June manufacturing output falls 7.4%
Manufacturing output fell 7.4% in June compared to June 2006. The transport/engineering cluster grew strongly at 31.3% but growth was offset by contraction in the biomedical manufacturing cluster. Marine and offshore segment grew 37.7% as shipyards increased their activities in shipbuilding, ship conversion and fabrication of oil rigs. The output of the aerospace segment servicing airliners rose 20.2%. The land transport segment grew 17.6% with continued demand for land vehicle components. Petroleum and petrochemical segments grew 1.8% and 1.6% respectively. Output of the chemicals cluster grew 2.5% in June. The electronics cluster contracted marginally by 0.7% in June. Manufacture of computer peripherals declined by minus 12.0%, data storage by minus 13.1% and infocomms & consumer electronics by minus 24.7%. These declines offset the growth of 13.8% in output of semiconductors. The biomedical manufacturing cluster shrank 46.1% in June with the sharp decline of 52.5% in output of the pharmaceuticals segment.
Singapore’s external trade to touch trillion US dollars in two years
Singapore trade promotion agency International Enterprise Singapore expects Singapore's trade with other countries to reach S$1.6 trillion (US$ 1 trillion plus) by 2015, double last year's S$810 million. According to WTO figures, only USA, Germany, China, Japan, the United Kingdom and France have trillion US dollar external trade.
Singapore's trade in goods in the past decade has been growing a strong 8 % a year on average. Singapore's exports to emerging high growth markets like China, India and Vietnam is growing at 26 – 31 % in the last three years compared to 12% annual export growth in its traditional markets, including Malaysia, the US and the EU. Signing of FTAs with India and Australia(23% yearly) also helped increase export growth. Trade by 200 odd offshore trading firms in Singapore has surged four-fold from US$84 billion in 2000 to US$366 billion last year.
Singapore markets suffer due to US mortgage problem
Singapore’s Straits Times Index fell 31.59 point to 3633.54 echoing similar crashes in the global bourses. Equities of banks and property were particularly affected.
Singapore’s MNCs
An increasing number of Singapore companies are increasing their turnover from overseas operations. The top 100 companies in Singapore International 100 Ranking index 2007, had $144 billion in overseas revenue for the year 2006, an increase of 56.63 % compared to overseas revenue of companies in last year’s ranking. South-east Asia remained as the largest source of revenue, generating $32.7 billion in turnover for this year's SI 100 companies, followed by China, the Americas and Europe. Singapore companies revenue from China grew 200% in 2006. European markets generated $20.6 billion in overseas revenue, an increase of 122 % over 2006.
While manufacturing and wholesale sectors continue to be strongly represented in the SI 100, they are being increasingly replaced by companies in the services, holdings and communication/transport/storage, showing the gradual shifting away of Singapore’s economy from manufacturing. The services sector had a 100 % increase in the number of companies ranked in SI 100. The strengthening regional economy helped increase in number of holding companies in SI 100 to 15 from 11 during 2007 with Straits Trading Co (ranked 42nd) and SP Corporation (ranked 84th). Both were ranked 178th and 144th respectively in the previous year. The booming oil prices resulting in highest orders for oil rigs enabled Singapore rig-builder Keppel Corporation to increase its global revenue by 320%.
FINANCE
S$10.31 billion new capital raised
Monetary Authority of Singapore stated in its annual report released in July 2007 that $ 10.31 billion new capital was raised by the Singapore private sector in 2006. Of the $10.31 billion of new capital raised, $7.76 billion was in the form of public issues of shares; $1.32 billion was in the form of rights issues; and $1.23 billion was raised through private placements of listed shares. The total amount of funds raised in the domestic capital market last year was $38.26 billion - which is a 13.5 % decline from 2005.
Ascendas announces US$200m ASEAN fund
Ascendas, one of Asia's largest suppliers of business space, announced in July a new property fund called Ascendas ASEAN Business Space Fund that will invest up to US$1 billion mainly in Vietnam, Malaysia and the Philippines. The size of the fund was US$ 200 million as on 17 July 2007. Ascendas will hold a stake of about 30 % in the fund. The remaining 70 % will be held by international and Singapore-based investors, including General Electric (GE) Real Estate Investment Holdings, Singapore Press Holdings and Shinsei Bank. The fund intends to invest in assets such as central business district and suburban office space, technology-related facilities, biotech & IT-related assets, mixed development projects industrial and logistics facilities. The ASEAN Fund is the latest addition to Ascendas' portfolio of real estate funds, and marks its move into developing its regional fund management business. The company recently launched the Ascendas India Development Trust, a fund focusing on mixed development projects in India.
CapitaLand sets up China, India property funds
Singapore’s Capitaland, South-east Asia's biggest developer, is setting up its second property fund worth US$ 600 million called CapitaRetail China Development Fund II, and a similar sized property fund in India, to invest in retail projects in China and India. 45% of the equity of the fund would be held by CapitaLand and the remaining by the external investors. CapitaRetail China I fund closed in June 2006 with a fund size of US$600million with 90% of funds committed. CapitaLand now owns and/or manages over 70 malls in 28 cities across China.
CapitaLand tie-up to develop China malls
Capitaland has signed an agreement with China Vanke, China's largest residential developer, in a move that will increase the Singapore property giant's potential pipeline of retail mall assets in the country. Under the agreement, CapitaLand and Vanke will jointly develop identified retail assets - for ongoing projects and upcoming ones - in Vanke's residential townships. These retail assets will then be acquired by CapitaLand 'at the appropriate time. The retail assets could eventually be injected into CapitaLand's CapitaRetail China Trust (CRCT), which is made up of some of CapitaLand's retail assets in China.
GIC buys $920m equity in Britain
In its second investment in a UK retail project this year, Singapore govt investment arm GIC bought 50% of equity of WestQuay Shopping Centre in Southampton for £299 million (S$920 million) million from Britain's third-largest real estate investment trust called London-Hammerson in July 2007. In March 2007, GIC bought 40 % of Liberty International's 90 % stake in the MetroCentre mall in Gateshead, England, for £426 million. GIC manages more than US$100 billion (S$151.5 billion) and owns 200 properties in 30 countries. GIC's other assets include the Queen Victoria Building in Sydney, the Franklin Centre in Chicago and the Shiodome City Centre in Tokyo.
New moneylaundering rules from Aug 15, 2007
The Legal Profession (Professional Conduct) (Amendment) Rules 2007 came into effect from Aug 15, 2007 to check money laundering in real estate through funds managed by legal firms which typically handle 90% of real estate transactions in Singapore. Till recently, real estate transactions used anonymous accounts which has now been banned. The legal firms are required to know a client's business and keep records for at least five years.
Temasek buys equity in Barclays
Temasek Holdings is investing up to £2.5 billion (S$7.5 billion) in Barclays plc, helping the latter in its takeover bid for ABN Amro. Temasek's investment comes in two tranches. It will first invest £1 billion at £7.20 a share for a 2.1 % equity in Barclays. If Barclays succeeds in taking over ABN Amro, Temasek will pay a further £1.5 billion at £7.40 a share, for a total equity of 2.9 % of the combined entity as well as a seat on the Barclays board, subject to a clawback to Barclays' existing shareholders. Barclays had approached Temasek about eight weeks ago to help with the takeover. Barclays is one of the partners in a Temasek-led consortium which bought a 35 % stake in Bank Internasional Indonesia, the sixth-largest bank in Indonesia by assets in 2003.
Singapore's REITs to double to 30 by 2008
Singapore’s real estate investment trusts (REITs) are expected to double to about 30 by the end of 2008 as more property owners raise funds in Singapore, according to the Asian Public Real Estate Association. Singapore has now 16 publicly traded Reits with a combined market value of US$19 billion, compared to Hong Kong’s six REITs worth US$ 8 billion. The new trusts will include cross-border REITs, such as Fortune Reit, which owns Hong Kong malls.
INDUSTRY
Philips subsidiary to spend 90m euros on R&D
Philips subsidiary, NXP Semiconductors is expanding its USB Innovation Centre in Singapore with an investment of 90 million euro (S$187.4 million) in R&D spread over five years in Wireless USB technology involving standardisation, IC (integrated circuit) design, test and product engineering, system and software development.
Tuas Biomedical Park 2
Singapore industrial park developer JTC Corp is developing the Tuas Biomedical Park 2, at a cost of about $80 million to house pharmaceutical and biotech companies. TBP 2 is next to TBP 1, which was launched in 2000 as a manufacturing hub dedicated to pharmaceuticals, biopharmaceuticals, biologics, vaccines and medical devices companies, and houses Merck, Sharp & Dohme (MSD), Pfizer, Wyeth, Ciba Vision, GSK Biologicals, Novartis, Lonza Biologics and Genentech.
STM, Intel chip JV
A new memory microchip JV comprising ST Microelectronics with 48.6% equity, Intel (45.1%) and Francisco partners(6.3%) based in Singapore would the largest NOR memory chip maker. The new JV will take over part of STMicro's chip plant in Singapore and manufacturing facilities in Israel, Italy and China. Intel, through IM Flash Technologies, a 49:51 joint venture with another US chip company Micron, has a US$3 billion chip fab in Singapore scheduled to be operational by 2008. STMicro is also shifting its Texas chip unit to Singapore to increase output of six-inch wafers to 90,000 a week.
Mitsui Chemicals to set up elastomers plant
Mitsui Chemicals announced it would up its second S$ 247 million plant in Singapore that will double its capacity to 200,000 tonnes polyolefin elastomers per annum. Mitsui set up in Singapore a petrochemical R&D centre in Aug 2006. The plant will source its ethylene feedstock from Petrochemical Corporation of Singapore, a JV between Shell and Sumitomo Chemicals.
Singapore needs one more big refinery: EDB
Singapore’s Economic Development Board is trying to attract at least one more huge oil refinery in Singapore. EDB also is encouraging investment in renewable energy areas like solar, biomass and fuel cells and is looking at developing carbon trading and LNG trading. Singapore’s energy sector is currently anchored on oil refining, trading and logistics, as oil is considered very important for Singapore economically and strategically. Singapore’s total refining capacity has remained unchanged at 1.3 million barrels per day (bpd) over the last decade and its share of global capacity has fallen to 1.4 % from 2 % previously in comparison to China with 8.1% share and India with 3.4% share as new refineries are set up in those countries. EDB is looking for a fourth international-scale refinery with 300,000 bpd capacity to add to Singapore Refining Company's 285,000 bpd plant, ExxonMobil's 605,000 bpd and Shell's 500,000 bpd capacity.
EDB feels that there are investment opportunities here for national oil companies 'like the Chinese companies looking at international investments, and also others from the Middle East. A recent proposal to build a US$200 million, 75,000 bpd condensate splitter in Singapore by oil trading firm Concord Energy fell through.
Solar energy development has been chosen as Singapore already has relevant technology in silicon fabrication, as well as its location near the equator. As Singapore is surrounded by countries that produce large quantities of biomass crops like sugarcane and palm oil, biomass industry could be developed taking advantage of local chemical and energy industries.
Singapore's US$500 million 6 million tonnes per annum LNG terminal will be built on a 30-hectare site on petrochemical cluster island Jurong by 2012.
Keppel Seghers wins Algerian waste water treatment contract
Keppel Seghers, the environmental technology division of Keppel Integrated Engineering, has secured a $7.2 million contract to design, build and operate a wastewater treatment plant in Laghouat province, Algeria. The project is expected to be completed by end-2008, and Keppel Seghers will operate it for two years.
INFOTECH
Singapore govt to spend US$604m on IT this year
The Singapore government and its statutory boards, will spend around US$604 million on IT this year, up 8 % from the US$559 million spent in 2006, according to Government Insights, which tracks government spending on IT. The government's spending on IT is expected to grow steadily at a compound annual rate of 3.3 % till 2011 to reach US$657 million. The government's ambitious multi-year $1.5 billion outsourcing contract, called Standard Operating Environment (SOE), is expected to be finalised this year. The impact of such a project is likely to result in the consolidation of a number of IT categories (such as desktop and network services) that were previously tendered out separately.
The government is also expected to continue calling for IT application solution tenders, either for new ICT initiatives, as enhancements to existing systems, or as upgrades to systems under the S$ 2 billion iGov2010 master plan, to improve and deliver more public services to citizens and businesses through ICT.
Singapore IT sector is region's most competitive
Singapore’s IT industry is the most competitive among the countries in the South-east Asian region, and the 11th most competitive in the world, according to a new study released on 11 July 2007 by the Economist Intelligence Unit (EIU) in collaboration with Hewlett Packard covering 64 countries and sponsored by Business Software Alliance. Singapore scored 63.1 out of 100 in the IT industry competitiveness index created by the EIU, a score which also placed it as the fifth most competitive IT industry in the Asia-Pacific region, behind Japan, South Korea, Australia and Taiwan.
Globally, Singapore ranked as the country with the fourth highest IT output per employee at US$216,941, trailing Taiwan, which had the highest labour productivity at US$386,413 per employee, South Korea at US$310,393 per employee and Ireland at US$278,451 per employee. Within the R&D environment category, Singapore ranked 17th with a score of 16.3, compared with Japan which led the group with 84.3 and South Korea with 56.6.
The study also revealed that an overwhelming majority of IT projects undertaken by Singaporean companies in the recent past did not achieve a positive outcome and were delivered late. The survey showed 74 % of the Singaporean respondents felt half or less of the IT projects had positive business outcomes, resulting in a significant waste of investment.
Outsourcing in Singapore more than cutting costs
According to a major global study called “Outsourcing Comes of Age: The Rise of Collaborative Partnering”, on outsourcing trends conducted by PricewaterhouseCoopers (PwC), companies in Singapore and Asia-Pacific are moving away from value-for-money outsourcing arrangements to managing the challenges in developing relationships with outsourcing vendors where both parties benefit.
AVIATION
Singapore, a hub of low-cost airlines
Low cost carriers (LCCs) Tiger Airways, Jetstar Asia, AirAsia, Cebu Pacific. Air India Express and others have used Singapore as a de facto hub for regional low-cost air travel and within five years, they have captured about 15 % of the regional passenger traffic. This figure is expected to double by 2010. To cater to the growing demand, these LCCs are expanding exponentialy.
Tiger Airways, owned by SIA (49%) and Temasek(11%), has a current fleet of nine A320s, and will take delivery of 70 A320s by 2014. Tiger is preparing to start inaugural flights to Indian destinations such as Chennai and Kochi in October, and other Indian airports like Hyderabad and Bangalore are also offering slots to it. With the start of its flights to India, Tiger will have the broadest footprint from Chennai to Melbourne, and from Guangzhou to Phuket, with Singapore, Melbourne as the hubs. In China, Guangzhou Baiyun International Airport (GBIA) is looking into constructing the country's first dedicated LCC facility to cater to budget flights of Tiger Airways.
Another Singapore-based LCC Jetstar Asia, which is three year old, operates flights from southern China into Australia. Jetstar Asia widely benefits from Qantas owned Jetstar Australia’s pan-Asian network including destinations such South Korea, Japan and even Hawaii. Malaysian AirAsia, operating since 2001, in Malaysia and through its 49 % owned associates in Thailand and Indonesia, operates through Singapore. By end 2008, limited open skies would be introduced in ASEAN countries.
SHIPPING
Marine Engineering
Singapore’s marine engineering sector remains buoyant as orders continue to pour in globally. Keppel Corporation’s wholly owned subsidiary Keppel Singmarine (KepSing) has won four orders worth a total of $350 million to build six offshore support vessels and a derrick pipe-laying vessel. The 163-metre multi-purpose pipe laying vessel for Global Offshore International, will be equipped with two 4,500-KW electric propulsion thrusters, six positioning thrusters, a 1,200-tonne crane and pipe-laying equipment that can lay pipes up to 1.5 metres in diameter in water up to 3,000 metres deep. KepSing has won contracts for more than 50 offshore supply vessels since focusing on designing and building specialised vessels in 2002.
Keppel Shipyard, another subsidiary of Keppel Corporation, has won a $150 million contract to install equipment on a new drillship. The drillship’s hull is being built in China and it would be towed to Singapore for outfitting.
Cosco Corporation, Singapore based company owned by China’s biggest shipping operator China Ocean Shipping (Group) company, has won four ship conversion contracts worth US$250 million (S$375 million) to convert VLCC ships to VLOC and construction of eight bulk carriers for US$ 313 million.
The marine arm of Singapore Technologies Engineering (ST Engg) won a $ 168 million contract to build a 930 passenger roll on roll off Ropax ferry that also carries cars and trailers - the first such vessel to be built in Singapore, for France's Louis Dreyfus Armateurs (LDA) to play the English Channel. The 4,000 DWT Ropax, the first such kind to be built in Singapore will be around 161m long and 25.6m wide and is expected to be delivered in the first half of 2010.
Zero attacks in Malacca Strait in Q2: IMB
The Malacca Strait recorded zero incidents of pirate attacks on ships in the second quarter of 2007 compared with three attacks in the same time last year. The improvement was largely attributed to the cooperation between states bordering these waters, the International Maritime Bureau (IMB) said. The piracy situation in the previously worrisome Malacca Strait has significantly improved, IMB said in its Piracy and Armed Robbery Against Ships report for the second quarter of 2007. The Malacca Strait saw 11 pirate attacks on ships last year, against 12 in 2005. In the first quarter of this year, it recorded two attacks on ships.
However, according to IMB, beyond Malacca straits, piracy attacks worldwide have jumped by 37 % when compared with the second quarter of 2006, and 12 Singapore-flag merchant ships were attacked by pirates in other regions in the first six months of this year - the same number as last year and down on the previous three years.
PSA to cap operations at India port due to tariff cuts
PSA International announced on 9 July 2007 that it would rationalise its operations at TCT, which it has operated through its joint venture PSA Sical since 1998, following a decision by Tariff Authority for Major Ports (TAMP) in Sept 2006 to halve tariffs at its Tuticorin Container Terminal (TCT), which PSA termed as commercially unviable. The terminal will put a cap on operations, fulfilling only the minimum annual throughput of 300,000 TEUs (20-foot containers) specified in its concession agreement. This represents a cut in handling of almost 25 % from last year's throughput of 377,000 TEUs and is expected to result in delays at the terminal. From July 15, TCT, which can handle 450,000 TEUs per year with four quay cranes, will operate with only three cranes. Some ships will likely experience a longer port stay as a consequence, PSA Sical said. PSA said the reduced revenue per box caused by the tariff cuts is not enough to cover operating expenses and the royalty payment per box that it has to pay the Indian government under the terms of the concession.
In early 2005, PSA-Sical, which has the right to run the Tuticorin box facility for 30 years, asked the Indian government to allow it to switch from a royalty format to a revenue sharing arrangement. Under the current format for port concessions, the bidder with the highest revenue share percentage wins the contest. Tariffs for the services provided at terminals are fixed by TAMP. At present, they are calculated by adding 15 % to actual costs, but the royalty portion paid to the government is not included as a cost in this calculation.
PSA was recently awarded concessions for two new terminals in India, both due onstream by 2009. The first is on the north-western coast in Gujarat at the Hazira port and the second on the east coast at Chennai.
TOURISM
Changi H1 passenger throughput up 5.4%
Changi airport handled 18 million passengers in first half of 2007, a 5.4% increase over 1H2006. In March and June 2007, Changi handled more than 3 million passengers. Given that passenger traffic is traditionally higher during the second half of the year, Changi looks set to break 2006’s full year record of 35.03 million passengers by year-end. Changi Airport is served by 79 airlines via 4,180 weekly scheduled flights to 185 cities
Costa Crociere, STB in global marketing tie-up
International cruise operator Costa Crociere has entered into a global marketing partnership with the Singapore Tourism Board, which will help Costa in the Asia Pacific and European travel market, with Singapore as cruising hub. Costa, a subsidiary of Carnival Corporation, the world's largest cruise operator, is said to be the leader in the European and South American markets. The STB will be co-operating with Costa in running seminars for travel industry partners and producing product brochures for customers. These marketing initiatives will be introduced in Australia and Europe this month, followed by expansion into the Indonesian and Indian markets next year. The cruise company, which has already operated cruises from Singapore to the Middle East, says new cruise routes combining visits to Singapore with various other Asian destinations will start later this year.
GOVERNMENT
Singapore stays in league of best run countries
Singapore is among the best for government effectiveness and regulatory quality, but is just middle of the pack for civil liberties scoring in the top percentile in five of six measures of governance in a World Bank study of 212 countries and territories titled “Governance Matters, 2007: Worldwide Governance Indicators 1996-2006”, released on 10 July. WB rates Singapore particularly strongly for government effectiveness (quality of policy formulation and implementation, and of the civil service) and regulatory quality (reflected in sound, market-friendly policies). On both these indicators, Singapore obtained near-100 % scores, and is behind only Denmark for government effectiveness, and behind only Hong Kong for regulatory quality. Singapore also scored for control of corruption, ranking fifth behind top-placed Finland, Iceland, Denmark and New Zealand. The other two indicators where Singapore ranks in the top percentile - that is, 90 % of countries rank below - are rule of law (public confidence in the quality of contract enforcement, the police and the courts) and political stability. 10 countries, including Singapore Australia, Austria, Canada, Denmark, Germany, Ireland, the Netherlands, Sweden and the United Kingdom, have 90th percentile scores in five out of six measures. The others are The 2007 study is the sixth update of the Worldwide Governance Indicators, a project to develop evidence-based measures over the past decade to track the quality of institutions, improve governance and address corruption.
PART III - EXTERNAL
INDONESIA
MM Lee’s visit to Indonesia
Singapore’s Minister Mentor Lee Kuan Yew accompanied by MOS for Trade and Industry and Members of Singapore Parliament visited Indonesia on a six-day visit from 22 July to attend a business event called ‘Citibank Legacies of Leadership event’. During his visit, MM Lee also met Indonesian leaders. He also delivered an address at the 'Vision 2030' event organised by the Yayasan Indonesia Forum (YIF) or Indonesia Forum Foundation, with economists, government officials and businessmen as its members. Vision 2030 refers to an economic blueprint for Indonesia that the YIF published in March, which includes targets such as achieving a gross domestic product of US$5.1 trillion by the year 2030, putting the country among the top five economies in the world.
While in Jakarta MM Lee noted that Indonesia, as the largest country in South-east Asia, should by right be attracting the lion's share of investments to the region but legal uncertainties and labour issues within the country, such as rigid labour practices and restive unions, have deterred a number of foreign investors. So it is countries like Vietnam that are now getting a lucrative slice of the investment pie instead, he said.
'The assessments of the Singapore fund managers and the financial securities houses is a factor in how the international financial community sees Indonesia's growth. So we have a complementary relationship with Indonesia's economic growth. The complementary nature of the two economies and the two countries is probably as strong as it ever was before”, MM Lee told the press at the end of his visit. That complementary factor is understood by Indonesia as well, which has welcomed Singapore as an investor. Yet, he noted, having made that invitation, Indonesia now appeared to have had a change of heart over certain assets sold to Singapore investors following the 1997 Asian financial crisis.
Singapore firm in $152m plantation venture with Indonesian company
Bakrie Sumatera Plantations, Indonesia's third-largest estate company, has invested in a US$100 million (S$151.5 million) for 20% equity in a JV called Agri Resources in collaboration with a Singapore group to buy palm oil plantations. Indonesia is the largest grower of palm. Agri Resources on July 3 bought 36,600ha of plantations in South Sumatra. The two companies backing the joint venture may profit 'from the expected strong demand of palm oil both for its traditional food-based usage and new energy-driven demand.
China
4th Singapore-China Joint Council for Bilateral Cooperation
Chinese Vice-Premier Wu Yi and Singapore's Deputy Prime Minister and Home Minister Wong Kan Seng co-chaired the 4th Joint Council for Bilateral Cooperation on 11th July, where the Singapore-China free trade agreement and an eco-city project - first mooted by Senior Minister Goh Chok Tong during his visit to China in April - were discussed.
DPM Wong announced on July 11 that Singapore would set up a 'green lane' mechanism to facilitate listing of Chinese enterprises in Singapore. 118 Chinese companies were listed on the Singapore Exchange (SGX) by May 2007.
Another major issue discussed during the JCBC meeting was the proposed 'eco-city' in China, which is to be another iconic joint project between Singapore and China,
During the JCBC meeting, Singapore and China also agreed to boost cooperation in tourism, HR development, high-tech collaboration in academia, industries and research. Both sides also agreed to explore new areas of cooperation such as financial services, business process outsourcing and environmental engineering.
Following the meeting, three MOUs were signed between the two countries, extending cooperation in training in urban planning, finance, taxation and environmental protection; border health measures; and urban environment and water resources management. A fourth MOU was signed to extend the Chinese Mayors' Study Visit Programme to June 2012, while another agreement was signed for double taxation avoidance. Singapore-Chinese Chamber of Commerce and Industry hosted a lunch in honour of Chinese Vice Premier.
Singapore-China FTA
At the JSC meeting on 11th July, Singapore DPM said that conclusion of Singapore-China FTA would take two years of hard negotiations. Mr Wong said that both sides understood each other's position and recognised the need to build on the ASEAN-China FTA (ACFTA) under which negotiations on the goods and services component have been concluded. We have reached an understanding that the SCFTA should be ACFTA-plus,' said Mr Wong. The DPM also hoped that the SCFTA would 'accelerate' negotiations on the other yet-to-be-concluded components of the ACFTA such as investment.
Suzhou park: Singapore and China cooperation in service sector
During the ninth meeting of the SIP's Joint Steering Council (JSC) co-chaired by Chinese Vice-Premier Wu Yi and Singapore's Deputy Prime Minister Wong Kan Seng in Singapore on 10 July, Singapore and China agreed to expand their cooperation in the Suzhou Industrial Park (SIP), particularly in the services sector. The high-level council oversees bilateral cooperation in the industrial park, a key project between the two countries that was started in 1994 and that has become a model for other industrial parks in China. Singapore has, over the years, trained more than 2,000 officials from Suzhou in areas such as environmental management, urban planning and logistics.
SembUtilities to expand capacities of China plants
SembCorp Utilities announced that it is expanding its industrial wastewater treatment capabilities in the Chinese cities of Nanjing and Zhangjiagang to meet increasing customer demand. China is planning to spend some US$125 billion over the next five years to deal with water shortages. The Nanjing plant, set up in 2005 with a capacity of 12,500 cubic metres per day will be raised by 30,000 cubic metres a day at an estimated cost of 110 million yuan (S$22 million).
The Zhangjiagang industrial wastewater treatment facility, located in Zhangjiagang Free Trade Zone (FTZ) in the south-east of Jiangsu Province, will expand its current capacity of 20,000 cubic metres a day by 15,000 cubic metres at a cost of 98.5 million yuan. With these expansions, SembCorp's combined industrial water capacity in operation and under construction, including industrial wastewater and water treatment, will total 277,500 cubic metres per day, more than Singapore's four NEWater plants with a total capacity of 239,200 cubic metres per day.
Mapletree ties up with Seastar for S$ 179 million Xian project
Mapletree Investments is to team up with Xian, China-based Seastar Science-Tech Investment Holding Group in an equal stake JV to develop an 896.2 million yuan (S$179 million) mixed-use project in Xian. The project consists of four residential towers, a 59,400-sq-m retail area and a car park. To date, Singapore has invested in 99 projects in Xian worth a total of US$640 million. One new project is Surbana Land and Temasek Holdings' real estate development at the east bank of the Chan river, which with a planned investment of S$1 billion is the largest Singapore real estate investment in China.
CAI to develop Chinese airports
Changi Airports International (CAI) has gone into a 49:51 JV with Shenzhen Airport Group to develop regional airports across China. There are 147 secondary airports around China. CAI already has a 29 % stake in Nanjing Lukou International Airport, the first private equity airport investment in China by a foreign investor. CAI is also providing airport consultancy to Chengdu and Qingdao airports. Total volume of passenger traffic in China has already reached 320 million in 2006 and is expected to grow by 15 % per annum over the next decade. CAI has also been active in India, where it has tied up a similar joint venture with the Tata group to bid for airport projects around India.
Singapore to train Dalian government officials in public administration
Singapore Cooperation Enterprise (SCE) agreed to offer training for up to 1,200 officials of Dalian's municipal government over a period of two years in the areas of public sector administration, services and government. SCE is a subsidiary of the Ministry of Trade and Industry and the Ministry of Foreign Affairs that provides expertise in public sector development to other countries. The training is targeted at Dalian's middle- to high-ranking officials from more than 40 sectors of government. Singapore was Dalian's seventh largest trading partner in 2006.
Vietnam
SingTel signs deal with Vietnam's SCIC
Singapore’s leading telecom major Singtel announced on 17 July that it has signed a cooperation agreement with Vietnam's State Capital Investment Corporation (SCIC) for exchange of experience on corporate governance and equitisation and developments in investment laws and the telecommunications industry. SingTel has said it is keen on investing in Vietnam once regulations ease there, as the company looks overseas to counter slowing growth in Singapore and Australia.
SembCorp Parks plans 3rd project in Vietnam
SembCorp Parks Holdings is setting up its third industrial township in Vietnam. It entered into an agreement with Becamex IDC to set up Vietnam Singapore Industrial Park JV that will invest US$103.7 million over five years to develop the industrial township. The Park, strategically located in the country's Northern Economic Zone, will comprise residential and commercial elements. Facilities planned include ready-built factories and an on-site logistics hub that will facilitate quick start-ups by manufacturers that set up operations in the industrial township.
Middle East
Hyflux to build used-oil recycling plant in S Arabia
Singapore water treatment company Hyflux is setting up a 48000 tonnes per year two-phase, waste petroleum base oil recycling plant in Jeddah, Saudi Arabia. Hyflux’ advanced membrane system would be used in oil recycling. This will be the first membrane-based oil-recycling plant in Saudi Arabia and will collect used oil from the power, petrochemical, marine and automotive industries and produce high-grade base oil. Hyflux will co-invest $45 million with the Saudi Economic Development Company (Sedco) and Lube Oil Refining Company to build the plant in two phases over the next three years.
Australia
ComfortDelGro buys Aussie bus operator
Singapore company ComfortDelGro JV ComfortDelGro Cabcharge, already New South Wales' largest private public bus operator, is paying A$14.5 million (S$18.9 million) for another bus and coach operator, Toronto Bus Services, a bus and coach operator in the Newcastle region of New South Wales. The JV was set up in September 2005 as a JV between ComfortDelGro and Cabcharge Australia. The JV currently operates Westbus, Hillsbus and Hunter Valley Buses in New South Wales. Aside from Toronto Bus Services, ComfortDelGro Cabcharge has also recently invested in a new bus depot in Singleton and acquired a three-hectare site in Heatherbrae to develop a bus body building plant. When operational in late 2008, the plant will be able to deliver up to 200 buses annually.
USA
US investments in Singapore cross US$60b in 2006
The stock of US investments in Singapore jumped 11 % to US$60.42 billion, after a 4.6 % dip in 2005 from the year before, according to the latest figures released by the US Department of Commerce. The 16% dip in 2005 followed a one-time tax incentive that encouraged US businesses to bring their earnings home. Singapore investors pumped US$230 million into the US last year, taking Singapore's cumulative investments there to US$2.41 billion. Department of Commerce figures show that the manufacturing sector in Singapore accounted for seemingly the biggest chunk - US$16 billion - of US investments in Singapore, followed by finance (US$5.13 billion) and banks (US$2.03 billion). But it is believed that US holding companies are actually responsible for the largest share of the investments in Singapore, the details of which are not disclosed. Manufacturing, especially that of computers and electronic products, also accounted for the single biggest chunk of Singapore investments in the US.
PART IV – BILATERAL
Satyam to expand its Singapore presence
Indian IT services major Satyam Computer Services is expanding its strength in Singapore to 500 after gaining outsourcing deals with the Singapore government. Satyam has bagged about 25 government IT contracts in the past six years. The firm has also collaborated with the Economic Development Board to set up a Centre of Excellence for mobile banking and business intelligence. Satyam’s Singapore regional headquarters also oversees its operations in Africa and the Middle East and also manages its domestic operations in India from Singapore. In addition, Satyam's first global business continuity and disaster recovery centre, as well as data warehousing and other technology resources, are located in Singapore. Satyam's Asia-Pacific operations account for about 18 % of its worldwide revenue.
CapitaLand sets up US$ 600 m India property fund
Singapore’s Capitaland, South-east Asia's biggest developer, is setting up a US$ 600 million CapitaRetail India Development Fund to invest in retail projects in India. CapitaLand is expected to hold about 40 % equity of the fund and remaining to be held by insurance companies, pension funds and other corporations. According to Capitaland CEO, the fund alongwith a similar sized Fund in China would allow Capitaland to capture the tremendous retail investment opportunities in India and China. CapitaRetail India is the first CapitaLand-sponsored development fund set up to invest in retail malls in India. CapitaLand made its first foray into the India retail market in April 2006. With the new fund, CapitaLand hopes to grow its retail presence in India over time. The developer is trying to replicate its China retail mall strategy in India. CapitaLand now owns and/or manages over 70 malls in 28 cities across China.
India will be next frontier for Singapore water firms
A five-day forum on urban water and environmental management was organised by IE Singapore and the ADB under the Asia Training and Research Initiative for Urban Management, which promotes cooperation and knowledge sharing on urban management for Asian developing countries. Singapore trade promotion body IE Singapore said Singapore companies were very active in China and the Middle East and once necessary reforms introducing water trariff structure to fund infrastructure are in place in India, entry of Singapore water companies in Indian market could be possible. Singapore water companies will then pool resources to provide a 'total solutions package. Singapore and ADB will develop pilot projects that the private sector will deliver.
SilkAir flights to Coimbatore from Oct
Singapore based SilkAir announced on 23 July that it plans to start thrice-weekly flights from Singapore to Coimbatore in Tamil Nadu from October 2007. The flights will be the first direct air service between both cities. SilkAir said the city's buoyant economic growth offers favourable prospects for business traffic and commercial cargo. Coimbatore will be its third South Indian destination after Kochi and Thiruvananthapuram in Kerala. It is also looking to launch thrice-weekly flights to Kathmandu this year.
TCS eyes casino projects in Singapore
TATA Consultancy Services (TCS) announced that it was in talks with casino developers to provide IT services to the two integrated casino resort (IR) projects in Singapore which are IT-intensive.
Tiger Airways starts selling India fares
SIA/Temasek majority owned low cost carrier Tiger Airways started selling tickets between Singapore and India on July 3, a year after it first announced it had obtained rights to operate to six Indian cities. Tiger will fly four times a week to Chennai, the capital of Tamil Nadu, and three times a week to Kochi (Cochin) in Kerala. Services to four more cities - Kolkata (Calcutta), Kozhikode (Calicut), Trichi and Trivandrum - are proposed to be introduced in 2008.
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TRADE INDIA MAIL
