Mr Lim Hng Kiang at the VIP Dinner for the Asia Petrochemical Industry Conference (APIC)

SPEECH BY MINISTER FOR TRADE AND INDUSTRY, MR LIM HNG KIANG, AT THE VIP DINNER FOR THE ASIA PETROCHEMICAL INDUSTRY CONFERENCE (APIC), TOWER CLUB, ON TUESDAY 27 MAY 2008 AY 7.05 PM 

Dr Chockalingam, Chairman of Singapore Chemical Industry Council Limited (SCIC),

Chairmen of the APIC Steering Committee Member Associations,

Distinguished guests,

Ladies and gentlemen,

Good Evening,

It gives me great pleasure to welcome all of you to Singapore for the Asia Petrochemical Industry Conference (APIC) 2008.Since its humble beginnings as East Asia Petrochemical Industry Conference, APIC has grown to become the premier event for the Asian petrochemical industry and Singapore is honoured to be hosting the event for the first time since we joined APIC in 2000.It is encouraging to learn that of the more than 400 companies are represented here, many of them have significant activities in Singapore.This is a reflection of how Singapore’s petrochemical industry is very much intertwined with that of Asia’s.

The Age of Asian Petrochemicals

In view of the buoyant Chinese and Indian economies, the Asian petrochemical industry has been enjoying strong growth in recent years.In fact, Saudi Basic Industries Corporation (SABIC)recently predicted that the Asian demand for petrochemical products will outstrip the combined demand of the US and Europe within the next two years.In tandem with this strong growth in demand, we are seeing major investments being made all over Asia.China, for example, is rapidly expanding both its ethylene capacity and the resultant downstream derivatives production in areas such as the ShanghaiChemicalIndustrial Park, with investments from petrochemical majors such as BASF and Huntsman.

This phenomenon has led many people to believe that we are now in the age of Asian Petrochemicals.While the Middle East has abundant feedstock at competitive prices and has attracted their fair share of investments, what sets Asia apart are the sound fundamentals of demand in the Asia-Pacific region, which many believe will keep the boom going for some time.

With this positive outlook as a backdrop, there are ample opportunities for multiple petrochemical hubs to develop in Asia to capture a slice of this fledging industry.At one end of the spectrum, market-driven hubs such as China and India are relying on the proximity of huge domestic markets to capture value.At the other end, export-driven hubs such as Singapore are leveraging on their logistics connectivity to serve regional markets, adding value through integration and technology.While competition exists between these hubs in the attraction of investments, there is ultimately much to be gained if the hubs are tightly connected.With linkages in areas such as free-trade agreements and the mutual sharing of best practices, the robustness and sustainability of the whole system can be significantly enhanced.

Singapore Leads: Model of Sustainable Development

As petrochemical companies expand their footprints in these Asian hubs, demands will be put on resources such as labour and materials, causing construction costs to escalate.Rising energy costs will further add to the strains.Singapore is not immune to these challenges.We are therefore working closely with companies to do all we can – both in terms of ensuring flexibility in our policies as well as providing a robust infrastructure - to help companies in Singapore to execute their projects successfully and safely.

Equally important is the challenge to ensure that this wave of growth is done responsibly and in a sustainable way, especially with regards to the environment.As climate change issues increasingly move to the forefront of global social and political agenda, it is important that key industries like the petrochemical industry take leadership in driving responsible practices.

Singapore is mindful of this need to play our part as a global citizen and ensure not just the competitiveness, but also the environmental sustainability of our petrochemical industry.We would like to offer JurongIsland as a model of sustainable development.In partnership with companies on JurongIsland, the Singapore government is taking pragmatic steps towards enhancing energy efficiency, attain water self-sufficiency and manage emissions of Nitrogen Oxide (NOx), Sulphur oxide (SOx) and carbon dioxide.

Singapore Differentiates: Focus on Technology

To this end, I believe that technology will be the key enabler.New innovations are driving the development of new processes that are more energy efficient, generate less waste and result in better yield.One such example is Lucite’s first commercial-scale Methylmethacrylate (MMA)facility using its latest Alpha technology, now being constructed in Singapore.Unlike conventional processes, it does not require the use of hydrogen cyanide (a highly toxic gas) as raw material, and its process is expected to be almost 40% more energy efficient.

Technology and innovation is also critical not only to create new products that people need, but are also manufactured through more environmentally friendly processes.Singapore is investing heavily in our technology infrastructure, and working with companies to establish new innovation centres to develop new products that serve the Asian, and global markets.BASF’s Nanostructured Surfaces and Organic Electronics lab, 3M’s new Superhub Campus and Mitsui Chemical’s new catalysis labs are just a few of such examples.

Conclusion

Asia will play a significant role in defining the future landscape of the global petrochemical industry.Singapore looks forward to participate and contribute to this.It is through these forums like APIC where the leaders of the industry can meet, exchange views, and steer this industry forward.With that, I wish all of you a successful and rewarding conference, and an enjoyable evening.Thank you.