Mr Lim Hng Kiang at the Global Trader Networking Dinner 2009

opening ADDRESS BY MR lim hng kiang, MINISTER FOR TRADE AND INDUSTRY,AT THE global trader NETWORKING Dinner 2009 ON tUESDAY 26 May 2009, 7.25 PM AT RAFFLESCITY CONVENTION CENTRE  

Distinguished Guests,

Ladies and Gentlemen,

Good evening.

It is my pleasure to join you at the Global Trader Networking Cocktail.

The Global Trader Programme Twenty Years on

Twenty years ago, the Ministry of Trade and Industry introduced the Approved Oil Trader (AOT) Programme to capitalise on Singapore’s growing role as a refining centre in the region.This was subsequently followed by the Approved International Trader (AIT) Programme, which complemented the AOT by attracting non-oil companies.Twenty years on, its successor programme, the Global Trader Programme (GTP), has surpassed the expectations of even the most optimistic views.Singapore is now one of the top global oil trading centres, with pricing for Asian oil products taking place here. Over 100 leading energy companies have set up their oil trading, marketing and supply operations in Singapore. A vibrant supporting ecosystem comprising bankers and brokers has also blossomed.

In addition, Singapore has expanded beyond oil to become a compelling commodities trading hub.For instance, we have built on our role as a small rubber trading nation to become a global rubber trading hub today.There is now an ecosystem of companies in the rubber industry with activities spanning across the entire value chain. This includes global tyre manufacturers such as Goodyear and Bridgestone, which have chosen to locate their global rubber procurement hubs in Singapore.

Furthermore, there is a diverse community of suppliers and traders from the region, such as Singapore’s Lee Rubber, Thailand’s Von Bundit, China’s Sinochem International and Indonesia’s Incasi Raya.

These developments have translated into a marked increase in the number of companies under the GTP.Tonight, we recognise the 53 new companies that have been granted GTP status, as well as the 38 companies that have successfully renewed or upgraded their status.Some of these companies, such as Shell, BP and Vitol Asia, have been under the Programme since its inception.

The GTP has also played an instrumental role in nurturing and supporting local companies.For example, Singapore-headquartered Kuo Oil, set up by businessmen Peter Fu and Ong Beng Seng in 1988, is a leading home-grown oil trading group that has expanded into oil storage.Similarly, another company, Wilmar International, is now the world’s largest integrated palm oil group and one of Asia’s largest agri-business companies.These players add a strong local flavour to our commodity trading cluster.

Strengthening our risk management capabilities

The volatility in the past year has put the spotlight on risk management.One of the tools for managing risk is the use of derivatives.However, products and contracts specific to the Asian markets remain lacking as most derivative exchanges in Asia are largely domestic-focused.Similarly, commodity futures exchanges are still a fledgling area in Singapore, with most of our derivative transactions taking place over-the-counter.But we have seen some positive movements recently, with the Singapore Mercantile Exchange (SMX) preparing to launch a commodities futures exchange in Singapore. At the same time, the SGX is gaining traction with their Asiaclear platform and recently launched an iron ore swap product.

Building our human capabilities

Commodity trading remains very much a talent-driven industry and Singapore’s open arm policy has helped many companies bring in talented trading professionals to Singapore.At the same time, we have looked to develop our talent pool locally.The decision to set-up the International Trading Institute (ITI) at the SingaporeManagementUniversity in 2007 is one such initiative.The first batch of graduates has since found employment with GTP clients such as Cargill, Shell, Vitol, BHP and Louis Dreyfus.Beyond the undergraduate programmes, the ITI has also launched a series of professional education programmes to train professionals, and provide structured training courses to help new hires and supporting functions quickly gain an understanding of the trading industry.

Conclusion

Even as we celebrate our success this evening, it is important to look forward and position ourselves for the future.Although the outlook for 2009 remains challenging and uncertain, Singapore continues to enhance the environment and infrastructure for the commodity trading industry to prepare for the eventual upturn. I look forward to your participation in these development efforts.Once again, may I congratulate all Award recipients of the Global Trader Programme and I wish you a pleasant evening.

Thank you.