Mr Lim Hng Kiang at the Official Opening of FTV Proclad (Singapore)'s New Manufacturing Facility

SPEECH BY MINISTER FOR TRADE & INDUSTRY, MR LIM HNG KIANG, AT THE OFFICIAL OPENING OF FTV PROCLAD (SINGAPORE)’S NEW MANUFACTURING FACILITY ON MONDAY 29 MAY 06, 5.50 PM

Dr Adel Khalid Al Sabeeh, Proclad Group Chairman,

Mr. Yaseen Mohamed Jaffer, Chief Executive Officer of Proclad Group,

Distinguished guests,

Ladies and gentlemen,

Good afternoon,

Introduction

It is a great pleasure for me to be here today to launch FTV Proclad (Singapore) Pte Ltd, or Proclad Singapore. The Proclad Group is a world leader in the provision of protective weld cladding services to the oil & gas industry.

Singapore is Opening up New Geographies by Increasing Investments from The Middle East

This opening in Singapore represents Proclad’s first manufacturing investment in the Asia-Pacific. Proclad Singapore will also be the first Kuwaiti manufacturing investment in Singapore. I understand that Proclad intends to use Singapore as its strategic node for the Asia-Pacific. Other Kuwaiti business presence here includes Kuwaiti Petroleum Corporation, PWC Logistics and the National Bank of Kuwait.

We have also seen increased investments from other parts of the Middle East, in sectors like logistics and airport management services, oil terminaling and private equity. We welcome more enterprises, like Proclad and parent company NI Group, from the Gulf region to partner Singapore as they internationalize their businesses. Singapore can be a trusted value-adding hub for these companies tapping on Asia’s growth, to undertake activities like manufacturing, business development, product test bedding and investment management. By harnessing the complementary strengths of the Middle East and Singapore, this makes for an enriching two-way relationship.

Singapore is a Houston of the East

The fact that world-class oil & gas companies, like Proclad, invest in Singapore is testimony to Singapore’s attractiveness as a center for oil & gas exploration and production.

The Oil and Gas industry is a very important one for Singapore. Today, we have a comprehensive oil & gas ecosystem in place, including oil majors, drilling operators, specialized equipment manufacturers, service providers, and offshore engineering companies.

Currently, Singapore is by far the world leader in the construction of oil rigs and the conversion of Floating Production Storage and Offloading platforms (FPSOs) with a dominant 80% and 70% of the respective markets. Furthermore, Singapore has the largest base of oil & gas equipment manufacturing companies in Asia, making sophisticated products such as drill bits, wellheads, down hole and production equipment. Besides Proclad, other global players such as Schlumberger, Halliburton, Cameron, FMC and Vetco Gray also have significant manufacturing and services operations in Singapore. The presence of Proclad in Singapore will further reinforce our oil and gas ecosystem.

The manufacturing output of the offshore and oilfield equipment sectors grew 25% in 2005 to a high of $2.8 billion. We project more strong growth over the next 5 years as shipyards and equipment manufacturers continue to invest heavily in expanding their manufacturing operations in Singapore to address the booming demand for their products.

What Singapore provides for these companies are our highly-skilled & productive workforce, our strong fundamentals in electronics and mechanical engineering, our comprehensive supporting industries, and our overall cost-competitiveness and efficiency. All these factors enable companies such as Proclad to deliver high-quality products to global customers.

Singapore is Developing New Technologies for Deep water Exploration & Production

Singapore is also determined to move up the value chain into more design and development activities to grow our oil and gas ecosystem. One area is in the development of new technologies for deep water exploration and production.

This area is important as the development of deep water oil & gas fields is a growing trend globally. Accessing these hydrocarbons will require new technologies to address the high temperatures, high pressures and corrosive elements encountered in this environment.

What makes Singapore an ideal location from which to develop and exploit new technologies are our availability of engineering talent, excellent research infrastructure and strong intellectual property protection. Furthermore, we have embarked on a strategy to develop specialized capabilities and manpower to meet the stringent demands of the oil & gas industry.

Our commitment is evident from our establishment in 2004 of the Centre for Offshore Research & Engineering (CORE) at the National University of Singapore to spearhead joint R&D and manpower development with the industry. In response to the local industry’s demand for specialized skills, we have worked with the industry to introduce a 2-year offshore oil & gas technology specialization for mechanical engineers at the National University of Singapore. I understand that the interest amongst students was so strong that there were twice as many applicants as there were places in the course.

Proclad’s announcement to develop new high-technology coatings for applications in the oil & gas industry is therefore especially important to us as it strengthens our local R&D capabilities and testifies to our suitability as a location for high-end R&D.

Conclusion

I believe Proclad shares Singapore’s optimism in the growth prospects of the oil & gas equipment and services industry. Proclad’s investment is a firm endorsement of its confidence in Singapore’s attractiveness as a manufacturing and R&D location.

I would like to thank both Proclad and its parent company, NI Group, for your confidence in and commitment to Singapore. I congratulate the management and staff and wish you all every success as you grow your business in Singapore and the Asia Pacific.

Thank you.