Speech by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance, at the Evonik Me5 Grand Opening

Date: 04 November 2014
Venue: Evonik Me5 Site
Speaker: Mr Tharman Shanmugaratnam
 
Dr Klaus Engel, Chairman of the Executive Board of Evonik Industries,

Mr Patrik Wohlhauser, Chief Operating Officer of Evonik Industries,

Dr Reiner Beste, Vice President Business Unit Health & Nutrition, Evonik Industries AG,

Your Excellency, Dr Karl Michael Witter, Ambassador of the Federal Republic of Germany,

Distinguished guests,

Ladies and Gentlemen,

Introduction

1. I am very pleased to join you this morning to celebrate the opening of Evonik’s Methionine plant on Jurong Island.

2. Evonik’s partnership with Singapore has grown significantly in less than a decade – you acquired Degussa’s chemicals portfolio in 2006, then sited your regional headquarters for Southeast Asia here, set up an innovation laboratory^[1] in 2011, and embarked in 2012 on the expansion of your oil additives plant. This Methionine plant is now another major addition.

3. I understand it is Evonik’s first such plant in Asia, and the largest single investment in your history. We are glad that you continue to place your trust in Singapore as a place where you can undertake mission-critical operations and from which you can serve and expand your customer base in the region.

Singapore is a gateway for specialty chemicals companies to address Asia’s increasing appetite

4. To strengthen our role as a leading global chemicals manufacturing hub, we are now focused on growing the specialty chemicals sector.

5. The sector will benefit strongly from Asia’s rapid urbanisation and the growing ranks of its middle class, because the materials it produces are essential to modern urban living – they are in fact omni-present, in the devices and products we use daily, from automotive parts to personal care products.

6. In the last two years alone, Singapore has attracted more than S$2 billion dollars of fixed asset investments in the specialty chemicals sector, creating more than 1,000 skilled jobs, the majority filled by Singaporeans.

To name a few: Sumitomo Chemical’s plant which supplies material for fuel-efficient tyres, and Croda’s alkoxylation plant, which produces specialty compounds (surfactants) that go into consumer products such as shampoos and detergents.

7. Our specialty chemicals industry hence plays in a myriad of value chains. Evonik’s new investment will expand this, by linking us to the protein value chain.

Evonik’s Methionine plant produces an essential amino acid which is used as an important nutritional component of poultry feed. It will cater to the increasing demand for poultry within Asia, arising from growing affluence and the increasing preference for lean meat in diets. In China alone, consumption of poultry is expected to more than double in the first three decades of this century^[2].

In addition, the plant also obtains its feedstock from suppliers on Jurong Island. This integration to other parts of our chemicals industry upstream will add to Singapore’s competitiveness.
The specialty chemicals industry also provides rewarding career opportunities

8. The specialty chemicals industry also provides Singaporeans with skilled and well-paying job opportunities, regardless of your qualifications. Evonik itself is a good case. Let me share a couple of examples to show how Singaporeans have benefited.

Abdul Kareem is Assistant Plant Manager in the Methionine plant. Currently in his mid-forties, Kareem graduated from Ngee Ann Polytechnic with a Diploma in Mechanical Engineering and started his career in the petrochemicals industry as a technician. He went on to lead a team of technicians, grew into other roles, and in 2013, Kareem joined the Methionine plant project as its Assistant Plant Manager. He’s had the chance to undertake three months of training in Antwerp, Belgium, where he learned how to run this new facility, and also networked with his counterparts in Evonik’s global chain of production sites. Kareem is now responsible for ensuring the plant’s safe and smooth operation, and also plays a key role in managing and developing staff.

My second example is Tan Wei Kiat, who was recruited to join Evonik’s Asia Pacific Oil Additives’ business in 2006 when he was in his thirties. He showed promise and was posted to Germany for four years as a Product Segment Manager – a strategic role in Evonik’s oil additives business. Wei Kiat was promoted, and is now back in Singapore as the Managing Director of Evonik Oil Additives. I’m told that Wei Kiat found that experience of working in Germany most useful for his personal and career development. It made him more aware of different ideas and perspectives.

9. Evonik’s HR philosophy of “Exploring opportunities. Growing together” reflects its commitment to provide its employees with opportunities for personal and career growth, with special emphasis on international collaboration and team spirit. We are happy to wocerk with partners such as Evonik to maximise the potential of Singaporeans.

The industry has embarked on a wide-ranging productivity effort to partner local businesses through PCMMC

10. I would also like to take this opportunity to say a few words about our Process Construction & Maintenance sector (or PCM in short).

11. The PCM sector has grown in tandem with our chemicals industry, and has developed a strong track record in building and delivering world-class plants, such as Evonik’s methionine facility – on cost and safely. Our local PCM companies such as HSL Constructor and Hiap Seng have contributed to the vibrancy of Jurong Island. Some like as Rotary and Hai Leck have expanded overseas, with the experience gleaned from projects on Jurong Island.

12. But this is a continuing journey for PCM players. We will continue to face tight limits on the supply of both land and labour. The PCM sector, like the rest of the economy, will have to upgrade management practices, mechanise and redesign processes, and invest in workers’ skills.

13. I am therefore pleased to announce that our PCM industry leaders are collaborating with the Government on a wide-ranging effort to improve productivity within the sector and raise the competitiveness of local PCM companies. This effort will be led by the PCM Management Committee (or PCMMC in short), which will comprise key stakeholders from major plant owners from the Energy & Chemicals industry, contractors from the PCM sector and relevant government agencies. This will be a long-term, multi-year partnership.

14. There are six work groups, developing practical and doable steps to take productivity forward. To highlight two initiatives here:

First, the industry plans to launch an aggregated data sharing portal to reduce overlaps in project scheduling among companies, which is a common occurrence in the industry. This will help to smooth the demand for manpower and help local companies to achieve better project planning.

Second, the Government has also worked with the industry to cater land for a PCM dormitory near Jurong Island to reduce traveling time for workers to get to their work sites on Jurong Island. This will reduce fatigue, allow workers to have more rest, and also improve on-site productivity.

There will be further announcements by the PCMMC on additional initiatives to improve productivity next year.

Conclusion

15. Before closing, I would like to once again congratulate Klaus, Patrik, Reiner and your team on the opening of this state-of-the-art manufacturing plant today, and thank Evonik for your continued trust and confidence in Singapore.

16. We look forward to many more years of a fruitful partnership.

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^[1] An upstream R&D Lab for their Coatings & Additives Business Unit, comprising 2 synthesis labs and 1 development lab. The lab aims to synthesize and invent new molecular structures, develop new chemical processes so as to shorten their time-to-market for their products relating to solvent-borne additives and resins for coating, printing inks and varnishes.

^[2] Source: United Nations Food and Agriculture Organisation; 2011. Mapping supply and demand for animal-source foods to 2030, by T.P. Robinson & F. Pozzi. Animal Production and Health Working Paper. No. 2. Rome.