Mr Chan Soo Sen at the Association of Process Industry (ASPRI) 10th Anniversary Dinner

SPEECH BY MR CHAN SOO SEN, MINISTER OF STATE FOR EDUCATION & TRADE AND INDUSTRY, AT THE ASSOCIATION OF PROCESS INDUSTRY (ASPRI) 10TH ANNIVERSARY DINNER ON FRIDAY, 21 APRIL 2006 AT 8:25 PM, INTERCONTINENTAL HOTEL BALLROOM

Mr James Goh, President of ASPRI

Members of ASPRI

Distinguished Guests

Ladies and Gentlemen

Good evening

We are gathered here tonight to celebrate the joyous occasion of ASPRI’s 10th anniversary. Let me congratulate ASPRI and your members on your many achievements in the past 10 years.

New Growth, New Opportunities

The process industry is a key supporting industry for our Oil & Gas and Chemical sectors, which together accounted for more than 31%, or $67.3 billion of Singapore’s manufacturing output in 2005.Singapore is the third largest oil-refining center in the world. All the major oil companies are located here, and they are all expanding their capacities to take advantage of the growing energy needs of fast-growing economies in the region, like China and India. China’s rapid development is now extending to the western part of the country, across Xinjiang and the Silk Road into Central Asia and the former Soviet republics. Oil & Gas explorations are also taking place in Bohai and South China Sea.

All these mean tremendous opportunities for growth for our companies. Petrol dollars will flow into the region – for Oil & Gas exploration and production, refineries and oil terminals as well as petrochemical and pharmaceutical plants.

The large MNCs will need support services to build and maintain multi-million dollar plant facilities.

Dream or Nightmare – Making a Concerted Decision 

Tonight, I would also like to share with you my dream for the process industry. I dream of a bigger and stronger process industry in Singapore, one in which our companies have constantly developed robust capabilities and established good working relationships with their MNC clients. In this dream, our companies have become service providers of choice to the MNCs, who partner our players to embark on overseas projects. Our companies in turn strengthen their capabilities and business networks, and are dominant players in their own right, able to compete in the global stage.

What I have just shared with you is a sweet dream. But on the other hand, we risk being rudely awakened from this sweet dream and being plunged into a nightmare if we do not proactively seize these new opportunities.

If our companies fail to upgrade and build new capabilities, we will over time lose the ability to service clients in new growth regions. That is not all. Once MNC clients build up good rapport with your foreign competitors, they may bring back these foreign companies to service their projects here. When this happens, our enterprises will also lose their foothold in Singapore.

I should not be talking about nightmares on such an auspicious occasion like this. But as advisor to ASPRI, I see it as my duty to alert you to the intense competition out there. I have spoken with many of you in the past. I am therefore confident that you will make the right decision whether you want to work hard to realize the dream, or to do nothing and face the consequences of the nightmare.

Alliances & Partnerships

So what can we do to fulfill this sweet dream of ours? I think our companies need to aim higher and shoot further. Firstly, our companies have to aim higher by upgrading their capabilities so that they can handle larger and more complex projects. Examples of important capabilities include areas such as project management, design engineering, machinery upgrading, and maintenance management.

Secondly, our companies must be prepared to shoot further, and go where their clients are expanding. Because when their clients prosper, so do our companies. The challenge for our companies is to serve their clients so well that they would want to invite our companies to venture anywhere in the world with them.

It is a huge market out there. Business contracts may be in faraway places. To have greater success in venturing into unfamiliar territories, one quick-win is for our companies to partner other like-minded companies to leverage on one another’s strengths and complement their weaknesses. Our companies must be prepared to work together and form alliances among themselves to provide one-stop solutions to clients.

I am happy to learn that there are already such alliances in the industry. Rotary, Hiap Seng, PEC[1], Hai Leck, and Mun Siong are good examples of companies that have successfully gone overseas and built up a broad range of expertise over the years. They have a wide network of associate companies, and enjoy strong support from their pool of subcontractors and suppliers, whom they know they can count on.We need more of such mutually reinforcing alliances in the industry.

Working in teams requires us to be prepared to give and take. We need to be open and trust one another. More importantly, we must be prepared to share. Unfortunately, Singaporeans are not known for our ability to share information or resources. In this aspect, we lag behind countries such as Taiwan, Japan, Korea, and Hong Kong, where mutual trust, reliance and teamwork seem to be the norm. These countries have been very successful in forming successful consortia such as the Japanese keiretsu and the Korean chaebol to win business contracts.

Let me share with you a story to show what I mean by good teamwork. In a village, the villagers would typically form small groups to look for food, such as honey. When they find honey, not all of them will go and grab the honey at once. One may do guard duty to provide early warning of predators. Another could help to distract the bees. The third will collect the honey, and later share it with his partners according to their respective roles and contributions.

What happens if one of them is injured by a tiger or stung by the bees? The two other villagers will give a bigger share of the harvest to the injured man and his family. And if they cannot agree? They will then turn to their village chief whom they trust to give a fair judgment. I share this story with the hope and belief that ASPRI can be this village chief and help to encourage greater collaborations among your members.

Leading Industry Growth

I understand that ASPRI has developed a plan to lead the growth of the process supporting industry. I am happy to say that the Government will support ASPRI’s proposal under the Local Enterprise and Association Development or LEAD programme. This is our present to you on this joyous occasion.

I am told that ASPRI will embark on a suite of projects estimated to cost $4.4 million, which is expected to create a value add increase of $173 million over the next three years. Some of the key projects include securing more outsourcing projects from MNCs, promoting a process industry safety standard, forming an international business unit, and developing a central membership database system.

I am confident that with strong leadership and commitment, these projects will boost the capabilities of companies and raise the competitiveness of the industry. You can count on continued strong support from SPRING, EDB, IE Singapore and other Government agencies in implementing your projects.

On this note, I wish ASPRI a happy 10th anniversary and many more years of success. I hope that in 10 years’ time, you would have realized my dream and become 10 times bigger and better. So here’s to more good dreams and making them all come true.

Thank you, and I wish you all an enjoyable evening tonight.

 [1] Plant Engineering Construction Pte Ltd