Mr Lim Hng Kiang at the Groundbreaking Ceremony of JAC’s Aromatics Complex, 26 Aug 2011

SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE GROUNDBREAKING CEREMONY OF JAC’S AROMATICS COMPLEX FRIDAY, 26 AUGUST 2011 AT 3.15 PM, JURONG ISLAND

Your Excellency, Mr Oh Joon, Ambassador of Republic of Korea,

Mr Mehdi Adib, Chief Executive Officer, Jurong Aromatics Corporation (JAC),

Board of Directors, JAC

Distinguished guests,

Ladies and Gentlemen,

Good afternoon. I am pleased to join you here on Jurong Island to celebrate the groundbreaking of JAC‟s Aromatics Complex. This is a significant milestone for Singapore‟s chemicals industry. When completed, it will be one of the largest in the world, with paraxylene production capacity of 800 thousand tonnes per annum (ktpa).

Introduction

In recent months, the global economic outlook has become more uncertain. The ongoing sovereign debt crisis in Europe and fiscal deficit challenges in the U.S. threatens to dampen global growth. On the other hand, the growth prospects for Asia remain promising. Asia‟s rising standards of living, increasing urbanisation, and a strong demographic trend continues to attract a strong flow of capital investments.

The strong demand for aromatics in Asia is a clear example of Asia‟s growing needs. Asia alone accounts for more than two thirds of the global demand for paraxylene. The strong and growing demand for paraxylene is driven by two key factors. First, polyester fibres production is migrating from Western Europe and North America to Asia, in particular China. The other factor is rising demand for paraxylene to produce plastic bottles and synthetic fibres

Singapore, a strategic vantage point in the region

In this regard, Singapore is well-placed to be a key vantage point for companies keen to ride the Asian Growth Story. Our strategic location in the heart of Asia, high connectivity and a well-integrated physical infrastructure are some of the factors that have made Singapore a global hub in Asia. We have also ensured that companies setting up bases in Singapore are provided with a conducive operating environment.

Jurong Island is a good example. It is home to Singapore‟s energy and chemicals industry. Through its excellent „plug-and-play‟ infrastructure and logistics connectivity, companies on the island also enjoy synergies through product innovation as well as cost savings. To date, over 95 global companies have invested more than over $30 billion on the island. These investments have helped to make Singapore a leading global energy and chemicals hub.

To maintain this lead, the Singapore Government remains committed to enhancing the long-term competitiveness and sustainability of the industry.

Last year, we launched the “Jurong Island version 2.0”, a new masterplan developed by a multi-government agency team as well as key industry players to propel the next phase of growth for the chemical industry. The masterplan focuses on key areas of energy, logistics and transportation, feedstock options, environment and water to improve energy efficiency and overcome resource limitations on the island.

Another long term investment we have made is the construction of the Jurong Rock Cavern. When completed by 2013, the facility will offer companies an innovative underground storage solution on the island. This in turn also frees up land for higher value manufacturing operations. I understand that JAC is the first company that will utilise the Jurong Rock Cavern for storage of its condensate feedstock.

Singapore, a trusted location for forging new business partnership opportunities

Our efforts to support the growth of the energy and chemical industry continue to help garner key investments for Jurong Island. New regional investors have also shown confidence in Singapore. Many are keen to use Singapore as a launching pad, to internationalise and grow their businesses in Asia from Singapore.

One of the latest being JAC‟s Aromatics Complex project. A joint venture involving eight leading international stakeholders, this project exemplifies the confidence investors have in Singapore as a trusted location for international companies to forge new business partnership opportunities.

The Singapore Government, on its part, will continue to make Singapore an attractive investment destination. Here on Jurong Island, we will continue to support the integration with petrochemicals and speciality chemicals and generate value for Singapore-based activities. The completion of JAC‟s Aromatics Complex will also further add to the vibrancy of the ecosystem of companies on Jurong Island. It will strengthen Singapore‟s status as a key producer of aromatics products. The use of condensates as a feedstock will also add diversity to the feedstock options for chemicals production in Singapore.

Conclusion

In closing, let me extend my heartiest congratulations to the management and team at JAC on the groundbreaking of JAC‟s aromatics complex. We appreciate your confidence in Singapore and I wish JAC every success in the execution of this project. Thank you.