Singapore Chemicals2010 Part1.Pdf

Home , Behn Meyer, Jurong Island, Pulau Bukom, Singapore Island

A Global Business Reports Publication, presented with Chemical Week Innovation, Evolution and Growth Chemical Industry in Singapore

Boasting an advanced, integrated petrochemicals hub, a range of world-class service providers and an ideal business environment, Singapore has successfully attracted the chemical industry’s leading players. As competition increases in the region the country is looking to move further downstream, increase its e!ciency and enhance its R&D capabilities.

ingapore is a country that attracted over 31 billion SGD of consistently punches above investment, world-class expertise Sits weight. Despite being the including excellent R&D and smallest nation in South East Asia training facilities and attractive with a landmass of only 274.2 government incentive packages, square miles and a population of the industry is continuing to just under 5 million, the island expand and develop. city-state is the 5th wealthiest The industry is however facing country in the world in terms of some challenges. As a response GDP per capita (49,433 USD ExxonMobil Chemical’s world-scale Singapore Chemical Plant to growing competition from in 2009). That this astonishing has been operating on Jurong Island since 2001 India, China and the Middle East, feat has been achieved in a mere and rising production costs at 49 years since the country attained its planning (the so-called Singapore Model), home, Singapore is seeking to distinguish independence from Britain in 1961 is access to a highly skilled and educated itself and keep its competitive advantages remarkable. workforce, and a stable, corruption-free by developing its downstream production A combination of factors help to government has helped to ensure the right and moving up the value chain, developing explain Singapore’s stratospheric infrastructure and economic conditions for its expertise in specialty chemicals and development. At the heart of this growth, attracting significant foreign investment. advanced materials. and the fundamental driver of the Rated the most business friendly country Two new crackers from Shell and country’s economy, is its geographical in the World Bank’s “Doing Business ExxonMobil, due to come on stream by position. Located in the middle of Asia 2008” report, Singapore has attracted over 2011, will increase Singapore’s total on the Malacca straights, the island is an 3,000 foreign multinationals from the US, ethylene output from 2 million tonnes ideal shipping point for goods traveling Japan and Europe. With excellent transport per annum (tpa) to 4 million tpa by 2012, along the east west shipping lines that and communication links and numerous providing the industry with the necessary link Asia Pacific to the West. Since the free trade agreements (16 bilateral and feedstock to produce specialty and British recognized its potential in the 19th multilateral with 24 trading partners, as of high value chemicals and move further century, Singapore has developed into one 2009) supporting its location at the centre downstream. of the world’s most important shipping of Asia Pacific, the country remains a top The island is also investing heavily and trading hubs. Today the Singapore choice for companies looking to enter or to develop its R&D capabilities in a Port is the world’s busiest in terms of expand in the region. move to make Singapore a centre for total shipping tonnage and is responsible Through the creation of the Economic new technologies and developments for a staggering one fifth of the world’s Development Board (EDB), responsible rather than merely a fast implementer. container transshipments. for creating solutions to attract investors The government has committed to raise Lacking space and natural resources, the and companies to Singapore, Singapore investment in research and development country has cleverly leveraged its unique has ensured that opportunities are well to 3.5% of the country’s GDP over the position. Through importing raw materials developed and created a centralized body for manufacturing and refinement and for speeding up and aiding the investment next five years. exporting finished products, the country has process. EDB has also developed a The industry has suffered the effects succeeded in building up an impressively range of attractive investment incentive of the global downturn. Cumulative diverse high-tech manufacturing sector, programs. output of the chemicals cluster from currently responsible for a quarter of A fundamental pillar of the country’s January to November 2009 contracted the country’s GDP and vital for driving manufacturing sector, Singapore’s 11.5% compared to the same period economic growth. Singapore has managed chemical industry has been remarkably in 2008, while new projects have been to achieve such impressive growth by successful in the last 15 years, experiencing delayed or put on hold. investing heavily in infrastructure, taking phenomenal growth. The Energy and With Asia expected to account for 50% advantage of the fact that English is Chemicals sector contributed 38.6% of the global demand for commodity the national language, a willingness to of total output worth around 97 billion chemicals by 2015, there is still adopt new technologies, ensuring strict Singaporean Dollars (SGD) in 2008. considerable growth potential for the intellectual property protection and a With the right measures in place, industry in Singapore, which is looking to knack for planning ahead. An innovative including a cutting edge ‘plug and play’ capitalize on its impressive past and find mixture of free market and economic chemical facility at Jurong Island which has the right solutions to ensure future growth. A Global Business Reports Publication, presented with Chemical Week Innovation, Evolution and Growth Chemical Industry in Singapore

ingapore is a country that attracted over 31 billion SGD of consistently punches above investment, world-class expertise Sits weight. Despite being the including excellent R&D and smallest nation in South East Asia training facilities and attractive with a landmass of only 274.2 government incentive packages, square miles and a population of the industry is continuing to just under 5 million, the island expand and develop. city-state is the 5th wealthiest The industry is however facing country in the world in terms of some challenges. As a response GDP per capita (49,433 USD ExxonMobil Chemical’s world-scale Singapore Chemical Plant to growing competition from in 2009). That this astonishing has been operating on Jurong Island since 2001 India, China and the Middle East, feat has been achieved in a mere and rising production costs at 49 years since the country attained its planning (the so-called Singapore Model), home, Singapore is seeking to distinguish independence from Britain in 1961 is access to a highly skilled and educated itself and keep its competitive advantages remarkable. workforce, and a stable, corruption-free by developing its downstream production A combination of factors help to government has helped to ensure the right and moving up the value chain, developing explain Singapore’s stratospheric infrastructure and economic conditions for its expertise in specialty chemicals and development. At the heart of this growth, attracting significant foreign investment. advanced materials. and the fundamental driver of the Rated the most business friendly country Two new crackers from Shell and country’s economy, is its geographical in the World Bank’s “Doing Business ExxonMobil, due to come on stream by position. Located in the middle of Asia 2008” report, Singapore has attracted over 2011, will increase Singapore’s total on the Malacca straights, the island is an 3,000 foreign multinationals from the US, ethylene output from 2 million tonnes ideal shipping point for goods traveling Japan and Europe. With excellent transport per annum (tpa) to 4 million tpa by 2012, along the east west shipping lines that and communication links and numerous providing the industry with the necessary link Asia Pacific to the West. Since the free trade agreements (16 bilateral and feedstock to produce specialty and British recognized its potential in the 19th multilateral with 24 trading partners, as of high value chemicals and move further century, Singapore has developed into one 2009) supporting its location at the centre downstream. of the world’s most important shipping of Asia Pacific, the country remains a top The island is also investing heavily and trading hubs. Today the Singapore choice for companies looking to enter or to develop its R&D capabilities in a Port is the world’s busiest in terms of expand in the region. move to make Singapore a centre for total shipping tonnage and is responsible Through the creation of the Economic new technologies and developments for a staggering one fifth of the world’s Development Board (EDB), responsible rather than merely a fast implementer. container transshipments. for creating solutions to attract investors The government has committed to raise Lacking space and natural resources, the and companies to Singapore, Singapore investment in research and development country has cleverly leveraged its unique has ensured that opportunities are well to 3.5% of the country’s GDP over the position. Through importing raw materials developed and created a centralized body for manufacturing and refinement and for speeding up and aiding the investment next five years. exporting finished products, the country has process. EDB has also developed a The industry has suffered the effects succeeded in building up an impressively range of attractive investment incentive of the global downturn. Cumulative diverse high-tech manufacturing sector, programs. output of the chemicals cluster from currently responsible for a quarter of A fundamental pillar of the country’s January to November 2009 contracted the country’s GDP and vital for driving manufacturing sector, Singapore’s 11.5% compared to the same period economic growth. Singapore has managed chemical industry has been remarkably in 2008, while new projects have been to achieve such impressive growth by successful in the last 15 years, experiencing delayed or put on hold. investing heavily in infrastructure, taking phenomenal growth. The Energy and With Asia expected to account for 50% advantage of the fact that English is Chemicals sector contributed 38.6% of the global demand for commodity the national language, a willingness to of total output worth around 97 billion chemicals by 2015, there is still adopt new technologies, ensuring strict Singaporean Dollars (SGD) in 2008. considerable growth potential for the intellectual property protection and a With the right measures in place, industry in Singapore, which is looking to knack for planning ahead. An innovative including a cutting edge ‘plug and play’ capitalize on its impressive past and find mixture of free market and economic chemical facility at Jurong Island which has the right solutions to ensure future growth. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

There are softer factors such as efficiency, One of the crucial factors in ensuring a Manufacturing the quality of education, the availability steady influx of players is undoubtedly the Interview with Mr. Leo Yip Seng Cheong, of a well-educated work force and the country’s Intellectual Property protection. Chemical manufacturing in Singapore Chairman, Economic Development Board logistics infrastructure.’ As Singapore aims to develop its specialty is intrinsically linked to Jurong Island. Given the costs and long-term products and manufacturers look to expand With 80% of production coming from Today Singapore is one of the top ten on what we have in terms of the range of commitment involved with the decision to in the region, Singapore crucially allows the island, the hub has attracted a wide petrochemical hubs in the world. Could you companies and scale of activities on Jurong build a major chemical plant, one of the companies to safely introduce advanced range of international manufacturers, outline some of the key factors that have Island. We are not done yet. main attractions is the country’s stability. proprietary processes and technologies from global household names to attracted so many companies to Singapore? With a transparent and fair legal system into Asia. In the increasingly competitive numerous smaller and specialized and one of the least corrupt governments world of chemical manufacturing Firstly, Singapore is a trusted location, which With the chemical industry increasingly players. While the facilities available in the world, companies can be assured of where technological innovation is key, is something that cannot be over emphasised focussing on growth opportunities in Asia, on the island have certainly been the security of their investments. Boasting the security offered by Singapore is in my view. When a company builds a cracker what role do you feel Singapore can play in this important in in!uencing decisions paramount. plant, it is for the long haul, 30 to 40 years. growth? to establish operations, a range of a well-educated, technically proficient, Security and stability are key considerations. English speaking workforce and excellent Recognising these advantages, new We see Singapore leveraging what Asia can other factors and advantages have infrastructure support, Singapore offers a companies are increasingly choosing Secondly, we have painstakingly built up our o"er the global economy in terms of market been equally important in attracting business environment second to none. Singapore to introduce their latest infrastructure over the years. Jurong Island, and growth potential. Asia, because of its rise, is manufacturers there. technologies, both regionally and the centrepiece of our chemical industry, going to be a huge market. More importantly, it Under the auspices of EDB, Singapore globally. Newly opened last year, Lucite is a manifestation of this commitment. Our is going to be a market which requires a unique n the face of growing regional has also been assiduous in courting MNCs infrastructure excellence is also re!ected in the set of products and services. This will in turn call competition, particularly in commodity by making the investment process as International, a subsidiary of Mitsubishi entire of Singapore island, in the physical connectivity and our for companies to adopt business and product strategies that and bulk chemicals, Singapore is seeking efficient as possible. Attractive financial Rayon, chose Singapore as the site to open I its first Alpha MMA plant. Similarly, as infrastructure here as a global business city. We have excellent are Asian centric and will allow them to design and customise to distinguish itself through concentrating incentives include a headline tax rate of part of the upcoming SPEC complex, Shell trade connections and have built up free trade agreements products and services speci$cally for Asian consumers. on high value specialty production. While 17% in 2009, compared to the Asia Pacific with many countries. the recent economic downturn has delayed has debuted their OMEGA processing Chemical companies will expand their presence in Asia. They average of 27.5%, single tier tax rates some projects, the advent of the two new technology in their Singapore MEG plant. Another attribute is the talent pool that we o"er. Today we will grow new product lines to service the Asian market. and no tax on capital gains. Government Ethylene crackers and projected growth in Other recent additions with state-of-art have skilled manpower, people who can create and pioneer Increasingly, companies are talking with us about locating support, including a willingness to invest demand throughout the region should help facilities include Ciba’s Irganox plant the next wave of technologies. Companies like Shell have told global headquarters in Asia. We see Singapore o"ering value in projects, has been key to attracting and Roche’s 500 million USD biologics us that to get access to the best labour and talent, they come as a location for them, as a global business city with the right ensure further investment. manufacturers. As Mr. Ho Chee Sam, manufacturing centre. to Singapore. infrastructure, connections and talent base where they can As a manufacturing base, Singapore CEO of Ethylene Glycols Singapore With government support facilitating the manage their business for the region. LANXESS, Huntsman offers numerous advantages. Mr. Ian It is not just for talent that is indigenous to Singapore but also (EGS), a joint venture, specializing in the investment process, an excellent process and Mitsui have recently relocated global headquarters for Wood, Managing Director of LANXESS talent from the region and even further away. manufacture of ethylene oxide, ethylene industry ensuring quick plant construction their various business units to Singapore. Singapore succinctly sums up some of the key attractions: ‘Singapore is a great glycols and ethoxylates between Shell and and IP protection allowing the use of Could you share with us some of your strategies for the Chemical place to operate. The government is pro- a Japanese consortium led by Mitsubishi latest technologies, companies looking to How can Singapore support and facilitate companies looking industry’s future growth and development in Singapore? business. They want people to come here Chemical Corp., confirms: ‘Without the invest can get up and running in less than to take advantage of opportunities in Asia? and they’re very good at analyzing what support of the government there would half the time it might take in other parts of The story of our chemical industry has been a story of going up We see potential for Singapore to o"er value in two speci$c it takes to be attractive. In addition to the not be any petrochemical industry in Asia. As Steve Stilliard, Vice President the value ladder. The two crackers that Shell and ExxonMobil areas. One is innovation and the other is talent. These two ease of doing business, there is also the Singapore. EGS itself is a good example, of Huntsman’s Performance Products are now building are going to help us to move up the value buttress our position as a global business headquarters predictability factor. Intellectual property with originally 50% owned by the division in Asia Pacific, confirms: “There ladder further. The chemistry chain that they will produce for companies around the world. With the siting of their will give us the base to move into specialties and advanced protection is another strong attraction. investment arm of the government.’ were two main reasons for our coming management team for Asia in Singapore, companies can materials. We are moving towards high value production, leverage Singapore as a base to recruit and manage talent building on what we have already achieved. for the region. In addition, companies are also creating or At EDB, we also see ourselves doing more to bring in medium commercialising their new technologies for Asia here. So sized global companies to Singapore. Previously we have innovation is where we see Singapore o"ering strong value focused more on the big players, but now we also see value for in. Over the years, we have built up very strong public sector us in enriching the corporate landscape. We are doing more to R&D infrastructure. bring in these medium sized enterprises. We aim to bring in There is a whole stable of research institutes that have been the top two or three niche players in each sector. built up from scratch. Years ago, we also started building up a skilled workforce. One of the icons on Jurong Island is the Having achieved remarkable success so far, do you have any Chemical Process Technology Centre. It is the $rst training further expansion plans for Jurong Island? centre in the world with an industrial scale petrochemical We see potential to enhance what Jurong Island o"ers. The process plant, so training is done in a working process plant. whole idea behind Jurong Island is integration, and its ‘plug and play’ infrastructure. Jurong Island gives us a very good Where do you see the chemical industry in Singapore in 5 to 10 platform to push that integration model to the next level. We years time? are looking at how we can work with all the companies there Given the pace of this part of the world, we would like to be the to build a large system for energy e#ciency. Every company leading global chemical hub. We see the industry becoming a can implement energy saving measures but we are going to lot more complex in terms of types of activities, with a greater do this on a large-scale model. focus on adding value and certainly operating on a larger scale Building new infrastructure continues to be a key part of our than we have today. We would like to be a reference model for industry strategy. We see the need for us to continue building the world of what a sustainable chemical hub can look like. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week here: the security of intellectual property operations in Asian markets and meet petrochemical production and both China Underpinning the government’s plans Chemical Plant observes: “By having a country’s importance in the region. and the speedy execution of the project.” growing demand, Mitsui Chemicals made and India developing their capabilities, and providing the critical feedstock are chemical complex integrated with the According to Singapore Managing Japanese manufacturers have had a large-scale investments in Singapore the country is no longer the only regional the upcoming major new investments refinery, we can optimize the value of the Director, Ian Wood: “LANXESS particularly long and productive history for phenol, bisphenol-A, and elastomers choice. Significant and growing local from ExxonMobil and Shell. Due for refinery streams and we can also optimize considers Singapore as a cornerstone of in Singapore. Helping to kick-start production facilities. The company markets in India and especially China completion early this year, the Shell the value of the products that the chemical its global growth strategy. Butyl rubber the industry in the 1980s as an initial attributes its success in the country to make them strong location choices, while Eastern Petrochemicals Complex (SEPC) plant makes. The other advantage is that is a premium product that fits in with the investor in PCS, Sumitomo Chemical has Singapore’s world-class procurement the Middle East, with a ready supply of will be the company’s largest fully we can integrate all the services we have. long-term strategy of Jurong Island in continued to invest heavily in Singapore. sources, port facilities, logistics and cheap feedstock, offers considerably integrated refinery petrochemicals hub. So the cost-basis that we have becomes terms of pushing the chemical industry In March 2008 the company started human resources. cheaper production. Furthermore, as the The facility will produce 800,000 tonnes much more competitive due to the large of Singapore up the value chain, from operation of their third MMA monomer Jurong Island’s integrated facilities and region industrializes, integrated facilities per annum (tpa) of Ethylene, 750,000 tpa scale of our operations.” petrochemicals to specialty chemicals.” plant and second MMA polymer facility services, requiring less initial investment, offering similar advantages to those in of Mono-ethylene-glycol, 155,000 tpa The imminent availability of While production costs alone may in the city state. have also attracted a range of smaller Jurong Island, are likely to be introduced. of Butadiene, 450,000 tpa of Propylene competitively priced new feedstocks be cheaper elsewhere, Singapore can As Mr. Masaki Shima, Managing manufacturers. One of the pioneers on Recognizing these threats the and 230,000 tpa of Benzene. Coming on in combination with the country’s continue to compete competitively when Director of Sumitomo Chemical the Island was Italian metal stearates government is seeking to capitalize on stream next year ExxonMobil’s expansion numerous benefits looks set to ensure that the overall costs are taken into account. Singapore elaborates: “Singapore is our manufacturer Faci, who opened a plant in its existing chemical eco-system and will offer two units producing 650,000 manufacturing remains competitive and With the latest technology in place and most important centre. The level of the 2000 to serve its growing number of Asia infrastructure and play to its strengths. tpa each of Polyethylene, 450,000 tpa of the location attractive. Indeed, the country an efficient workforce, plants based in technology is advancing year by year Pacific and Middle Eastern customers. While the country cannot compete when polypropylene, 300,000 tpa of specialty has already succeeded in attracting a Singapore can be particularly efficient. and markets are expanding. The coverage The experience has been overwhelmingly it comes to commodity chemicals, it elastomers, 340,000 tpa of benzene from significant new player. In January this “We believe that the productivity levels of these markets is very important for positive for the company, which has is aiming to use its advantages to add an aromatics unit, a 125,000 tpa oxo- year LANXESS confirmed that it will seen here are amongst the highest in the us. So Singapore will be the core of the chosen to enter into several further phases value and develop its specialty offerings. alcohol unit expansion and 80,000 tpa of be building a new butyl rubber facility world.” Confirms Mr. Steve Stilliard, Vice- Sumitomo Chemicals’ future business of investments. Indeed the plant has Minister for Trade and Industry, Mr. Lim additional paraxylene. in Singapore. Producing 100,000 tpa, the President of Huntsman’s Performance expansion, not only for petrochemicals, started production of calcium and zinc Hng Kiang, outlined this strategy in a The net result will be an increase in plant, located on Jurong Island, represents Products division in Asia Pacific. but for other chemicals also.” stearate water based dispersions and is speech during Jurong Island’s reclamation Singapore’s total ethylene output from a 573 million USD investment. In a strong Establishing a plant in 2007, Huntsman The Mitsui Chemicals Group has currently responsible for around 25% of completion ceremony: “We intend to 2 million tpa to 4 million by next year. indication that the market is recovering, chose Singapore as their manufacturing been actively expanding its business in the company’s manufacturing business. achieve a critical mass of feedstock, move Within the integrated context of Jurong the company has also committed to and regional distribution base for Singapore for more than 40 years since the Despite so many positives, Singapore to higher value chemical chains which Island, the new feedstock will be available complete the project two years ahead of surfactants for the cleaning industries, Group established itself as an adhesives is facing significant challenges as produce specialty chemicals and advanced for use in a wide range of applications. As schedule to meet growing demand. agro-chemicals and mining as well as manufacturer in the country in 1966. In a manufacturing destination. With materials, and partner companies in Mr. Derk Jan Hartgerink, Manufacturing The move is a boost for the government’s polyetheramines for use in coatings and the late 1990s, to support its business the Middle East diversifying into developing new chemical products.” Director of ExxonMobil’s Singapore new strategy and a recognition of the resins. Like many players, the company A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week here: the security of intellectual property operations in Asian markets and meet petrochemical production and both China Underpinning the government’s plans Chemical Plant observes: “By having a country’s importance in the region. and the speedy execution of the project.” growing demand, Mitsui Chemicals made and India developing their capabilities, and providing the critical feedstock are chemical complex integrated with the According to Singapore Managing Japanese manufacturers have had a large-scale investments in Singapore the country is no longer the only regional the upcoming major new investments refinery, we can optimize the value of the Director, Ian Wood: “LANXESS particularly long and productive history for phenol, bisphenol-A, and elastomers choice. Significant and growing local from ExxonMobil and Shell. Due for refinery streams and we can also optimize considers Singapore as a cornerstone of in Singapore. Helping to kick-start production facilities. The company markets in India and especially China completion early this year, the Shell the value of the products that the chemical its global growth strategy. Butyl rubber the industry in the 1980s as an initial attributes its success in the country to make them strong location choices, while Eastern Petrochemicals Complex (SEPC) plant makes. The other advantage is that is a premium product that fits in with the investor in PCS, Sumitomo Chemical has Singapore’s world-class procurement the Middle East, with a ready supply of will be the company’s largest fully we can integrate all the services we have. long-term strategy of Jurong Island in continued to invest heavily in Singapore. sources, port facilities, logistics and cheap feedstock, offers considerably integrated refinery petrochemicals hub. So the cost-basis that we have becomes terms of pushing the chemical industry In March 2008 the company started human resources. cheaper production. Furthermore, as the The facility will produce 800,000 tonnes much more competitive due to the large of Singapore up the value chain, from operation of their third MMA monomer Jurong Island’s integrated facilities and region industrializes, integrated facilities per annum (tpa) of Ethylene, 750,000 tpa scale of our operations.” petrochemicals to specialty chemicals.” plant and second MMA polymer facility services, requiring less initial investment, offering similar advantages to those in of Mono-ethylene-glycol, 155,000 tpa The imminent availability of While production costs alone may in the city state. have also attracted a range of smaller Jurong Island, are likely to be introduced. of Butadiene, 450,000 tpa of Propylene competitively priced new feedstocks be cheaper elsewhere, Singapore can As Mr. Masaki Shima, Managing manufacturers. One of the pioneers on Recognizing these threats the and 230,000 tpa of Benzene. Coming on in combination with the country’s continue to compete competitively when Director of Sumitomo Chemical the Island was Italian metal stearates government is seeking to capitalize on stream next year ExxonMobil’s expansion numerous benefits looks set to ensure that the overall costs are taken into account. Singapore elaborates: “Singapore is our manufacturer Faci, who opened a plant in its existing chemical eco-system and will offer two units producing 650,000 manufacturing remains competitive and With the latest technology in place and most important centre. The level of the 2000 to serve its growing number of Asia infrastructure and play to its strengths. tpa each of Polyethylene, 450,000 tpa of the location attractive. Indeed, the country an efficient workforce, plants based in technology is advancing year by year Pacific and Middle Eastern customers. While the country cannot compete when polypropylene, 300,000 tpa of specialty has already succeeded in attracting a Singapore can be particularly efficient. and markets are expanding. The coverage The experience has been overwhelmingly it comes to commodity chemicals, it elastomers, 340,000 tpa of benzene from significant new player. In January this “We believe that the productivity levels of these markets is very important for positive for the company, which has is aiming to use its advantages to add an aromatics unit, a 125,000 tpa oxo- year LANXESS confirmed that it will seen here are amongst the highest in the us. So Singapore will be the core of the chosen to enter into several further phases value and develop its specialty offerings. alcohol unit expansion and 80,000 tpa of be building a new butyl rubber facility world.” Confirms Mr. Steve Stilliard, Vice- Sumitomo Chemicals’ future business of investments. Indeed the plant has Minister for Trade and Industry, Mr. Lim additional paraxylene. in Singapore. Producing 100,000 tpa, the President of Huntsman’s Performance expansion, not only for petrochemicals, started production of calcium and zinc Hng Kiang, outlined this strategy in a The net result will be an increase in plant, located on Jurong Island, represents Products division in Asia Pacific. but for other chemicals also.” stearate water based dispersions and is speech during Jurong Island’s reclamation Singapore’s total ethylene output from a 573 million USD investment. In a strong Establishing a plant in 2007, Huntsman The Mitsui Chemicals Group has currently responsible for around 25% of completion ceremony: “We intend to 2 million tpa to 4 million by next year. indication that the market is recovering, chose Singapore as their manufacturing been actively expanding its business in the company’s manufacturing business. achieve a critical mass of feedstock, move Within the integrated context of Jurong the company has also committed to and regional distribution base for Singapore for more than 40 years since the Despite so many positives, Singapore to higher value chemical chains which Island, the new feedstock will be available complete the project two years ahead of surfactants for the cleaning industries, Group established itself as an adhesives is facing significant challenges as produce specialty chemicals and advanced for use in a wide range of applications. As schedule to meet growing demand. agro-chemicals and mining as well as manufacturer in the country in 1966. In a manufacturing destination. With materials, and partner companies in Mr. Derk Jan Hartgerink, Manufacturing The move is a boost for the government’s polyetheramines for use in coatings and the late 1990s, to support its business the Middle East diversifying into developing new chemical products.” Director of ExxonMobil’s Singapore new strategy and a recognition of the resins. Like many players, the company A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week was attracted by the infrastructure, services and fututre availability regards to competition from, for example, India and China, I feel of feedstock: “From the point of view of the chemicals industry, that the growth in those countries is so rapid that it may be difficult Jurong Island a great advantage of Singapore is the integration of the facilities. for them to build facilities at the same speed as their demand The centerpiece of the Singaporean All our main raw materials are manufactured here, and soon we increases. So I think those countries give us an opportunity rather than a challenge. Of course the chemical industry in India and chemical industry, and for many will have pipeline access to several components – a major safety companies the main attraction, is improvement” continues Steve Stilliard. Mr. Stilliard, however, China will grow, but there will be a balance between demand growth and facilities in those countries so I think all the facilities undoubtedly Jurong Island. Formed is keen to point out the dangers presented by the competing that now supply those two countries will still have a good future from seven separate islands, the countries. With growing investment in the Middle East, attracted for quite some time to come” reckons ExxonMobil’s Mr. Derk development lays testament to the by cheap energy costs presenting a threat to Singapore in the Jan Hartgerink. Singaporean government’s level of long term, Mr. Stilliard cautions that: “Singapore has to be very As the market for both commodity and especially specialty investment, foresight and commitment careful to maintain its competitiveness in terms of integration, chemicals grows in Asia Pacific, Singapore’s ability to supply to to the petrochemical industry. infrastructure and overall ease of doing business.” Others are not the region cost effectively and efficiently is a growing attraction. so concerned about the new developments in the region. “With With less lead-time, manufacturers can respond quickly to the hrough its provision of innovative changing needs of the market. integrated services, allowing plants Singapore’s location next to major Tto feed off each other through a palm producers is another key advantage centralized service corridor, the island Jurong Island is currently home to many of the world’s leading chemical producers for current and future producers. As has attracted 96 different companies to EGS’s Mr. Ho explains: “Our business date, including a plethora of prestigious as late 60 and 70s, ExxonMobil and technical and financial requirements, model focuses on our strength of being international heavyweights. In the face SRC, which was a joint venture between the idea was a visionary and bold move. strategically located in Singapore and of growing competition from abroad Chevron and SPC. Since then we wanted Albeit one which has paid off in the long Jurong Island. We are between Malaysia and rising costs, service providers and to develop the petrochemical industry. term. With land reclamation starting in and Indonesia, two of the largest palm manufacturers are constantly looking at From an economic point of view we saw 1995 and the facility officially opening new ways to increase efficiency such as oil producers in the world and one of the it to be quite stable and a good base on in 2000, last year saw the completion of outlets for palm oil is natural alcohol. the island can provide. which Singapore’s economy could grow. the land reclamation, in a testament to When you combine natural alcohol with With considerable opportunities in In 1982 Sumitomo and the Singapore Singaporean efficiency, 20 years ahead ethylene oxide you come out with the basic mid and downstream offered by the government started the PCS cracker. That of schedule. From the original size of component for the production of personal two upcoming crackers from Shell and was really the start of the petrochemical 9.91 km² land area on the island has been care products, like, shampoo, body lotions ExxonMobil, the island is laying down and other specialty chemicals. So we are further groundwork in preparation for an industry. We had a long-term vision that tripled to 32 km². really in a strategic location.” influx of new players. with a cracker in place we could start A list of the current occupants of the With fresh momentum provided by In many ways the history of Jurong developing downstream activities. Jurong island reads like a Who’s Who of the LANXESS’s recent announcement Island is that of the entire chemical Island seemed a natural place to develop global chemical industry. The island and the overwhelmingly positive industry. Mr. Heah Soon Poh, Biomedical the industry, as that’s where the cracker has so far attracted a broad range of experience of manufacturers already & Chemicals Cluster Director at JTC and refineries were already based. That’s multinational corporations including: operating in the market, other MNCs Corporation, the government owned when the government took a very long- Chevron Philips, Eastman Chemical, are considering taking the plunge or company responsible for the development term view and had the vision to join the ExxonMobil, Huntsman, Akzo Nobel, making further investments. Following of the project, explains Jurong Island’s seven islands together.” BASF, Lucite, Evonik RohMax, Mitsui the success of Evonik RohMax’s first history: “It actually started off as seven Considering the lack of players, limited Chemicals, Sumitomo Chemical and Asian manufacturing site, opened in islands. There were refineries as early natural resources and considerable Asahi Kasei. 2008, Evonik is considering further opportunities. “Evonik views Singapore as a potentially interesting place for investments, always finishing among the top sites during internal site screenings” confirms Mr. Peter Meinshausen, President, South East Asia, Australia and New Zealand Region at Evonik. Huntsman and ExxonMobil are also both considering additional expansions. It seems that Singapore’s chemical industry growth is back on track.

The Jurong Rock Cavern project will provide underground oil storage facilities A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week was attracted by the infrastructure, services and fututre availability regards to competition from, for example, India and China, I feel of feedstock: “From the point of view of the chemicals industry, that the growth in those countries is so rapid that it may be difficult Jurong Island a great advantage of Singapore is the integration of the facilities. for them to build facilities at the same speed as their demand The centerpiece of the Singaporean All our main raw materials are manufactured here, and soon we increases. So I think those countries give us an opportunity rather than a challenge. Of course the chemical industry in India and chemical industry, and for many will have pipeline access to several components – a major safety companies the main attraction, is improvement” continues Steve Stilliard. Mr. Stilliard, however, China will grow, but there will be a balance between demand growth and facilities in those countries so I think all the facilities undoubtedly Jurong Island. Formed is keen to point out the dangers presented by the competing that now supply those two countries will still have a good future from seven separate islands, the countries. With growing investment in the Middle East, attracted for quite some time to come” reckons ExxonMobil’s Mr. Derk development lays testament to the by cheap energy costs presenting a threat to Singapore in the Jan Hartgerink. Singaporean government’s level of long term, Mr. Stilliard cautions that: “Singapore has to be very As the market for both commodity and especially specialty investment, foresight and commitment careful to maintain its competitiveness in terms of integration, chemicals grows in Asia Pacific, Singapore’s ability to supply to to the petrochemical industry. infrastructure and overall ease of doing business.” Others are not the region cost effectively and efficiently is a growing attraction. so concerned about the new developments in the region. “With With less lead-time, manufacturers can respond quickly to the hrough its provision of innovative changing needs of the market. integrated services, allowing plants Singapore’s location next to major Tto feed off each other through a palm producers is another key advantage centralized service corridor, the island Jurong Island is currently home to many of the world’s leading chemical producers for current and future producers. As has attracted 96 different companies to EGS’s Mr. Ho explains: “Our business date, including a plethora of prestigious as late 60 and 70s, ExxonMobil and technical and financial requirements, model focuses on our strength of being international heavyweights. In the face SRC, which was a joint venture between the idea was a visionary and bold move. strategically located in Singapore and of growing competition from abroad Chevron and SPC. Since then we wanted Albeit one which has paid off in the long Jurong Island. We are between Malaysia and rising costs, service providers and to develop the petrochemical industry. term. With land reclamation starting in and Indonesia, two of the largest palm manufacturers are constantly looking at From an economic point of view we saw 1995 and the facility officially opening new ways to increase efficiency such as oil producers in the world and one of the it to be quite stable and a good base on in 2000, last year saw the completion of outlets for palm oil is natural alcohol. the island can provide. which Singapore’s economy could grow. the land reclamation, in a testament to When you combine natural alcohol with With considerable opportunities in In 1982 Sumitomo and the Singapore Singaporean efficiency, 20 years ahead ethylene oxide you come out with the basic mid and downstream offered by the government started the PCS cracker. That of schedule. From the original size of component for the production of personal two upcoming crackers from Shell and was really the start of the petrochemical 9.91 km² land area on the island has been care products, like, shampoo, body lotions ExxonMobil, the island is laying down and other specialty chemicals. So we are further groundwork in preparation for an industry. We had a long-term vision that tripled to 32 km². really in a strategic location.” influx of new players. with a cracker in place we could start A list of the current occupants of the With fresh momentum provided by In many ways the history of Jurong developing downstream activities. Jurong island reads like a Who’s Who of the LANXESS’s recent announcement Island is that of the entire chemical Island seemed a natural place to develop global chemical industry. The island and the overwhelmingly positive industry. Mr. Heah Soon Poh, Biomedical the industry, as that’s where the cracker has so far attracted a broad range of experience of manufacturers already & Chemicals Cluster Director at JTC and refineries were already based. That’s multinational corporations including: operating in the market, other MNCs Corporation, the government owned when the government took a very long- Chevron Philips, Eastman Chemical, are considering taking the plunge or company responsible for the development term view and had the vision to join the ExxonMobil, Huntsman, Akzo Nobel, making further investments. Following of the project, explains Jurong Island’s seven islands together.” BASF, Lucite, Evonik RohMax, Mitsui the success of Evonik RohMax’s first history: “It actually started off as seven Considering the lack of players, limited Chemicals, Sumitomo Chemical and Asian manufacturing site, opened in islands. There were refineries as early natural resources and considerable Asahi Kasei. 2008, Evonik is considering further opportunities. “Evonik views Singapore as a potentially interesting place for investments, always finishing among the top sites during internal site screenings” confirms Mr. Peter Meinshausen, President, South East Asia, Australia and New Zealand Region at Evonik. Huntsman and ExxonMobil are also both considering additional expansions. It seems that Singapore’s chemical industry growth is back on track.

Central to the Jurong island concept and vital for attracting players and ensuring efficiency is the so-called ‘plug and play’ concept: a series of pipes connect different facilities, allowing companies to feed off each other’s feedstock. Integrated utility services additionally pipe in cooling water, steam, hydrogen and provide wastewater cleaning. The island also has comprehensive storage and logistics facilities, allowing end products and source feedstock to be easily stored and distributed. With such comprehensive services and facilities in place, the advantages for manufacturers are evident. Integrated services and piping require a significantly lower investment, while tight integration creates production synergies, increased efficiency and lower costs. The end result is that manufacturers can afford to concentrate on production. As Dr. Chockalingam, Chairman of the Singaporean Chemical Sanjiv Lamba Liam Kinsella Industry Council (SCIC) and Shell Process Integrator in Singapore, Managing Director of South Managing Director, observes, the system is particularly attractive for smaller players: and East Asia for Linde Gas Asia Linde Gas Singapore “Companies can come into Singapore, focus on their main activity and they can get utilities or other services from other providers reformer which will produce hydrogen for industrial customers so that they don’t have to invest in everything themselves. This is in Jurong Island and Tuas. With J10 due for completion this year, an attraction to smaller companies that like the connectivity but the projects reflect a total investment of over 400 million SGD to don’t want to carry the full burden of infrastructure. You are able service Jurong within the space of 3 years. to latch onto a particular feedstock that gives you an advantage Working closely with EDB, SOXAL is extremely confident and it is cheaper to move products to different parts of Asia than of Jurong’s future and has made a significant commitment in from the Middle East” Currently three crackers - two owned by the Petrochemical support of this. These new investments, aimed to meet future Corporation of Singapore (PCS), a joint venture currently expansion, have also been designed to maximise efficiency and owned by the Japan-Singapore Petrochemicals Company, Qatar reduce costs. According to Mr. Woo: “We are investing twice as Petroleum International and Shell and one from ExxonMobil much as current needs demand. This reflects our bullish outlook – supply feedstock to the island. With extra feedstock due to be for the chemicals sector in Singapore. The rationale is that there provided by the upcoming introduction of the two new crackers is still land on Jurong Island which will be filled. If you build two from Shell and ExxonMobil there is considerable potential, plants it is going to cost a lot more, take up more space and have particularly for downstream activities based on C4 and C5 a higher carbon footprint. At the end of the day our costs will be compounds. lower.” Indeed, the advent of cheaper and more varied feedstock offers Linde is also highly committed to supporting growth and excellent growth opportunities. “The two crackers will basically capturing market share in Singapore. On Jurong the company double the output. With the existing crackers there are more than operates one of the world’s largest gasification plants, generating 70 companies in Jurong Island that feed on them. So when you carbon monoxide and hydrogen for the chemical industry as well double the capacity you may expect another 30 or 40 companies as liquid nitrogen, liquid oxygen and liquid argon. “On Jurong to come on board,” predicts Dr. Chockalingam. Island, our main products are carbon monoxide and hydrogen. We Gearing up to meet the growth and increased demand, a supply hydrogen to the refining industry and carbon monoxide plethora of service providers, both local and international, goes to the chemical industry. We are in fact the largest supplier are already providing a range of innovative and cutting edge of carbon monoxide and also the largest industrial gas producer services on the island. Ensuring a good supply of vital industrial of hydrogen in Singapore,” says Linde Gas Singapore Managing gasses, international heavyweights Air Liquide, under its local Director, Mr. Liam Kinsella. SOXAL brand, and Linde Gas both have significant presences. Both companies have made major commitments to Jurong in Singapore is the world’s easiest place to do business preparation for new players. With numerous high purity gas plants throughout Singapore, Country 2010 Rank 2009 Rank including two air separation facilities in Jurong Island as well as an HyCo plant, SOXAL has installed extensive inter-connecting Singapore 1 1 pipelines to serve customers. Such levels of integration offer New Zealand 2 2 significant advantages. As Managing Director, Mr. Woo Siew Hong Kong, China 3 3 Wah explains: “We supply 20 tonnes of product in one single United States 4 4 pipe to Jurong. Without that pipe we would have to supply one United Kingdom 5 6 truck every single hour to provide the same amount. The pipe has Denmark 6 5 allowed companies to save costs as well as energy. Outsourcing allows us to achieve this kind of synergy which is vital for the Ireland 7 7 industry’s success in Singapore.” Canada 8 8 In a sign of continued commitment to servicing Jurong and the Australia 9 9 sector, the company has recently made two new major investments: Norway 10 10 J9, a new air separation unit with a capacity well over 1000 tpd which started at the end of last year and J10, a world scale steam Source: Singapore Economic Development Board, World Bank A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

In December last year the company officially opened its first end to end, through which and highly efficient, cost saving packages. capacity of 3.5 million tonnes per annum carbon dioxide plant as well as an extensive supply chain facility products and raw materials can As Mr. Lim of Tuas Power explains: (mtpa), with provisions for expansion to 6 on the island. The facility will produce 100 tonnes a day of liquid be transported upstream and “What is important in all these projects mtpa or more if required. carbon dioxide, effectively doubling the local existing capacity. downstream. This provides a is addressing three key factors; security With Singapore currently relying on Again the company, thinking for the long term, has designed a huge advantage to companies, of supply, economics and environmental natural gas supplies from Indonesia, the plant that exceeds current needs in Singapore. “In the last two who can ship their products sustainability. For example, using solely terminal will help to ensure the long- years we have invested some 60 million SGD in our plant in through a pipeline rather than gas would satisfy the latter two of these term energy security for the country and Singapore and will continue to look for opportunities to invest having to transport it by barge, but we could not guarantee the security of industry as well decreasing its reliance on for instance.” The company here to serve the growth sectors,” affirms Mr. Sanjiv Lamba, supply.” high greenhouse gas emission sources. has also further enhanced its Managing Director of South and East Asia for Linde Gas Asia. Despite a government preference for range of services by building With a 125,000 square metre plot on Jurong Island, Linde has gas power, Tuas’s Tembusu project will an 800 megawatts and 600 Auxiliary Services considerable room to grow and is considering building two actually be biomass and coal based. “We tonnes of steam per hour additional facilities. are glad to see that the government is As well as the wide range of utility gas-fired co-generation plant Atul Nargund Home-grown player Sembcorp has also invested heavily on the starting to recognize the need for us to suppliers, the island is also home to Managed by Petrofac, The Chemical Process which provides competitive Senior Vice President , Business explore alternatives such as coal,” says excellent storage and distribution facilities. Technology Centre provides excellent island, playing a vital role in the provision of plug and play and pricing for energy while also Development and Acquisitions Tuas’s Mr. Lim. The consideration for a Vopak and Oiltanking both have extensive training facilities for industry workers utility services. Originally providing shipyard engineering and safeguarding the chemical - Singapore & ASEAN, Deputy wider range of power sources could prove facilities on the island, with enough construction, the company was the first utility supplier on the industry against capacity Head for Singapore Utilities of volume to cater to both increased export island. Beginning investment in 1995 and operations in 1997 the fluctuations. Sembcorp positive for ensuring lower energy costs. of the terminal, amounting to a total company has grown from providing utilities to just one company Having successfully proved Furthermore, through waste capturing, for as well as the import needs of the growing investment of 300 million SGD on the to 41 today. Learning from the needs and challenges faced by that they can develop, own and operate a comprehensive service example recycling ash for use in the cement industry. With tank storage a short pipeline island. customers, the company has also increased the range of services package, the company is considering further investments on the production, Tuas Power will be minimizing away, transportation costs are kept to a A range of additional support services it offers. island. As Mr. Nargund confirms: “Replicating this (development) the environmental impacts of coal. minimum. The integration model even further strengthen Jurong Island’s As Mr. Atul Nargund, Senior Vice President Business in other areas of Jurong Island is something we are looking to In a bid to ensure ongoing energy security extends to distribution. Katoen Natie’s offering. In view of the fact that access Development & Acquisitions (Singapore & ASEAN) & Deputy do – albeit in different shapes and forms given the new types of and competitive costs, the government Jurong Logistics Terminal provides a to high quality trained staff is crucial for Head, Singapore Utilities for Sembcorp explains: “Today, industries coming in.” has also committed to the development total packaging and distribution service attracting manufacturers, EDB created almost everything that a company needs, we can supply from of an LNG terminal on Jurong Island. for Jurong Island residents, capable of ‘The Chemical Process Technology our centralized facilities. This effectively gives our customers a Power Expected to begin operations in 2013, interfacing directly with manufacturers. Centre’. The facility is unique in that it plug-and-play environment to operate in. Our services include at an estimated investment of 1.5 billion Two more phases of investment are set is a live, full-scale plant. “It is not just a supplying energy, water and wastewater treatment, as well as Sembcorp is not alone in offering integrated utility services to SGD, the terminal will have an initial to further increase the size and capability training centre, but is a hydrocarbon plant providing a service corridor connecting Jurong Island almost customers in Jurong. Given the high levels of energy consumption required by the industry, local power companies are also starting to focus on opportunities on the island. As Mr. Lim Kong Puay, President and CEO of major energy player Tuas Power observes: “The chemical industry is a big user of energy. In terms of our normal energy production 30-40% of industrial electricity is used by the chemical industry.” Based on Jurong Island, PowerSeraya, the largest local energy company, is already supplying high-pressure stream to neighbour PCS. “A few years ago we took the strategic direction to become an integrated energy player, which has met with much success. We have moved from just selling electricity into supplying utilities within the area of our influence,” explains CEO Mr. John Ng. This year the company will complete a new 800MW co-generation plant on Jurong Island. “Co-generation plants bring greater energy efficiency and also help to further reduce our carbon footprint by another 10%. In addition to this, our power station has infrastructure quite common to some of these chemical companies. If a customer requires cooling water we can reconfigure our system to meet the cooling water requirement. If a customer wants compressor air or a fire fighting system we can also easily re-configure to supply to them,” affirms Mr. Ng. Similarly, Tuas Power has announced the creation of a state-of- the-art multi utilities complex in 2008. The facility will include a cogeneration plant, a desalination plant and waste water treatment and is set to start operations next year in Tembusu, Jurong Island. With a total cost estimated at around 2 billion SGD the complex represents a considerable commitment. By combining services and increasing efficiency to 70% the company aims to lower energy and utility costs for its customers in the cluster. The influx of new utility services in Jurong Island looks set to offer potential consumers a wider choice of service providers A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

beginning to open up and a variety of choices among other service providers, Jurong seems to be approaching a critical mass of providers capable of offering a range of different services. This healthy competition should also benefit the end users. Not content to rest on their laurels, JTC is currently working on a number of projects to further improve the island’s efficiency. Aimed to maximise the island’s space, the Jurong Rock Cavern is an innovative initiative to create underground storage facilities for liquid hydrocarbons. With a potential storage capacity of nearly 3 million cubic meters and the first two caverns slated for completion in 2013, the Katoen Natie o"ers integrated packaging and logistics support project will offer valuable extra storage for manufacturers on Jurong Island space as well as possibly freeing up land for redevelopment. Thinking longer term which has a training centre connected offer training as part of our membership JTC is also considering offshore storage to it,” explains Mr. Phil Costelloe, Asia package. If we can offer this to companies, projects. Pacific director at Petrofac Training then they are guaranteed to get something In a move to speed up the transport Services, the global training services back from their investment. It also means of chemicals and goods, plans are also provider that took over management and that we get to know their facility, so if a under way to introduce a barge terminal, operation of the facility in 2008. real incident happens, we are not going into connecting Jurong Island with the main Working with the Singapore Workforce it blind,” says SOSRC manager, Mr. Chris port, thus negating the need for road Development Agency, Petrofac has helped Richards. Although they have successfully transportation. Plans have also been to create a Workforce Skills Qualification dealt with some incidents, specifically confirmed to build a second road link to for the industry. The company has also container leakages, the company reports the mainland to speed up access. used its extensive experience to introduce that incidents are extremely rare on the There’s no doubt that the integrated, a more competence based training island due to the well organized, designed outsourcing based model that Jurong program to the centre. “The key drivers and built terminal and chemical facilities Island offers has been vital in ensuring in the industry relate to competence and in operation. that the Singaporean chemical industry assessing and determining competence, is efficient and competitive. With the especially of skilled labour. This is what Challenges advent of new feedstock, support and most of the clients are asking for and it is infrastructure investments in place, the not just here in Singapore but worldwide,” The result of all this ongoing investment is island is well served to cater for the affirms Mr. Costelloe. that today, Jurong Island is one of the most expected cycle of new investments. With integrated and well served petrochemical the arrival of more plants there is also Safety hubs in the world. However, with much of the potential to increase the levels of this investment being made in preparation interdependency of feedstocks, maximise With chemical spills and leaks presenting for future developments, some service resources and exploit synergies that will a particular danger in Singapore, due providers, especially the smaller players, be the key for ensuring Jurong Island’s to Jurong Island’s proximity to the city, feel there is a danger of overextending continued success. safety is of paramount importance. With themselves. its own comprehensive range of oil and Some companies and consumers also hazardous response equipment and trained feel that the island could benefit from and experience staff, Singapore Oil Spill a wider range of competing providers, Response Centre (SOSRC) provides a particularly with regards to piping and vital service to safeguard against spills. service corridors. “Another issue is the Mr. Peter K M, Director of parent infrastructure around Jurong Island. At company POSH SEMCO, explains: “Our the moment, because there is one main members are guaranteed a service. They player with incumbent pipelines, the are guaranteed a response within two opportunity for another player to replicate hours at any time of the day or night. They and create redundant pipelines does not may not call us for five years, but when work economically, although having an they call us they will get a quick response. alternative is important to ensure greater We have a vessel on standby 24 hours a reliability of supply to customers. We have day, the whole year, to respond to oil or made this point to EDB, they understand it chemical spills.” and they are looking into this issue,” says The company also provides additional Mr. Sanjiv Lamba of Linde Gas. Linde Gas has invested 60 million SGD in support services for their members. “We With the utility and energy sector the last two years to support the industry A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

Process

The process industry plays a vitally important role in supporting Singapore’s chemical industry. Responsible for the construction, improvement and maintenance of increasingly complex plants and facilities, the country today boasts a growing, dynamic and technically advanced engineering industry.

Process

he industry has been particularly successful for local firms, producing a plethora of companies from niche Chia Kim Piow T Chairman and Managing players to an increasing number of Director for Rotary Group regional heavyweights. The numerous opportunities in the field have also attracted a growing range of international into the terminal business. We companies. As a location with a reputation did not know that this area for state of the art facilities, Singapore had so many opportunities offers companies the chance to practice and could be so lucrative,” and improve their offerings. continues Mr. Chia. Attracting and nurturing a wide pool Maintenance and of service providers, the industry today is construction work constitute extremely competitive and varied. Indeed, the main activities for major development projects play host to the industry. With plants an entire ecosystem of providers, as often requiring regular servicing, working together or subcontracting as Home grown heavyweight PEC sees considerable growth potential both locally and abroad maintenance offers a lucrative competing for the same contracts. ongoing source of revenue. Local engineering service providers Given the scale and range of opportunities support a network of specialized small, While maintenance projects used to be (ESPs) have a long history of involvement in the industry, local companies have not medium and large players. Subcontracting offered on a job-by-job basis, as plant in the petrochemical sector. For many had the market to themselves. Some of the also allows companies to develop sizes and capital investment increase, companies it has been their main catalyst first new arrivals came from elsewhere in competencies, build up resources and clients are progressively choosing the for growth, providing the impetus, support the Asia Pacific region, such as Japanese slowly move up the value chain. extra efficiency offered by longer-term and incentive for them to evolve from basic, engineering firms Chiyoda Corporation With clients usually appointing contracts. Some clients prefer to use only specialized contractors to sophisticated, and UTOC Engineering and Australian several key contractors who sub-contract one contractor while others split the work multi-service engineering companies. company McConnell Dowell. extensively, for many companies, the between several. With such a symbiotic relationship, as the The country has also attracted numerous eventual aim is to gain a larger slice of the For PEC, the sector, which typically petrochemical industry has become more western MNCs, including Foster Wheeler, pie by being able to offer a comprehensive accounts for 30% of the company’s sales, complex, advanced and consolidated in who chose Singapore as the location for service package to customers. is a key part of their business strategy. As Singapore, so has the process industry. their first Asian office in 1989, and Jacobs Initially starting as a sub-sub- Group CEO, Robert Dompeling, explains: At the top end, the local industry is Engineering, who established a regional contractor, focussing solely on electrical “The maintenance services industry is a dominated by a handful of major players headquarters for Asia in the country maintenance in the 1970s, Rotary very important market for us. We provide including PEC, Rotary Engineering, Hiap in 2001. With companies increasingly Engineering, whose main business is maintenance services for most of the Seng, Hai Leck and Mun Siong. The sector focussing on Asia for growth opportunities, now terminal construction, has been able key plants in Singapore.” Maintenance is also host to a wide range of medium and the sector is continuing to attract leading to follow a successful growth strategy contracts are also a useful means for small players, often specialized in specific new entrants, including Hertel who chose through increasing and diversifying their growing business, enabling contractors areas. Singapore as their base to spearhead capabilities. to get a foot in the door. “Long-term Despite decidedly humble beginnings, expansion into the region in 2007. As “As the years passed by, we realized contracts provide us with an on-going the major local players of today have the industry has matured, the country has that there was other related work which relationship with the client and enable us become regional giants. From an initial also attracted a range of additional service we needed to do, such as civil engineering to develop in-depth knowledge of their capital investment of just 15,000 SGD, providers, such as Brunel Energy, offering and piping work, so we progressively got facilities,” he continues. Rotary Engineering, for example, has an additional outsourcing and recruitment into these other disciplines” explains Mr. Mun Siong also provides a range of order book worth 1.3 billion SGD today. services. Chia Kim Piow, Chairman and Managing maintenance services. The company Last year PEC achieved an impressive The Singapore chemical industry’s Director of Rotary. operates two models. “One is to 220.3 million SGD of turnover. Indeed, adoption of an outsourcing based model “We developed from being sub-sub- provide only mechanical, electrical & reflecting the scale of business and is the key to understanding the wide contractors to being subcontractors to a instrumentation maintenance services to opportunities in the country, even smaller range of players and ongoing success of multinational engineering companies like our clients. The other model is to provide players, like Shao Fook Engineering, the process industry. Through extensive GGC or Chiyoda. Originally we were just integrated maintenance services; besides achieved a turnover of 20 million SGD subcontracting, the increasingly large and trying to fill a vacuum, doing the simpler our core maintenance services we also for 2009. complex requirements of major projects engineering EPC work and then moving manage all other trades’ services for the A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week client,” explains Managing Director, Mr. expand in the sector. “We are able to and piping ensures a steady supply of maintenance. As the company looked to Vincent Quek. combine maintenance and engineering contracts: “When it comes to projects, we expand in Asia at the end of the 1990s, the For Hertel maintenance services are services by looking after a facility and are one of the favourite companies in the maturity of outsourcing in Singapore was the company’s main focus and at the core helping to improve its efficiency by taking chemical sector because we can provide a key selling point for the company, who of its strategy for the region. “Hertel has out the bottlenecks and re-engineering it,” steel structure works, equipment and started operations in the country in 1996. traditionally specialised in the provision affirms Singapore Managing Director, piping work in the same project which The company’s approach is to provide of maintenance services. It is our expertise Mr. Murray Dundas. is cost effective and easy control for our outsourced staff directly to engineering in this field of activity that forms the Given the scale and quantity of recent client,” observes Mr. Tan Ngiap Teck. firms and plant owners. “For the execution cornerstone of our growth plan for Asia,” projects, construction services have been McConnell’s offering, meanwhile, of a big project no company is staffed up to explains Mr. Simon Kramer, Director of the mainstay for most firms over the last stretches beyond plant construction. “Not the level where they can handle everything Asia for the company. few years. For new plants, companies only do we provide mechanical, electrical themselves. This is especially the case To support their entry into the market offer a range of different services and instrumentation works, we also if you are talking about new technology the company has made several strategic covering engineering, procurement and provide civil infrastructure and marine where you need to guide it very carefully. local acquisitions including engineering construction (EPC). While specialization works,” says Mr. Dundas. Having worked So when owner companies commit to firm Tong Hoi and scaffolding company helps many companies to win business, extensively with Oiltanking and Vopak, a project there is always a requirement Louis Harrewijn Kok Chang. the eventual aim is to diversify. the company is the number one player for personnel,” confirms Mr. Harrewijn, Regional Director for Brunel Mun Siong o"ers a wide range of di"erent maintenance With a range of current and future “Project works typically accounts for petrochemical jetties. With a current Regional Director for South East Asia. International South East Asia and engineering services plants requiring ongoing maintenance, for about 70% of our revenue and is the focus on storage tank construction and A range of large scale projects in other players are also eyeing the sector. future growth driver for PEC,” says Mr. installation, Rotary’s numerous divisions Singapore over the last few years, such some huge projects on the drawing board. “At the moment UTOC (of Japan) is Dompeling. Projects and construction also offer a wide range of mechanical, as the upcoming new crackers, have Talent We believe that from the middle of next focused on projects concerning the work has also accounts for over 70% of electrical and structural services. allowed many players in the industry to year when some of the projects starting In an increasingly competitive and building of new plants, but increasingly Mun Siong’s turnover over the last few Subcontracting is at the heart of Brunel sustain impressive growth. Last year was now will enter fabrication phase there growing market, gaining access to talent we want to include more maintenance years. “Our services include mechanical Energy’s business model, which supplies UTOC’s highest earning for example, will be a tremendous need for fabrication is currently proving one of the industry’s work,” says General Manager, Mr. Tan and E & I construction, installation of highly skilled technical specialists, with a turnover of 91 million SGD. In the capacity and Asia will be favoured due to main challenges. “As family units get Ngiap Teck. Maintenance work currently structural steel and piping, equipment ranging from project managers to process same period McConnell achieved growth labour rates, availability of yard space and smaller less people want their children accounts for around 6 million SGD of the installation and other specialized engineers. The company is active in of between 10 and 20%. expertise,” says Brunel’s Mr. Harrewijn. to become construction workers or company’s turnover, but it aims to double services,” says Managing Director, Mr. all phases of a project from inception The process industry in Singapore “I think there are certainly signs that even engineers. This, ultimately, leads that figure. Vincent Quek. of design to detailed engineering, has, however, not been entirely immune things are starting to pick up. Companies to shortage of skilled workers and this McConnell Dowell is also looking to UTOC Engineering is another company procurement, construction on site, start to the recent financial downturn. Due to are beginning to consider capital is occurring in the Singapore market,” harness its engineering expertise and whose specific expertise in steel fabrication up and commissioning, operations and the nature of the industry it is likely that expenditure again. People are talking explains Rotary’s Mr. Chia. With a strong the sector has yet to feel the full effects. workforce vital not just for the success about big projects once more, especially “Obviously Singapore has been affected of the process industry, but the entire among the larger players,” confirms Mr. by a downturn, as has every country in Singaporean chemical industry, it is a Dundas of McConnell Dowell. the world. We have seen in late 2008 and crucially important issue. Many players are expecting a range of 2009 a slowing down of activities. That Companies are thus recruiting more new projects to come on the back the new means that financial investment decisions talent from abroad and investing more crackers. “We are hoping that after the have been postponed, with projects being in their training programs. Singapore’s Shell and ExxonMobil cracker facilities put on hold or being cancelled,” observes willingness to allow foreign workers are completed, there will be an influx of Brunel’s Mr. Harrewijn. into the country has proved over time to downstream plants in Singapore,” says With long production times, however, be a considerable asset for the industry. UTOC’s Mr. Tan. In the mid and long companies are still benefiting from pre- With fluctuating demand based on current term players feel the demand will be downturn projects. “On the other hand, projects, labour from the region helps the considerable. when you are talking of a project life cycle industry to be competitive and efficient. of anywhere between 18 months and 3 ½ With a raise on levies paid for importing years, these projects do not stop once they Singapore o"ers highest levels of skilled foreign workers due to come into effect are on a roll,” continues Mr. Harrewijn. labor in Asia and is second to only on July 1st this year as part of the Existing contracts have helped soften the Switzerland in the world government’s plan to reduce dependency impact for many companies. Country 2009 Rank on foreign workers, the industry may well The industry is expecting business to be negatively effected. slow down in the short term. “With the Switzerland 1 Not every company finds access to talent projects near completion and new projects Singapore 2 to be quite such a challenge however. “At in the pipeline, but put on hold whilst United States 3 UTOC, we do not have the problem of waiting for the economy to fully recover, United Kingdom 4 getting skilled staff. My senior managers we expect to see a fall in available conduct interviews for new employees and Ireland 5 projects in the market”, says Mun Siong’s shortlist the suitable ones. The advantage Mr. Quek. “From a sales perspective, I Luxembourg 6 of this is that the employment process is see us being kept busy for the first half of Australia 7 carried out by construction experts and this year. For the second half of the year, Canada 8 senior managers who have the experience however, I don’t feel the sales prospects Hong Kong 9 to know what they need and who will will be as promising,” confirms Mr. Tan Chile 10 be suitable,” explains Mr. Tan. With a of UTOC. senior engineer providing support from Nevertheless, companies are confident Source: Singapore Economic day one, thorough training is still of vital that the pace will pick up again.. “There are Development Board, World Bank importance for the company. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week client,” explains Managing Director, Mr. expand in the sector. “We are able to and piping ensures a steady supply of maintenance. As the company looked to Vincent Quek. combine maintenance and engineering contracts: “When it comes to projects, we expand in Asia at the end of the 1990s, the For Hertel maintenance services are services by looking after a facility and are one of the favourite companies in the maturity of outsourcing in Singapore was the company’s main focus and at the core helping to improve its efficiency by taking chemical sector because we can provide a key selling point for the company, who of its strategy for the region. “Hertel has out the bottlenecks and re-engineering it,” steel structure works, equipment and started operations in the country in 1996. traditionally specialised in the provision affirms Singapore Managing Director, piping work in the same project which The company’s approach is to provide of maintenance services. It is our expertise Mr. Murray Dundas. is cost effective and easy control for our outsourced staff directly to engineering in this field of activity that forms the Given the scale and quantity of recent client,” observes Mr. Tan Ngiap Teck. firms and plant owners. “For the execution cornerstone of our growth plan for Asia,” projects, construction services have been McConnell’s offering, meanwhile, of a big project no company is staffed up to explains Mr. Simon Kramer, Director of the mainstay for most firms over the last stretches beyond plant construction. “Not the level where they can handle everything Asia for the company. few years. For new plants, companies only do we provide mechanical, electrical themselves. This is especially the case To support their entry into the market offer a range of different services and instrumentation works, we also if you are talking about new technology the company has made several strategic covering engineering, procurement and provide civil infrastructure and marine where you need to guide it very carefully. local acquisitions including engineering construction (EPC). While specialization works,” says Mr. Dundas. Having worked So when owner companies commit to firm Tong Hoi and scaffolding company helps many companies to win business, extensively with Oiltanking and Vopak, a project there is always a requirement Louis Harrewijn Kok Chang. the eventual aim is to diversify. the company is the number one player for personnel,” confirms Mr. Harrewijn, Regional Director for Brunel Mun Siong o"ers a wide range of di"erent maintenance With a range of current and future “Project works typically accounts for petrochemical jetties. With a current Regional Director for South East Asia. International South East Asia and engineering services plants requiring ongoing maintenance, for about 70% of our revenue and is the focus on storage tank construction and A range of large scale projects in other players are also eyeing the sector. future growth driver for PEC,” says Mr. installation, Rotary’s numerous divisions Singapore over the last few years, such some huge projects on the drawing board. “At the moment UTOC (of Japan) is Dompeling. Projects and construction also offer a wide range of mechanical, as the upcoming new crackers, have Talent We believe that from the middle of next focused on projects concerning the work has also accounts for over 70% of electrical and structural services. allowed many players in the industry to year when some of the projects starting In an increasingly competitive and building of new plants, but increasingly Mun Siong’s turnover over the last few Subcontracting is at the heart of Brunel sustain impressive growth. Last year was now will enter fabrication phase there growing market, gaining access to talent we want to include more maintenance years. “Our services include mechanical Energy’s business model, which supplies UTOC’s highest earning for example, will be a tremendous need for fabrication is currently proving one of the industry’s work,” says General Manager, Mr. Tan and E & I construction, installation of highly skilled technical specialists, with a turnover of 91 million SGD. In the capacity and Asia will be favoured due to main challenges. “As family units get Ngiap Teck. Maintenance work currently structural steel and piping, equipment ranging from project managers to process same period McConnell achieved growth labour rates, availability of yard space and smaller less people want their children accounts for around 6 million SGD of the installation and other specialized engineers. The company is active in of between 10 and 20%. expertise,” says Brunel’s Mr. Harrewijn. to become construction workers or company’s turnover, but it aims to double services,” says Managing Director, Mr. all phases of a project from inception The process industry in Singapore “I think there are certainly signs that even engineers. This, ultimately, leads that figure. Vincent Quek. of design to detailed engineering, has, however, not been entirely immune things are starting to pick up. Companies to shortage of skilled workers and this McConnell Dowell is also looking to UTOC Engineering is another company procurement, construction on site, start to the recent financial downturn. Due to are beginning to consider capital is occurring in the Singapore market,” harness its engineering expertise and whose specific expertise in steel fabrication up and commissioning, operations and the nature of the industry it is likely that expenditure again. People are talking explains Rotary’s Mr. Chia. With a strong the sector has yet to feel the full effects. workforce vital not just for the success about big projects once more, especially “Obviously Singapore has been affected of the process industry, but the entire among the larger players,” confirms Mr. by a downturn, as has every country in Singaporean chemical industry, it is a Dundas of McConnell Dowell. the world. We have seen in late 2008 and crucially important issue. Many players are expecting a range of 2009 a slowing down of activities. That Companies are thus recruiting more new projects to come on the back the new means that financial investment decisions talent from abroad and investing more crackers. “We are hoping that after the have been postponed, with projects being in their training programs. Singapore’s Shell and ExxonMobil cracker facilities put on hold or being cancelled,” observes willingness to allow foreign workers are completed, there will be an influx of Brunel’s Mr. Harrewijn. into the country has proved over time to downstream plants in Singapore,” says With long production times, however, be a considerable asset for the industry. UTOC’s Mr. Tan. In the mid and long companies are still benefiting from pre- With fluctuating demand based on current term players feel the demand will be downturn projects. “On the other hand, projects, labour from the region helps the considerable. when you are talking of a project life cycle industry to be competitive and efficient. of anywhere between 18 months and 3 ½ With a raise on levies paid for importing years, these projects do not stop once they Singapore o"ers highest levels of skilled foreign workers due to come into effect are on a roll,” continues Mr. Harrewijn. labor in Asia and is second to only on July 1st this year as part of the Existing contracts have helped soften the Switzerland in the world government’s plan to reduce dependency impact for many companies. Country 2009 Rank on foreign workers, the industry may well The industry is expecting business to be negatively effected. slow down in the short term. “With the Switzerland 1 Not every company finds access to talent projects near completion and new projects Singapore 2 to be quite such a challenge however. “At in the pipeline, but put on hold whilst United States 3 UTOC, we do not have the problem of waiting for the economy to fully recover, United Kingdom 4 getting skilled staff. My senior managers we expect to see a fall in available conduct interviews for new employees and Ireland 5 projects in the market”, says Mun Siong’s shortlist the suitable ones. The advantage Mr. Quek. “From a sales perspective, I Luxembourg 6 of this is that the employment process is see us being kept busy for the first half of Australia 7 carried out by construction experts and this year. For the second half of the year, Canada 8 senior managers who have the experience however, I don’t feel the sales prospects Hong Kong 9 to know what they need and who will will be as promising,” confirms Mr. Tan Chile 10 be suitable,” explains Mr. Tan. With a of UTOC. senior engineer providing support from Nevertheless, companies are confident Source: Singapore Economic day one, thorough training is still of vital that the pace will pick up again.. “There are Development Board, World Bank importance for the company. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

For Rotary Engineering, the recruitment workers when there is work, you then equipment allows them to move speedily. an alternative and experienced talent pool of these disciplines, but the market leader performance quality of PEC, and these and retention of staff is a vital part of the have to send them back when there is no “We own a range of equipment that is (Indonesians are currently not allowed to in the provision of the combined service skills can be ‘exported’ to other locations company’s strategy. Indeed, the company’s work. To solve this, we have to globalize critical to our needs. This enables us to work in Singapore), the facility has been package under an integrated management overseas,” explains Mr. Dompeling. With expansion has partly been on the back of a in order to be able to utilize all our trained be in control and respond quickly when a strong selling point that has helped structure” explains Mr. Kramer. overseas work accounting for around desire to retain skilled and knowledgeable people,” says Mr Chia. To ensure they the need arises,” explains Mr. Dompeling. to secure several recent ExxonMobil Hertel’s expertise and approach to 40% of the company’s revenue, some workers. “People are assets and if you have access to the best staff and next With further investments in technology contracts. providing innovated integrated services long-term clients have specifically asked are not able to retain them you are losing generation of talent, Rotary has set up and through the adoption of industry best International companies often have the is already proving attractive. The the company to participate in overseas your assets. So from the beginning we overseas training and test centres in India practices the company feels that they will benefit of a global network. As UTOC’s company has recently been awarded the projects. have introduced systems to keep our and near universities in China. With a be able to raise their productivity. Mr. Tan explains: “Our sister company maintenance contracts for the existing Rotary Engineering is another company people. We have people who have been global workforce of 7,800, Rotary aims to McConnell’s multi-disciplined in Thailand provides the opportunity Pulau Bukom Shell refinery with the with a strong regional presence. “At the with us for 37 years and we manage this have 10,000 in the next few years. capabilities allow the company to take for sharing resources, including the obligation to introduce initiatives based moment we are in China, Indonesia, by rewarding them not only for seniority on a wider variety of projects. As a result workforce.” With major players such as on techniques developed in the UK over Malaysia, Thailand, Vietnam, India but also through a meritocracy,” explains of the downturn the company is currently Jacobs and Foster Wheeler, extensive a number of years and to continuously and Saudi Arabia, with Singapore as Mr. Chia. Diverse strategies focussing on government infrastructure international experience and first-rate improve the means by which the plant our headquarters. We are also looking Through organizing the business into a As competition grows companies are projects. The company is also focussing international reputations are also key is maintained and ensure that uptime is into other areas, such as South Africa, range of different subsidiaries including relying on a variety of different advantages on developing its design capabilities on selling points. safely maximised. the Middle East, and more emerging piping, project management and civil to gain an edge. Some larger local players, the back of its engineering strength to be For Hertel: “A uniquely important factor economies,” says Mr. Chia. engineering, the company employees such as Rotary Engineering, PEC, Hai able to offer more consultative services. we have is that we are able to transfer Mun Siong, having successfully have more independence. “As your people Leck and Hiap Seng have chosen to raise Another key asset for the company has technology and resources from other parts Locals completed short-term work in Malaysia, become more and more capable you need funds by going public. Mun Siong, on the been the creation of a plant base in Batam, of the world when needed and without Local companies, who have achieved Indonesia and Thailand, are actively to give them more responsibilities because other hand, believes that remaining private Indonesia. delay” says Mr. Kramer. Drawing on its considerable success in Singapore, are looking to expand in India and Vietnam. at a certain point it is not just about the and relatively small gives the company an A modern full process facility, including European experience, the company is increasingly looking at expanding abroad. With representative offices in Thailand money,” explains Mr Chia, who is also an edge. “We have the advantage of enjoying automatic welding processes, automatic aiming to introduce a refined outsourcing Indeed many companies feel that their and Indonesia Fao Shook is also keen for advocate of secondary training to create a a shorter chain of communications blasting and painting facilities, and testing model to Singapore. “Our primary experience in Singapore, working with international expansion. more efficient, multi-skilled workforce. between clients and management, which facilities, offers numerous advantages. objective is to become the market leader international players on major projects, While there is considerable potential With considerable resources spent on makes us more “nimble” and able to tailor “It’s cost efficient and we are totally in in the provision of integrated support puts them in good stead. for overseas expansion, companies need training foreign workers, the company our services to our clients’ requirements charge of the all the steps in the process, services. We will offer a portfolio of Local heavyweights are already active to consider the fact that the chemical recognizes the value of keeping hold of more exclusively,” claims Mr. Quek. ensuring quality and limiting any potential services to support our clients. It is not our internationally. “Working for these multi- industry is generally not as advanced in its staff. “If you bring in a lot of foreign For PEC, owning a range of essential delays,” says Mr. Dundas. With access to intention to be the market leader in each national companies here has raised the the rest of Asia as it is in Singapore or as A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week open to outsourcing. “Many companies in the region are not yet A view that Rotary’s Mr. Chia shares: “When we look at ready to adopt this approach and we hope that this will change in competitors we think maybe we could form alliances with them the near future,” observes PEC’s Mr. Dompeling. to be even more capable, increase our capabilities, in terms of With most infrastructure development occurring in Asia, PEC skills, know-how and geographical areas.” also feels that there are considerable opportunities for companies Looking to the future, players feel there is the potential to further to export their expertise and experience to Europe. Both PEC and increase efficiency through expanding technical capabilities. As Rotary are looking at the potential for tank terminal projects in Mr Chia of Rotary explains: “We are trying to automate as much the continent. as possible and also systemizing our processes. This is a very difficult and long process, but it is worth it and will help us maintain and improve our efficiency.” With the high cost of operating in Industry Support Singapore and rising employees salaries mechanization looks set The Singaporean government and local industry group, the to become more widespread in the sector. Association of Process Industry (ASPRI) have been providing With many clients choosing to focus on one or two main the sector, particularly local players, with significant support. contractors, local companies are also keen to raise their Lawrence Cheung Mr. James Goh, president of ASPRI, outlines some of the international profile. “Sometimes the challenge is simply that the Country Manager, Dow Boon Yeow Yee measures that have been put in place: “The Local Enterprise and value Singapore companies can offer has not been sufficiently Singapore and Sales Director Head of BASF Singapore and Association Development Program (LEAD) is a strategic move made aware of as a lot of the decisions for multinational for South East Asia, Australia Managing Director of the BASF to propel the growth of the industry through trade associations companies are centralised and made at the headquarters,” feels and New Zealand Plastics ASEAN sub-region such as ASPRI. Some of the initiatives under the LEAD program PEC’s Mr. Dompeling. Indeed many local players in the industry include outsourcing facilitation, internationalization, training feel clients tend to rely too much on international “brand” name it – right to the very long-term – converting biomass to chemicals development and establishing a safety standard for the process engineering firms. or making chemicals directly from methane.” supporting industry.” The process industry in Singapore is doing an excellent job Ready access to top facilities and expertise without the need for Working with the Singapore Workforce Development Agency, in supporting and attracting plant construction. The industry has heavy investments is a considerable attraction for manufacturers. the ASPRI has also established the Institute of Process Industry, developed considerable local talent while new players continue to The country’s strong IP protection and skilled workforce serve whose aim is to establish skills and competencies for the process be attracted to the market, many of whom view the country as a to further increase the country’s attractiveness. With growing industry. As part of its strategy to raise the industry’s profile, cornerstone for future development in the region. demand from Asia, the location also offers companies the the association has also introduced ProcessCEM Asia, an annual With new projects on the horizon and the prospect of new opportunity to create and test products and solution tailored to international conference on plant construction, engineering and downstream players coming to Jurong Island, there is definitely the regional market. The government also offers additional tax maintenance held in Singapore. excellent growth potential for the process industry. incentives for companies locating R&D facilities in the country The government has also introduced a range of other programs and has committed to invest 3.5% of its GDP in the sector. to help the industry. “We are able to enjoy management As Mr. Ho notes, these investments are beginning to see training programs launched by SPRING Singapore to help Innovation some impressive returns: “The fact that BASF is here with a local companies to grow and upgrade their business model. For large corporate lab looking at nanostructure surfaces, 3M has companies who are keen to explore overseas markets, we have IE Research and development is a key pillar in the government’s put a superhub here with research and development for new Singapore to provide us with all the necessary overseas support strategy for the future growth of the industry. EDB’s Assistant applications delving into Asia Pacific and that Mitsui has put a and information,” observes Mun Siong’s Mr. Quek Managing Director, Mr. Julian Ho explains: “We need to build catalyst lab here – are examples to us that we are moving in the The association is keen to help the industry to grow abroad. a technology engine and be a technology inventor. We are right direction.” Citing opportunities in the Middle East, Asia, China, Vietnam moving from being a fast adopter to becoming a "rst adopter With a long commitment to the country Mitsui has worked and Brazil, Mr. Goh feels that the industry could benefit from of technologies. Over time, we hope to also be a creator of greater collaboration: “ASPRI members who are like minded and technologies.” Attracting top scienti"c talent, the government closely with ICES. The company set up its first overseas R&D offer complimentary services could form alliances and provide is investing heavily to support development in the sector centre in Singapore in 2006, the first in the country from a a one-stop maintenance solution to the giant oil and chemical and take advantage of the growing number of regional major Japanese chemical manufacturer. Fellow Japanese giant conglomerates out there.” headquarters in Singapore and increased focus on the Asian Sumitomo has also entered into R&D activity in Singapore to markets. support the market. “Nowadays excellent R&D is in play here in Singapore. The market is always pressing us to supply technology entral to the government’s initiative is the Institute of to meet its needs. So to meet such requirements we are doing our Chemical and Engineering Sciences (ICES). The institute R&D business here in Singapore,” confirms Sumitomo Chemical has established world-class research laboratories and Singapore Managing Director, Mr. Shima. C ICES is keen to support similar companies. “We can never pilot facilities to support innovation in chemistry and chemical engineering sciences. have the business understanding that companies like Mitsui have, “We do hardcore organic synthesis right through to chemical for example, but we can take care of the scientific input. And that processing. We work on a milligram scale right to kilogram scale. is what we look for – a collaboration where we both respect each What we have tried to do is to set up an organisation that goes other’s strengths,” says Dr. Carpenter. across all of the relevant disciplines and all of the relevant scales,” A variety of players are recognizing Singapore’s potential for explains Executive Director, Dr. Keith Carpenter. The institute is innovation. The country is also an increasingly popular test bed conducting a range of projects designed to improve the industry’s for, and consumer of, new technologies. “Singapore has in place productivity and sustainability. Current projects include how to an ecosystem conducive for companies to engage in high-value diversify feedstock for the industry, how to use crude oil more manufacturing and R&D activities. This creates an interesting efficiently and finding potential alternatives. market for our products,” says LANXESS Singapore’s Managing As Dr. Carpenter reveals, the institute also works closely with Director, Ian Wood. “Our engineering plastics business unit, for manufacturers: “We have a whole range of partnerships. They go example, is in the final stage of commercializing its first project from relatively short-term problem solving – somebody that has with LANXESS’ new ECO plastics grade for a customer based Power Seraya o"ers integrated utility services to Jurong Island a problem and needs to have some fundamental science to solve in Singapore.” A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week open to outsourcing. “Many companies in the region are not yet A view that Rotary’s Mr. Chia shares: “When we look at ready to adopt this approach and we hope that this will change in competitors we think maybe we could form alliances with them the near future,” observes PEC’s Mr. Dompeling. to be even more capable, increase our capabilities, in terms of With most infrastructure development occurring in Asia, PEC skills, know-how and geographical areas.” also feels that there are considerable opportunities for companies Looking to the future, players feel there is the potential to further to export their expertise and experience to Europe. Both PEC and increase efficiency through expanding technical capabilities. As Rotary are looking at the potential for tank terminal projects in Mr Chia of Rotary explains: “We are trying to automate as much the continent. as possible and also systemizing our processes. This is a very difficult and long process, but it is worth it and will help us maintain and improve our efficiency.” With the high cost of operating in Industry Support Singapore and rising employees salaries mechanization looks set The Singaporean government and local industry group, the to become more widespread in the sector. Association of Process Industry (ASPRI) have been providing With many clients choosing to focus on one or two main the sector, particularly local players, with significant support. contractors, local companies are also keen to raise their Lawrence Cheung Mr. James Goh, president of ASPRI, outlines some of the international profile. “Sometimes the challenge is simply that the Country Manager, Dow Boon Yeow Yee measures that have been put in place: “The Local Enterprise and value Singapore companies can offer has not been sufficiently Singapore and Sales Director Head of BASF Singapore and Association Development Program (LEAD) is a strategic move made aware of as a lot of the decisions for multinational for South East Asia, Australia Managing Director of the BASF to propel the growth of the industry through trade associations companies are centralised and made at the headquarters,” feels and New Zealand Plastics ASEAN sub-region such as ASPRI. Some of the initiatives under the LEAD program PEC’s Mr. Dompeling. Indeed many local players in the industry include outsourcing facilitation, internationalization, training feel clients tend to rely too much on international “brand” name it – right to the very long-term – converting biomass to chemicals development and establishing a safety standard for the process engineering firms. or making chemicals directly from methane.” supporting industry.” The process industry in Singapore is doing an excellent job Ready access to top facilities and expertise without the need for Working with the Singapore Workforce Development Agency, in supporting and attracting plant construction. The industry has heavy investments is a considerable attraction for manufacturers. the ASPRI has also established the Institute of Process Industry, developed considerable local talent while new players continue to The country’s strong IP protection and skilled workforce serve whose aim is to establish skills and competencies for the process be attracted to the market, many of whom view the country as a to further increase the country’s attractiveness. With growing industry. As part of its strategy to raise the industry’s profile, cornerstone for future development in the region. demand from Asia, the location also offers companies the the association has also introduced ProcessCEM Asia, an annual With new projects on the horizon and the prospect of new opportunity to create and test products and solution tailored to international conference on plant construction, engineering and downstream players coming to Jurong Island, there is definitely the regional market. The government also offers additional tax maintenance held in Singapore. excellent growth potential for the process industry. incentives for companies locating R&D facilities in the country The government has also introduced a range of other programs and has committed to invest 3.5% of its GDP in the sector. to help the industry. “We are able to enjoy management As Mr. Ho notes, these investments are beginning to see training programs launched by SPRING Singapore to help Innovation some impressive returns: “The fact that BASF is here with a local companies to grow and upgrade their business model. For large corporate lab looking at nanostructure surfaces, 3M has companies who are keen to explore overseas markets, we have IE Research and development is a key pillar in the government’s put a superhub here with research and development for new Singapore to provide us with all the necessary overseas support strategy for the future growth of the industry. EDB’s Assistant applications delving into Asia Pacific and that Mitsui has put a and information,” observes Mun Siong’s Mr. Quek Managing Director, Mr. Julian Ho explains: “We need to build catalyst lab here – are examples to us that we are moving in the The association is keen to help the industry to grow abroad. a technology engine and be a technology inventor. We are right direction.” Citing opportunities in the Middle East, Asia, China, Vietnam moving from being a fast adopter to becoming a "rst adopter With a long commitment to the country Mitsui has worked and Brazil, Mr. Goh feels that the industry could benefit from of technologies. Over time, we hope to also be a creator of greater collaboration: “ASPRI members who are like minded and technologies.” Attracting top scienti"c talent, the government closely with ICES. The company set up its first overseas R&D offer complimentary services could form alliances and provide is investing heavily to support development in the sector centre in Singapore in 2006, the first in the country from a a one-stop maintenance solution to the giant oil and chemical and take advantage of the growing number of regional major Japanese chemical manufacturer. Fellow Japanese giant conglomerates out there.” headquarters in Singapore and increased focus on the Asian Sumitomo has also entered into R&D activity in Singapore to markets. support the market. “Nowadays excellent R&D is in play here in Singapore. The market is always pressing us to supply technology entral to the government’s initiative is the Institute of to meet its needs. So to meet such requirements we are doing our Chemical and Engineering Sciences (ICES). The institute R&D business here in Singapore,” confirms Sumitomo Chemical has established world-class research laboratories and Singapore Managing Director, Mr. Shima. C ICES is keen to support similar companies. “We can never pilot facilities to support innovation in chemistry and chemical engineering sciences. have the business understanding that companies like Mitsui have, “We do hardcore organic synthesis right through to chemical for example, but we can take care of the scientific input. And that processing. We work on a milligram scale right to kilogram scale. is what we look for – a collaboration where we both respect each What we have tried to do is to set up an organisation that goes other’s strengths,” says Dr. Carpenter. across all of the relevant disciplines and all of the relevant scales,” A variety of players are recognizing Singapore’s potential for explains Executive Director, Dr. Keith Carpenter. The institute is innovation. The country is also an increasingly popular test bed conducting a range of projects designed to improve the industry’s for, and consumer of, new technologies. “Singapore has in place productivity and sustainability. Current projects include how to an ecosystem conducive for companies to engage in high-value diversify feedstock for the industry, how to use crude oil more manufacturing and R&D activities. This creates an interesting efficiently and finding potential alternatives. market for our products,” says LANXESS Singapore’s Managing As Dr. Carpenter reveals, the institute also works closely with Director, Ian Wood. “Our engineering plastics business unit, for manufacturers: “We have a whole range of partnerships. They go example, is in the final stage of commercializing its first project from relatively short-term problem solving – somebody that has with LANXESS’ new ECO plastics grade for a customer based Power Seraya o"ers integrated utility services to Jurong Island a problem and needs to have some fundamental science to solve in Singapore.” A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

world’s leading chemical challenges forced companies to innovate. Island and increasing demand in the region and 21 years respectively, have made hubs, has in recent years also On Jurong Island, for example, space and Storage and make the island particularly attractive for significant investments. As the industry been establishing itself with resource limitations have helped to create petrochemical logistics. develops and opportunities in the market increasing success as a global an innovative integrated system and Logistics In addition to its location, the same grow, an increasing number of smaller, Research and Development service solutions. assets that have drawn other sectors to specialist players such as Store + Deliver Given its location, port facilities and hub. As such it is also The water industry is another example. the industry are equally attractive for + Logistics and Eagletainer Logistics, connectivity, Singapore is naturally promising for Evonik’s R&D Limited access to clean water has helped logistics and storage. “The rule of law, have also appeared. one of the world’s leading logistics and innovation management. the business environment and numerous For the larger multinational 3PLs the create the market for companies such as hubs. With the growing number of We have begun evaluations on regional head offices are some of the focus is on providing a complete range Hyflux to develop cutting edge, energy companies choosing Singapore as either our options in this area, which attractions of Singapore,” continues of services to customers. One of the efficient membrane cleaning technology. a manufacturing base or the location are efficiently supported Vopak’s Mr. Hoekstra. Easy access to a longer established players on the market, Today the country has become something for their headquarters, petrochemicals by EDB,” says South East skilled workforce is another main benefit german company Leschaco specializes of a water hub for companies looking to are an increasing focus for logistics Asian president, Mr. Peter for many. “From a human resource in intercontinental logistic solutions ICES Building - At the centre of the develop and test new technologies. providers, many of whom specialize Meinshausen. perspective, 90% of my team is drawn for sea and air freight transportation. government’s R&D strategy At the other end of the scale, As environmental concerns become in the sector. The country has also from the local Singapore resource pool. With subsidiaries throughout the region, local companies have also more important globally, Singapore can attracted the leading petrochemical They are multi-lingual and logistics is the company is particularly focussing In 2007 Dow decided to create an R&D benefited from developing their R&D again use the challenge of providing for storage providers as well as supporting proactively pushed as a career within on assisting its existing clients in Asia and technical service centre on the island. capabilities with government support. its own needs as a test bed for developing a growing number of local players. Singapore, which has allowed a very Pacific. Called the Dow Singapore Development “When EPChem started in 2001, the first new technology in areas such as recycling strong skill set to emerge,” informs Dino “We provide the full range of logistics Centre, it specializes in bioscience thing we did was to take advantage of the and clean energy. ith markets developing and Pertsinidis, Vice President Chemicals services, including warehousing and research. “Singapore provides a platform government Product Development Grant With a growing recognition of the the global petrochemical Sector Asia Pacific for international tankcontainer maintenance. Our special were most international companies can to develop a range of environmentally country’s R&D capabilities, potential to landscape changing, the W distributor Agility. focus is on regional distribution for our feel quite safe to transfer know-how and friendly natural waxes to replace mineral create innovative solutions for the Asian industry is currently undergoing a period In keeping with the diverse opportunities worldwide customers,” explains Mr. technology into Asia. That’s why we waxes in the candle application,” says market and committed support from of considerable development. Despite Singapore offers, the logistics and Jacobsen, Singapore Managing Director. have our R&D centre here,” explains company CEO, Mr. Seah Cheong Leng. the government, the chemical sector in increased competition from other countries storage industries currently operating With chemical customers focusing on Country Manager Mr. Lawrence Cheung. The company is currently looking to Singapore is well on its way to become a in the region, Singapore’s numerous in the country are populated by a wide reducing distribution costs as a result of The company is also aiming to grow and develop its in-house capabilities in leading player in R&D. competitive advantages are hard to beat. range of different players and business the economic crisis, the company’s supply develop the facility in the future. personal care formulations. The sector should see continued The country’s location, in the middle models. At the top end a growing number management services are becoming Evonik is another company that sees In many ways Singapore’s resource investment, the arrival of more facilities of world shipping lanes and in the heart of multinational logistics firms such increasingly sought after. Mr. Jacobsen opportunities: “Singapore, as one of the limitations have helped the country, as and the development of new products. of the Asia Pacific region is ideal for believes that Leschaco’s international international and regional shipping and as Leschaco, Agility and BDP, many logistics. When combined with world- of whom specialize in chemicals, are background and thorough understanding class infrastructure and access to excellent looking to expand their reach into Asian of the long-term needs of their clients staff, it is no surprise that the country is the markets and support their international are crucial for effectively optimizing top choice for logistics players. Indeed, customers’s expansion drive in the region. clients’ processes and reducing costs. Singapore is currently home to 21 of the With a history of logistics expertise the “Companies are looking into their supply top 25 third party logistics companies local industry has also produced a handful chain and really trying to optimize them; (3PLs), many of whom have chosen the of successful players such as YCH and these are things they can only do with island as their regional headquarters. For CWT, with excellent capabilities and the international players and not with many logistics providers Singapore’s impressive regional networks. the local players. They need monitoring advantages have long been apparent. Due to the country’s long history of of shipping and products all around the “Right from the beginning of our involvement in petrochemicals and the world, which local players cannot provide activities here in Singapore in 1992 unique requirements of Jurong, storage at the moment.” we promoted using Singapore as a giants Vopak and Oiltanking, who have The company is heavily commited distribution hub to our clients,” affirms been operating in the market for 26 to the region with a growth strategy Uwe Jacobsen, Managing Director of leading international player Leschaco’s Singapore operations. Fellow international operator BDP International also identified the country’s potential when it entered into Asia in 1995. Due to its strategic international location on the major international shipping routes, Singapore’s significance for many international players is not merely regional. As Mr. Eelco Hoekstra, Asia President for leading storage giant Vopak, explains: “Singapore is important for us as a location not only in Asia but within the whole worldwide network. There are few big ports and shipping points in the Uwe Jacobsen world and Singapore is definitely one of Managing Director them.” Growing production from Jurong Local logistics success story and strong regional player, YCH Leschaco Pte LTD A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

beginnings the company today handles in Asia. Most of the operators are based in 80 ISO tanks in 2006, Eagletainer has 50 billion USD of inventory annually for Europe,” explains Managing Director, Mr. built up its fleet to over 1300 tanks in just major international firms. The company Lim Meng Kong. The company focuses four years. services the Asia Pacific region, using on providing logistics solutions based on Working directly with producers, Singapore as its main hub and with its fleet of ISO tanks. “We service most the company has made the most of smaller regional facilities as satellites. of the Asia-Pacific rim for petrochemical Singapore’s location close to palm Through the provision of an advanced in companies. We offer a port-to-port service. producing countries such as Malaysia house IT system, the company provides Depending on our customers requirements and Indonesia to build up a solid base of an entire end-to-end supply chain service we can also provide door-to-door services oleo-chemical players, many of whom and currently has a presence in 32 cities or whatever other options they require,” are attracted by Eagletainer’s new tank and 12 countries in the region. says Mr. Lim. stock. The company also serves many While the country supports more established local players, it is also The company has enjoyed impressive petrochemical customers, who currently nurturing a new generation of dynamic, growth since its inception. Starting with account for the majority of business. Eelco Hoekstra successful and ambitious companies. CEO for Asia Paci$c region for Established in 1997 Store + Deliver Royal Vopak + Logistics is a logistics company specializing in chemicals. “Our logistics services include haulage of containers focussed on strenghening its from the port, storage of the chemicals, market postion. Indeed, in tracking them with barcode, providing a reflection of the increased inventory management and the distribution focus many global logistics of chemicals within Singapore and the companies have on the region, region,” says company Chairman, Dr. the company now has more Lee Ah Teng. With considerable past people in Asia than in Europe experience in the industry, Dr. Lee, or America. With a growth foreseeing the growth in the sector, took rate of around 12% in Asia Vopak has recently expanded two of its terminal facilities in Singapore the astute decision to focus on speciality during the crisis, compared chemicals. service to help customers improve their Island, providing a unique and extremely to neglibible increases in Europe, the The company has designed and built company’s focus is understandable. Mr. supply chains. Mr Pertsinidis also feels integrated solution for manufacturers. a state-of-the-art warehouse specifically Jacobsen predicts that the region will that the company’s multinational chemical Indeed, it is a model that has influenced to handle specialty chemicals, including account for 40% of business by 2012. heritage offers valuable experience and local heavyweight CWT considerably. As inflammables. Ensuring safety is an utmost Similarly sized American competitor expertise. Mr. Eric Herman, CEO of CWT Logistics concern for the company. “Our facility BDP is also focussed on the region. Peter The trend among global 3PLs operating explains: “One of the visions that we is approved by the relevant authorities Barnesby, the company’s Regional Director in Singapore is very much on adding had was to really start breaking into the and it has all the required safety features for South East Asia, feels that customers value and providing more consultative petrochemicals sector. We knew that there and licenses. Our people are trained and are looking for a more complete service in services to help global customers expand were a lot of things going on, but there we are audited by a third party for all the region: “I think the difference we find in the region. Companies are increasingly was only really one company in Singapore the processes right down to disposal of in Asia compared with other parts of the taking advantage of the country’s skilled offering the complete re-packaging and chemicals (which is a prerequisite for globe is that companies in Asia are after workforce and connectivity to manage distribution services.” membership of the NACD),” assures Dr. a complete solution and so we find that in customer’s worldwide logistics operations. The company has recently won a Lee. Asia we need to be able to provide freight, In addition to its significance in Asia, it lucrative ten-year contract with plastics With key customers consisting of warehousing, transportation, visibility… seems that Singapore’s importance in producer Borouge to operate a strategic MNC’s from the US, Europe and Japan, a combined total solution.” The company supporting global logistics operations for packaging and distribution hub for the the company anticipates further growth believes customers also can benefit from companies may well increase. company. “The reason for this was that in the market. “MNCs prefer to use knowledge on growing regulations and Unlike its fellow multinationals, they wanted to be closer to the market and Singapore as a logistical hub so there are free trade opportunities. Katoen Natie has adopted a strikingly be able to better anticipate the fluctuating still opportunities for us in Singapore, Singapore is also crucial for global different operating strategy. Having prices of petrochemicals by offering especially given the level of infrastructure chemical logistics specialist Agility been in Singapore for 12 years, the shorter lead times to their customers,” we have here,” says Dr. Lee. The company Chemicals. The country is one of four company works extremely closely with says Mr. Herman. is looking to build an additional facility to regional world centres for the group and the petrochemical manufacturers. As Building on the advantages offered by meet local demand in the next three to five the company has seen chemical volume Mr. Koen Cardon, Managing Director existing warehouse space in the country years. As high operational costs force some management increase substantially. “It of the firm’s Asia operations explains: (currently over 9 million square foot) and smaller manufacturers to move to cheaper has been on a positive trend for the last “As soon as the product is formed within additional in house expertise, the company locations, especially China, the company three and a half years, apart from the glitch the plant, we work in the engineering, has built an annex to handle the packaging is also looking to expand operations in the in quarter one last year, and we continue we do the packaging, the reworking, the of products coming from the Middle East. region in the longer term. to see very strong upturns in Singapore,” planning, the mixing within the plants, With growing production in the Middle Formed in 2006 Eagletainer Logistics, says Mr. Pertsinidis, Vice President for then get that to the port of Singapore.” East looking to supply demand in Asia, a wholly owned subsidiary of shipping the Asia Pacific Chemicals Sector. With the company’s activities blurring there is considerable potential for similar company EagleLiner, is another successful In addition to procurement and freight the distinction between logistics and services in Singapore. new local entrant to the market. “We saw management, the company has also manufacturing, Katoen Natie is closely YCH is another strong regional player an opportunity to do business with ISO developed an in-house consultancy integrated with production on Jurong and Singapore success story. From humble tanks as there are relatively few operators A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

“We have internal programs on auditing, from Singapore and the cost of attracting good staff, the overall them. Companies such as training and investing to ensure that our costs are not as competitive in Malaysia as they may initially Katoen Natie and CWT are track record on safety improves. We seem. introducing new systems and share this data with our customers openly The main potential challenge to Singapore’s position is the approaches to the market. because we believe that transparency also advent of new manufacturing from the Middle East and the route As the industry changes, and will lead to a higher level of understanding those products will take to market. “The huge volumes we expect especially with the influx of and joint development.” Mr. Hoekstra to see coming out of the Middle East will have an effect on how new products from the Middle believes that safety, environmental the product needs to go to market and then the main question East and rising demand protection and emission control are likely is the role that Singapore will play in that,” says Vopak’s Mr. in Asia, there is potential to become increasingly important for the Hoekstra. to develop new logistics industry. Due to its position and facilities, Singapore could become solutions. When compared to Oiltanking also has a considerable an important strategic staging post. As Katoen Natie’s Cardon other industries, the chemical presence in the market. The company observes: “If you are in the Middle East and have to make industry’s supply chain entered into the chemical market in 2000 modifications based on customer requirements in China and management and logistics are and has created a joint venture with India, the lead time is too long. Singapore is in a very good relatively underdeveloped. As Dino Pertsinidis shipping firm Odfjell. “The driver is position to push products in this direction, customize it and then products from Europe and the Vice President of Chemical because chemical terminals and chemical feed the market.” US increasingly get shipped Sector for Agility Logistics shipping are inter-linked from the supply Solutions 7KH GLYHUVLW\ RI ORJLVWLFV FRPSDQLHV LQ 6ÕQJDSRUH HQVXUHV D to Asia and companies look chain point of view,” says Mr. Rutger variety of different strategies. While major international players to cut costs in the wake of the van Thiel, President of Oiltanking Asia such as Leschaco and Agility are seeking to harness their downturn, logistics and supply chain management will become Pacific. global experience and offer existing customers a total solution, increasingly important for the industry. Again Singapore is an important location Indeed, according to Mr. Lawrence Cheung, Country Manager Oil Tanking, expecting increased demand for its storage facilities for the company, whose facilities serve local companies such as CWT and YCH are choosing to focus of Dow Singapore: “In terms of hubbing, physical inventory or both local manufacturing and regional specifically on the region while smaller players such as Store + transhipment, Singapore will only get bigger. Judging on capacity, Demand for the company’s services terminal operator, Vopak, has been distribution. “Currently we have a large Deliver + Logistics and Eagletainer are currently focussing on Singapore will be number 1 for many many years to come. For are increasing while the price of the tanks operating in Singapore for 26 years. The expansion programme that is related to more specialized markets. themselves has decreased considerably in country is their largest operating base in the chemicals storage business in Asia, Some companies, such as Leschaco and BDP, prefer to operate supply chain and hubbing nobody will be as competitive. It is the the last 2 to 3 years, allowing for further the region, with 4 different terminals and our largest terminal is in Singapore. The an asset light strategy, believing it gives them efficiency and most efficient port operation in the world.” expansion. The growing move towards a storage capacity of over 3 million cubes country is a hub for chemical logistics and flexibility, whereas others, such as CWT, Agility and YCH The future for the logistics sector and Singapore’s role in it specialties as well as smaller shipping as well as their regional head office. manufacturing,” says Mr van Thiel. feel that being willing to invest in infrastructure distinguishes looks very bright. volumes occasioned by the downturn “We have recently expanded two of In expectation of further growth the have both proved advantageous for the our terminals here to follow the growth company recently expanded their terminal company. of distribution and storage of chemicals in capacity as well as expanding the segments “If the volume requirements decrease, this part of the world and in anticipation of the chemical market it caters to. While ISO tanks are more likely to be used of an additional flow of chemicals into the company feels investment has slowed by the shipper. Compared to PARCEL Singapore,” says Asia President, Mr. down due to the crisis it believes that the tankers, ISO tanks need a much smaller Hoekstra in an indication of the company’s situation is now picking up. volume to be financially feasible. With 20 optimistic view of Singapore’s future. Despite growth in India and China and tones in an ISO tank, you are ready to go,” Unlike other sectors, the storage competition from neighbouring countries, says Mr. Lim industry has remained stable during the companies operating in the market today For environmental and economic downturn, which Mr. Hoekstra ascribes are more than confident that Singapore reasons the company has also converted to the relatively robust position that will remain the pre-eminent logistics hub from using drum packaging, while ISO Singapore has as a manufacturing base in the region. tanks are also becoming more popular in and the fact that: “the stimulus packages Despite lower costs in other countries, developing countries. “There are a lot of here in Asia have worked quite well to Singapore’s efficiency and effectiveness different uses for them. For example, our keep consumption relatively stable so ensure that it remains competitive. ISO tanks are used as storage terminals South East Asia has not been as badly “To give you an example, we are faster for diesel. We even carry waste oil from affected as other parts of the world.” going out of Singapore to Shanghai than India to be refined for reuse,” observes In a competitive market the company it is to go from a bonded warehouse Mr. Lim. In ten years time, the company is looking to find the right opportunities in Shanghai to a local company. This aims to be operating between 4000 and for growth, focussing on efficiency, is because of customs formalities – in 5000 tanks. cost-effectiveness and reliability. “We Shanghai you need up to ten days to get With Singapore’s history in oil refining, have started a project which is called out of the warehouse,” says Leschaco’s importance as a chemical distribution hub Operational Efficiency Improvement Mr. Jacobsen. and growing feedstock requirements for and it is based on the lean methodology. With red tape and customs formalities manufacturing, the major storage players Basically we look at the terminals, take hindering exports from China and have had a long presence in Singapore. out a few processes and ask whether we infrastructure development limiting Due to the integrated nature of Jurong are doing this in the most efficient way. potential in India, Singapore is still in a Island and its associated space constraints, The whole idea is to take ‘waste’ out of dominant position. Competition closer to outsourced storage facilities have the system,” explains Mr. Hoekstra. home, in the form of Tanjung Pelepas in been critical for ensuring the facilities Vopak is also working closely with its Malaysia is also not as compelling. With efficiency. customers on safety matters, an issue that limited ocean carriers calling at the port, The world’s largest independent tank is of utmost importance to the company. many containers requiring transportation A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

Local Players Regional Reach For many local distributors the size of operations on Jurong Island Given the small size of the local market and Singapore’s makes it impossible for them to supply their needs. The focus is considerable advantages as a logistics hub, many distributors have instead on serving smaller producers and other industries. In order naturally expanded into the wider region and even further a field. to remain competitive, many suppliers carry numerous products Going international in the early 1990s, MegaChem currently has and cover a wide range of industries. six offices in South-East Asia, as well as additional offices in “The manufacturing base is very wide but not very deep. In China, India, the Middle East and even the UK. China a chemical distributor may only have five products in their Setting up its first overseas operation in 1989, Fu Yuan portfolio, but this can support them. But if you look at chemical currently has offices in Taiwan, Malaysia, Indonesia, Thailand, distributors in Singapore, they will have a whole portfolio of and Hong Kong, Shanghai, Guangzhou, Chengdu and Tianjin in different products,” says Mr. Nicholas Lim, Managing Director China. Similarly industrial chemical and polymer player Linkers of leading local distributor Unilite Chemicals. has offices in 10 countries in South East Asia, South Asia and the Carrying around 50 commonly traded products at any one time Middle East. Unilite Chemicals is not alone in focusing on covering a wide With less than 5% of the company’s sales in Singapore, Woo Siew Wah area of the market. EPChem’s market stretches from South East Asia, Greater China, Managing Director, Mr. Seah Chong Leng “We supply everything from dangerous cargo to general food Australia and Africa to Latin America. SOXAL Air Liquide CEO EpChem types and pharmaceuticals. Performance chemicals and polymers With continued growth throughout the region, much of it among are two of our key areas, as well as biotech, the food industry, smaller producers, there is a lot of potential for distributors. focussing on taking advantage of opportunities in Africa, while petrochemicals, cosmetics and photographic chemicals,” explains China is naturally a huge target for many distributors. Indeed MegaChem, seeing considerable potential in South America, is Mr. Sidney Chew, Executive Chairman of leading local and it currently accounts for 40% of Fu Yuan’s sales. Other regions regional player MegaChem. have also been performing well. looking to set up an operations hub there. With solid distribution With some local manufacturing in decline and the market “Southern Asia is coming up really strongly, with markets like networks in place and a growing understanding of market needs shrinking, distributors are looking to alternative sources of India and Pakistan,” says MegaChem’s Mr. Chew. Demand is and trends, some Singaporean distributors are successfully revenue. “About 5 years ago we started to realize that factories are also growing closer to home, particularly in Thailand, Malaysia, competing with established regional players. moving away from Singapore. This meant we needed to do more Vietnam and Indonesia. For MegaChem the region presents 72% While still relatively small in global terms, there are also some than just distribute; we needed to add more value to the supply of sales. large regional players currently operating in the market. Founded Many distributors are also looking further afield. Recognizing in 1840 with its holding company in Hamburg, Behn Meyer is Rotary Engineering has worked on a range of recent storage projects, chain,” says local distributor, Aik Moh’s Managing Director, Mr. catering to growing regional distribution needs Roy Keng Hong opportunities in the Middle East, both Linkers and MegaChem one of the older players in the region. With group companies Aik Moh’s toll blending and packaging facilities currently have expanded their operations to cover the region. Linkers is also operating in Germany, Singapore, Malaysia, Thailand, Indonesia, account for 10% of the company’s revenue. Although only Distribution currently responsible for 5% of the company’s turnover, MegaChem is also looking to expand its contract manufacturing With one of the busiest ports in the world and a well- services to account for 30%. established chemical manufacturing sector, it is no surprise With traditional industries being attracted abroad, sourcing that Singapore is the leading distribution hub in the Asia new products and finding new clients is becoming increasingly Paci"c region. important. “Singapore is a very small country with a small market, so we have to widen our product range. We are always looking s Mr. Dino Pertsinidis, Vice President of the Chemical for new products and new areas, otherwise we cannot survive,” Sector for leading international distributor Agility affirms leading local and regional operator, Fu Yuan’s Managing Aobserves: “If you draw a 7 or 8 hour radius you will literally Director, Mr. CJ Teng. cover all of Asia from Singapore.” Indeed most business is even As Singapore attracts new industries, local distributors feel closer. The country’s location, supported by an excellent logistics that there are some fresh opportunities. “Newer industries like sector and the numerous free trade agreements in place, is ideal electronics and water treatment will continue to grow here,” says for distribution. The presence of numerous global and regional Unilite’s Mr. Lim while Mr. Chew of MegaChem believes: “The head quarters and manufacturing sites ensures that distributors aviation industry is coming to Singapore, so we expect to see have access to a superlative range of different products, while the potential growth in this area.” projected growth within the region will ensure an increasing need According to Mr. Lim of Unilite: “Environmental chemistry is for them. The city state is currently home to a diverse range of also something very new, which more and more people are getting distributors from commodity traders to niche specialty operators. in to. There are many environmental companies in the water While some companies continue to concentrate on servicing the reclamation, water treatment, energy conservation, alternative local market an increasing number of local players are focusing energy business.” on expanding their services throughout the region. While some distributors cover a wide range of different The regional market is still quite undeveloped with only a few products, others have chosen to focus on niche markets. established regional suppliers. As the global focus of the industry Established in 2001, EPChem International decided to specialize shifts towards Asia, larger MNCs are also beginning to recognize in hydrocarbon, covering the spectrum from synthetic liquid the market’s potential. Despite challenges, including the recent paraffin oil [C8] and semi-solid petrolactum to long chained economic downturn and the region’s considerable diversity, there polyethylene and polypropylene solid hard waxes [C100++] and are impressive growth opportunities for the sector. their derivatives. “Instead of being an insignificant player in a Broadly speaking distributors fall into three categories. Local big commodity chemical business, EPChem decided to move to SMEs, foreign owned regional players with an established a business domain which is too small for the big boys, but too network and multinationals, of which there are currently very complicated for the small,” EPChem’s CEO, Mr. Seah Cheong few. Leng explains. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

Vietnam, Myanmar and Cambodia, the members of larger organizations they are company recognizes significant growth company has a long history and well- also able to draw on the resources of their potential in China, India and some established base in the region. parent companies and extended networks. countries in South East Asia and Mr. Headquartered in San Francisco and Local competitors are fast catching up Nejade believes the acquisition will open with a Singapore presence since 1970, however, with larger players achieving the door for Brenntag suppliers. The Connell Bros. Company is another similar sales and creating comparable The company’s arrival is reflective large player, whose heritage dates back networks. of the growing interest in the region. to 1890’s Hong Kong. Specializing in Furthermore, as Mr. Nejade points out: servicing Asia Pacific, the company “While there are successful distributors currently has a presence in 17 countries Global that have been here for a long time, they producing a turnover of 150 million Even they, however, are dwarfed in only have a local network. We are the first USD. comparison to the latest arrival. With truly global full line distributor.” Brenntag Also started in Hong Kong in the 19th the purchase of Rhodia’s South East is looking to leverage this experience as it century, Jebsen & Jessen, like Behn Asian chemical distribution business aims to become master distributor in the Mayer, concentrates on distribution in 2008, Brenntag has demonstrated a region. within South East Asia from offices in clear commitment to the region. “With Singapore, Malaysia, Thailand, Indonesia, Brenntag’s experience and stability, the Philippines and Vietnam. acquisition of the distribution business Weaving webs In 1997 the company entered into a of Rhodia was a natural step to enter While the Asia Pacific and South East joint marketing and distribution venture the region. We could build upon a good Asian markets are attractive and potentially with Evonik Degussa. While this was platform and 20 years of know-how in lucrative they are also extremely varied disbanded in 2008, the company continues the market. There is also strong potential and challenging. As Mr. Meinshausen to handle much of Evonik’s business in for adding value,” says Mr. Henri of Evonik observes: “The feature of the the region. Nejade, CEO of Brenntag’s Asia Pacific region is its heterogeneity. With emerging countries, industries and specific customer independent entity. Fu Yuan Enterprises Riding the storm These regional players currently operations. economies as in Indonesia, Vietnam or needs. In such a varied market distribution also understands the importance of local Surprisingly, many distributors have been enjoy some advantages over their local With a focus on specialty chemicals, Thailand as well as highly developed is understandably quite underdeveloped knowledge. “We believe in having a largely unaffected by the recent economic competitors. With long histories, they Brenntag is looking to expand and economies as in Singapore or Australia.” when compared with other regions. global perspective but to place importance downturn. Indeed, some feel that it has even have been able to set up broader and more develop their operations and establish an Such regional diversity requires an Producer, trader, agent and distributor on localization also. So in our offices we had a positive effect on their business. For concentrated distribution networks. As Asia-Pacific distribution network. The in depth understanding of the various roles are often less clearly defined than in have local people managing the business MegaChem the downturn has helped them mature markets, while distribution is often because they know the market the best fragmented along country and product to acquire new customers and reduced the and can provide the lines of resources, lines. With rapid growth the needs of the competition. “We thrive in crisis. The suppliers and channels,” says Sales various industries in different countries market at the moment is overcrowded and are also constantly changing. Executive Mr. Teng Chen Ji. this financial crisis is getting rid of some Recognizing these challenges, EPChem, meanwhile, has created of the excess suppliers,” says Mr. Chew. distributors are opting for a decentralized independent divisions, focussing on a Indeed, for many local distributors, approach and greater sub-regional number of application areas, where: covering a wide range of industries autonomy. Behn Meyer, for instance, has “Each unit is accountable for its sales and and markets has helped insulate them no regional headquarters in South East profitability and is rewarded according to from the shock. “Our business model of Asia, with each country office acting as an the unit’s performance.” diversification in various countries/regions and serving a wide range of customers in different industries has always helped us, particularly in difficult times,” explains Mr. Shamsher Zaman, Managing Director of Linkers. With Middle Eastern and African markets largely unaffected, the company has been able to concentrate resources in those regions, resulting in new business. “Because we are in specialty chemicals, the downturn was not so serious a factor for us,” believes Fu Yuan’s Mr. CJ Teng. “This year in Singapore we have already recovered – our turnover is slightly higher than last year. Our other markets are the same. The prices have dropped, but quantities are much higher, which compensates for this.” Last year saw a 30% annual increase in turnover for the company, which took the opportunity to provide product training to customers and CWT - Preparing for a new role servicing international producers create a new business development unit. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

While AIK Moh Paints did see the effect have relocated to China, attracted by the With 50 engineers in South East Asia becoming more sophisticated in India, of the downturn, it has largely recovered. cheaper operating costs and growing local trained in the company’s products and China and South East Asia, there are “In 2009 we had half a year that was very market. applications, the company feels it can numerous opportunities for suppliers, good and half a year when things went Another challenge, particularly for function as a single sourcing point for especially those offering specialties. bad. We saw a decline in sales of between smaller players is ensuring access to large chemical manufacturers in the Singapore’s move towards higher value 20 to 30% in the worst period, but things a skilled workforce. With workers region backed by its considerable global production should ensure that distributors are picking up and now we are only 10% attracted by the higher pay scales of resources. will have ready access to a growing below our normal pre-crisis level,” said the top tiered chemical companies in With Asia expected to be the main range of products, direct from the Mr. Roy Keng Hong, speaking at the Singapore, SME’s such as EPChem and vehicle for growth in the chemical industry, manufacturers. end of last year. The company also saw Unilite find it difficult to attract talent. there are considerable opportunities for Given the diverse, challenging and continued growth and demand in certain With the continued strength of the Euro, distributors. constantly evolving nature of the sectors, including pharmaceuticals and companies carrying European products Due to its location and facilities distribution landscape, manufacturers are water treatment. are experiencing problems. Although Singapore is the ideal location from which also likely to rely heavily on distributors Due to EPChem’s diversity the company some companies feel the government to supply the region. With production to gain access to the market. also managed to maintain sales. Mr. could provide more support for SME’s in Seah Cheong Leng believes that recent the industry, others believe that the right downsizing in the industry has created programs are available. additional opportunities for distributors. In such a competitive and varied market, “The unintended effect was that knowledge distributors rely on a wide range of in many special applications has been lost unique strengths. In addition to the speed with the departure or earlier retirement advantage of having their own warehouse of experienced staff in their respective facility, Mr. Lim feels that Unilite’s small fields. This would also mean that more size offers them an advantage over their special performance chemical companies bigger competitors. “As a local SME we are able to move faster. Big multinationals find the need to outsource their sales and would have a certain process they would marketing to third party distributors.” have to follow, but here it requires just With government rescue packages one phone call to our company.” helping to stimulate demand in China and Fu Yuan’s Mr. CJ Teng also believes not elsewhere in the region and new players being a large multinational helps. “We are arriving to the market, the industry’s fast more independent, more aggressive, have recovery is reflective of the region in more initiative to get new business and general. long-term relationships with our clients.” In the short term demand is likely to For local distributors being associated increase as manufacturers and producers, with Singapore brand and its perceived having put purchases on hold as a quality is also beneficial, particularly as cautionary measure during the downturn, they look to expand further abroad. look to restock. The downturn has not EPChem’s strength is being one of been entirely positive, however, especially MacDow - Extensive process facilities and a long history in the country the major suppliers for a full range of in the local market where many producers wax products in Asia Pacific. “We have competitors in virtually every product type but have few direct competitors who cover the exact product range as ours,” says Mr. Seah. Larger players see advantages in being able to offer a range of technical support services. With a laboratory in Singapore, Connell Bros can produce examples to show potential clients the benefits of their products. Having invested in heavily in IT data profiling, the company also feels it is better placed to understand and respond to the needs of the market. Brenntag believes its size and experience gives the company a competitive edge. “What we bring here is our knowledge of the market and of product applications and add it to our logistics expertise. We deliver to our customers at each location where our products are required. We provide a total sourcing solution. We believe you can do this well only if you are a global company,” claims Mr. Nejade. A Global Business Reports Publication, presented with Chemical Week A Global Business Reports Publication, presented with Chemical Week

While total supply solutions from Integration has been the key. As the In the medium and long term, rising global heavyweights like Brenntag will Minister for Trade and Industry, Lim costs and growing competition from be attractive for larger manufacturers, Hng Kiang observed: “The success of China, India, the Middle East and South the more modest needs of a growing our chemical industry has been very East Asia present significant challenges group of smaller manufacturers and much anchored on a seamless integration for the country. However, by working to producers should also ensure considerable strategy. Working closely together with increase efficiency, taking advantage of its opportunities for smaller distributors. the industry, we have created an ecosystem strengths and concentrating on moving up Acquisition opportunities are also that not only achieves a high level of the value chain, Singapore should be able arising as a result of the downturn and feedstock integration, but also integration to ensure that it remains a leading player, there should be a considerable amount of through a full spectrum of logistics and not only in the region but increasingly consolidation in the market, which should utilities services.” globally. see the emergence of a group of stronger With the two new crackers ensuring regional players and market maturation. vital new feedstock, the country is looking Following Brenntag’s example, other to develop its downstream activities while GBR would like to thank global distributors may well start to focus extensive investment in R&D should see more closely on the region. an increased focus on innovation. Economic Development Board Singapore As the petrochemical industry in (EDB) Singapore develops further and demand www.edb.gov.sg Conclusion from producers and consumers in the region increases, there are numerous opportunities Singapore Chemical Industry Council The Singaporean petrochemical for manufacturers, distributors and service (SCIC) industry has enjoyed remarkable providers in Singapore. As EDB’s Mr. Ho Mr. Terence Koh success throughout its history. confirms: “If you look around the region, Dr. A. Chockalingham From a series of small islands and a strong GDP growth rates are a reflection www.scic.sg handful of re"neries, the country has of robust demand growth. Asia is a key Association of Process Industry (ASPRI) succeeded in building, literally from the region where we will continue to see www.aspri.com.sg ground up, an innovative world-class long-term positive growth and Singapore petrochemical hub that has attracted is well-positioned to play a critical role in ASPRI is organizing 2nd International the world’s leading players. meeting the region’s energy and chemical Exhibition & Conference on Plant Construction, needs.” Engineering & Maintanance for the Process o do this the country has overcome A full range of services, the ease of Industry considerable challenges, not least of doing business and extensive support www.processcemasia.com which has been the limited resources from EDB make the country particularly T SPRING Singapore – Enterprise available. Singapore’s ideal geographical attractive for players looking to enter the Development Agency location, excellent infrastructure and region. Indeed, the numerous established www.spring.gov.sg facilities, use of advanced technologies, players and new arrivals, increasingly skilled workforce and active governmental choosing to create regional headquarters Energy Market Authority - EMA Singapore support have ensured the industry’s in the country, reflect the opportunities www.ema.gov.sg success. and advantages the country offers.