mechanical solutions as well. However on larger developments, like the ExxonMobil project, we are one of the only

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INTERVIEW WITH Murray Dundas

MANAGING DIRECTOR MCCONNELL DOWELL

McConnell Dowell has been active in Singapore lines of the government’s Jurong Island v2.0 In terms of design we are able to offer cre- for several decades; can you provide a history initiative. Indeed, the beginning of the indus- ative, cost competitive solutions to our clients, of the company here and its major milestones? try was the creation of the Petrochemical Cor- we can look to improve the efficiency of the McConnell Dowell has been active in the coun- poration of Singapore (PCS), and McConnell construction process by re-engineering bottle- try since 1971, starting with a project for Dowell served PCS with a pipeline integration necks, high risk activities or shut down tie-ins ExxonMobil constructing a tank terminal and project in the early days of Jurong Island. We and therefore ensure the projects are delivered then laying the original crude pipeline that ran are currently working on two Chemical projects safely on time, on budget and to the same high to the SRC refinery. In the early days our work on Jurong Island; Undertaking the construction quality standard. centered on solutions for industrial clients in of the civil, underground piping and structural the private sector; we have developed several works for the new Lanxess Compass facility, and What is on McConnell Dowell’s radar in terms pipeline systems on Jurong Island mainly for the Design and Construction of the Marine fa- of potential opportunities? the refining and petrochemical industries in cilities, including all ME&I topsides for Jurong McConnell Dowell is currently leveraging its ex- Singapore. One of McConnell Dowell’s main Aromatics Company. perience in Singapore on further expansions in strengths in Singapore has been its ability to Our solutions are expanding alongside the the region. Whereas we have not worked with cater to a diverse array of needs in both civil more specialized needs of our clients on and off Linde Gas here, for example, we are currently works and manufacturing. Our past chemical of Jurong Island: McConnell Dowell is continu- involved on a project with them in Thailand and clients for our civil and mechanical processing ally advancing its pipe-racking and subsea pipe- hope to partner with them again for their new expertise consist of major players including lines solutions to suit a more integrated and facilities in Malaysia as well as tendering other DuPont, Celanse, Lanxess and of course work sophisticated portfolio of clients in Singapore’s opportunities with new clients and contractors. on ExxonMobil’s Singapore Parallel Train (SPT) downstream specialty chemicals industry. We are actively tendering projects on Jurong project. Our work for ExxonMobil represents a Today, McConnell Dowell is working with the Island for existing clients, new clients and as major milestone for McConnell Dowell in Sin- industry to add further value to Singapore’s a specialist sub-contractor for particularly large gapore: We performed over 8.5 million million chemical sector through innovative designs and packages of work that arise. Moreover, we are man-hours worth of work LTI free, we mod- our industry expertise. At the moment, there is looking to incorporate a significantly more ulated over 6km of interconnecting piperacks, more activity in the industry than there was a automation into our mechanical process solu- we utilised 2,500 people in our Batam yard few years ago, but it is not at the level it was tions in order to mitigate costs; limitations on fabrication facility where we fabricated 130 before the financial crisis and I am not sure it foreign labor in Singapore have made certain modules, and carried out the work on site with will recover to that level any time soon. operations more cost-prohibitive. McConnell over 1,000 people on the project before its suc- Dowell is striving to achieve greater efficiency cessful completion in 2011. In a crowded domestic EPC market, what distin- in labor productivity in order to enhance our guished McConnell Dowell from other firms? competitiveness in Singapore and throughout What proportion of McConnell Dowell’s order Whilst McConnell Dowell is a foreign-owned Southeast Asia. Looking at Singapore in com- book today is dedicated to the chemical indus- company we have been in Singapore since 1971, parison to other countries, construction costs try in Singapore? so in many cases we have more local experience are extremely competitive here; it is a good McConnell Dowell is committed to the growth than the locals. Our 40-plus years experience environment for initial investment because of of the chemical industry in Singapore. As a ma- in Singapore with over 300 locally based staff, the relatively short build time. Another advan- jor player on Jurong Island, we have supported of whom a large number have been with us for tage of Singapore is the ease of access to the the growth of the sector with our services from many years instills an excellent safety culture logistics needed for construction; it is still eas- its early stages until today. McConnell Dowell and track record, reputation for timely delivery ier to bring in resources from other countries is heavily present in Singapore’s chemical and and a diverse offering in Singapore along with to Singapore compared to many Western coun- petrochemical industries, and we will continue an ability to lever off additional international tries and once a project is initially approved by to apply our mandate of ‘creative construction’ resources if required helps distinguish us from the government there are very rarely regulatory in Singapore as the industry evolves along the other EPC Contractors in Singapore. hold ups. •

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INTERVIEW WITH Don Cheng

MANAGING DIRECTOR HAI LECK ENGINEERING

Please provide a brief introduction to the disciplines under one roof. Being a public company and some of its major milestones? listed company has helped build confidence Hai Leck Engineering was founded in 1971, among Hai Leck’s current and potential from one man’s vision to provide corrosion MNC clients. Our IPO signalled to the chem- prevention services in the marine industry. ical industry that Hai Leck is a stable, reli- Armed with limited resources and lead by able, and approachable partner in Singapore. its founder and Executive Chairman, Mr. We are not only recognised as a Service Cheng Buck Poh, Hai Leck has grown into Provider for SIP, but also as a contractor for a multi-disciplinary company serving the providing mechanical services, E&I and civil oil & gas and petrochemical industries. In engineering solutions. In our new mechani- the year 2000, Hai Leck acquired Indus- cal business unit, we focus on piping, struc- trial Services, a company that specializes tural steel, tank fabrication and installation, in insulation and refractory services. The tank construction, heat exchanger mainte- company continues to grow and expand its nance and plant equipment installation and business by integrating multiple disciplines maintenance. between its core business and alliance part- ners, providing excellent performance and How does Hai Leck leverage its position in efficient delivery of projects in the areas of Singapore in its operations overseas, and mechanical engineering, civil works, shop what markets are you currently targeting? fabrication, field construction and plant Hai Leck considers itself a global ESP: we maintenance. As a testimony of our ability have been active in Malaysia for around 30 to deliver cost-effective service, Hai Leck years and have more than a decade of ex- was chosen in Q3 of 2011 to provide a perience in both Vietnam and Thailand. Hai turnkey solution for Taiwan’s Chang Chun Leck is seeking to expand into the emerging group on Jurong Island: a cumene plant in- markets of Indonesia and Myanmar, which cluding offsite utilities such as storage tanks have recently opened up many opportuni- and pipelines; that project is expected to be ties in their oil and gas sectors. completed by the end of Q1, 2013. Can you elaborate on Hai Leck’s involve- How is Hai Leck expanding its service of- ment in the JTC’s Jurong Rock Caverns in- fering to the chemical sector in Singapore? frastructural project? The chemical and petrochemical industries The Jurong Rock Caverns (JRC) is the first are upgrading and expanding their current underground storage project undertaken assets to cater to increased demand from by the JTC. Hai Leck has been chosen by Asia and stricter emissions standards in Eu- Hyundai, the primary contractor, as the rope. Singapore’s current economic condi- main subcontractor for corrosion protec- tions have made pricing very competitive tion, fireproofing and tank construction for ESPs: we face a great deal of competition services for the JRC; this project is our first from foreign peers in the market, moreover project in collaboration with a government manpower shortages have made growth body. difficult for contractors overall. One of the ways in which we differentiate ourselves How does the EDB facilitate the operations at Hai Leck is by integrating multiple trade of ESPs in the chemical sector, and how are

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contractors like Hai Leck adapting to new regulation? The recent government approach to reduce dependency on foreign labour has directly affected our operation costs; this challenges local companies who are striving hard to meet deadlines and continue operating with existing manpower levels. On the other hand, the government and the EDB are pushing for greater productivity as a whole via automation and other efficien- cy-enhancing measures such as the use of innovative materials and new technologies. Hai Leck Engineering has implemented au- tomation in some of its processes: we have a fully automated blasting and painting facil- ity, and are upgrading our capabilities in ar- eas such as machine welding and cutting for our mechanical works. Hai Leck’s strategy is to continue to invest in capital and tech- nologies that increase productivity, reduce operating costs, and lowers the number of man-hours required on projects..

What are Hai Leck’s goals over the next sev- eral years? Hai Leck’s main goals are to continue to provide quality service and high safety stan- dards whilst ensuring 100% customer satis- faction; increase the scale of projects we un- dertake; and to expand our footprint across the globe. •

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INTERVIEW WITH Alvin Leong

MANAGING DIRECTOR WH MARATHON

What is your personal background, and how Will new restrictions on foreign labor make it did you come to form WH Marathon? harder for WH Marathon to continue to attract My partner, Mr Wong and I have been in the new talent? industry for the last 40 years. WH Marathon Finding new talent is now a big challenge in was formed in July 2009, when I was offered Singapore. In the past young engineers would a S$20 million project by Hin Leong Trading be very proud of their profession, but these to build a 50,000m3 storage capacity in Tuas. days most of Generation-Y want the comfort of WH Marathon is a fully integrated EPC com- air-con and to stay out of the sun – they have pany, serving tank farms, terminals and process forgotten someone has to build the buildings plants. We all come from the oil business, where they sit in and that hard work is what pays. we have vast experience of working for multi- Young people should remember that most nationals – this was one reason we were able to CEOs in the oil and gas industry are engineers. set up so fast. We have formed alliance partner- Singapore has a lot of talented new graduates, ships with key people we know in the industry, but not enough of them are engineers. Today it and specialize in the areas we know well. is tough to get a job, but labor shortages make executing one even tougher. What have been some of the company's key Some of the foreign workers coming into Sin- milestones since this first project? gapore are professionals. My office has EPs and WH Marathon has slowly expanded and is to- S Passes, but I also have a lot of Permanent day turning over around S$100 million. Our Residents and foreigners who have become employees are one of our key assets – we re- Singaporeans. With Burmese, Malays, Chinese ally believe in the professional staff that have and Indians on our staff, WH Marathon is an been working for us and look after them very open company, but of course we also try to well. Our numbers have grown to around 150, bring in local people; we do employ many lo- and we also have various subsidiaries and joint cal engineering graduates from NUS and NTU. ventures. We work very closely with companies I would think restrictions on foreign labor are such as McConnell Dowell, Tiong Woon Crane making recruitment tougher. Our strategy is and Keller. When these partners turn to us, they to ensure each of our engineers can do two know they are being taken care of by a specialist. or three different tasks – for example, we have civil engineers who are also safety managers Many companies in Singapore cite operating and registered as surveyors and registered tech- costs as a key challenge here. What common nical officers (RTO) with the BCA. This helps mistakes you see operators making that could fill gaps that may appear in our company. The be eliminated to reduce costs? other important thing is to pay your employ- Safety is one of the primary industrial concerns ees well – the world works for money, although in Singapore, and the government is pushing people also want to be comfortable with their the issue very hard. WH Marathon understands management. WH Marathon pays for its staff to the importance of safety precautions and recog- take training courses so they can upgrade them- nizes that they must sometimes come at a cost. selves. This cost must be minimized for operators to remain competitive, and the best way they can What do you regard as some of the key domes- do this is by consulting specialists. This is why tic projects you want to be involved in over the we have formed alliance partnerships with ex- next few years? Do you see the market picking perts in specific areas. up at all?

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Quite frankly, many big industrial projects in Singapore are now coming to an end, and com- panies are expanding more in other countries. While a small company, WH Marathon also does business abroad, with projects in ASEAN region and representative offices in China, Hong Kong and across the region. Business in Singapore looks very tough; any new projects will face high costs, and new entrants into the industry may not realize quite how competitive it has become.

Malaysia has its RAPID project, while Indonesia has attracted some Korean investment. Do you see your role in these countries growing? We certainly see our participation in ASEAN re- gion increasing. WH Marathon has a couple of projects on the table there which we hope will materialize. We will work alongside the same specialists as in Singapore. Singapore’s vastly ex- perienced skilled labor pool – especially at top and middle management levels – definitely gives companies here an advantage when entering the neighbouring markets.

The government has tried to promote high val- ue-added chemicals at Jurong Island 2.0. For WH Marathon, what are some of the key chal- lenges when working in this specialty sector? Our company is always geared up to take high value-added jobs. All of our top and middle managers are graduates, and we work in partner- ship with NUS on certain studies. WH Marathon also works with Keller, a very good German company specialized in foundations and dams.

What are WH Marathon’s strategic priorities for the next five years? WH Marathon wants to expand and form more joint ventures. We are looking around the ASEAN region. I think the oil and gas industry in Singa- pore will remain very strong for the next two or three decades; the multinationals place a lot of trust in the country and are here to stay. •

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INTERVIEW WITH Michael Ang

CHIEF OPERATING OFFICER TIONG WOON CORPORATION HOLDING

Tiong Woon was founded 35 years ago and Tiong Woon began its operations, safety has played a key role in facilitating the growth regimes were almost non-existent until the of Singapore’s chemicals industry. Could we Ministry of Manpower and the multina- begin with a brief overview of the company? tional refining companies really took steps to The late chairman, Ang Choo Kim, founded rapidly improve the safety culture. Tiong Woon in 1978 as a crane rental com- During the same time as multinational com- pany with one 20-ton crane. The business panies invested and brought new standards grew quickly as we acquired more and more with them, we looked at what the multina- cranes and in 1987, we became the owners tional crane companies were doing and saw of a 300-ton crane which was the largest them winning some additional businesses in Singapore at that time. In the 1990s we through lead engineering. As a result, we bought the AC1600, one of the largest of all moved into the engineering field as well in terrain cranes in the market with a 500-ton order to integrate ourselves with our cus- capacity. With these achievements, the com- tomers. This allowed us to increase our busi- pany had established a very strong footing ness from petrochemical projects. In 2008, in heavy lift and haulage. We expanded our we had a real breakthrough because we were business to provide marine transportation selected by a major Oil & Gas player as an in because at that time, Jurong Island had no house contractor for two of their plants in bridge connecting it to the mainland. Thus, Bukom and Seraya. we provided the tugs and barges services to move our cranes in order to satisfy the grow- Currently, how important is petrochemicals ing demand on the island. to the company and what is your strategy for We listed the company on the main board winning contracts in the local market? of the Singapore stock exchange in 1999 As a local boy, we have the advantage in and began moving into the heavy haulage knowing the market and regulation better sector with 600-ton class and 1000-ton than the foreign players. Thus, we can in- class cranes. This brought us up to the level tegrate our services to provide solutions for of the world-class players and we were able the given situation. We can help EPCs from to service the construction of petrochemical the beginning of the project to design and refineries and infrastructure during this pe- build, and receive permits for things such as riod. In 2005, we began doing mechanical temporary jetties, or to work with various engineering work, which allows us to offer authorities to remove lampposts, trees, etc a total package solution to customers. We are when something like a large column needs now an integrated solutions provider as we to be moved overland. offer three services: marine transport, logis- tics, and heavy lift. What do you see as the biggest challenges facing Tiong Woon within Singapore? What was the impetus behind expanding Manpower related issue like cost will un- your product offering in 2005 and how has doubtedly be our biggest challenge going this impacted your business today? forward. As a labour-intensive industry we I think the impetus behind this decision re- rely heavily on foreign labour regardless of ally speaks to how Singapore has developed skill level. However, the government’s white its worldwide brand. For example, when paper policy is putting restrictions on im-

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migration in the future. So to deal with this situation, we work together with numerous government agencies to provide more train- ing for a new local work force like crane op- erators. One of the key factors differentiating Singapore with other countries is the amount of training and certification that our opera- tors receive to become qualified. Operators in Singapore have to undergo a more struc- tured, extensive training and have to pass a government test to receive the authorization. Thus, they are very valuable to a company and in a high demand.

What do you expect to be the performance of the company in the coming years and what are your key priorities? The outlook looks generally quite positive right now as there is new investment coming into Singapore. In the next two to three years, our revenue will continue to remain strong in Singapore. However, we are also focused on further integrating our business units and expanding our overseas presence. We are in process of expanding our business into Myanmar, which we are very excited about. •

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INTERVIEW WITH INTERVIEW WITH Lim Jit Say

EXECUTIVE DIRECTOR ASSOCIATION OF PROCESS INDUSTRY

When was ASPRI founded and why? members increase safety regulations which come this struggle. The Association of Process Industry, ASPRI, will improve their productivity and prof- ASPRI- Institute of Process Industry (AS- previously known as the Process Industry itability by minimizing lost working hours. PRI-IPI) aims to train workers and is actively Contractors’ Association Singapore, PICAS, Our process supporting industry has an ex- helping members overcome this problem. was founded in 1997 in anticipation that cellent safety record and Singapore has set For example, we have recently signed a Mem- many chemicals companies would be enter- the golden standard for the region. This is orandum of Understanding (MOU) with ing the Singaporean market in the near fu- due to the fact that every ESP must comply WDA, which will provide structured training ture. Today, the association serves as a major with both the plant owners’ safety regulations and career counseling services attract locals to platform to improve and facilitate dialogues, and the regulations set out by the Ministry of join the industry. address industry issues among the various Manpower (MOM) and the Workplace Safety government agencies, such as Singapore Eco- Health Council (WSHC). In summary, safety What are your goals for the Process Industry nomic Development Board (EDB), Interna- is always the number one priority. Academy and for ASPRI in general? tional Enterprise (IE) Singapore, Singapore One of ASPRI’s goals in the next four phases Workforce Development Agency (WDA), Are all of your members, including the is to establish a “Process Industry Academy”, SPRING Singapore, the plant owners and the smaller players, capable of investing in these a one-stop industry training academy. Fur- engineering service providers (ESPs). ASPRI new automation and technology processes? thermore, we recently outlined a road map also serves four key clusters namely, the pe- This is a long and ongoing process for all our for the next 10 years. In this roadmap, we troleum, petrochemicals, specialty chemicals members. For multinational corporations, have planned three phases. The first and most and pharmaceuticals. new automation and technology investments important step is to sustain productivity lev- are easier to implement. However, in Singa- els through government-sponsored schemes. When we visited Singapore in 2010, our team pore small and medium enterprises receive Second, we want to encourage Singapore’s fu- encountered an environment that was not government incentives, so it is also a feasible ture development into a regional multi-disci- favorable to engineering service providers. for them. Finally, to avoid production delays plinary advanced research hub. We also want What is the situation today? caused by stringent safety rules, plants have to help our members move up the value chain From our perspective, and that of our mem- realised the benefits of automating processes. through market consolidation efforts. Since bers, the future looks very bright. The EDB Overall, these investments represent an ed- many of our members are specialized in very has done an excellent good job in attracting ucational process to change our society’s niche areas, we will encourage members to new investments into Singapore and pro- mindset. With increasingly governmental establish consortiums where members with moting the city as an international business rules, companies in Singapore eventually have different capabilities can collaborate to max- hub. Recent new investments have enhanced no choice but to change their outlook and ad- imise their market share. • the businesses of our members and service here to these new processes. providers. In recent years, management failures and How are ASPRI’s members adapting to meet manpower issues have caused significant new health, safety, security and environment project delays. Is the problem of manpower (HSSE) standards set by multinational corpo- also negatively affecting the businesses of AS- rations (MNCs)? PRI members? Firstly, I need to thank multinational corpora- Recent changes of governmental policies tions for training our members on important concerning foreign worker’s permits have universal safety regulations. Today, ASPRI is affected small to medium sized service actually working in collaboration with several providers. However, the government has multinational corporations and providing acted very proactively in providing means them with training services. By helping our and incentives to help these companies over-

104 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations EDITORIAL

Retaining the Edge

Maintenance providers for Singapore’s facilities

Like the small gains made through innovation, plant maintenance will be an increasingly vi- tal aspect for Singapore’s chemicals engineer- ing, procurement, and construction providers (EPCs) as new construction projects become fewer in number and existing facilities age. It is important to note that many of Singa- pore’s facilities have been operational for two decades or longer and Singapore’s chemicals market is reaching a more mature phase ac- cording to Robert Dompeling, CEO of PEC: “The project market will slowly tail off over the next ten years as Jurong Island fills up. The emphasis will need to change towards sus- tainable and responsible maintenance.”

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Despite the long-term view of the chemicals industry that many executives company has become accustomed to handling, it has taken claim to take, Dompeling believes many operators are willing to go with the action to adopt thermographic technology to measure heat cheapest service provider du jour: “Some multinational companies should look loss at plants worldwide. Application of this technology more at the total costs of ownership and maintenance from a long-term per- helps operators gain a better understanding of their wasted spective. Scale is crucial – companies can offer competitive rates only if they are potential energy. “Operators are becoming aware of how relatively large and serving many clients”. much heat their plant is losing, which means the potential Competing on cost is anyway no longer a viable option in Singapore. New of energy saving is huge when they are operating at temper- labor regulations, an expensive workforce and costly operating environment atures between 150 and 300 degrees. For Singapore, this is will counter any efforts to provide a cheap service. Instead Singaporeans look particularly imperative as we have one of the highest energy to excellence, sustainability, mechanization and software as areas where they costs in Asia,” comments Hertel’s regional managing direc- can maintain an edge. Most Singaporean firms are familiar with European and tor of Asia and Australia, Marinus Jacometti. American regulatory criteria and with international best practice after years of Jacometti notes that a single un-insinuated or poorly insu- working alongside leading multinationals. A cadre of experienced world-class lated valve, which is easily identifiable by thermographic engineers exists who have tasked themselves with insuring that high costs can technology, can cost a company €2800 ($3620) per year. be offset by operational excellence. For large plants, this can mean savings of $7 million to $10 UK-based Hertel is an industrial service construction and maintenance service million per year on a one-time investment of $3 million for provider that has made energy conservation a key component of its offering. re-insulation. This has wide ranging implications for Hertel Due to the stricter European Union environmental goals and objectives the and others in the insulation business as the industry takes a new look at construction and maintenance costs. Jacometti describes how companies used to look at insulation as an afterthought, but this attitude is evolving. “Now the conver- sation has changed from construction costs to total costs of ownership for plant operators. This is creating a paradigm shift in the industry because in the past operators saw little reason to go through the cost and inconvenience of insu- lating something like valves, but now modern techniques like thermography allows us to calculate the exact losses in energy from an un-insulated or a poorly insulated valve.” Locally-based player Ad-Meth Mech Field sees its prospects as strong given the landscape of the local market. “Demand is picking up on downstream maintenance as plants in Sin- gapore age. Typically operators are looking to run a plant for up to four years in Singapore without a scheduled shut down in order to minimize operating costs,” states Shaun Pang Tong Heng, general manager of Ad-Meth Mech Field. As operators are persistently put a higher premium on re- ducing plant shut down time as a cost saving measure, Ad- Meth Mech Field has positioned itself accordingly. “Oper- ators want a quick turnaround time for maintenance and repairs, thus this is at the core of our business strategy. For us at Ad-Meth Mech Field, we understand the urgency of our customers’ requests. We recognize for every minute our customer’s plant sits idle, their operating costs increases and their plant turns from an asset to a liability” says Pang. Maintaining Singapore’s ageing industrial infrastructure so that it will be able to compete with new installations going up throughout ASEAN will be a demanding task and will entail incorporating the latest and most innovative systems and technologies. If companies can achieve this, such ex- pertise will help them to ensure that Singapore can remain a regional leader for a few decades more. •

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INTERVIEW WITH Shaun Pang

GENERAL MANAGER AD-METH MECH-FIELD PTE.LTD.

Could you please provide a brief overview What do you see as the company’s place on Singapore has effectively opened its doors to of Ad-Meth Mech-Field and the services you the value chain? What value-added services do the largest multinational corporations in the provide to the chemicals industry? you provide? world. What do you see as the role of local Ad-Meth Mech-Field is a local Singaporean The fact we are a one-stop shop for heat ex- SMEs in a market where multinationals are company that started operating in 1991 and changers is very valuable in such a time-sensi- usually considered the focus of the economy? currently there are three areas of services tive environment. There are several companies Small businesses have flexibility and the abil- we provide for our clients in the chemicals who provide services that overlap with ours, ity to react quickly to the market. There are process industry. The first is high pressure wa- but we are the only company in Singapore to SMEs with good, innovative ideas but find it ter-jet cleaning of up to 40,000 psi for a vari- provide such a comprehensive range of ser- difficult to market yourself. Marketing here is ety of components used in process plants such vices in our field. This is critical because coor- difficult because there is not a ready made do- as heat exchangers, drums and columns. The dinating between different service contractors mestic market for many SMEs like there would second area of our business is the fabrication leads to lost time on the maintenance and be in a market such as China or the United and repair of heat exchangers. We are special- repair project, meaning operators may have a States. Thus, organizations like the EDB should ists in this area of heat exchangers and con- longer shut down time. work more in marketing these innovative sider ourselves a one-stop-shop for companies Demand is picking up on the downstream SMEs in order to promote their viability. • in need of heat exchanger maintenance and maintenance as plants in Singapore age. Typ- repair services. The third area is the supplying ically operators are looking to run a plant for of valves, pipes, and other specialized equip- up to four years in Singapore without a sched- ment that we supply to major petrochemical uled shut down in order to minimize operat- clients. Our customer base includes a number ing costs. For scheduled maintenance of plants of the leading companies operating in Singa- we are often shooting for a turnaround time pore including ExxonMobil, Shell, Chevron, of around two to three weeks depending on Petro China, DuPont, and Lanxess. the scope of the work being done at the plant We operate in a very specialized niche; in the and for unscheduled shutdowns we can usu- petrochemical industry the key to operating ally provide clients with a turnaround time of an efficient, profitable unit is to keep the plant five days to one week. running with as few maintenance issues as possible. Obviously plants develop mainte- What do you see as the biggest challenges fac- nance issues over time and have to be shut ing Ad-Meth Mech-Field? down for repairs and upkeep. Operators want For us the biggest issue is labour cost as the a quick turnaround time for maintenance and government has sought to restrict the number repairs, thus this is at the core of our busi- of foreign workers in the country by increas- ness strategy. For us at Ad-Meth Mech Field, ing the levy on lower skilled foreign workers. we understand the urgency of our customers’ Their philosophy is that restricting labor will requests. We recognize for every minute our create more jobs for Singaporeans. However, customers’ plants sit idle, their operating costs what this policy fails to recognize is that Sin- increase and the plant turns from an asset to a gaporeans do not have a desire to work in liability. We work with our customers in or- hands-on industries such as ours. As an SME, der to have an intimate recognition of their the government wants us to control the num- schedules and to minimize the shut down ber of foreign workers we employ, however if time at their plants. This is why our facility is we did not have foreign workers, it would be operating twenty four-seven, to deliver to the impossible for us to operate. turnaround our customers demand.

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 107 Global Business Reports INTERVIEW Industry Explorations

INTERVIEW WITH Marinus Jacometti

REGIONAL MANAGING DIRECTOR ASIA AND AUSTRALIA HERTEL

Hertel was established in Singapore in 2007. and thus was placed near the bottom of the Singapore’s chemicals sector over the last year, What have been the major developments for value chain. However, now the conversation do you expect business to pick back up again? the company since then? has changed from construction costs to total The nature of this business is cyclical; some- Hertel’s establishment in Singapore in 2007 costs of ownership for plant operators. This times you have investments concentrated over came on the back of several big contracts and is creating a paradigm shift in the industry one to two years where service companies since then we have established ourselves as a because in the past operators saw little rea- are struggling to keep up with overwhelming significant regional player. We have made ac- son to go through the cost and inconvenience demand. This occurred in 2009 and 2010 in quisitions in Thailand and have several part- of insulating something like valves, but now Singapore; there was a huge uplift due to all nerships in China and Malaysia. However, the modern techniques like thermography allows these projects. In recent years the demand has main crux of our Asian operations remains us to calculate the exact losses in energy from tapered to what I would call a more normal in Singapore. Through our acquisitions of an un-insulated or a poorly insulated valve. level. With new, big projects coming in 2014, Kok Chang Scaffolding in 2008 and Tong Hoi This can lead to losses of up to 2800 Euro per I expect Singapore to pick back up a bit. Engineering, a mechanical engineering com- year per valve. At an average plant, savings like pany in 2009, we were able to develop the this can lead to savings of $7 to 10 million What do you see as your strategic priorities Hertel’s operations in Singapore quite well dollars per year based on a one-time $3 mil- for Hertel Singapore over the next three years? both in terms of revenues, profits and pene- lion investment. The first is safety, which is always of primary tration of markets. concern. Second, is to optimize our processes Our strategy is to work with clients through Given the high cost of energy in Singapore, is further by lean implementation in order to the construction and into the maintenance the market here particularly receptive to en- defend our margins given the price pressure phase or to use maintenance to get new ergy saving technology? in the market. Thirdly, is business innovation; projects if a company decides to undertake I think Singapore is just one of many markets through collaboration worldwide, Hertel is new construction. clamoring for this. Apart from the fact that planning on launching several new initiatives energy is becoming more expensive, we are in the coming years to improve upon our How is the nature of non-mechanical process living in a world that is more acutely aware products and services as well as expanding engineering changing and what initiatives that we need to waste less as human beings, our customer base. • is Hertel undertaking to meet this changing whether it is food, water, or energy. This is a dynamic? global issue, not just a Singaporean or Asian As a global company we are able to share per- issue and global companies are paying at- spective, which is invaluable to improving our tention. The traditional tension we used to operations worldwide. At Hertel Europe, the see amongst our clients was between main- company has become more aware of energy tenance managers, who have a set budget to efficiency given the 2020 goals and objectives spend on insulation, and operations man- set by the European Union. In Asia, we are agers, who want to keep operating costs as adopting this as we have recently launched low as possible. However, now many multina- an energy conservation initiative, which in- tional companies have an energy manager to corporates new thermographic technology to bridge the contradiction between these two measure heat loss in process plants and create parties. substantial savings for our customers. For Sin- gapore, this is particularly imperative as we Many industrial service companies, including have one of the highest energy costs in Asia. Hertel, have seen a downturn in their Singa- This will allow Hertel to move up the value porean revenues as a result of lack of invest- chain as insulation used to be perceived as a ment in new projects during the financial necessary, but distinctive part of construction crisis. Given the new wave of investment in

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INTERVIEW WITH Masatoshi Nakahara & Ong Choon Nan

MN: MANAGING DIRECTOR OCN: SENOR MANAGER YOKOGAWA ENGINEERING ASIA

Could you provide a brief introduction to have come to the country and many major is in the quality of our products. Some com- Yokogawa in Singapore? companies have their headquarters here, panies talk their products up, but ours are MN: Yokogawa provides automation solu- so there are great opportunities to build a really as good as we say. Yokogawa’s service tions, particularly to the processing industry. business here. Also, the EDB provides some center here improves our understanding of Our business volume is around $3.5 billion assistance to companies investing here – it customers’ needs and ability to make quality worldwide. Our main solution consists of supported us when we first built our factory, products for them. control systems and field sensors, but in ad- and we have established a good relationship. dition to the product we will also supply the Yokogawa now has four functions in Singa- Do you have a final message for the readers? engineering work and service support. We can pore. The most important is to sell engineer- OCN: Yokogawa has established a very strong help each customer realize stable plant oper- ing services to customers here; second, we base on Jurong Island. Last year Singapore ations and more efficient energy usage. When still have manufacturing in the country; third, brought in about $16 billion of investment, Yokogawa opened in Singapore in 1974, it Singapore is our Southeast Asian headquar- of which about 40% was in chemicals, and we began as a factory manufacturing meters. In ters, covering a region spanning from India to were successful in winning a lot of contracts. the 1980s we started selling our products in Australia to Taiwan; fourth, it is also the head- The investment outlook for 2013 does not this region, and later in the same decade we quarters for Yokogawa’s international market look so rosy, with challenges around energy opened an engineering center. outside Japan. In each case we have received costs and human resources, but we are see- some help from the EDB. ing more and more upstream projects. We still Which of your solutions are in highest de- have a major role to play on Jurong Island: ap- mand from petrochemical clients in the re- Your clients are facing difficulties with staffing proximately 60% of the companies on Jurong gion? because of restrictions placed on foreign tal- Island use Yokogawa’s services. We continue MN: Our distributed control systems are our ent. How can automation help chemical com- to service systems we installed 20 or 30 years solution in highest demand from petrochem- panies get more out of a limited labor pool? ago, and have more than 100 people support- ical clients in the region. These are special Retention of human resources is a headache ing customers in Singapore. We run continu- computer systems which control more than for every company, and the Singapore gov- ous improvement programs to upgrade our 10,000 sensing points in certain petrochemi- ernment is now becoming very strict toward customers’ systems. • cal plants. Today all temperatures and pressure foreign workers coming into the country. levels should be set by computers – but these Yokogawa suffers less than others because our computers must also be reliable, because if employees are highly skilled, and Singapore they ever crash it will cost plants huge sums still welcomes such capable engineers. The of money. Yokogawa has therefore developed more severe problems facing chemical com- its hardware and software very carefully. We panies are an opportunity for them to intro- also provide management solutions to help duce our solutions. customers with their plant operation. What are Yokogawa’s main competitive advan- Singapore is a very international market and tages over other automation companies? a gateway into Asia. What are Yokogawa’s rea- MN: One of our core strengths is in human sons for investing in automation here? resources. We have established businesses in MN: Singapore has no resources; so to survive Southeast Asia, the Middle East, Africa, Brazil, its government engages overseas investment. the US and Europe, so our customer is al- Its ambitions have been very successfully re- ways local. Being able to speak a customer’s alized in the last two decades; Singapore has language is a very important step in forming good mechanisms for human capital and re- a relationship with them, and our local staff source transportation. Many strong investors is very important to us. Our second strength

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 109 Global Business Reports EXPLORATION Industry Explorations

The Problem of Space

Addressing Land Scarcity

Land-use on Jurong Island and in the neigh- term costs. The government’s willingness to bouring areas of Tuas and Jruong is a severely get involved in projects like the SLNG termi- limiting factor in Singpaore. With Jurong Is- nal and JRC illustrate the long-term vision the land and the main island becoming increas- government has for the chemicals sector. In ingly built-out, storage and distribution com- these projects the Singaporean government panies in Singapore are having a difficult time is willing to invest on its own when private acquiring the necessary land to expand their companies are reluctant to do so. While time operations. Kelvin Sim, managing director will tell if these latest investment decisions are of Singapore-based distributor Absotech ex- wise, Singapore has a proven track record of plains the conundrum surrounding land-use correctly betting on long-term trends. for storage and distribution companies: “Land The JRC is not the only storage project enter- has not only become very expensive in Singa- ing Singapore’s chemical scene. Private sector pore, but it has also become exclusive: many companies such as Oiltanking, Yang Kee and companies may have the capacity to purchase YCH are looking to expand warehousing ca- a certain plot or asset, but the company who pacity, while minimizing land use. Locally the government perceives will add the most based Yang Kee Group recently christened a value in its bid is ultimately the one favored to S$120 million ($100 million) Jurong Pier make a purchase.” Chemical Logistics Hub (CLH) with more Although this behavior limits distribution and than 1 million square feet and two floors storage companies, the government views for chemicals. “Yang Kee’s CLH is specially preservation of prime real estate for high outfitted for our chemical clients; it has fire- value production as a necessary measure. Fur- fighting and water containment features, ex- thermore, the government, through the JTC plosion-proof lightning, epoxied flooring, a Corporation, is also taking action to introduce mechanical ventilation system, and a design its own storage measures. This project, known that caters to Quality, Health, Safety, and En- as the Jurong Rock Caverns (JRC) is an am- vironmental (QHSE) compliance,” explains bitious subterranean complex located 130m Ken K.C. Koh, deputy managing director of below the surface that seeks to save limited Yang Kee. space on Jurong Island. The Jurong Aromatics Local warehousing and logistics provider Corporation, whose $2.4 billion integrated YCH broke ground on an innovative new complex is expected to go online in 2014, is facility dubbed Supply Chain City™. The fa- scheduled to be the first user of this new facil- cility will offer 15 floors of automated stor- ity. Eugene Leong comments on the value of age and warehousing and utilize Automatic the JRC: “It is an efficient and unique way of Storage and Retrieval Systems in order to save storing products on the island that does not space and manpower costs. Michael Leong, compromise the limited space available. It has vice president of sales and marketing at YCH capacity to store up to nine million barrels of Group explains the concept behind the com- petrochemical products, which would have pany’s new Supply Chain City: “our SCC will taken up 60 hectares of space above ground.” be a fully consolidated and integrated com- Considering the total landmass of Jurong Is- plex, housing new technologies and a wide land is currently around 3000 hectares, the selection of professionals in the logistics and JRC is a significant space saving initiative that SCM industries; the SCC is quintessentially is focused on long-term gains over short- plug-and-play.” •

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INTERVIEW WITH

customers; we buy product in bulk and have our technology and capital that decreases reliance on Kelvin Sim & own ISO tanking and drumming capabilities. The man-hours. The government is now providing majority of our current products are destined for more funding programs and other initiatives to export, but Absotech is building a stronger local prop up SMEs. Ooi Tiat Jin distribution network for the future; we want our Singaporean operations to be equally as strong as Is there adequate support in place for a local Sin- those overseas. We feel that Singapore has many gaporean company to meet the HSSE standards of strengths that can be leveraged within our busi- MNCs in the chemical industry, many of which KS: MANAGING DIRECTOR ness. First, Singapore enjoys high levels of trans- are potential partners and customers for service OTJ: EXECUTIVE MANAGER parency. Although other countries may have lower providers? ABSOTECH overheads, there are many unforeseen costs when OTJ: Capability and compliance building for SMEs compared to here. can be undertaken through many channels. The As the founder and Managing Director of Ab- What are some of the methods Absotech has un- SCIC, for example, is a good source of both in- sotech Pte Ltd, can you provide a history of the dertaken to make more efficient use of its asset formation and training on issues relating to HSSE company and its major milestones? portfolio? compliance. For a company like Absotech, we can KS: I started Absotech Pte Ltd in 2002 from out- KS: Because chemical markets are so speculative, utilize the SCIC as a platform to address our con- side of the chemical industry; however, suppliers Absotech is able to explore new opportunities via cerns. One area in which there is still room for with whom I had worked with at my previous expanding our logistics assets and capabilities: improvement, however, is the promotion of SCIC- position soon sought me out for my distribution an experienced trader can regain several months MNC partnerships and mentoring programs; the expertise. Namely, ExxonMobil was looking for of business lost from a lack of inventory almost difference between a MNC’s HSSE standards and a partner with experience in emerging markets. overnight, for example. Furthermore, our market a local Singaporean enterprise’s are large, and we After a year, Absotech secured a partnership and intelligence capabilities are very strong, and we feel that these gaps cannot be filled without long- support from ExxonMobil. By June of 2003, we can forecast demand for our customers based on term partnerships or immersion programs. were self-sufficient. Absotech’s most intensive firsthand information and Absotech’s ability to period of growth came shortly thereafter; we read the market. Yet currently Absotech has cho- What is Absotech’s vision for the future both in went from less than one million in turnover in sen to strategically downsize to S$20 million un- Singapore and overseas? 2003 to upwards of S$25 million by the end of til the cost-curve for logistics shifts downwards KS: Absotech is looking to become more than a 2006. Until Q3 of 2007, ExxonMobil remained again. trader and distributor of solvents; we are building our main partner. Today, we purchase stock from partnerships in the mining industry with part- a diverse array of major players both locally and Singapore’s Ministry of Trade and Industry is ners in the United States. However, new growth internationally. committed to promoting the operations of SMEs requires a stronger asset base, which we cannot like Absotech. What has been your relationship enhance despite the fact that Absotech is currently What are Absotech’s supply chain capabilities, with the government and what incentives are very liquid in terms of funds. Land has not only and how are they bolstered by your position in available to businesses such as yours? become very expensive in Singapore, but it has Singapore? OTJ: Labor restrictions are being offset by many also become exclusive: many companies may have KS: Presently, the majority of Absotech’s inven- new incentives to help SMEs become both more the capacity to purchase a certain plot or asset, but tory is housed in Singapore. Where we used to competitive and productive. Whereas a local SME the company who the government perceives will only focus on trading, Absotech offers blending, in the past might have built up its manpower, the add the most value in its bid is ultimately the one logistics and other value added services to our government today is promoting investment into favored to make a purchase. •

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INTERVIEW WITH Kai Chladek

MANAGING DIRECTOR LESCHACO

What are the recent developments at gional dangerous goods and their require- Given the recent indigenous growth of the Leschaco? ments. He also handles the warehousing, chemical sector in Singapore, is Leschaco In recent years, Leschaco has shifted its fo- the transportation and any other require- facing new competition by smaller, local cus to Asia, where the company has estab- ments related to dangerous goods. players? lished a large strong regional network. With For the past 10-15 years, the Singaporean regards to the chemical industry, Leschaco What are Leschaco’s capacities or capabili- market has becoming increasingly compet- serves major global costumers including ties in terms of tonnage transported in and itive. There are now over 9000 established BASF, Bayer, Lanxess, Evonik and Clariant in out of Singapore? logistics companies in Singapore of which Europe. Globally, Leschaco runs a fleet of 300 units the majority are local or regional players. Leschaco’s branch in Singapore opened in of which 23 tank containers solely transport However, there are still a large amount of 1992. Today, this office has roughly 35 em- chemicals. Singapore is one of many mar- multinational market entrants because Sin- ployees and the division frequently hosts key kets, which Leschaco serves in the Asia Pa- gapore is such an attractive business hub. account events for special regional clients. cific region. In terms of global movements, The chemical sector constitutes about 60% Leschaco imports and exports approxi- What are Leschaco’s primary objectives of Leschaco’s overall business, but the com- mately 10,000 to 12,000 tank containers for the near future and what strategy does pany has diversified into fields such as the annually. In terms of local chemical trans- Leschaco have for achieving its goals? automotive sector, shipment, storage logis- ports, Leschaco moves 40 to 50 chemical The main objective for Leschaco is to ex- tic solutions and distribution. Particularly in tank containers in and out of Singapore pand regionally, to build partnerships and to Singapore, every type of service is impor- annually. continue satisfying the growing demands of tant and there is a high demand for a com- our costumers. We are looking particularly bination of services such as manufacturing, Holding assets in Singapore can be expen- to strengthen our footprint in Singapore by distribution and logistics solutions. sive due to the rising cost of land and regu- investing in local chemical warehousing fa- lations. Has Leschaco also encountered this cilities for the storage of dangerous goods. In 2009 your predecessor characterized problem and how is it’s warehousing busi- Last year, Leschaco grew by around 14-15 Leschaco as “not only a logistics solutions ness dealing with this? % in the Singaporean market and I expect to company but also a distributor”. What It is very costly for a foreign company like see this trend continue in upcoming years. can one expect from a partnership with Leschaco to acquire land in Singapore. Nev- Leschaco’s ultimate goal is to become a Leschaco? What are Leschaco’s service of- ertheless, due to the strong local demand dominant player not only in Singapore but ferings? for chemical warehousing, Leschaco is con- also throughout the region. • Leschaco provides its partners with all the sidering opening its own warehousing fa- necessary supply chain services. It is proud cilities in Singapore by the end of this year. to have capabilities to complete the entire Another challenge in Singapore is that the supply chain lifecycle. For example, the government heavily regulates the property company can supply and transport raw ma- acquisition process. This challenging cost terials into Singapore and to other regions. environment has made us contemplate Additionally, Leschaco arranges various moving our operations to Malaysia. How- in-house operations such as packaging or ever, relocating to Malaysia would entail transportation of goods from their manu- new risks and disadvantages. Unlike most facturing site to their destination countries. neighbouring countries, our business in Also, Leschaco consults clients in han- Singapore benefits from easy costumes dling dangerous goods in cargos. For this, clearances, favorable trade agreements with Leschaco has a specialist located in Thailand Europe and the Americas and a robust in- who is in charge of all of Leschaco’s re- frastructure.

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INTERVIEW WITH Michael Leong

VICE PRESIDENT OF SALES & MARKETING YCH GROUP

Can you please introduce YCH and outline YCH spends about 3 to 5% of its revenue on services to YCH. Indeed, this is no different the role of the chemical industry in its over- developing its technological capabilities. In from our current service offering to chemi- all operations? what ways does YCH’s focus on technology cal companies in the APAC. YCH is a world-class logistics and sup- enhance its SCM services? ply chain management (SCM) solutions YCH employs the use of advanced IT sys- What are YCH’s goals in the near term and provider that was founded in Singapore in tems in its solutions. Our IT platform is the what is your strategy for achieving them? 1955. At present, our footprint extends to result of over twenty years of experience in Apart from the completion of our SCC 10 different countries across the APAC re- logistics and infrastructure, and supports project, YCH is looking to reach a turnover gion. In all of these locations, YCH owns a high degree of customization to suit the goal of $500 million over the next two to and operates its own assets; however, we do individual needs of our customers. YCH is three years. In terms of technology, YCH is believe in an asset-light strategy, and YCH’s quite proud to be one of only a few com- looking to integrate more cloud-based solu- in-house engineering team designs each of panies that invests heavily into in-house IT tions into its IT services for the future. these facilities with maximum efficiency in systems. Although we are already 4,000 strong, YCH mind. wishes to inculcate a passion for logistics YCH’s involvement with the chemical in- Land and manpower prices are very prohib- amongst APAC’s youth, who are less at- dustry began in the 1990s when we devel- itive in Singapore, what is YCH’s strategy for tracted to industries such as ours. To accom- oped logistics partnerships with companies overcoming these challenges? plish this, the SCC, for instance, will have such as DuPont, Huntsman, Ciba-Geigy; and YCH is confident that Singapore will be able the facilities to educate, train, and increase today YCH has extended its offering to com- to overcome these challenges. In terms of awareness within Singapore’s talent pool. panies like ExxonMobil and Wacker Chemie ASEAN, Singapore is in a leading position YCH and the logistics and SCM management AG. Nearly 40% of our current business is in terms of SCM technology; our logistics industries are committed to the APAC; as derived from the chemicals industry in APAC companies can closely match if not exceed we increase our infrastructural and SC ca- Today, the chemical industry in Singapore the technological offering of our peers in pabilities, we are actually helping countries and APAC is no longer simply looking at Europe and North America. Yet, APAC is a and the region to grow and develop to the quality and price when making strategic much more challenging and dynamic lo- betterment of the APAC. For Asia, YCH is fo- decisions; companies must enhance their gistical environment than those regions be- cused not only on generating money, but supply chain capabilities in order compete. cause Asia’s infrastructure is still developing. also meaning. • Our Intrabution™ solution, or the distribu- The EDB and Singaporean government are tion of finished goods, remains YCH’s main doing their best to facilitate solutions to service line to its chemical clients. YCH’s In- these problems, and YCH is seeking to ac- tribution™ solutions are becoming increas- tively engage these agencies to promote our ingly attractive to the chemical sector for industry. their ability to add value and increase cost competitiveness. These solutions integrate In which markets and industries is YCH our IT capabilities directly into production looking to expand its footprint? lines. The unique quality of Intribution™ China and India are key markets for YCH is in the way it lowers costs: YCH maintains because of their large manufacturing bases. exclusive partnerships with complimentary As new companies enter these countries, suppliers, who fully own stocks at our ware- YCH wants to assist them in overcoming houses until we receive a production order; the infrastructural challenges of operating hence, when plants are not running our in a new country or region. In this way, our manufacturing clients incur no associated partners abroad will be able to focus on their inventory costs. core operations and leave support and SCM

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INTERVIEW WITH Bay Chin Hao

COMMERCIAL MANAGER, ASIA PACIFIC OILTANKING

Oiltanking has been in Singapore for 24 The scarcity of land is an issue in Singapore of storage in Singapore, of which 365,000 years. What is your history in the country? – everyone wants a bit more of it. It is safe cubic meters are in chemicals, with the bal- Oiltanking is part of a privately-held family to say the amount of land Oiltanking would ance in petroleum. The Helios terminal also business, headquartered in Hamburg, Ger- like in Singapore is beyond its current hold- gives us a physical presence on the other many. Founded in the early 1970s, the com- ings, but we do sympathize with any party side of the island; we are keen to see how we pany has grown significantly into a world- who has the unenviable task of attracting can serve the industry there, either through wide, independent third-party logistics investments and allocating this precious re- expansion or optimization of existing assets. provider for oil, gas and liquids. Our parent source. In fact, this predicament has in turn company, Marquard & Bahls, holds various fostered a unique working climate in Jurong What is Oiltanking’s short term strategy for other energy-related companies under its Island, where inhabitants cooperate closely Singapore? umbrella, of which Mabanaft and Bomin to the extent of sharing resources; instead of Our immediate focus is on our integration are also present in Singapore. When Oil- undertaking projects solely by themselves. of the Helios asset – many people involved tanking set foot on what was then known as Indeed, we see ourselves as collaborators in the business are bubbling with excite- Seraya Island, it was a standalone terminal; with, rather than mere service providers ment about the possibilities. OOTS still we have since grown with the fortunes of of, the industry. For example, we have an has some land available for expansion at Jurong Island and are now integrated with on-going project with Shell where we are its current site, and recently we have won the wider industrial community. In partic- optimizing existing assets to support their a contract to support a new chemical plant ular, the island’s chemical expansion has expansion, instead of simply adding new in- on Tembsu, Jurong Island. We will receive had a very positive impact on our business frastructure. Together with the involvement and in turn deliver via pipeline, the plant’s – the chemical industry remains very im- of government agencies, I find this joint key feedstock by investing in 12,000 cubic portant to us. The continuing development solution-focused approach an exciting and meters of pressurized spherical tanks and and prominence of Singapore as a global mutually beneficial feature. associated infrastructure. We are very en- oil trading hub has also facilitated the com- The JTC is looking for an operator for its up- couraged to have the opportunity to provide pany’s growth. coming Jurong Rock Caverns project. What such a critical and integral aspect of their leadership and expertise would Oiltanking, plant operations, particularly since it is more At the time of our last report, in 2010, Oil- one of the potential candidates, lend it? than 10km away. It’s certainly supports the tanking was undertaking an expansion pro- The Jurong Rock Caverns is a very interest- government’s vision to provide competitive gram in Asia. What has this entailed to date, ing project for Singapore. Oiltanking has plug-in solutions on Jurong IslanD. • and what role does Singapore play in your extensive experience in other parts of the regional operation? world in the area of strategic storage; and as During this period we expanded the Oiltank- this facility will also serve the industry, we ing Odfjell chemical terminal in Singapore, will be ideal candidates to play the required adding its fifth, sixth and seventh phases to independent role. support both industrial and regional trade flows. Other Oiltanking locations in the re- Acquisitions have been part of Oiltanking’s gion have also experienced organic growth. strategy worldwide. How has the purchase, last year, of Helios here expanded your ca- It is quite difficult for storage companies on pabilities? Jurong Island to petition for new space – Oiltanking is very excited about its acqui- some claim the government does not see the sition of Helios. It functions today mostly industry as adding enough value or creating as a fuel oil terminal, which complements enough local jobs. How is Oiltanking mak- our current portfolio here well. In total we ing the most of its limited assets? now have more than 2 million cubic meters

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INTERVIEW WITH Richard Strollo

MANAGING DIRECTOR - SOUTH ASIA BDP INTERNATIONAL

To begin, could you please provide a brief extensive global network and the excellence ing the fragility in supply chains such as the overview of BDP’s recent operations in South relationships with core shipping lines and tsunamis and earthquakes in Indonesia and Asia? carriers, we are able to help our clients to op- Japan respectively. With cheap fuel sources This is one of our largest offices globally timize costs. bringing down potential production costs for with over 200 employees, which reflects the In terms of warehousing, Singapore is a land manufacturers, this could make supply chains importance of Singapore in global chemicals scarce nation and this becomes an issue. With more intra regional then they have over the market. Our capabilities in Singapore reflect our non-asset based model, we have the last few decades. At BDP, we are fast and nim- our customers’ needs as we have a very large flexibility to increase or decrease the space ble in recognizing trends and adjusting our warehousing operation in Singapore. Ad- requirements base on market situation and business accordingly. • ditionally, we have other services offering customers. including ocean, air and ground transporta- Labor issues in Singapore are unique with the tion; lead logistics process analysis, design quotas and controversy surrounding the role and management; export freight forwarding; of foreign workers, but our strong perfor- import customs clearance and regulatory mance in recent years speaks on how we have compliance; project logistics; consolidation/ effectively dealt with these challenges. BDP is distribution; and web-based shipping transac- committed to invest in our most important tion/tracking management systems. asset, our people by having global responsi- bility for the education and development of all Singapore has a perceived image of being the employees. We have set up BDP’s Training, Ed- world leader in logistical efficiency and clear, ucation and Development (TED) department transparent regulatory regime; does the situa- is further proof that BDP strives to deliver pro- tion on the ground live up to this hype? grams that make BDP an employer of choice. BDP recognizes that Singapore maintains an In turn, our employees are prepared to handle effective and robust regulatory regime that the demands of the logistics industry in order is able to adapt quickly to the ever-changing to best serve our clients. business landscape. The Singapore govern- ment is always looking at ways to improve What do you see as the greatest opportunities the infrastructure and transportation network, in Asia over the next three to five years? What be it airports, roadways or ports. Regulatory shifts could we experience in the markets that compliance is one of the key services where would affect the logistics industry? we have experts located in each region who The rise of the Asian middle class certainly are knowledgeable about local regulatory creates all kinds of opportunities in places like compliance procedures. Vietnam, Indonesia, Philippines, and China. The opening of Myanmar to the West is also Globally the logistics industry is facing higher interesting, but should be approached with transportation costs and Singapore is facing caution. When Vietnam opened up, there was land and labor constraints, how is BDP work- a rush into the market and then a subsequent ing to mitigate these challenges? rush to exit as multinationals crowded into a BDP is a non-asset based company. We are able smaller than expected market. to work with a variety of partners to custom- The effects of the shale gas boom in North ize the solution to meet customers’ require- America could have an interesting impact. ments. This model allows us a greater flexibil- Even before this advent of cheap natural gas, ity especially if volumes increase. With BDP’s North American companies were recogniz-

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 117 Into the Future: Final Thoughts, Travel, Company Guide, and Index

“We are orienting ourselves towards Asia everyday. We started small in Singapore and have expanded our network. Today, Asia represents about 30% of Eurotainer’s global business... Singapore is an important part of our business as approximately one third of our Asia business comes out of Singapor,e representing approximately 2,000 tanks.”

- Claus Ringgaard, General Manager Asia Pacific, Eurotainer Asia Source: Shutterstock Global Business Reports FINAL THOUGHTS Industry Explorations

“Singapore enjoys a great deal of regulatory transparency, but there are “We have seen in Europe, North America and South America a consolidation nonetheless some key weaknesses. Regarding Jurong Island, the level of of the chemicals distribution industry. This is being driven by the regulatory restrictions placed on the island’s logistics and infrastructural capacities is requirements and, to a lesser extent, consolidation in chemicals manufacturing. too high: there is only one overland bridge to and from the island. This often The cost to adhere to regulatory demands are not small and are going to becomes congested, which is not conducive to supply chain management. become more difficult as programs like REACH are used as a global model. Singapore’s second weakness is in manpower; companies are experiencing We believe this trend will be a game-changer in Asia, as rising regulatory costs great difficulty in recruiting and retaining capable staff. Yang Kee is building will cause consolidation here as well. With that said, Connell Brothers is well its image as a premium service provider; we provide premium service and pay positioned to manage these regulatory changes given our financial strength and premium compensations to our employees, and we tend to invest more into experience in North America.” people and equipment than our competitors. Furthermore, Yang Kee is more hands-on in our approach as a SME; we are not small, but we are not so large as to become indifferent to our staff.”

- Ken K.C. Koh, Deputy Managing Director, Yang Kee Logistics Pte Ltd - E. Scott Graddy, Vice President, Connell Bros.

“Singapore’s chemical market itself is quite small, although it has always been “I think the challenges will revolve around legislations and the fact that Jurong an ideal place to trade, purchase, stock, and export our products. In the past Island will eventually become the only point of entry for hazardous products. several years, the re-export business in Singapore has become expensive and Furthermore, I think the size of Singapore, as an island will inevitably limit we have been forced to ship products directly from some of our supply sources. its capacity for growth. Some of our costumers have recently relocated to Today, it is still the best place to operate, but our inventory is not as extensive in neighbouring countries. Hence, another threat is that multinationals are moving this specific port. Yet, our principals desire to do business here has not abated, their regional headquarter to places like Shanghai. Nevertheless, I am confident and in many cases we partner directly with them to store some of our products that the Singaporean government will continue to attract new multinationals.” when needed in order to provide a better price for all of our customers. The dynamics have changed, but the presence of nearly all of our clients, ease of communication, and ease of business means Singapore continues to be a very important place for Linkers Far East; you can feel the pulse of the whole chemical market in Singapore.”

- Shamsher Zaman, Founder and Managing Director of Linkers Far East Pte Ltd - Graeme Rooney, Managing Director of Suttons International Singapore Pte Ltd

120 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations FINAL THOUGHTS

“Our next wish is to start new programs in new areas of research. Looking “Brenntag is over 100 years in the chemical distribution business, but in at oil field chemicals, for example, one of the issues is about being able to just four short years our business in APAC has grown significantly over the get at oil deposits in a sustainable way. There is a lot of potential harm in the entire group. Over the coming years, we believe that the APAC will comprise chemicals used in enhanced oil recovery, so we want to know how we can have approximately one third of the global chemical market. Therefore, Brenntag has enhanced oil recovery without causing major problems. There are also major been assertively pursuing a focused growth strategy in Asia. Today, Brenntag programs in personal care: one of the major issues facing the pharmaceuticals has a solid position in SEA and now Oceania since acquiring ISM; we are also industry is how to deal with the fact that there are not any more big blockbuster the largest distributor in Thailand and Vietnam for specialty chemicals. Over innovations in development. Conducting research in personal care builds upon the near term, we are heavily targeting China; in 2011, Brenntag secured a our strengths in pharmaceuticals because of the formulations involved, as well fantastic network in Tanjin, Shanghai and Guangzhou for industrial chemicals as link to our biology-oriented sister institutions that understand skin and hair via the acquisition of the Zhong Yung group. However, the Chinese market will care; we are currently in collaboration with one of the pharmaceuticals majors in take some time to consolidate fully given its vast size, differences in culture developing an emerging markets business.” and means of conducting business. India is also a country of interest for us. Brenntag’s story in Asia has been a very quick and exciting one, but we will not slow down until we are the market leader in the region, a goal that we are very close to achieving.”

- Dr. Keith Carpenter, Executive Director, Institute of Chemical and Engineering - Henri Nejade, President & CEO, Brenntag Asia Pacific Pte Ltd Sciences (ICES)

“Zeon Chemicals is pursuing very high efficiency in production. Our new SSBR “The profile of [chemical] investments has changed over the last three to plant is in its infancy, so cost-cutting activities are possible now, if not after the four years. The new wave of investments is focused on specialty chemicals, plant starts up. Our new plant will incorporate some new technology, so expect which involves more hazardous, unique and proprietary processes. From production costs to be lower than in Japan. We will make just a small number our perspective as a training center, we have to expand our offering to meet of products, facilitating efficiencies; there will be less downtime than in Japan, the needs of the new profile of companies. Some of the skill sets that these where our plant frequently switches between products. Our main priority for the specialty chemicals manufacturers require are of a higher level and require next three years is to introduce our Singapore material to customers, especially more specialized training. Singapore continues to evolve, for us it is about in Southeast Asia, the most important market of the future. Zeon Chemicals is a staying ahead of the curve and prepositioning ourselves to the training and pioneer in SSBR and has secured its status in the global market; we must now manpower needs to these new investments.” grow our presence in this core business of ours. High performance plastics are important too, but in SSBR we are able to provide a unique product and contribute to the global supply of environmentally friendly materials.”

- Yuki Hirakawa, Managing Director, Zeon Chemicals Singapore - Lee Wing Kit, Business Development Manager, Petrofac Training Institute

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 121 Global Business Reports TRAVEL GUIDE Industry Explorations

Singapore Travel at a Glance

Visa Information

Social Visit Pass - Valid for 30 days - Granted on arrival for nationals of most countries - Onward ticket and sufficient funds required

Up-to-date information can be found on the Immigration & Checkpoints Authority (ICA) Travel in Singapore website

The following countries CANNOT obtain a visa While Singapore may not hold the exotic cultures Sunday brunches are a national habit and most at the border or airport: or pristine beaches of other destinations, it does of the up-market hotels offer one, withSource: the Shutterstock Hyatt Afghanistan, Algeria, Bangladesh, Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, nonetheless have a certain charm. It is, first and and the Mandarin Oriental among the best. Alter- Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, foremost, one of the world’s easiest destina- natively, a lazy Sunday morning could be spent Uzbekistan), Egypt, Georgia, India, Iran, Jordan, tion to travel to. Arriving in , con- in one of the multitude of new coffee shops that Lebanon, Libya, Morocco, Myanmar, Nigeria, Pakistan, People’s Republic of China, Saudi Arabia, Somalia, sistently ranked the best in the world, travelers have opened in the city: Common Man Coffee Sudan, Syria, Tunisia, Turkmenistan, Ukraine,Yemen from most countries can obtain visas or social Roasters in , the confusing- visit passes on arrival at no charge. Once out of ly-named Chye Seng Huat Hardware on the the airport, Singapore’s public transport system outskirts of Little India or (for those grabbing a Exchange Rates (bus and MRT) is fairly slow, but always on time coffee before work) Jewel Coffee in the Central Currency: Singapore Dollar (SGD) and quite comprehensive. Alternatively, taxis are Business District are among the best. cheap. Traffic can be bad though, so it is advis- Club Street and the area around Neil Road have a 1 SGD = 0.78 USD able to leave plenty of time, especially if going to plethora of excellent restaurants: for those Amer- 1 SGD = 0.59 EUR Jurong Island or some of the outlying industrial icans missing home, Jerry’s BBQ & Grill, an unas- 1 SGD = 0.50 GBP 1 SGD = 0.82 CAD districts from the center of town. suming place on Club Street, does Singapore’s 1 SGD = 0.85 AUD After business is concluded, the most important best buffalo wings. Esquina, just off Neil Road, thing to do in Singapore is eat. With influences is in this writer’s opinion the best restaurant in from all around China, Malaysia, Indonesia, In- Singapore. Dialing Codes and Useful Numbers dia, the West and elsewhere, Singapore boasts For an after-dinner drink, , Holland arguably the world’s most diverse and exciting Village and Club Street hold the largest concen- Singapore Country Code: +65 culinary scenes; as the locals are not shy about tration of bars (in descending order of drunken- Police: 999 pointing out. From cheap but delicious hawker ness). For somewhere a little more upmarket, try Emergencies/Ambulance/Fire: 995 centers to Michelin-starred chefs, Singapore has 28 Hong Kong Street or the Mad Men Attic Bar in Non-emergency Ambulance: 995 everything a stomach could desire. the Central Business District. Police Hotline: 6225 0000

Climate

Average Average Rainy Sunshine Precipitation high °C low °C days hours mm JAN 30.1 23.3 15 173.6 242.5 FEB 31.1 23.6 11 183.6 162.0 MAR 31.6 23.9 14 192.2 184.8 APR 31.7 24.4 15 174.0 178.8 MAY 31.6 24.8 14 179.8 171.8 JUN 31.3 24.7 13 177.0 161.2 JUL 30.9 24.5 13 189.1 158.3 AGO 30.9 24.4 14 179.8 176.2 SEP 30.9 24.2 14 156.0 169.7 OCT 31.1 24.0 16 155.0 193.9 NOV 30.6 23.7 19 129.0 255.7 DEC 29.9 23.4 19 133.3 288.2

122 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations Global Business Reports Industry Explorations TRAVEL GUIDE: INTERVIEW

aware of large investments on behalf of Singa- Business and poreans into Bintan. Our personal experience with Singapore’s investment community is they are very traditional, and are not keen to Pleasure invest into alternative ventures. We attribute this trend to the Singaporean investment culture, where most investors want to see a project package with quick investment return. As the central hub of Southeast Asia, Singapore serves as a convenient base from which to take a relaxing weekend on one of the region’s multitude of pristine beaches. Bintan’s infrastructure is challenging with lack For some, however, these city escapes offer a business opportunity. GBR spoke to of roads and interrupted power supply. Does Monique Hempel Turini and Marco Turini, founders of BintanGoldenInvest, to find this affect the attractiveness of investing in out more. Bintan? MHT: The government is investing in some What can Bintan offer to potential investors project offers investors land at $35 to $45/ infrastructure. As of 2013, there is already and where do these investors come from? sq.m, while other fully serviced properties a completed stretch of a newly enlarged east MT: First of all, it is important to identify have a starting price $200/sq.m. It is impor- coast road from the new Barakit Ferry Terminal two types of investors: those looking for an tant to find the right kind of balance between (projected to open Q1/2014) as well as the early stage, long-term investment and higher luxury resorts and sustainable tourism, which electricity required to accommodate the har- reward, and who are willing to take up part is exactly what Bintan could offer to both in- bour as a new point of entry into Indonesia. It of the risk developing a project. On the other vestors and visitors. is easily accessible from Singapore by ferry. The hand, there are investors looking to invest MHT: Bintan is an attractive destination for majority of the hotels situated along the east into developed sites and expect a faster return. Singapore-based investors for a number of coast can potentially draw from these main While Bintan as a whole offers a number of reasons: Singaporean and Indonesian govern- power lines. The island is constantly being options, we are looking for those people who ments have a history of collaboration through developed and the Indonesian government is have a vision and who are willing to invest an established consortium to develop the north working hard to attract international investors and wait for a return on this investment. Our of the island. However, presently we are not and realising Bintan’s true potential. •

Raffles Hotel Orchard Hotel Singapore Marina Bay Sands 1 Beach Road, Singapore, 189673 442 , Singapore, 238879 10 Bayfront Ave, Singapore 018956 Tel: +65 6337 1886 Tel: +65 6734 7766 Tel: +65 6688 8868 www.raffles.com www.millenniumhotels.com.sg www.marinabaysands.com

Arguably Singapore’s most historic hotel, home of the Furama Riverfront Though relatively new, Marina Bay Sands has quickly Long Bar (birthplace of the Singapore Sling cocktail) and 405 Havelock Road, Singapore, 169633 become one of Singapore’s most recognizable the Royal China restaurant, which serves some of the Tel: +65 6333 8898 landmarks. It boasts an already-famous rooftop infinity best Dim Sum in Singapore. pool, a casino, a multitude of shops and restaurants, and www.furama.com unparalleled views of the city.

Naumi Hotel GUIDE HOTEL 41 Seah Street, Singapore, 188396 Goodwood Park Hotel Novotel Singapore Clarke Quay Tel: +65 6403 6000 22 Scotts Road, Singapore, 228221 177A River Valley Road, Singapore, 179031 Tel: +65 6737 7411 Tel: +65 6338 3333 www.naumihotel.com www.goodwoodparkhotel.com www.novotel.com Pan Pacific Singapore 7 Raffles Boulevard, Marina Square, Singapore 039595 New Majestic Hotel Tel: +65 6336 8111 Amara Singapore 31–37 Bukit Pasoh Road, Singapore, 089845 165 Rd, Singapore, 088539 Tel: +65.6579.2026 www.panpacific.com Tel: +65 6879 2686 www.newmajestichotel.com The Ritz Carlton, Millenia Singapore www.amarahotels.com 7 Raffles Avenue, Singapore, 039799 A smaller boutique hotel, located in one of Singapore’s The Fullerton Hotel Singapore Tel: +65 6337 8888 most exciting food districts. 1 Fullerton Square, Singapore, 049178 www.ritzcarlton.com Tel: +65 6733 8388 Hilton Singapore Four Seasons Hotel Singapore 581 Orchard Road, Singapore, 238883 www.fullertonhotel.com 190 Orchard Boulevard, Singapore, 248646 Tel: +65 6737 2233 Tel: +65 6734 1110 The colonial building of the Fullerton Hotel is one of www.hilton.com Singapore’s most distinctive historical landmarks. With a www.fourseasons.com relaxing outdoor bar area and spacious rooms, it still lays InterContinental Singapore a claim to being one of Singapore’s best hotels. Conveniently located close to Singapore’s main shopping 80 Middle Road, Singapore, 188966 and financial districts, the Four Seasons also boasts one Tel: +65 6338 7600 Grand Hyatt Singapore of the countries best lunchtime buffets and a particularly 10 Scotts Road, Singapore, 228211 tranquil bar. www.intercontinental.com Tel: +65 6738 1234

Grand Copthorne Waterfront Hotel Singapore Shangri La Hotel Singapore www.grand.hyatt.com 392 Havelock Road, Singapore, 169663 22 Orange Grove Road, Singapore, 258350 Tel: +65 6733 0880 Tel: +65 6737 3644 www.millenniumhotels.com.sg www.shangri-la.com

Industry Explorations Global Business Reports // SINGAPORE CHEMICALS 2013 123 COMPANY NAMEWEBSITE PAGE

Government, Associations and Organizations Association of Process Industries (ASPRI) www.aspri.com.sg 94, 104, 126 Economic Development Board (EDB) www.edb.gov.sg 10, 12, 15, 32, 39, 42, 43, 45, 48, 59, 61, 65, 66, 70, 77, 80, 86, 88, 89, 90, 91, 94, 95, 98, 99, 104, 107, 109, 114, 126 Managing risks and maximising opportunities Institute of Chemical and Engineering Sciences (ICES) www.ices.a-star.edu.sg 6, 76, 126 National University of Singapore www.nus.edu.sg 100, 101 Singapore Chemical Industry Council (SCIC) www.scic.sg 13, 35, 39, 48, 60, 62, 112, 126 International Petroleum Week 2014 Chemical Manufacturers (Petrochemicals, Specialty Chemicals, etc) Asahi Kasei Plastics Singapore www.asahi-kasei.co.jp 10, 59, 60 Asia Polyurethane Manufacturing (APU) www.apu.com.sg 70, 71, 74 17 - 19 February 2014 | Intercontinental Park Lane COIM Group www.coimgroup.com Croda Singapore www.croda.com.sg 34, 51, 59 Dow Chemical Pacific www.dow.com 13, 34, 39 Conference Exhibition Networking Eco Special Waste Management www.eco.com.sg 92 Evonik Rohmax Asia Pacific www.degussa.com 10, 15, 18, 38, 43, 45, 48, 52, 59, 60, 88, 113 ExxonMobil Singapore www.exxonmobil.com.sg 10, 12, 14, 15, 42, 60, 62, 67, 70, 86, 88, 89, 94, 96, 107, 112, 114 Huntsman www.huntsman.com 34, 38, 79, 114 The leading strategic forum for the international oil and gas industry Jurong Aromatics www.jurongaromatics.com 18, 48, 59, 60, 62, 66, 89, 94, 110 Kurita (Singapore)kurita.com.sg attracting over 2,000 key influencers and senior decision-makers. Lanxess www.lanxess.sg 10, 15, 59, 60, 64, 107, 113 Linde Gas www.linde-gas.com 48, 52, 53 Matex International www.matex.com.sg 62 Mitsui Chemicals www.mitsuichem.com 15, 59, 60, 61, 88 IP Week Conferences Unique to IP Week is its breadth of content covering Nalco (an Ecolab company) www.nalco.com 43, 46, 47 and Exhibition Ovivo www.ovivowater.com upstream, midstream and downstream oil and gas. Petrochemical Corporation of Singapore www.pcs.com.sg 60, 65, 67 Pidilite Industries www.pidilite.sg 17-19 February 2014 Riverbank Chemicals www.riverbank.com.sg Sasol Chemicals Pacific www.sasol.com 23, 32 In-depth strategic conferences and round tables discussions Standard Chemical Corporation www.standardchemical.com Professional Development Stella Specialty Chemicals www.stellachem.com will focus on: Sulzer Chemtech www.sulzerchemtech.com 77 Programme for Graduates Sumitomo Chemical www.sumitomo-chem.co.jp 10, 13, 15, 32, 42, 59, 60, 65, 67, 88 Unifine Chemicalunifinechemical.com 17-19 February 2014 • Global energy outlook: future growth scenarios Veolia Water www.veoliawater.com 81 Zeon Chemicals Asia Pacific www.zeonchemicals.com 10, 59, 60, 86, 121 • Oil and gas development projects in Russia, CIS and the Arctic IP Week Drinks Reception Distribution, Transportations and Logistics Absotech www.absotech.com.sg 82, 110, 112 17 February 2014 • Capitalising on Africa’s expanding oil and gas industry BDP International www.bdpinternational.com 29, 117 Brenntag www.brenntag.com 28, 35, 121 • Mapping the future investment in the Asia Pacific oil and gas ChemStationAsia www.chemstationasia.com 20, 29, 82 IP Week Lunch Connell Bros Co. (Singapore) www.connellbrothers.com/ 31, 120 Damco Logistics Singapore www.damco.com 18, 29, 33 18 February 2014 • Challenges and opportunities in global oil and gas project Eurotainer www.eurotainer.com 31, 118 Fortrec Chemicals & Petroleum www.fortrec.com 19, 24, 25 Speaker: finance in partnership the UK National Committee of the Goldcrest International Singapore www.goldcrest.com.sg Integra Petrochemicals www.integra-global.com 18, 26, 27 Bob Keiller FEI, World Petroleum Council (WPC) Jebsen & Jessen www.chemicals.jjsea.com 28, 38, 71 Katoen Natie Singapore (Jurong) www.katoennatie.com 16, 31 CEO, Wood Group Leschaco www.anker-leschaco.com 86, 113 • Are we heading for a golden age for gas? Linkers (Far East) www.linkers.com.sg 120 Maha Chemicals (Asia) www.mahachem.com IP Week Dinner • Carbon Capture and Storage: the role of enhanced oil recovery Oiltanking www.oiltanking.com 48, 52, 88, 110, 115 Planet Asia www.planasia.com 19, 31, 36, 37 19 February 2014 Quincannon Associates www.quincannon.com 31 • Raising the talent of your workforce: the global skills gap Richland Logistics www.richlandlogistics.com 40 Speaker: Sankyu Singapore www.sankyu.com.sg • Iraq and Kurdistan oil and gas sector and its impact on Stolt-Nielson Ltd www.stolt-nielsen.com Chris Finlayson, Suttons Logistics www.suttonsgroup.com 120 global markets Unilite Chemicals www.unilite.com.sg 29, 30, 31 CEO, BG Group Yang Kee Chemical Group www.yangkee.com 110, 120 • Exploration activities and recent discoveries in the Eastern YCH Group www.ych.com 110, 114 IP Week Sponsors Engineering, Maintenance and Testing Mediterranean Ad-Meth Mech-Field www.admeth.com 106, 107 Gold Sponsors Aggreko www.aggreko.com 91 Alstern Technologies Group www.alstern-technologies.com 62, 79 Amos Solutions www.amos-sg.com/ Cape East www.capegroup.net 94, 96 Enter discount code IPWKMP02 and Cyclect Singapore www.cyclect.com.sg 83, 88, 94, 95 Emerson www.emerson.com 58 receive 10% off the normal rate Falkor Engineering Services falkorengineering.com Hai Leck Engineering www.haileck.com 82, 94, 95, 98, 99 Hertel Singapore www.hertel.com 94, 106, 108 McConnell Dowell www.macdow.com.au 94, 95, 97, 100 Petrofac www.petrofac.com 62, 121 For more information about Sembcorp Utilities www.sembutilities.com 48, 49, 54, 62, 68, 79 Shing Leck Engineering Service www.shingleck.com Silver Sponsors speaking or sponsoring at Tiong Woon Corporation Holding www.tiongwoon.com 32, 94, 100, 102 TÜV SÜD PSB www.tuv-sud-psb.sg 70, 71, 73 IP Week, please email: WH Marathon www.whmarathon.com.sg31, 32, 86, 94, 100, 101 Yokogawa www.yokogawa.com 109 Sheetal Ruparelia: Consultancy, Human Resources and Energy [email protected] Aegis Recruiting www.aegis-recruitment.com.sg Brunel International www.brunel.net 84, 86, 87 EnviroSolutions & Consulting (ESC) www.envirosc.com 86 PacificLight Energy www.firstpacific.com 48, 49, 56, 57 Kelly Services www.kellyservices.com 86 McKinsey & Company www.mckinsey.com 70, 90 Methanol Market Services Asia (MMSA) www.methanolmsa.com 62 Connect with us Follow us on Twitter Nandini Consultancy www.nandinichemical.com on Linkedin @energyinstitute#ipweek SpencerStuart www.spencerstuart.com 86, 90 Tuas Power www.tuaspower.com.sg 48, 49, 50, 88 www.energyinst.org/ip-week Global Business Reports Industry Explorations INDEX & COMPANY GUIDE

COMPANY NAMEWEBSITE PAGE

Government, Associations and Organizations Association of Process Industries (ASPRI) www.aspri.com.sg 94, 104, 126 Economic Development Board (EDB) www.edb.gov.sg 10, 12, 15, 32, 39, 42, 43, 45, 48, 59, 61, 65, 66, 70, 77, 80, 86, 88, 89, 90, 91, 94, 95, 98, 99, 104, 107, 109, 114, 126 Institute of Chemical and Engineering Sciences (ICES) www.ices.a-star.edu.sg 6, 76, 126 National University of Singapore www.nus.edu.sg 100, 101 Singapore Chemical Industry Council (SCIC) www.scic.sg 13, 35, 39, 48, 60, 62, 112, 126

Chemical Manufacturers (Petrochemicals, Specialty Chemicals, etc) Asahi Kasei Plastics Singapore www.asahi-kasei.co.jp 10, 59, 60 Asia Polyurethane Manufacturing (APU) www.apu.com.sg 70, 71, 74 COIM Group www.coimgroup.com Croda Singapore www.croda.com.sg 34, 51, 59 Dow Chemical Pacific www.dow.com 13, 34, 39 Eco Special Waste Management www.eco.com.sg 92 Evonik Rohmax Asia Pacific www.degussa.com 10, 15, 18, 38, 43, 45, 48, 52, 59, 60, 88, 113 ExxonMobil Singapore www.exxonmobil.com.sg 10, 12, 14, 15, 42, 60, 62, 67, 70, 86, 88, 89, 94, 96, 107, 112, 114 Huntsman www.huntsman.com 34, 38, 79, 114 Jurong Aromatics www.jurongaromatics.com 18, 48, 59, 60, 62, 66, 89, 94, 110 Kurita (Singapore)kurita.com.sg Lanxess www.lanxess.sg 10, 15, 59, 60, 64, 107, 113 Linde Gas www.linde-gas.com 48, 52, 53 Matex International www.matex.com.sg 62 Mitsui Chemicals www.mitsuichem.com 15, 59, 60, 61, 88 Nalco (an Ecolab company) www.nalco.com 43, 46, 47 Ovivo www.ovivowater.com Petrochemical Corporation of Singapore www.pcs.com.sg 60, 65, 67 Pidilite Industries www.pidilite.sg Riverbank Chemicals www.riverbank.com.sg Sasol Chemicals Pacific www.sasol.com 23, 32 Standard Chemical Corporation www.standardchemical.com Stella Specialty Chemicals www.stellachem.com Sulzer Chemtech www.sulzerchemtech.com 77 Sumitomo Chemical www.sumitomo-chem.co.jp 10, 13, 15, 32, 42, 59, 60, 65, 67, 88 Unifine Chemicalunifinechemical.com Veolia Water www.veoliawater.com 81 Zeon Chemicals Asia Pacific www.zeonchemicals.com 10, 59, 60, 86, 121

Distribution, Transportations and Logistics Absotech www.absotech.com.sg 82, 110, 112 BDP International www.bdpinternational.com 29, 117 Brenntag www.brenntag.com 28, 35, 121 ChemStationAsia www.chemstationasia.com 20, 29, 82 Connell Bros Co. (Singapore) www.connellbrothers.com/ 31, 120 Damco Logistics Singapore www.damco.com 18, 29, 33 Eurotainer www.eurotainer.com 31, 118 Fortrec Chemicals & Petroleum www.fortrec.com 19, 24, 25 Goldcrest International Singapore www.goldcrest.com.sg Integra Petrochemicals www.integra-global.com 18, 26, 27 Jebsen & Jessen www.chemicals.jjsea.com 28, 38, 71 Katoen Natie Singapore (Jurong) www.katoennatie.com 16, 31 Leschaco www.anker-leschaco.com 86, 113 Linkers (Far East) www.linkers.com.sg 120 Maha Chemicals (Asia) www.mahachem.com Oiltanking www.oiltanking.com 48, 52, 88, 110, 115 Planet Asia www.planasia.com 19, 31, 36, 37 Quincannon Associates www.quincannon.com 31 Richland Logistics www.richlandlogistics.com 40 Sankyu Singapore www.sankyu.com.sg Stolt-Nielson Ltd www.stolt-nielsen.com Suttons Logistics www.suttonsgroup.com 120 Unilite Chemicals www.unilite.com.sg 29, 30, 31 Yang Kee Chemical Group www.yangkee.com 110, 120 YCH Group www.ych.com 110, 114

Engineering, Maintenance and Testing Ad-Meth Mech-Field www.admeth.com 106, 107 Aggreko www.aggreko.com 91 Alstern Technologies Group www.alstern-technologies.com 62, 79 Amos Solutions www.amos-sg.com/ Cape East www.capegroup.net 94, 96 Cyclect Singapore www.cyclect.com.sg 83, 88, 94, 95 Emerson www.emerson.com 58 Falkor Engineering Services falkorengineering.com Hai Leck Engineering www.haileck.com 82, 94, 95, 98, 99 Hertel Singapore www.hertel.com 94, 106, 108 McConnell Dowell www.macdow.com.au 94, 95, 97, 100 Petrofac www.petrofac.com 62, 121 Sembcorp Utilities www.sembutilities.com 48, 49, 54, 62, 68, 79 Shing Leck Engineering Service www.shingleck.com Tiong Woon Corporation Holding www.tiongwoon.com 32, 94, 100, 102 TÜV SÜD PSB www.tuv-sud-psb.sg 70, 71, 73 WH Marathon www.whmarathon.com.sg31, 32, 86, 94, 100, 101 Yokogawa www.yokogawa.com 109

Consultancy, Human Resources and Energy Aegis Recruiting www.aegis-recruitment.com.sg Brunel International www.brunel.net 84, 86, 87 EnviroSolutions & Consulting (ESC) www.envirosc.com 86 PacificLight Energy www.firstpacific.com 48, 49, 56, 57 Kelly Services www.kellyservices.com 86 McKinsey & Company www.mckinsey.com 70, 90 Methanol Market Services Asia (MMSA) www.methanolmsa.com 62 Nandini Consultancy www.nandinichemical.com SpencerStuart www.spencerstuart.com 86, 90 Tuas Power www.tuaspower.com.sg 48, 49, 50, 88

This list contains those companies interviewed during the course of research for this publication and as such represents only a selection of the companies operating in the chemical industry of Singapore. It should not be considered a comprehensive guide. GBR holds an exclusive and extensive chemical database for Singapore and the wider region. For further information on database access packages, please contact [email protected] or call +44 20 7612 4511. Global Business Reports CREDITS Industry Explorations

EDITORIAL TEAM

Project Coordinator: Vanessa Acuna Chapela ([email protected]) Journalist: Andrew Mason ([email protected])

Executive Editor: Barnaby Fletcher ([email protected]) Graphic Designer: Gonzalo Da Cunha ([email protected]) General Manager: Agostina Da Cunha ([email protected])

For more information about GBR, please email [email protected]. For updated industry news from our on- the-ground teams around the world, please follow us on Twitter @GBReports or subscribe to our newsletter at gbroundup.com.

Additional copies of this book can be ordered at gbroundup.com/publications.

THANK YOU

GBR would like to extend our thanks to the following organisations for the assistance provided during the research of this publication:

Association of Process Industry (ASPRI) www.aspri.com.sg

Economic Development Board (EDB www.edb.gov.sg

Institute of Chemical and Engineering Sciences (ICES) www.ices.a-star.edu.sg

Singapore Chemical Industry Council (SCICI) www.scic.sg

We would also like to express our sincere gratitude to all the companies, associations and individuals who took the time to provide their insights into the market.

126 Global Business Reports // SINGAPORE CHEMICALS 2013 Industry Explorations     ­ € ‚­€ƒ€­

Brenntag is the global market leader in This is backed by technical application full-line chemical distribution ful lling expertise and strong understanding of value-added services from the purchase, the market. storage to logistics of a wide range of specialty and industrial chemicals. Operating with high standards on quality, safety, health & environment, Brenntag In Asia Paci c, Brenntag operates a network delivers customized one-stop solutions in over 40 locations in 16 countries serving throughout the entire value chain, every day. more than 11,000 manufacturing customers who enjoy the vast product portfolio that Discover our services at Brenntag has to o er. www.brenntag-asia.com

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