Speech by Minister S Iswaran at the launch ceremony of the Technology Centre for Offshore and Marine Singapore (TCOMS)

​SPEECH BY MR S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY), AT THE LAUNCH CEREMONY OF THE TECHNOLOGY CENTRE FOR OFFSHORE AND MARINE SINGAPORE (TCOMS) AT THE NATIONAL UNIVERSITY OF SINGAPORE ON MONDAY, 31 OCTOBER 2016, 10 AM

Your Excellencies

Professor Tan Chorh Chuan, President, NUS

Mr Lim Chuan Poh, Chairman, A*STAR

Professor Chan Eng Soon, CEO, Technology Centre for Offshore and Marine Singapore (TCOMS)

Distinguished guests,

Ladies and gentlemen,

Good morning.

Introduction

1.            I am pleased to join you today to celebrate the launch of the Technology Centre for Offshore and Marine Singapore (TCOMS).

2.            My congratulations to NUS and A*STAR on establishing Singapore’s first national Research & Development (R&D) centre to advance our Marine and Offshore Engineering (M&OE) industry.  

Marine and Offshore Engineering (M&OE) is an important industry for Singapore.

3.            We launch this Centre at a time of uncertainty in the global economy.    While there has been a general slowdown in economic growth, the impact has been uneven. External headwinds are affecting industries such as wholesale trade, finance & insurance, and M&OE. For instance, growth in the finance & insurance industry has moderated from 5.3% in 2015 to 1.7% year-on-year in the first half of 2016, while the manufacturing output of the M&OE industry has seen several consecutive quarters of contraction. On the other hand, sectors such as information & communications, accommodation, and education, health & social services have remained resilient. For example, the information & communications sector posted growth of 2.1% year-on-year in the first half of 2016. The Government has therefore been closely monitoring the trends and developments in our economy and industries, including the M&OE industry. 

4.            The M&OE industry has made significant contributions to Singapore’s economy, developing specialised design and engineering capabilities in rig building, ship repair and conversion, as well as offshore engineering and construction. These capabilities have enabled the building of increasingly complex products such as drilling and evaluation tools, and ice-class vessels.

5.            Today, the M&OE industry is facing a prolonged downturn due to cyclical and structural forces. This in turn has intensified the sector’s financing challenges in recent months.

6.            Some level of market-driven consolidation is inevitable; some industry players say it is even necessary, to enable the industry to adapt and restructure.

7.            We cannot hold back this restructuring, both to cope with the downturn and to prepare for future opportunities. Yet it is also essential that, in this transition process, the industry does not lose key capabilities that have been developed over the years, and can be built upon for future growth.    

8.            Companies adversely affected by the slowdown can tap on Government measures that are already in place. For example, the SME Working Capital Loan, introduced as part of Budget 2016, helps SMEs with cash flow concerns and financing needs. As stated recently in Parliament, the Government continues to closely monitor the situation and is ready to act if further measures are necessary.

9.              In this connection, the Government is studying, in consultation with the M&OE industry and financial institutions, the need for measures for the sector.  However, while the Government will endeavour to render assistance where appropriate, it cannot be a panacea. It is critical that companies and financial institutions take appropriate measures in their own long term interests - to ensure that good businesses survive, respond to the industry’s challenges and build capabilities for future growth.

TCOMS will be a valuable partner for the M&OE industry

10.         This also brings me to my next point.  Even as we grapple with today’s real challenges in the M&OE sector, we should continue to build capabilities for the long-term and be ready for the next up-cycle. The long-term outlook for the M&OE industry remains positive. The fundamentals of growing energy demand remain unchanged, and oil prices are expected to recover as the market rebalances. According to the 2016 International Energy Agency Mid-Term Oil Market Report, global demand for oil will grow from 95.6 million barrels per day in 2016, to 100.5 million barrels per day by 2020. This backdrop, coupled with the world-class design and engineering capabilities of many of the companies and suppliers in our M&OE ecosystem, augurs well for the long term prospects of the M&OE sector.    

11.         The Technology Centre for Offshore and Marine Singapore will be an important part of the effort to secure that long-term future for the sector. The launch of TCOMS is testament to the government’s strong commitment to investing in the future of the M&OE sector, particularly through R&D.

12.         As part of the development of TCOMS, the Government will be investing close to S$107 million into infrastructure. As a national Centre of Excellence for M&OE research, TCOMS will be accessible to Institutes of Higher Learning (IHLs), public R&D agencies and the industry, and serve as a focal point for M&OE R&D activities in Singapore. It will also partner the Singapore Maritime Institute to engage in maritime research.

13.         I am pleased to note that TCOMS will expand our research capabilities to adjacent and emerging areas, such as renewable energy and marine robotics.  I understand that the deepwater ocean basin facility in TCOMS will enable the coupling of numerical simulations with physical model testing, which will enable complex R&D work to be undertaken, particularly in prototyping and design. In addition, this deepwater ocean basin can also recreate the current and wave conditions of a harsh sea environment. This will allow TCOMS to support R&D around emerging concepts such as remote operations for offshore platforms, underwater robotics, platforms for renewable energy and aquaculture.

14.         Today’s signing of bilateral Memorandums of Understanding (MoUs) between TCOMS and various industry players to explore research collaborations in future M&OE technologies, attests to the new R&D opportunities that TCOMS can support.

Closing

15.         In closing, let me reiterate that the M&OE sector remains an important part of Singapore’s economy, and the Government is committed to investing in its future.  A concerted effort by the Government, industry, IHLs and RIs to drive innovation and transform the sector will help ensure that our M&OE sector emerges stronger, leaner and more sustainable than before to succeed in the new environment.

16.         I wish the entire team at TCOMS every success. Thank you.​​