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Singapore Chemicals Report 2009Published by: Business Monitor International Published: Jul. 13, 2009 - 37 Pages Table of Contents
AbstractMarket OverviewThe Singaporean chemicals industry is one the largest sectors in Singapore. The Singaporean governmenthas been promoting the industry since the mid-1990s, with the aim of increasing the share of chemicalsand petrochemicals of total manufacturing output to 30% by 2010. The country has a chemical complexon Jurong Island, Singapore, acting as a base for more than 94 domestic and international companies. Thechemical industry output accounted for about SGD98.1bn (US$65.05bn) in 2008, contributing more thanone-third the country’s manufacturing output. Industry Performance Manufacturing output shrank by 13.5% year-on-year in December 2008. The growth of the sector wasaffected throughout the year by the fluctuation in biomedical manufacturing output. The three-monthmoving average index for December declined 10.5% and the seasonally adjusted month-on-month indexfor December was 11% below that of the previous month. For the full year in 2008, total manufacturingoutput dipped 4.1% compared with 2007. Fixed asset investment (FAI) in Singapore’s chemical industrywas reported at SGD8.55bn (US$5.68bn) for the January-December 2008 period. Industry Developments In January 2008 it was reported that Finnish refining and marketing company Neste Oil will be investingSGD1.2bn (US$800mn) to build an 800,000 tonne per year plant to manufacture biofuel. The plant willproduce NExBTL, which is thought to be the cleanest renewable diesel available. The plant will use thecompany’s proprietary technology and will use palm oil as the main input material. Construction willbegin in 2008 in the Tuas Industrial Zone with completion expected in 2010. In February 2008 it was reported that Nikko Chemicals had invested SGD38.4m (US$ 25.4) in a newsurfactant plant to make ethoxylated surfactants that would be used in the cosmetic industry. The site is tobe built on Jurong Island over 1.2 hectares (ha) and is expected to be operating by 2009, producing 3,000tonnes in its first two years. Later the month it was reported that the Germany-based LANXESS willinvest SGD823mn (US$545) in building a production plant on Jurong Island to manufacture 100,000tonnes per year of butyl rubber. Construction will begin in 2009 and by 2010 supply of the raw materialrequired by the plant, Raffinate 1, will be delivered by Shell Eastern Petroleum to the site. The plant isexpected to require more than 200 staff once fully operational. Meanwhile, in June 2008 Samsung and Sitronic opened a SGD1.36bn (US$0.9bn) 300mm silicon waferfactory in Singapore. The factory, which began production in June, should have the capacity to produce300,000 wafers each month by 2010, making it one of the largest wafer factories in the world. In October2008 it was reported that Japanese firm Kanto Kagaku, which makes speciality chemicals, beganconstruction on a SGD30mn (US$19.9mn) manufacturing plant and laboratory based in Tuas. Operationsare expected to begin in the last quarter of 2009, when production of highly purified chemicals will begin. SGD Future Risks The economic downturn and weak demand is expected to have a significant effect on manufacturinglevels and immediate investment. Singapore is also experiencing a threat from resource-rich countries such as Indonesia and Malaysiawhere there are indigenous hydrocarbon feedstock resources and low production costs for petrochemicals.If these countries improve their support infrastructure and, in the case of Indonesia, address politicalstability concerns, they may attract business that might otherwise go to Singapore. Similarly,diversification from oil to petrochemicals in Middle Eastern economies may provide new competition forSingapore. China and India continue to increase their capabilities within this sector and this may alsoinfluence Singapore’s position in the chemicals industry. The introduction of the EU Registration, Evaluation, Authorisation and Restriction of Chemicals(REACH) legislation is expected to be one of the biggest obstacles in the future of Singapore’s chemicalindustry, and failure to educate chemical companies on compliance could result in a decrease of exportlevels to the EU, which accounts for a significant proportion of Singapore’s exports. Get Full Details About This Report >> |
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