Mr S Iswaran at the Singapore Chemical Industry Council Annual Dinner 2008 and Responsible Care Awards 2007 Presentation

SPEECH BY MR S ISWARAN MINISTER OF STATE FOR TRADE AND INDUSTRY AT THE SINGAPORE CHEMICAL INDUSTRY COUNCIL ANNUAL DINNER 2008 AND RESPONSIBLE CARE AWARDS 2007 PRESENTATION THURSDAY, 27 MARCH 2008, 7.00PM THE BALLROOM, LEVEL 2 OF CONRAD CENTENNIAL SINGAPORE

Dr Chockalingam, Chairman, Singapore Chemical Industry Council

Distinguished Guests

Ladies and Gentlemen,

It gives me great pleasure to join you this evening at the Singapore Chemical Industry Council annual dinner and awards presentation ceremony.

Continued Growth of Singapore’s Chemicals Industry

2 Indeed, we have good reasons to hold such a celebratory dinner as the chemical industry has chalked up healthy growth in the past few years. Last year, the chemicals sector accounted for more than 22,000 jobs and manufacturing output totalled S$83.1 billion.This is an 11 per cent increase over the previous year and represents one-third of Singapore’s total manufacturing output.

3 Jurong Island continues to be the cornerstone of the chemicals industry in Singapore.It is one of the world’s top three oil refining centers and a leading chemicals hub, home to more than 90 companies with investments in excess of S$30 billion.

Challenges Ahead

Global Competition

4 While these are strong numbers, the competition ahead looms large.Middle Eastern economies are diversifying from oil production to building petrochemical hubs of their own.China and India are also building their capabilities.Moving ahead, the volatile US economy as well as legislative changes in Europe, could have serious implications for the overall chemicals industry.

5 Therefore, to ensure that we remain one of the foremost petrochemical hubs in the world and maintain the sector as a key pillar of the manufacturing cluster, we will continue to pursue an aggressive strategy of expansion.With unwavering focus on infrastructure, technology and a total-solutions approach, which integrates innovation, manufacturing, regional distribution, marketing and other services, Singapore will continue to work at offering a cost-competitive and synergistic environment to the world's leading petroleum, petrochemicals and specialty chemicals giants. These include companies like ExxonMobil, Shell and Sumitomo Chemical.To remain a top petrochemical hub, we need to anchor a critical mass of refining and cracking capabilities, which can in turn catalyse further downstream activities in petrochemicals and specialty chemicals.

Impact of the EU’s REACH Regulation

6To keep Singapore ahead, our manufacturers must be faster and sharper than our competitors.One challenge that could potentially affect the growth of Singapore’s chemical industry is the EU’s new regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals, or REACH for short. It was introduced last June to reduce health and environmental risks caused by chemicals. REACH places the responsibility of compliance on importers, requiring them to manage the use of a list of chemicals above a certain quantity, in any product that is brought into the EU market. This means that importers in the EU will require detailed information on your products in order to put them on the EU market.In turn, you will need to communicate these requirements and implement them across your entire supply chain.The chemical industry will be involved in the registration and pre-registration process for REACH, which commences on 1 June 2008.

7 The EU represents a huge market for us. Last year, Singapore exported almost $11 billion of chemicals and related products to the EU, which accounted for 23 per cent of our total exports to the EU.To ensure that we do not lose our market share, it is essential that our chemical product exporters fully understand the potential impact of REACH.

8 A study commissioned by SPRING last year showed that most companies are not adequately prepared to comply with the legislation. It also found that beyond the chemicals clusters, other industries such as plastics, rubber, electrical and electronics, and pharmaceuticals, which are also highly reliant on the EU market, may also be affected because of costly testing requirements under REACH.

9 Therefore to help our companies better understand the technical regulations of REACH, SPRING’s Export Technical Assistance Centre (ETAC) has initiated a series of workshops, commencing this month, aimed at helping companies cope with the new regulations. SPRING and the SCIC are also working closely together to help companies in the chemicals and related industries meet the challenges of complying with the REACH regulation.Tonight’s signing of a Memorandum of Understanding will seal the collaboration between the two parties to help Singapore exporters in the chemical cluster stay competitive in the global market.

Conclusion

10 I urge all enterprises in the chemical industry to work closely with both SPRING and SCIC as you adapt to the global changes affecting your businesses. At the same time, you should remain focused on areas affecting health, safety, security and the environment, which SCIC is actively advocating through its Responsible Care programme. Besides economic considerations, these are important aspects of your business that attest to your commitment to your employees and the environment within which you operate.

11 I understand that 17 companies will be receiving the Responsible Care Awards 2007 tonight and I would like to extend my heartiest congratulations to all winners. You have distinguished yourselves in your respective fields and are an example for others to follow.

12 On this note, I wish all of you an enjoyable evening.

Thank you.