Mr Lim Hng Kiang at the Russia-Singapore Business Forum

OPENING ADDRESS BY MR LIM HNG KIANG, MINISTER FOR TRADE & INDUSTRY, AT THE RUSSIA-SINGAPORE BUSINESS FORUM, 20 MARCH 2006, 0905 HRS, RAFFLESCITY CONVENTION CENTRE

Introduction

Mr German Gref, Russian Minister for Economic Development & Trade

Distinguished guests

Ladies and gentlemen

Good morning. It gives me great pleasure to extend my warmest welcome to Minister German Gref to Singapore. Your first visit to Singapore is significant, and your presence at this inaugural Russia-Singapore Business Forum, coupled with the strong turnout of Russian businessmen and officials, bear testament to the growing importance of the links between our countries.

Growing Economic Ties

I am pleased to note that Singapore and Russia have strengthened economic ties in recent years. Our bilateral trade has increased more than 50% from S$879 million to S$1.32 billion over the past 3 years. There are also growing investment interests in Russia. Temasek Holdings has formed a joint venture with leading Russian investment bank, Troika Dialog, to start a US$150 million private equity fund, targeting at Russia’s growing sectors such as retail, consumer goods and logistics. Master Beverage and other Singapore food-related companies have also re-invested in packaging facilities in Russia, to meet rapidly rising consumer demand.

In the area of tourism, it is encouraging to see 30% growth in visitors from Russia last year. With the recent launch of Singapore Airlines’ thrice-weekly flight between Moscow and Singapore, we foresee twice as many business and tourist visitors from Russia this year.

These growing ties are fuelled by strong economic growth as well as economic reforms within Russia. In a move to diversify its resource-dependent economy, Russia is also developing Special Economic Zones to attract more foreign investments. In this area, Singapore is glad to share with Russia our experience in developing SEZs both locally and in other countries. We hope this will help to shorten Russia's learning curve and help you to quickly build up a strong team of senior managers who understand SEZs and how to manage their implementation. Last month, Singapore hosted officials and project managers from the six shortlisted SEZ regions, who were here to study how Singaporebuilds and manages our industrial and technology parks. By adapting the best practices they have observed here in Singapore and other SEZs, we hope they will help foster a pro-business and pro-investment environment back in Russia that is crucial to the success of SEZs.As a small strategic partner, we hope that our experience and know-how can help Russia adapt and develop its own SEZ model, a model best suited for Russia's requirements.

Singapore as a Hub and Partner
 
These bilateral developments are a positive indication of the potential for our countries to work together. Moving ahead, as we deepen our collaboration, I would also like to invite Russian enterprises to leverage on Singapore as a hub and partner, to tap on the growth of Asia and the world.
 

Singapore is already host to more than 7,000 MNCs. Like many foreign firms, Russian companies which set up in Singapore can benefit from our pro-business policies, superb infrastructure, and our connections to global markets. For instance, you can reap preferential benefits from our extensive network of bilateral Free Trade Agreements with countries such as the US, Japan, and the Middle East.
 
Russian firms can also tap on Singapore’s companies’ extensive networks in Asia and their strong understanding of the region’s business practices. Russian companies from a variety of sectors, from shipping to certification, have to date found Singapore an ideal springboard to reach out to Southeast Asian markets. For instance, GOST-Asia, the Certification body for products exported to Russia from Asia, has operated in Singapore since 1992. Over this period, it has built up a substantial customer base comprising major consumer products and industrial equipment manufacturers from Singapore, Malaysia, China and Japan among others, using Singapore as its hub.
 
I am pleased to note that OPORA, the Russian SME association, has experienced Singapore’s dynamism as a meeting place for partnerships in Asia during Singapore’s Global Entrepolis matchmaking event in October 2004. During the same trip, they had signed a Memorandum of Understanding with the Singapore Business Federation to further SME collaboration and matchmaking. I look forward to seeing Russian and Singaporean firms teaming up not only in our countries, but also in third markets in the region and beyond.

Russia is a leading producer of numerous commodities such as oil and gas, iron ore, non-ferrous metals, gold and platinum. For Russian traders, Singapore could be an ideal trading node in Asia. We are home to over 170 international trading companies, including oil majors and traders such as BP, ExxonMobil, and other oil traders such as Vitol and Glencore. As an approved delivery point for plastics and metals traded on the London Metal Exchange, we also host the trading operations of global steel players such as Arcelor, Stemcor, Tata and Baosteel.
 
Several Russian companies are already tapping the advantages of Singapore for their offshore trading operations. For example, Lukoil trades crude oil and refined oil products both from Lukoil sources and from 3rd parties through its Singapore operations Lukoil Asia Pacific. It was ranked as Singapore’s fastest growing company by DP Group in 2004.
 
The success of companies such as Lukoil and GOST Asia re-affirms the attractiveness of Singapore as a place to leverage on the growth of the region – another scope where both countries can work closer economically.
 
Conclusion
 
I look forward to continue our mutual discovery, learning and engagements. Today’s forum offers an opportunity to know Russia better, network and build friendships. I encourage everyone here to make full use of the panel discussions during this forum. To our Russian friends, I hope you will get to know Singapore better, and leave with good memories.
 
I wish you all a very pleasant and fruitful day ahead. Thank you.