A Growing Chemical Center in Asia
Singapore is a Major Location for the Global Chemical Industry and Keeps Developing its Assets
As a country with almost no natural resources and limited land space of only 710 km2 (slightly more than three times the size of Frankfurt, Germany), Singapore's chemical industry is an unlikely success story.
Today, Singapore's chemical industry contributes 37% to the total manufacturing output and is one of the most important economic pillars in the city state. Key to Singapore's reputation as a chemical hub is Jurong Island, made up of seven small islands joined together.
To date, almost 100 leading global petroleum, petrochemicals and specialty chemicals companies have set up subsidiaries there and have invested over €25 billion. With its dedicated „plug and play" infrastructure, Jurong Island enables these companies to enjoy cost savings through shared third-party utilities and services, and at the same time build synergy through product integration.
Chemical companies include BASF, DuPont, 3M, Evonik Industries, Lanxess and Clariant. Besides manufacturing, these companies also have their regional headquarters or research & development functions located in Singapore due to the country's conducive business environment. The World Bank consistently ranks Singapore as one of the easiest places to do business.
Large Pool of Highly Qualified Employees
Three quarters of the people employed in Singapore's chemical industry are locals. They are particularly appreciative of their employers, as they not only offer the best paid jobs in the production sector but also a large number of positions for highly qualified workers such as technicians and engineers. Specialty chemicals manufacturer Evonik Industries readily taps on Singapore's talent pool of engineers and technicians. Several hundred jobs are occupied by well-trained locals.
Internationalizing in Asia from Singapore
German specialty chemicals group Evonik Industries came into existence in 2007, but its history goes far back. The former company Degussa has been active in Southeast Asia, Australia and New Zealand ever since the 1920s. In 2008, the company set up its first production plant on Jurong Island, producing oil additives. As the company grew in Asia, it was a logical next step to make Singapore its regional office in 2009.
And in 2014, the company set up Evonik's first-in-Asia methionine complex. This plant has an annual capacity of 150,000 metric tons of DL-methionine, which is an important amino acid that is added to modern animal feed. The new methionine complex in Singapore officially came on stream on November 4, 2014 after two years in construction. The company has spent over €500 million on the plant, the most it has ever invested in a single chemical project.
The new system is one of the most modern throughout the world. It will considerably strengthen Evonik's position as one of the worldwide market and technology leaders. The choice of Singapore as the site for the new methionine complex was due not only to the excellently trained people there, but also because of its excellent logistics and its connections with the petro-chemical industry.
In recent years, other German chemical companies have made manufacturing investments on Jurong Island, including Lanxess' combined investments of over €600 million in butyl rubber and neodymium-polybutadiene rubber plants. At the same time, there were expansions to Evonik's oil additives and BASF's anti-oxidants plants. Chemical companies continue to invest in R&D from Singapore, such as Evonik's new innovation center for coating additives, Wacker-Chemie's expansion of the technical center for consumer chemicals, and BASF's joint research with the National University of Singapore in graphenes.
Non-German chemical companies have also benefitted greatly from leveraging Singapore as their key manufacturing hub. ExxonMobil's new, second petrochemical complex - costing an estimated €3.8-4.6 billion - is the US energy giant's largest investment here and also Singapore's largest manufacturing investment ever, bringing ExxonMobil's total investment in the city state to well over US-$10 billion. "But that's not the end of the story," ExxonMobil Chemical's president, Steve Pryor, assured, disclosing that the group was already planning additional specialty plant investments, including for butyl rubber used for tires, and premium resins for adhesives. "ExxonMobil views the Singapore complex as a platform for future growth," he added. Mr Pryor explained that when the company built its first petrochemical complex in Singapore back in 2001 "it marked a strategic shift in our manufacturing footprint to Asia", adding that "it also reflected our belief that Singapore would be the optimal base for serving the market in Asia".
Chemical Industry in Singapore Continues to Transform and Grow
Singapore plans to continue building on its success by attracting even more chemical companies, particularly those focused on green technologies and specialty chemical products. As the world population grows from 7 billion people to a projected 9 billion in 2050, the world's resources, and our ability to feed and fuel this growth, will increasingly come under strain. And solutions (from specialty chemical companies) that allow for greater resource productivity are therefore critical.
Evonik Industries Innovation center Tego in Singapore, which is part of the company's global R&D network, is a good example for developing such solutions. From its Singapore-based location, the company caters to manufacturers in the paint and coating industries in Asia by providing support in the production of environmentally compatible painting systems.
The Singapore government also plans to improve both the competitiveness and sustainability of Jurong Island with a strategic blueprint focused on infrastructure developments and system-level optimization of valuable resources (energy, carbon, water and land).
Jurong Island 2.0: Maintaining Future Competitiveness for Energy & Chemicals Sector
Singapore will continue to support the energy and chemicals industry, ensuring the city state retains its status as a major global hub for the sectors.
Several initiatives are underway to achieve that goal, including the enhancement of the infrastructure on Jurong Island. The Jurong Island Version 2.0 initiative is a key development - the initiative will introduce alternative feedstock sources such as LPG (liquefied petroleum gas) to increase competitiveness and reduce the costs for the plants here. Another strategy is to use waste heat for water desalination to save energy.
To ensure Singapore continues to attract new investments, a new LPG terminal will be built on Jurong Island. The new terminal will allow LPG to be stored and distributed to plants on Jurong Island. Other developments on the island include Tuas Power's Tembusu Multi-Utilities Complex to provide cost-effective utility services for industries and the launch of Jurong Island Terminal last year to reduce dependence on trucking.
These developments will ensure that energy and chemicals companies continue to find Singapore the ideal chemical hub in the region for their future growth strategies.
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