Country Focus of Singapore

Monthly Economic & Commercial Report of Singapore

PART I - ECONOMIC AND TRADE DATA

in billion S$

	2005	2006	2007	2008	2009
GDP at current market prices	201.313	221.143	251.610	257.418	257.640
GDP at 2000 market prices	197.721	214.224	230.871	233.524	231.776

GDP Growth Rate at 2000 market prices (Change in %)

Sector	2007	2008	Q1 2009	Q2 2009	Q3 2009	Q4 2009	2009	Q1 2010	Q2 2010
GDP	7.8	1.1	-9.5	-3.3	0.6	4.0	-2.0	15.4	16.7
Goods producing- Industries	7.2	-1.0	-17.4	1.6	7.1	3.6	-1.1	23.6	24.2
Manufacturing	5.9	-4.1	-24.1	-1.1	6.6	2.2	-4.1	31.8	33.0
Construction	18.2	20.3	24.4	18.6	12.8	11.2	16.0	-2.0	-2.7
Services producing- Industries	8.1	4.7	-5.1	-4.8	-2.2	4.1	-2.2	11.4	13.2
Wholesale & Retail Trade	7.4	2.6	-14.8	-13.8	-8.8	2.2	-9.1	12.8	16.5
Transport & Storage	5.0	3.1	-9.7	-10.7	-7.5	0.1	-7.0	8.4	10.5
Hotels & Restaurants	4.9	1.2	-5.6	-5.9	-2.5	0.9	-3.0	7.1	16.8
Info & Communications	6.5	7.2	1.9	0.3	0.1	1.6	0.8	2.7	3.4
Financial Services	15.7	5.5	-7.7	-4.5	-0.2	10.8	-1.4	16.1	8.3
Business Services	9.1	7.4	3.8	2.7	2.6	3.3	3.3	12.7	14.8

Rate of Inflation

July 2010		1Q 2009	2Q 2009	3Q 2009	2008	2009
Over July 2009	Over June 2010	2.1%	-0.5%	-0.4%	6.5%	0.2%
3.1%	1.3%

Growth rate of Singapore’s trade with top 10 countries in 2009 over 2008

1) Malaysia	-22.17%	6) Japan	- 25.16%
2) PRC	-17.18%	7) South Korea	-9.60%
3) United States	-22.46%	8) Taiwan	-14.83%
4) Indonesia	-22.11%	9) Thailand	-23.21%
5) Hong Kong	-9.67%	10) India	-24.94%

Top 12 Singapore’s Domestic Export destinations in 2009

1) Hong Kong	2) Malaysia	3)PRC	4) United States	5)Indonesia	6) Japan
7) Australia	8) Panama	9)Taiwan	10)South Korea	11) Thailand	12)India

Top 10 Singapore’s Export (Domestic + Re-Export) destinations in 2009

1) Hong Kong	2)Malaysia	3)PRC	4)Indonesia	5)United States
6) SouthKorea	7) Japan	8) Australia	9) Thailand	10)India

Top 12 Singapore’s Import Sources in 2009

1) UnitedStates	2) Malaysia	3)PRC	4) Japan	5) Indonesia	6) SouthKorea
7)Taiwan	8) France	9)Thailand	10) Saudi Arabia	11)Germany	12) India

Singapore’s total Trade with India for top 10 items (in thousands S$)

July 2009			July 2010
Imports from India	Exports to India	Total Trade	Imports from India	Exports to India	Total Trade
470,051	657,392	1,127,443	641,455	834,494	1,475,949

Principal five global domestic export items from Singapore in July 2010

Topped Crudes;
Ships& Aircraft Bunkers & Stores Loaded on board for own consumption
Motor Spirit Refined Premium Leaded
Other Electronic Integrated Circuits
Parts & Accessories of Automatic Data Processing Machines Etc

Principal five global import Items of Singapore in July 2010

Topped Crudes
Other Electronic Integrated Circuits
Petroleum oils & oils from bituminous minerals crude;
Motor Spirit Refined Premium Leaded
Parts & Accessories of Automatic Data Processing Machines Etc

Principal five domestic export items of Singapore to India in July 2010

Topped Crudes
Parts & Accessories of Automatic Data Processing Machine etc
P-Xylene
Styrene
Other Printed matter

Principal five import Items of Singapore from India in July 2010

Topped Crudes
Motor Spirit Refined Premium Leaded
Articles Of Jewellery Of Other Precious Metal Whether Or not Plated Or Clad With Precious Metal
Telephones for Cellular Network Or Other Wireless Networks
Vehicles For Goods With Gvw Over 20 Tonnes Diesel Or Semi-Diesel Driven

Monthly trade figures between India and Singapore(in thousands S$)

Trade	July 2007	July 2008	July 2009	July 2010	June 2010
Total Trade#	2,096,825	3,056,021	2,016,156	2,585,141	3,090,385
Sgpr’s Imports	714,249	1,525,298	682,102	857,447	1,343,948
Sgpr’s Exports#	1,382,576	1,530,723	1,334,054	1,727,694	1,746,437
Sgpr’s Domestic Exports	577,373	682,021	593,230	745,434	873,009
Sgpr’s Re-Exports	805,203	848,702	740,824	982,260	873,428

#Total Trade = Imports + Exports, Exports=Domestic Exports+Re-exports

Monthly figures for Singapore’s Global Trade (in thousands S$)

Trade	July 2007	July 2008	July 2009	July 2010	June 2010
Total Trade#	73,231,275	88,301,318	66,378,674	79,017,404	78,537,136
Sgpr’s Imports	34,024,330	43,133,774	31,358,202	38,168,769	37,538,974
Sgpr’s Exports#	39,206,945	45,167,544	35,020,472	40,848,635	40,998,161
Sgpr’s Domestic Exports	20,232,155	23,947,679	18,205,482	20,538,703	21,007,318
Sgpr’s Re-Exports	18,974,790	21,219,865	16,814,990	20,309,932	19,990,843

Cumulative figures for Singapore’s Global Trade (in thousands S$)

	2006	2007	2008	2009	Jan-July 2009	Jan-July 2010
Total global Trade	810,483,273	846,607,420	927,654,759	747,417,400	409,644,225	516,248,820
%change y-o-y	13.24%	4.46%	9.57%	-19.43%	-26.88%	26.02%
Singapore's Imports	378,924,079	395,979,700	450,892,588	356,299,229	195,801,385	245,353,072
%change y-o-y	13.73%	4.50%	13.87%	-20.98%	-27.90%	25.31%
Singapore's Exports	431,559,194	450,627,720	476,762,172	391,118,171	213,842,841	270,895,748
%change y-o-y	12.82%	4.42%	5.80%	-17.96%	-25.91%	26.68%
Sgpr’s Domestic Exports	227,377,989	234,903,097	247,617,959	200,003,141	107,902,988	139,574,278
%change y-o-y	9.61%	3.31%	5.41%	-19.23%	-28.17%	29.35%
Singapore’s Re-Exports	204,181,205	215,724,623	229,144,213	191,115,030	105,939,853	131,321,471
%change y-o-y	16.62%	5.65%	6.22%	-16.60%	-23.46%	23.96%

Cumulative figures for India and Singapore Bilateral Trade (In thousands S$)

	2006	2007	2008	2009	Jan-July 2009	Jan-July 2010
Total Bilateral Trade	19,920,832	23,860,242	28,756,963	21,585,714	12,809,408	17,459,362
%change y-o-y	19.97%	19.78%	20.52%	-24.94%	-30.41%	36.30%
Singapore's Imports	7,755,256	8,814,189	11,922,381	8,156,459	4,729,682	7,137,909
%change y-o-y	14.24%	13.65%	35.26%	-31.59%	-39.11%	50.92%
Singapore's Exports	12,165,576	15,046,053	16,834,582	13,429,255	8,079,726	10,321,452
%change y-o-y	24%	23.68%	11.89%	-20.23%	-24.06%	27.75%
Sgpr’s Domestic Exports	5,094,876	6,191,148	7,515,094	5,677,674	3,531,315	4,628,303
%change y-o-y	7.8%	21.52%	21.38%	-24.45%	-28.09%	31.06%
Singapore’s Re-exports	7,070,700	8,854,905	9,319,488	7,751,581	4,548,411	5,693,149
%change y-o-y	39%	25.23%	5.25%	-16.82%	-20.60%	25.17%

Singapore’s Total Global Trade in July 2010

Singapore’s Total global trade in July 2010 expanded by 19% on a year-on-year basis, after the 27% increase in the previous month.

Total exports increased by 17%

Total imports increased by 22%

Total domestic exports increased by 12.82%

Re-exports increased by 20.78%

Non-oil domestic exports (NODX) increased by 18%.

Electronic NODX increased by 26%

Non-electronic NODX increased by 14%

Oil domestic exports increased by 1%

Non-Oil Re-Exports (NORX) increased by 18%.

Electronic NORX increased by 26%

Non-electronic Re-Exports increased by 9.5%

PART – II

INTERNAL

ECONOMY

Singapore posts 18.9% growth rate

With a sizzling 18 per cent first-half pace in the bag, Singapore is on track to post a 40-year high economic growth this year, if not its highest ever. The Ministry of Trade and Industry hiked up the official forecast of Singapore's 2010 GDP growth by an unprecedented six points to 13-15 per cent - a range that should place it among the fastest-growing economies. The last time that Singapore's full-year growth crossed 13 per cent was in 1972 when the economy grew 13.5 per cent - which is not far from the all-time high of 13.8 per cent in 1970. GDP figures released - revised Q1 growth of 16.9 per cent and a record 19.3 per cent Q2 surge – has prompted private sector economists also to revise their projections upwards. Q2 growth was fairly broad-based, with boosts as well from not only global electronics demand and trade flows but also strong domestic bank lending and foreign exchange trading and, higher visitor arrivals, with the opening of the integrated resorts.

SPH profit up a robust 29.9% in Q3

SINGAPORE Press Holdings (SPH) reported a 29.9 per cent increase in its net profit for the third quarter on the back of a strong rebound in advertising sales and higher contribution from its property segment. Earnings for the three months ended May 31 stood at $165 million, up from $127 million in the same period a year ago. Recurring earnings grew 34.7 per cent to $177 million from a year ago, buoyed by better performance in the group's newspaper and magazine segment. With a rebound in advertising sales, revenue from the segment rose 19.8 per cent to $266 million. Print advertisement revenue was up 28.1 per cent to $204 million, thanks to higher sales in advertisement categories such as recruitment. Circulation sales, however, dipped 3.1 per cent for the quarter to about $53 million. Revenue from its property segment jumped 43.4 per cent to $135 million, due to higher revenue from Sky@eleven - which secured its temporary occupation permit in May - and the increase in rental income from Paragon.

Q2 earnings of companies lag behind GDP growth

While Singapore economy has performed spectacularly in the second quarter, not all companies kicking off the reporting season saw the boom firing their bottom lines. 20 listed companies reported a combined net profit of $845.9 million for the second quarter ended June 30, 2010. This is down 26.8 per cent from a year ago. This can be attributed to seven firms which saw their earnings shrink. Of the blue chips, Keppel Corp took a big hit as net profit attributable to shareholders dropped 53 per cent year on year to $347.3 million. This reflected the absence of a one-off gain - the conglomerate had bagged $422 million last year from selling Singapore Petroleum Company. On a pre-exceptional basis, Keppel's Q2 net profit rose 9.4 per cent year on year to $347.3 million, but it saw a 24.6 per cent year-on-year fall in revenue to $2.42 billion. Among the smaller companies, Aztech Group saw its net profit plunge 80 per cent to $1.1 million as revenue from the marine division declined, and labour and raw material costs increased. Suntec Real Estate Investment Trust (Suntec Reit) got through the second quarter with a slight 3.7 per cent dip in income available for distribution to $45.9 million. It blamed lower office and retail revenues. The lower earnings from the seven companies more than offset higher takings from the remaining 13. Of these, 12 earned more from a year ago and another reversed from losses to profit. Buoyed by strong property markets in Singapore and the region, Keppel Land raked in a net profit of $70.1 million, up 20 per cent year on year. Its unit K-Reit also did well as distributable income to unit-holders rose 26 per cent to $22 million. OSIM International sustained its comeback with a second-quarter net profit of $12.1 million, which is more than two times the $5 million it made a year ago. For the first half ended June 30, 22 companies - not all companies report second-quarter breakdowns - posted a combined profit of $1.66 billion, down a smaller 9.4 per cent from the previous year. While corporate earnings may appear unspectacular so far, analysts seem unperturbed. For instance, several are upbeat about Keppel Corp and are expecting it to win a large deal from Brazilian oil group Petrobras. The market also continues to favour Reits, many of which have finished reporting their second-quarter earnings. The Singapore economy grew a sizzling 19.3 per cent in the second quarter, according to official flash estimates. The official forecast of Singapore's 2010 growth has now been raised to 13-15 per cent. Apart from one-off factors, the apparent disconnect between economic growth and earnings is due partly to the lag effect, and to the fact that many Singapore companies now earn a substantial part of their income from outside the country.

EMPLOYMENT

Foreign workers needed for top posts in finance, IT

A sizeable proportion of foreign workers entering Singapore this year could be highly skilled employees. Recruiters' observations of the rising number of expatriate professionals now being hired point the same way. The strong economic rebound, coupled with a tightening labour market, could mean Singapore will need more than 100,000 extra foreign workers this year, Prime Minister Lee Hsien Loong said last week. While the bulk of these foreigners are likely to take on lower- wage jobs in manufacturing with ramped-up production as well as the retail, F&B (food and beverage) and construction sectors, a good number will also be needed for top posts in sectors such as finance and IT.

MANUFACTURING

Indicator points to slower June manufacturing growth

SINGAPORE'S manufacturing sector continued to expand in June, though at a slower pace from the month before as global manufacturing activity dipped. The Singapore Institute of Purchasing & Materials Management (SIPMM) said yesterday the Purchasing Managers Index - a leading indicator for manufacturing - dropped to 51.3 in June, from 52.2 in May. SIPMM said the dip was due to lower new orders and a fall in production output and imports. In particular, output from the electronics sector moderated to 50.5 in June, from 53.7 in May. A reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 marks a contraction. The moderation in Singapore's factory output is in line with the global picture. Economic powerhouses the US and China have also seen slower growth in manufacturing. Economists here reckon the drop in pace is expected to continue given the more somber global economic climate, but is unlikely to drag the local economy into recession.

Biomed puts brake on June output growth

Industrial production has recorded first fall in 7 months on sharp account of slowdown in biomedical sector. June's factory output fell short of expectations for the first time this year, as a slowdown in pharmaceutical output put the brakes on manufacturing's acceleration. Industrial production last month rose 26.1 per cent from a year ago, way under consensus expectations for 36.7 per cent growth. Factories also produced 23.4 per cent less than they had in May - the first sequential, seasonally-adjusted fall in seven months. Biomedical output's year-on-year growth slowed to 29.8 per cent as pharmaceutical plants produced 30.8 per cent more than they had last June. This was a sharp slowdown from growth in excess of 100 per cent the month before, and June's biomed output was less than half that recorded in May. Excluding biomedical manufacturing, overall production grew 24.8 per cent from last June but fell 1.8 per cent from May, data released by the Economic Development Board shows. Biomedical output accounts for a fifth of Singapore's value-added, the second largest industry share after electronics' 30 per cent. Growth in the latter sector slowed slightly, but was still a robust 46.8 per cent year-on-year, as semiconductors output grew 74.9 per cent thanks to strong demand for cellphones, personal computers and consumer electronic products. The other sectors - precision engineering (33 per cent), general manufacturing (11 per cent ) and chemicals (7 per cent growth) - all saw their pace of growth slow by several percentage points too. And transport engineering's output continued its year-on-year fall due to fewer ship conversion and repair jobs in the ship yards, which offset growth in the land and aerospace segments.

BANKING

Bank lending up for 7th straight month

Bank lending grew in May for the seventh straight month, as optimism over the economic outlook for Singapore prevailed over worries about the impact of Europe's sovereign debt troubles. In a sign that business sentiment stayed upbeat despite financial-market volatility, loans to businesses expanded 1.7 per cent over the month to $155.1 billion at end-May, the fastest pace of growth since September 2008. Total Singapore-dollar bank lending here rose 1.5 per cent, or $4.45 billion, in May to $292.5 billion at the end of the month, driven by an increase in both business and consumer lending. Compared to a year ago, bank lending rose 8 per cent, the fastest expansion since March last year. Most of the growth in business loans in May was due to increased lending to financial institutions - a category that includes fund management firms and real estate investment trusts - as well as a rise in general commerce loans and loans to manufacturing firms. Loans to building and construction businesses fell, as did loans to transport, storage and communications firms. Consumer loans continued their upward climb, driven by housing and bridging loans, which expanded 2 per cent, or $1.94 billion, over the month to $98.5 billion at end-May. Credit-card lending rose, but car loans and loans for share financing fell compared to a month earlier.

UOB taking up US$100m of AgBank's IPO

UNITED Overseas Bank became the first Singapore bank to join the action surrounding the initial public offer by Agricultural Bank of China; it agreed to subscribe for shares worth US$100 million in AgBank's global share offering. The last of China's 'Big Four' banks to go public, AgBank is offering 25.4 billion H-shares in Hong Kong at between HK$2.88 and HK$3.48 apiece and 22.2 billion A-shares in Shanghai at between 2.52 yuan and 2.68 yuan each in a dual listing.

DBS blames IBM for outrage but braces for action from MAS

DBS Bank blamed a botched hardware repair job for causing widespread service outage for a few hours. But the explanation may not shield the bank from a backlash, from Monetary Authority of Singapore (MAS) with Singapore's financial regulator saying that it would look at what action to take. MAS will review DBS's investigation report on the incident and assess 'the extent to which the bank has failed to meet the recommended standards set out in the Internet Banking and Technology Risk Management Guidelines before determining the appropriate regulatory action to take'. DBS outsourced its network and mainframe functions to IBM under a 10-year, $1.2 billion deal in 2002. Due to an oversight, what would typically have been a routine replacement eventually escalated to become a complete systems outage.

AVIATION

Finnair to start Singapore- Helsinki flights next May

Finland's Finnair, which pulled out of Changi three years ago, will be back soon. Changi Airport Group (CAG) announced that Finnair will start daily non-stop flights between Singapore and Helsinki from May 2011. The flights to the Finnish capital will reintroduce direct air links between Singapore and Finland which ended when Finnair scrapped its one-stop (via Bangkok), four-times-a-week service in May 2007. Finnair is the largest Nordic carrier with a strong European network that includes capitals like London, Paris, Copenhagen and Stockholm.

Tiger Airways passenger numbers soar

TIGER Airways reported robust passenger volumes and load factors for June 2010, with passenger numbers growing 39 per cent year-on-year to 508,000. Load factor for the month was 86 per cent. In total, some 5.3 million passengers flew on the budget carrier during the 12 months to June, an increase of 52 per cent over the 3.5 million passengers in the preceding 12 months. Load factor for the 12-month period to June 2010 was 85 per cent, an increase of 5 percentage points year-on-year. The airline, which is 34 per cent owned by Singapore Airlines and operates from bases in Singapore and Australia, is planning to boost its fleet to 14 by the end of this year, from 10 A320 planes now. This will grow to 68 planes by the end of 2015. The airline has also announced plans to hire at least 20 more pilots and 60 cabin crew to support its growing operations out of Singapore.

SIA, Tiger Airways offering more flights and destinations

Singapore Airlines (SIA) has announced that it is implementing higher frequencies on select routes from Oct 31, 2010 - March 26, 2011, in response to growth in travel demand. Budget carrier Tiger Airways is planning to add Taipei to its network as well as increase frequencies to four other destinations in Greater China, which will boost its services there by 55 per cent.

SIA's Q1 turnaround better than expected

A STRONG recovery in passenger demand and resurgence in air freight have lifted Singapore Airlines back into the black. SIA reported a first-quarter profit of $252.5 million, reversing a loss of $307.1 million in the April-June 2009 period. The latest results are better than many analysts' estimates and translate to earnings per share of 21.2 cents, versus a loss of 26 cents a share a year earlier. Revenue this time around was $3.47 billion, up from $2.87 billion in Q1 last year. SIA was sitting on $5.3 billion in cash and near-cash at end-of June, up from $4.4 billion a year earlier. Group operating profit for Q1 was $251 million, a turnaround of $570 million from a $319 million operating loss last year. The parent airline company made an operating profit of $136 million, versus an operating loss of $271 million last year. And SIA Cargo bounced back with an operating profit of $60 million, versus a loss of $104 million last year. SIA Engineering's operating profit is $36 million, up from $12 million in 2009. Silkair chalked up an operating profit of $15 million, against a $3 million loss previously. The International Air Transport Association last month projected an overall industry profit of US$2.5 billion this year - a sharp reversal of its March forecast of a US$2.8 billion loss.

Four short-listed for 3rd Changi ground-handler

Changi Airport Group (CAG) has short-listed four companies - AirAsia Berhad, US-based Aircraft Service International Group, Jetstar and SIA Engineering Company - in its search for a third ground-handler for Changi Airport. CAG has also revised the tenure of the ground-handling licence from five to 10 years, based on feedback from the short-listed companies. The third ground-handler should commence operations at Changi Airport in the first quarter next year. The tender, which closes on Sept 17, covers the provision of passenger-handling, apron-handling and cargo-handling services. As such, the 89 airlines operating at Changi will enjoy a more competitive ground handling market, which could translate to better quality, wider choice and cost savings. The third ground-handler will join incumbents Singapore Airport Terminal Services Limited, which handles the bulk of the business at Changi, and Changi International Airport Services (Pte) Limited. The search for a new party was initiated after Europe-based ground-handler Swissport International pulled out of Singapore in March last year, having chalked up losses of over $50 million during its four-year stint here.

TOURISM

Passenger, cargo traffic at Changi higher in June

PASSENGER traffic at Changi Airport rose to 3.62 million in June - 18.6 per cent more than in the same month last year and almost 13 per cent more than in June 2008. This takes the number of passengers passing through the airport in the first half of the year to more than 20.2 million - 17 per cent more than in recession-hit H1 2009 and 8.1 per cent more than in H1 2008. Growth was led by traffic to and from South-east Asia, North-east Asia, South Asia and North America - all notching double-digit jumps. Long-haul traffic also improved, with passenger movements to and from North America rising 28 per cent. Full-service carriers (FSCs) accounted for two-thirds of June's passengers. Low-cost carriers (LCCs) provided the rest. On the cargo side, Changi handled 879,000 tonnes from January to June - a 16.5 per cent increase year on year. It dealt with almost 15,000 tonnes in June alone - up 13.1 per cent year on year. Aircraft movements continued to increase. Changi handled 128,010 flights in the first six months this year - up 10.4 per cent from H1 2009. June alone saw 21,800 flights - up 14.5 per cent from a year back. Changi serves 89 airlines operating close to 5,100 weekly scheduled flights. Its latest customer is Mandala Airlines, which operates to Jakarta and Balikpapan. Mandala started using Changi on June 25.

Visitor arrivals set new June record of 950,000

VISITOR arrivals in June rose 26.7 per cent to 950,000, from 750,000 in the same month last year. And the latest figure is not only a seventh straight monthly rise but a June record. Visitor days - the amount of time travelers spent in Singapore - totaled 3.8 million in June, up 22.6 per cent from a year back. The top five visitor-generating markets were Indonesia, Malaysia, India, Australia and China. These markets provided 56 per cent of all arrivals for the month. In particular, Indonesia accounted for 214,000 arrivals - far ahead of second-placed Malaysia with 93,000. In terms of growth, China, Malaysia, and Hong Kong were strongest. The number of Chinese tourists coming to Singapore leapt 65.8 per cent. On the hotel front, gazetted room revenue rose 45.7 per cent year on year to $170 million in June. The average occupancy rate (AOR) was 12.3 percentage points higher year on year at 88 per cent. And the average room rate (ARR) was 22.7 per cent higher at $219. Revenue per available room (RevPar) was up 42.6 per cent at $192.

TECHNOLOGY S'pore to make smallest biosensors in the world

STMicroelectronics has begun manufacturing the smallest 'biosensors' in the world at STMicro's cutting-edge facility in Singapore. The Geneva-headquartered giant said it is making about 400,000 biosensors a day at its Singapore plant to meet global demand. Biosensors are extremely tiny devices (2mm by 2mm) that combine a biological, a mechanical and a chemical detector component. One example of a biosensor is a blood glucose analyser - a tiny drop of blood is inserted into a device in which a tiny biosensor analyses the blood composition rapidly. A MEMS (Micro-Electro-Mechanical Systems) is a very tiny device that integrates mechanical elements, sensors, actuators, and electronics on a silicon wafer. A typical accelerometer would cost about US$1 while a gyroscope would be under US$3 apiece.

EPGC to be constructed in end 2014

The Experimental Power Grid Centre (EPGC), that will cost an initial $38 million and is due to start up in the second half of 2011, will support R&D on new energy concepts with industry partners. It will help support prototype, experimental test-bed projects like the micro-grid using renewables like sun, wind and waste energy on Pulau Ubin, as well as first-adoption, 'live' tests including those on electric vehicles and smart electricity meters here. The plan is that the whole-of-government approach to develop technology for a 'smart' grid here - which can for instance, allow owners of electric cars or buildings with solar panels to sell electricity back to the power grid - can also be scaled up and commercialised for global markets in future. The EPGC - being built next to, and leveraging on resources at the Institute of Chemical and Engineering Sciences (ICES) on Jurong Island - 'represents a next milestone in our blossoming energy research, development and demonstration landscape'. As the Agency for Science, Technology and Research's dedicated centre for energy research, EPGC will undertake R&D for intelligent and decentralised power distribution, interconnection and use. It will complement other agencies in attracting new companies to invest here in areas related to smart grids and distributed generation, he added. Industry partnerships - like those signed with SP PowerGrid and CEI Contract Manufacturing (covering mobile solar technology) - will be a key focus of EPGC. Two others, Vestas (already committed to a $500 million wind research centre here) and Rolls Royce (aerospace and ships) also signed letters of intent.

INFORMATION TECHNOLOGY

Singapore firms lead in cloud adoption: Savvis

SINGAPORE firms lead the pack when it comes to the adoption of cloud computing, according to a cloud computing study commissioned by cloud infrastructure firm Savvis. The study surveyed 456 IT chiefs across Singapore, the United States and Britain and reported that 76 per cent of the 50 Singaporean firms that responded have already begun to use cloud computing, against 66 per cent in the US and 57 per cent in the UK. Cloud computing refers to Internet-based computing, where resources and information are stored on a server provided by a third party. Users access the data via a network such as the Internet, and the third-party provider manages and maintains the infrastructure. This can help the company save on its capital expenditure. The most cited benefit for firms in Singapore was the ability to scale resources up and down to meet fluctuating business demands, with 42 per cent of the Singapore businesses pointing to this as the main reason they chose to turn to cloud computing. About half of the local firms said that the key issue their company faced was having to accomplish more with a reduced budget, and those who had adopted or are planning to adopt cloud computing said they expect to save an average of 15 per cent on their IT budget by switching to cloud. The survey found that 62 per cent of the Singapore companies keep most of their IT infrastructure in- house, and not one of the companies surveyed said that it completely outsourced its IT. The top reason for firms' reluctance to move to cloud computing is concern over the security of sensitive data, and the Savvis report postulated that this concern may be due to 'mass market cloud solutions not offering the high security standards . . . available from reputable enterprise cloud service providers'. Savvis operates a data centre in Singapore and has maintained a presence here since 1999. It currently employs about 70 people in Singapore. The study was conducted by Vanson Bourne, a research-based technology marketing consultancy.

TRADE & INVESTMENT

Wilmar bags Aussie sugar giant for A$1.75b

Wilmar bought Sucrogen, Australia's largest raw sugar producer for A$1.75 billion (S$2.04 billion) through a combination of debt and equity as part of a plan to build a 'significant sugar business' tapping demand from fast-growing developing countries. Sucrogen has seven sugar mills in the northern Australian state of Queensland, which produce 2.1 million tonnes of sugar annually. Sucrogen is the world's second-largest exporter of raw sugar. It is also the largest sugar refiner in Australia and New Zealand, the second-largest Australian producer of fuel bio-ethanol and the largest supplier of industrial ethanol to the Australian market.

Assets under management hit new peak last year: MAS survey

ASSETS managed by Singapore fund managers reached a new high last year as money poured into the region following the global financial crisis. Total assets managed by the fund management industry here rose to $1.2 trillion, up 40 per cent compared to $864 billion as at end-2008. According to the annual survey of the Singapore asset management industry, the latest assets under management (AUM) have exceeded the pre-crisis peak of $1.17 trillion in 2007. More than 80 per cent of total AUM were sourced from outside Singapore, demonstrating the Republic's primary role in serving regional and international investors.

Temasek focus on Asia pays handsome returns

Temasek Holdings, whose portfolio value climbed to a new high in the latest fiscal year, has found its focus on Asia has paid off handsomely in shareholder returns. It plans to raise its Asian exposure further over the next 10 years. Temasek's annual report 2010 showed its net portfolio value jumped $56 billion to $186 billion as at March 31, thanks to investments made and the robust recovery in global stock markets during the period. Its portfolio value was $185 billion as at March 31, 2008 before diving to $130 billion as at March 31, 2009 amid the global financial crisis. Temasek's one-year total shareholder return (TSR) hit 42 per cent by market value and 26 per cent by shareholder funds. Temasek's portfolio exposure to Asia, outside of Singapore and Japan, has grown to 46 per cent in March 2010, compared to 16 per cent in March 2004 and 43 per cent in March 2009. Post-March 31, Temasek has invested in India's leading utility firm GMR Energy, mining companies Platmin of South Africa, Inmet Mining of Canada, and Chesapeake Energy of the US.

Trade, exports set to grow 17-19% this year

Better than expected Q2 trade figures prompted Singapore to raise this year's forecasts for both total trade and non-oil domestic exports (NODX) growth to between 17 and 19 per cent. Buoyant trade growth from Asian economies in the first half and Gartner's upgraded forecast for global semiconductor sales are other reasons for the upgrades. Previous forecasts for both NODX and total trade growth in 2010 were 15-17 per cent and 14-16 per cent respectively. These upgrades accompanied news of a sharp upward revision to the official GDP forecast, and strong trade numbers for June. NODX grew 29 per cent year-on-year last month, regaining its pace after growth slowed to 24 per cent in May from April's 30 per cent surge. Singapore's NODX in Q2 thus grew a larger than expected 28 per cent year-on-year. Higher domestic exports of integrated circuits, IC parts and computer parts led to the 44 per cent jump in electronic NODX last month, up from May's 39 per cent increase. And the rebound in pharmaceutical exports, as well as increased shipments of petrochemicals and machinery exports, pushed non-electronic NODX 21 per cent higher, after May's 16 per cent rise. In sequential terms, however, exports eased for a second straight month in June. After seasonal adjustments, last month's NODX fell a marginal 0.1 per cent month-on-month, after a 0.2 per cent fall in May.

Retail sales fall for 3rd straight month

RETAIL sales fell short of expectations for a third straight month in May, pulled down again by a slump in car sales. Total sales fell 3.4 per cent year on year in May, after a revised 2.3 per cent drop in April. The drop was bigger than a median forecast of 2.4 per cent by economists polled by Bloomberg. But excluding motor vehicle sales, retail sales in May rose 7.8 per cent from the same month a year ago. Vehicles are the single largest component of Singapore's monthly retail sales index, with a weight of 34.5 per cent. May's 37 per cent fall in car sales widened from April's 31 per cent drop, as higher car prices due to higher certificate of entitlement premiums were offset by a fall in the volume of COE quotas from last year. But most other retail trade activities reported higher sales this May than last May, with double-digit growth in the sales of watches and jewellery, apparel and footwear, petrol, medical goods and toiletries, and furniture and household equipment. Provision and sundry shops were the only category of retailers to see a fall in sales, at 2.7 per cent.

Temasek sells F & N stake to Japanese company and exits with $ 436m profit

The Tokyo-based beverage giant Kirin Holding is buying Temasek's entire 14.7 per cent stake in F&N for $1.336 billion, and is targeting F&N as a platform for growth in South-east Asia. Temasek will be netting a handsome gain of some $436 million from the deal. It bought its interest in F&N for $900 million or $4.38 per share in 2006, becoming the second largest shareholder after OCBC and the Lee family that founded the bank. Kirin is valuing each share at $6.50, which represents a premium of 14.6 per cent over F&N's closing price of $5.67 yesterday. Merrill Lynch was Kirin's financial adviser on the deal. Kirin owns a wide portfolio of beers, wines, teas and juices, and has interests in breweries and distilleries in countries such as China, the Philippines and the US. Recently, it bought all the remaining shares in Australian beer producer Lion Nathan that it did not already own. The company is planning to become the F&B group in Asia.

IE S'pore leads food firms to S Africa, Nigeria

INTERNATIONAL Enterprise Singapore (IE) led its first ever food business mission to South Africa and Nigeria on Sunday to explore expansion opportunities in those countries. The eight participating firms were Ace Synergy, Gan Hup Lee, Ha Li Fa, Owl International, Seng Hua Hng Foodstuff, Sin Mui Heng Food Industries, Tai Hua Food Industries and The TiffinBox Company. They will be there until Aug 4. IE also organised a three-day trip in early July for six food service operators such as Les Amis and Polar Puffs to Jakarta, which included meetings with potential franchisees.

Khazanah wins Parkway battle

Khazanah Nasional got its way when it revised its earlier partial offer of $1.18 billion to a $3.5 billion general offer for all Parkway shares it does not own. But rival bidder Fortis Healthcare, which threw in the towel and accepted Khazanah's offer, is poised to snap up a profit of more than $116 million for its four-month venture into Parkway. Fortis - via RHC Healthcare - has also since withdrawn its own general offer for Parkway. Valuing Parkway at over $4.5 billion, Khazanah's general offer of $3.95 per share represents a 4.5 per cent increase from its partial offer price of $3.78 per share and a 3.95 per cent premium to Fortis' offer price of $3.80 per share.

PROJECTS PUB calls tender for second desalination plant

National water agency PUB is calling an open tender for Singapore's second - and larger - desalination plant to be built at Tuas. The plant, which will be completed by 2013, will add 318,500 cubic metres - or 70 million gallons - of fresh water daily to the nation's supply. The tender launch comes as Singapore aims to boost its desalination capacity almost 10 times by 2060 to be water self-sufficient by the time the country's water agreement with Malaysia expires in 2061. New long-term goals call for desalinated water (water reclaimed from the sea) to meet at least 30 per cent of water demand by 2060; at present, just 10 per cent of water demand is met by desalinated water. The new desalination plant is Singapore's latest water supply infrastructure project since the fifth and largest Newater plant at Changi was completed last month. PUB also intends to build a sixth Newater plant, at Tuas, by 2030. It aims to triple Newater capacity so it can meet half of water demand by 2060. Singapore's first desalination plant - the $200 million SingSpring plant at Tuas - was awarded to a Hyflux consortium in 2003. This plant has now been operating for close to five years and produces 136,000 cubic metres - or 30 million gallons - of fresh water daily. The project was PUB's first public-private partnership project.

Three more deals for PUB at Water Week

THREE more deals have been struck at the 2010 Singapore International Water Week. Under the first deal, ITT Corporation and national water agency PUB will establish a joint research and technology testing programme to develop energy- efficient water and waste- water treatment solutions. ITT transports and treats water and waste-water. Under a memorandum of understanding signed yesterday, ITT and PUB will collaborate on energy- efficient pumping and secondary treatment, sludge handling and advanced oxidation process development. ITT will also look at using Singapore as a base to test-bed its products and treatment systems. The second deal is between PUB and Singapore- based Optiqua Technologies, to develop Optiqua's real-time sensor technology. The two organisations will work to accelerate the development and launch of Optiqua's monitoring technology in affordable sensors that can be implemented in the distribution grid for real-time water quality monitoring. The technology is being pilot-tested at PUB's facilities. The third deal is between PWN Technologies and PUB. Under a memorandum of understanding on research collaboration, they will jointly look at ceramic membranes for water treatment, membrane process optimisation and advanced oxidation processes.

Sembcorp secures 92.26% stake in Cascal

SEMBCORP Industries has paved the way for Singapore to become a global water player with enhanced capabilities to serve both industrial and municipal customers by buying 92.26% of stake in Cascal, a Dutch water company. Sembcorp announced that its initial tender offer for US-listed Cascal NV has been successfully completed. The energy, water and marine group garnered almost 28.4 million shares, at US$6.75 a share, costing it US$191.7 million for its majority stake of 92.26 per cent in Cascal. Sembcorp, also made a subsequent offer for the remaining 7.74 per cent stake at US$6.75 a share which was to expire at 5pm New York time on July 30. If Sembcorp owns at least 95 per cent of Cascal shares by the end of this subsequent offer period, it could complete the acquisition of Cascal by effecting squeeze-out proceedings under the Dutch Civil Code. The price to be paid to minority shareholders will then be determined by the Dutch court. After such an event, Cascal will no longer be a public company. The Cascal takeover provides Sembcorp with an additional five million or so customers that Cascal currently serves. It will also expand Sembcorp's water business - now in Singapore, China, the UK and the Middle East - to include South Africa and South America, spanning a total of 31 locations in 11 countries. Sembcorp has said that the Cascal buyover will be earnings accretive in its fiscal year 2011.

APPOINTMENTS HSBC appoints new Singapore CEO

HSBC has appointed a new Singapore chief executive to succeed Guy Harvey-Samuel, who is moving to Hong Kong to help oversee the bank's Asia-Pacific operations. Alex Hungate, now HSBC's global head of personal financial services and marketing, based in London, will take over from Mr Harvey-Samuel as Singapore CEO on Sept 1. Mr Harvey-Samuel, HSBC Singapore CEO since August 2006, will move to Hong Kong to become head of international, Asia-Pacific, from Sept 1. He will have responsibility for 12 Asia-Pacific countries that make up part of HSBC's operations in the region. He will continue to report to Peter Wong, HSBC's overall head in Asia-Pacific, also based in Hong Kong. HSBC has operations in 22 markets in Asia-Pacific, including its two biggest - Hong Kong and mainland China.

SGX appoints two co-Presidents to tap Asian opportunities and grow the company

The Singapore Exchange (SGX) appointed its head of Markets, Gan Seow Ann, and head of Market Services, Muthukrishnan Ramaswami, as 'co-presidents' - so that they may 'steer and grow SGX' together with CEO Magnus Bocker. Much of SGX's restructuring effort involves re-grouping existing business and support units to provide a more streamlined organisation structure. The result is 10 clearly defined business units and seven support units, which the SGX believes will provide a 'sharper focus' on key products and customer segments. Risk management and regulation remains a separate division. Notable changes include the addition of a specific Derivatives business unit and a Fixed Income one, both of which will be led by Mr Gan. Mr Gan will continue to oversee the markets business, ie divisions such as Derivatives, Commodities, Fixed Income, Listings, in addition to the aforementioned Securities. Mr Muthukrishnan, who is also the chief operations officer, will continue to oversee market services such as Broker Services, Clearing Services and Depository Services.

MISCELLANEOUS

Summit on managing human capital in Asia

THE Singapore Human Capital Summit 2010 will take place on Sept 29 and 30 at Resorts World Sentosa. Co-organised by the Ministry of Manpower (MOM) and the Workforce Development Agency (WDA), the event is expected to draw more than 700 local, global and regional business leaders with more than 50 speakers and facilitators. The summit, now in its third year, will look at how Asia faces the challenges of managing human capital. Highlights will include findings from the recently concluded first phase of a 'Future of Work' study conducted by Lynda Gratton, ranked second most influential woman thinker in the world, according to Thinkers 50. During the summit, the winner of the Second Asian Human Capital Award will also be announced. The award is conferred by MOM, INSEAD and CNBC Asia Pacific, to recognise regional companies with innovative and effective people practices.

Cost of hosting YOG by Singapore likely to touch $387m

The government has projected that the cost of hosting next month's inaugural Youth Olympic Games (YOG) will touch $387 million - more than three times its initial estimate of $122 million. That original figure - which was listed in the bid document submitted to the International Olympic Committee (IOC) back in 2007 - was an 'indicative' one, given that the scale and scope of the Games has grown significantly since then, said Niam Chiang Meng, permanent secretary at the Community Development, Youth and Sports Ministry. He also added that the $387 million budget did not include the $60 million already secured in sponsorship deals, almost 90 per cent of which is in kind. More money had to be pumped in for technology systems, upgrading of sports venues, logistics and transport, and brand-new security systems. About 70 per cent of the new budget, or $260 million, were tenders and contracts awarded to local companies such as Comfort-Delgro and CityNeon Holdings, which in turn would give a timely boost to the economy. Another $46 million worth of deals were snapped up by foreign companies with local subsidiaries. The number of volunteers has soared to 20,000, up from just 7,000 initially. This meant setting aside additional funds to provide uniforms, meals and transport for them, among various necessities. While stressing that Singapore's YOG operating expenditure was 'far less' than what Beijing, Vancouver or Melbourne spent in recent years to host the Olympics or Commonwealth Games, he added that Singapore's intent was to win the hosting rights and help showcase the country to the international community as a world-class sporting hub. The last multi-sport event that Singapore organised was the Southeast Asian Games in 1993. According to latest numbers from the Singapore Tourism Board, some 40,000 foreigners will visit the Republic for the Aug 14-26 event and spend $57 million, but the actual sum may turn out to be even higher. The ministry also estimates that the international media value to Singapore will be worth $86 million as a result of the publicity from the over 2,000 accredited media personnel flying in to report on the YOG. Among the many enduring legacies that Singapore hopes to leave behind will be upgraded stadiums for Singaporeans to enjoy, a Youth Olympic Park and museum, and a lasting sporting culture. The local companies involved will also get to gain good experience and exposure that will enhance their brand, both locally and overseas.

Changi Motorsports Hub ready by 2012

The $330 million Changi Motorsports Hub (CMH) will be up and running by March 2012, in time for the year's racing season. The consortium, which pipped both Singapore Agro Agriculture and the Haw Par Corporation-backed Sports Services to operate the CMH for a 30-year period, consists of former Japan GT driver Genji Hashimoto, former Jurong Kart World owner Thia Yoke Kian, Singaporean lawyer Eddie Koh and Fuminori Murahashi, who has experience with events such as Formula Nippon and Super GT. Located along Aviation Park Road, the 41 hectare sea-facing site will include a Federation Internationale de l'Automobile (FIA) Grade-2 certified four kilometre (km) racetrack, a 1.2 km karting track, a drift track, a bonded warehouse and seating capacity for some 20,000 spectators plus a 10,000-seat temporary grandstand.

Singapore's richest get 17% wealthier this year

The Republic's wealthiest are enjoying better fortunes this year, in tandem with the local economy's improving performance, according to data collected by Forbes Asia. The publication, which tracks the wealth of Singapore's 40 richest people, said their total net worth this year is US$45.7 billion (S$62.4 billion) - up 17 per cent from last year's US$39 billion. Of the lot, 26 tycoons saw their wealth increase this year, while seven suffered declines. The family of the late Ng Teng Fong topped the list with a combined net worth of US$7.8 billion. Still, they were among the few whose wealth declined - from US$8 billion the year before, as the value of their shareholding in Hong Kong developer Tsim Sha Tsui Properties fell 18 per cent over the past year, on fears of a slowdown in China. Forbes Asia said the biggest chunk of the family's wealth continues to come from its privately held Singapore property development company Far East Organization. Meanwhile, the family of the late Khoo Teck Puat (who died in 2004) is second, with a total net worth of US$5.9 billion, up from US$5.5 billion in 2009. The family - the 14 children who inherited the fortune - sold its stake in Standard Chartered Bank to Temasek for US$4 billion in 2004. Its main asset is the Goodwood Group of hotels and a minor stake in the Ng family's Orchard Parade Holdings. United Overseas Bank chairman Wee Cho Yaw moves up to third from fifth place last year, adding US$500 million to his wealth. Wilmar International's chairman Kuok Khoon Hong holds steady in fourth place with a net worth of US$3.5 billion. He's expected to add more to his fortunes, however, with the recently inked US$1.5 billion deal to buy Sucrogen (the largest raw sugar producer in Australia and maker of fuel ethanol) expected to be completed by September. There were also some notable entrants to the list this year. Making a debut, at No 5, is New Zealand- born social entrepreneur Richard Chandler, who became a Singapore resident in 2008. The 52-year-old heads RF Chandler (a fund which invests in emerging markets) and has also set aside US$100 million for educational causes in the developing world. The other newcomers to the top-40 list this year are Otto Marine's Yaw Chee Siew, who comes in at No 22, with a total net worth of US$385 million, and ARA Asset Management's John Lim at No 38, with US$202 million. And returning to the list, after a two-year absence, is Osim International's Ron Sim. He re-enters at No 28, with a net worth of US$301 million, after having written off his investment in loss-making Brookstone in 2008. Hotelier Ong Beng Seng and his wife Christina Ong are also first-time billionaires - with a combined wealth of US$1 billion, up from US$700 million last year, thanks to the better performance of their hotel and retailing empire. Between them, they control Hotel Properties, UK fashion house Mulberry, the Club 21 retail chain and the Como Group.

PART – III

INTERNAL

Singbridge to invest 2b yuan in China 'knowledge city'

TEMASEK Holdings subsidiary Singbridge International is planning to invest 2 billion yuan (S$411 million) in a 'knowledge city' on the outskirts of Guangzhou city in southern China. The project is a 50-50 joint venture between Singbridge and the Guangzhou Development District. Senior Minister Goh Chok Tong and Guangdong party secretary Wang Yang officiated at a ground-breaking ceremony for the project yesterday. The knowledge city will be located 35km northeast of Guangzhou city centre and was first mooted as a joint development by Mr Wang in 2008. An initial agreement was signed with Keppel Group in March 2009 to conduct a feasibility study and the project got the go-ahead last July. Singbridge, whose chairman is former Keppel chairman Lim Chee Onn, took over the project last September. An initial 6 sq km start-up area will be developed over the next three years, scaling up to 60 sq km when the site is fully developed. The start-up area is expected to be home to a population of 77,000 and provide employment for 35,000 people.

P&G building plant for water-purifying sachets

GLOBAL consumer products provider Procter & Gamble (P&G) announced during the Singapore International Water Week that it will build a plant in Singapore to manufacture its PUR Purifier of Water sachets. PUR Purifier of Water is part of a P&G charitable programme with non-government organisations to provide clean drinking water to needy children worldwide. The PUR sachets contain a water-purifying powder developed by P&G and the US Centers for Disease Control and Prevention to help reduce sickness and death resulting from drinking contaminated water. Each sachet can turn 10 litres of dirty water into clean, drinkable water. The plant here is expected to be able to produce more than 200 million packets a year. From past efforts, this is equivalent to averting 85 million days of diarrhoea and saving more than 11,000 lives. The Singapore plant will employ close to 50 full-time locals. Production will start in 2012.

Infineum building second S'pore plant

OIL additive producer Infineum Singapore - a joint venture between Exxon Mobile and Shell - will build a calcium salicylate manufacturing plant here. The plant - Infineum's second in Singapore after a facility at Jurong Island - is slated to begin production in the second half of 2013. Calcium salicylate is a critical component in Infineum's passenger car and heavy-duty oil formulations, as well as its marine oil additive products. At present, Infineum has only one manufacturing plant for the substance, in Berre, France. Foster Wheeler Asia Pacific will carry out front-end engineering and design early next year for the local plant. Construction will take place from 2012 to 2013.

SGX signs deal with Suzhou on listing firms

THE Singapore Exchange (SGX) yesterday signed a memorandum of understanding (MOU) with China's Suzhou Industrial Park (SIP) to promote the listing of companies from SIP and other parts of its province on SGX. Under the MOU, SIP will provide guidance to potential listing aspirants, and facilitate regulatory processes and approvals from relevant Chinese authorities where necessary. SGX said the MOU paves the way for closer collaboration between the government of Jiangsu (the province where SIP is located) and SGX to meet the business funding needs of companies in Jiangsu. In a separate announcement SGX said that its mutual offset arrangement with the Chicago Mercantile Exchange (CME) will now cover Nifty futures - allowing round- the-clock trading of the contract where investors can offset Nifty futures positions on one exchange to the other. The Nifty futures contract is the fifth covered by the mutual offset arrangement between SGX and CME, which has been in place since 1984. Contracts covered by the arrangement are the Eurodollar, Euroyen, Yen Nikkei 225 and US$ Nikkei 225 futures contracts.

New Swiss-S'pore tax treaty in the works

SWITZERLAND and Singapore are expected to sign a new tax treaty later this year that will include the latest international standard on information-sharing for tax purposes, Swiss President Doris Leuthard said yesterday. Both Singapore and Switzerland last year endorsed the OECD standard (known as Article 26 of the OECD Model Tax Convention), which sets out conditions under which two governments must share information relevant for enforcing each country's domestic tax laws - including the investigation of tax cheats. It was originally developed by the Organisation for Economic Cooperation and Development in 2004, but since a United Nations committee of tax experts endorsed a revised version of the standard in 2008, it has been adopted by many non-OECD countries as well. Both countries also have a common interest in influencing the direction of global financial reform, or risk being disadvantaged by new rules agreed among the Group of 20 (G-20) economies - since both Switzerland and Singapore are major financial centres but not part of the G-20, Ms Leuthard said.

ST Engg unit in JV to set up aircraft facility

SINGAPORE Technologies Engineering (ST Engg) announced that its ST Aerospace arm will partner Guangdong Airport Management Corporation (GAMC) to set up a commercial aircraft heavy maintenance facility in Guangzhou, China. They will invest US$99 million in a joint venture company called ST Aerospace (Guangzhou) Aviation Services, which will be operated and managed by ST Aerospace. ST Aerospace will own a 49 per cent stake, and GAMC the other 51 per cent. Located at Guangzhou Baiyun International Airport, the facility will have two hangars - each able to accommodate two widebody aircraft simultaneously. Construction is expected to take about two years, after which the facility will provide maintenance and modification services for Boeing and Airbus aircraft.

Wilmar to buy Natural Oleochemicals

PALM oil giant Wilmar International is buying 91.38 per cent of Natural Oleochemicals, a unit of Malaysia's Kulim group, for RM450 million (S$192.3 million) in cash. The acquisition of the Johor-based oleochemical producer is expected to be completed within three months. Wilmar said the purchase will be funded internally and through bank borrowings. The acquisition is subject to certain conditions including regulatory approvals from Malaysia's Ministry of International Trade and Industries, said Wilmar. Oleochemicals are chemicals derived from animal and plant fats. And Natural Oleochemicals is one of the world's largest producers, making products such as glycerine, soap noodles, fatty acids and esters from crude palm kernel oil and palm stearin.

Cambodia rolling out red carpet for S'pore firms

CAMBODIA is rolling out the red carpet for Singapore companies to invest there, with the invitation coming from none other than the kingdom's Prime Minister Hun Sen. The 59-year-old leader, who is in Singapore for a three-day bilateral visit, told a business luncheon yesterday that he was 'personally committed' to ensure a 'conducive and friendly business environment' for all those keen to expand into Cambodia. Singapore's economic agencies and business associations have stepped up their level of engagement with Cambodia over the past 18 months, with six business missions and study trips organised to the kingdom to explore potential opportunities there. Recently, trade promotion agency International Enterprise Singapore led an agri-food mission to various Cambodian provinces, the second such trip in the past year. Among the participating companies were HLH Agriculture, a wholly-owned subsidiary of mainboard-listed HLH Group whose interest is in large-scale corn cultivation for feedstock. Another firm, Singapore Agri-Tech, took part because of its interest in rice cultivation for both domestic and export purposes. Many small and medium-sized enterprises are also increasingly looking towards Cambodia as a lucrative destination for trade and investment. Bilateral trade has been improving steadily of late, with total trade reaching $1.3 billion in the first six months of this year - a 62 per cent jump over the same period last year. In the whole of last year, the Republic's investments rose eight-fold from the previous year to US$278 million, bringing total investment in the last 15 years to US$602 million. Singapore is Cambodia's eighth-largest foreign investor.

PART IV

BILATERAL

Visit of CIM: Shri Anand Sharma, Union Minister for Commerce and Industry, paid a bilateral visit to Singapore from 8-10 July 2010. He was accompanied by the Commerce Secretary and senior officials from the Ministry of Commerce and Industry. He also led a high-level CII delegation. During the visit he called on Senior Minister Mr. Goh Chok Tong and met Foreign Minister George Yeo and Minister for Trade and Industry Lim Hng Kiang. In his meeting with Singapore leaders, Shri Sharma discussed issues relating to bilateral relations, ongoing 2nd Review of India Singapore CECA, opportunities for investment in India’s infrastructure development and India’s engagement with ASEAN. He attended a meeting organized by Confederation of Indian Industries with Indian CEOs and industrialists in Singapore and also delivered a public lecture on the “Resurgence of Asia in the 21st Century – an Indian Perspective” at the Lee Kuan Yew School of Public Policy.

New opportunities opening up in India

As India gears up its manufacturing sector by improving infrastructure, India’s Commerce and Industry Minister, Anand Sharma during his visit to Singapore made a proposal. On his first official visit here after assuming his current post, Mr Sharma suggested that Singapore consider setting up an investment fund to tap into India's rapid urban and infrastructure development plans. Singapore was one of the first countries to recognise India's potential, back in the early 1990s. While doing business in India has sometimes been a challenge for Singapore companies, there have been many success stories as well. Now, new opportunities are opening up in India's manufacturing sector, which accounts for just 16-17 per cent of its total GDP. One of Mr Sharma's goals as Industry Minister is to take that share to 25 per cent which, in his words, 'will make India a manufacturing hub of the world'. With some 200 million more people expected to join the workforce within the next decade, India needs to both create jobs and ensure they are filled by adequately trained workers. To help achieve these aims, India is seeking Singapore's participation. Mr Sharma has sought institutional help for training young people in industrial skills, an area where Singapore has world-class expertise. The payoffs could be promising: India's manufacturing sector is growing at about 20 per cent a year, and with infrastructure improving, this growth is likely to be sustained. A recent report on manufacturing competitiveness by the consulting firm Deloitte placed India second behind China and above South Korea and Japan in terms

of global manufacturing competitiveness. The Deloitte report pointed out that India's rich talent pool of scientists, researchers and engineers as well as its large, well-educated

English-speaking workforce and democratic regime 'make it an attractive destination for manufacturers'. While there are opportunities in several areas of manufacturing and infrastructure, some specific projects are worth a detailed look. One of these is the ambitious US$90 billion New Delhi-Mumbai industrial corridor, which is envisaged to contain six manufacturing nodes. The corridor is now at the take-off stage and land acquisition is taking place. Mr Sharma suggested that Singapore consider building one of the six nodes or cities and also one of five industrial zones that will come up under the new National Manufacturing Policy. Mr Sharma said his goal was to double the current level of India-Singapore trade of US$16 billion by 2012. That goal seems entirely feasible, but it would require Singapore companies to seize the opportunities opening up across Asia's third largest economy, and to capitalise on their first mover advantage as well as the stellar reputation that they enjoy in India. Companies from other countries are already showing interest.

The Asia Pacific Group on Anti Money Laundering and Combating Financing of Terrorism met in Singapore from 12 - 16 July. The India delegation led by Shri Jose Cyriac, Additional Secretary of Dept. of Revenue attended the meeting. India took over as the co-chair of APG at the conclusion of the meeting and will retain this status till 2012. Australia is the permanent co-chair of APG.

Source: Commercial Section, Embassy of India, Singapore