Mr Lee Yi Shyan at the Opening Ceremony of Denka’s Styrenics Manufacturing Facility

SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE OPENING CEREMONY OF DENKA’S STYRENICS MANUFACTURING FACILITY TO BE HELD AT THE SHANGRI-LA HOTEL BALLROOM ON 19 APR 07, 7.00 PM

Mr Toshio Hiruma, Chairman of Denki Kagaku Kogyo Kabushiki Kaisha (Denka)

Mr Seiki Kawabata, President of Denki Kagaku Kogyo Kabushiki Kaisha

Mr Kohji Saitoh, MD of Denka Singapore Pte Ltd

Distinguished Guests

Ladies and Gentlemen

Good evening. Let me begin by congratulating you on the successful completion and opening of Denka’s styrenics manufacturing facility. This is indeed a joyous occasion, and it is my pleasure and privilege to join all of you today.

Denka’s Contribution to the Singapore Chemical Industry

Since the year 2000, Singapore’s chemical industry has been experiencing strong growth. Just last year alone, the chemical industry grew by 10% to exceed S$74 billion in manufacturing output, on par with the electronics sector, which has for a long time been the largest manufacturing sector in Singapore.

Japanese companies such as Denka have played a big role in this. You trusted and stood by Singapore in the development of our chemical industry. From your early beginnings with your first acetylene black facility in 1983, Denka’s operations in Singapore have blossomed over the years.To date, Denka has invested an estimated S$300 million in Singapore, and is home to 170 employees. We would like to express our sincere thanks to Denka for your continued confidence in Singapore, and for playing such an instrumental role in the growth of our chemical industry.

Singapore’s Approach to the Long Term Growth of the Chemical Industry

With the rapid pace of development in the global chemical industry, it is imperative that Singapore maintains our competitiveness and our relevance to the industry. To do so, we have to anticipate trends and potential issues early, and respond effectively.

Today’s chemical industry is undergoing robust growth. Investment sentiments in Asia and the Middle East are strong. With this surge of activity, we are mindful that competition for resources is intense. We have to manage it well. Otherwise, costs could spiral out of control and as a result, projects may be delayed or even cancelled. While we recognise that global factors, such as material costs, would be beyond our control, we believe that we can play an active role in managing local risk factors that may lead to increased costs. Singapore has a reputation for quality and timely execution of projects, and we want to work hard to ensure that Singapore keeps to that reputation.

Initiatives to Manage the Construction Boom

We will take a holistic and multi-faceted approach to manage the construction boom.

Firstly, Manpower. To ensure that companies have access to the necessary manpower resources, we have been enhancing our manpower policies. With effect from 1 April 2007, the dependency ratio for the construction and process industries will be raised from 1:4 to 1:5.

Secondly, Efficiency.We want to ensure that the resources available are efficiently utilised. Going forward, contractors in the process industry will be allowed to cross-deploy their workers so as to optimise manpower utilisation.

We are also upgrading the JurongIsland checkpoint to facilitate smooth traffic flow in view of the expected surge in traffic, while not compromising on the security of the island. With this upgrading, we aim to decrease the expected peak hour queue time at the check point from 78.4 minutes to 9.7 minutes.

To minimize bottlenecks that may arise due to accreditation of new foreign workers, the Association of Process Industry (ASPRI) and our local Institutes of Technical Education are exploring the possibility of setting up a one-stop localized training and testing centre.

Thirdly, Communication.We will continue to communicate with the Engineering, Procurement and Construction (EPC) companies, to ensure that the EPCs fully comprehend the initiatives that have been put in place, and respond confidently with sensible bids.

Finally, Feedback. We are committed to work with companies and listen to your feedback, so that we can continue to be a location where investors feel assured that their projects will be implemented seamlessly and efficiently.

Developing Talent Resource for Sustainable Growth

Beyond the immediate term, we believe that the availability and quality of talent is a key factor for the sustainability of our chemical industry. The government has placed a strong focus on science and technology, to build up a local talent pool for knowledge- and technology-intensive activities. Today, our local universities and polytechnics churn out more than 1,000 chemical-related graduates yearly. To complement classroom and lab experience, we also have the Chemical Process Technology Centre, a uniquely Singapore training school which equips 500 students per year with live-plant training skills. We will continue to profile this industry, to engage the newer generation, and ensure a steady flow of fresh graduates each year.

In addition, we aim to complement this local pool by attracting foreign talent through open immigration policies and world-class education institutions. We trust that a diverse and rich talent resource will pave the way for sustainable growth and the diversification of the chemical industry towards higher value activities.

Conclusion

I’d like to conclude by assuring you of Singapore’s commitment to help our investors maintain and improve their competitiveness. I am confident that Denka will successfully leverage on Singapore’s strengths for its future growth and development.

Once again, my heartiest congratulations to Denka on the opening of your styrenics facility and your partnership with Singapore. I wish everyone great success in all your endeavours.

Thank you.