Mr Lim Hng Kiang at the Groundbreaking Ceremony of Lanxess' New Butyl Rubber Plant, 17 May 2010

SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE GROUNDBREAKING CEREMONY OF LANXESS’ NEW BUTYL RUBBER PLANT ON 17 MAY, 10AM AT TEMBUSU, JURONG ISLAND

Dr Axel Heitmann, Chairman of the Board of Management, Lanxess AG

Dr Werner Breuers, Member of the Board of Management, Lanxess AG

Distinguished guests

Ladies and gentlemen

Good Morning.

Introduction

It is my pleasure to join you today to celebrate the groundbreaking of Lanxess’ new Butyl Rubber plant on Jurong Island.

Emerging Opportunities in Asia

I understand this plant is Lanxess’ single largest ever investment globally. It reflects the positive growth trends in Asia as well as growing awareness amongst global companies of the emerging opportunities in Asia. I also welcome Lanxess’ decision to relocate its Butyl Rubber Global Headquarters and its top management team to Singapore. It affirms Singapore's value as a strategic vantage point in the region for global companies. We offer a very conducive environment for global companies seeking a home base from which to tap into the emerging markets of Asia.

Chemical Industry in Singapore – Preparing for the Next Phase of Growth

Lanxess’ new investments in Singapore gives further diversity to Singapore’s chemical sector.As a key driver of our economy, the chemical sector contributes about one third of Singapore’s total manufacturing output in 2009.This has helped to make us a leading global energy and chemicals hub. To maintain this lead, we will be embarking on the “Jurong Island version 2.0” initiative. A key strength of our chemical sector has been its seamless integrated ecosystem from feedstock through to logistics and utilities services. This initiativewill further enhance the infrastructural developments on Jurong Island. It was developed in close partnership with the industry and will focus on areas such as system-level energy efficiency solutions and new competitive feedstock and logistics options. It will also look into optimising the use of valuable resources such as energy, land, and water.

A key reason Lanxess is basing its new Butyl Rubber plant in Singapore, as Dr Heitmann has said, is because we have a superior workforce. Indeed, for our chemical sector to continue to grow, we will ensure there is a sufficient highly-skilled talent pool in Singapore. This is essential for companies such as Lanxess that seek to introduce complex “first-of-its-kind” production facilities in Singapore. Through our schools and institutions like the Chemical Process Technology Centre (“CPTC”), we continue to train and equip future generations of workers with the necessary skills and knowledge to meet the demands of the chemical industry.

Growing the Specialty Chemical Sector

We will also focus on growing the specialty chemical sector.Last year, this sector contributed more than half of the chemical cluster’s total value-added. It is a key sector that will be instrumental in moving the chemical industry higher up the value chain. Earlier this year, the government made a commitment to grow R&D spending to 3.5 per cent of GDP over the next five years.This bodes well for the specialty chemical sector with its strong focus on R&D to create new products and solutions.Companies in the specialties chemical sector can also tap on partnerships with research institutes such as the Institute of Chemical and Engineering Sciences (“ICES”).

The outlook for our specialty chemical sector also looks extremely promising. We are located in region with fast growing demand for more specialty and higher value chemicals and polymers. Lanxess’ Butyl Rubber is one good example of a high-value added specialties product in high demand.It is an essential component used in the manufacturing of products such as high performance tyres which Asia’s growing automotive market needs. Indeed, Lanxess’ plant in Singapore is a key milestone in our plans to grow the specialty chemical sector. It will be the largest Butyl Rubber manufacturing facility in Asia and will make Singapore a key supplier of Butyl Rubber to the region. 

Conclusion

In closing, I would like to extend my heartiest congratulations to the management and staff of Lanxess on the groundbreaking of the Butyl Rubber plant.We are happy to have a partner like Lanxess who continues to take a long-term view on your investments. Thank you for your trust and confidence in Singapore. I wish Lanxess every success in the execution of this project.

Thank you.