Singapore

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Singapore

  1. 1. SINGAPORE MARKET REPORT 1/2010
  2. 2. SINGAPORE MARKET REPORT 1/2010CONTENTSSINGAPORE MARKETS .............................................................................. 5 Spore bets on global and Asia links ................................................................5 Singapore ranked 7th in the world for innovation ...............................................5 Five steps to a bigger, better Spore ...............................................................5 Asia’s ageing population presents investment opportunities ................................6 S’pore up two notches in office costs ranking ...................................................7ECONOMY ................................................................................................ 7 Sales of private homes up 130%....................................................................7 MAS Monetary Policy Statement..................................................................... 8 S’pore ‘to benefit from the recovery in Asia’ .....................................................8 Stronger Sing dollar wont hurt exports ...........................................................9INTERNATIONAL TRADE ......................................................................... 10 Singapore and EU complete first round of negotiations on free trade agreement .. 10 Gazprom among big boys eyeing S’pore LNG trade ......................................... 10 Singapore signs FTA with Costa Rica............................................................. 11 Spore and China commence review of China-Singapore FTA ............................ 11RESEARCH AND INNOVATIONS ............................................................... 11 DNV Establishes Clean Technology Centre in Singapore ................................... 11 S’pore to host Asean economic research unit ................................................. 12 Eye research institute aims to be among world’s top 5 .................................... 12 Panasonic sets up R&D centre for new growth areas ....................................... 13 A*Star launches MEMS group for joint research .............................................. 13ENERGY ................................................................................................. 13 Experts recommend differentiating strategies for Singapores Clean Energy industry ................................................................................................... 13 Best long-term options - solar, nuclear power ................................................ 14 S’pore to still consider use of nuclear energy ................................................. 15 Nuclear energy: Learning the ropes .............................................................. 15ENVIRONMENT ....................................................................................... 16 Singapore to go ahead with carbon emission cuts .......................................... 16 Confucianism and moral sentiments ............................................................. 17 Benefits from riding the green wave ............................................................. 18 The S’pore way of going green .................................................................... 18CHEMICAL INDUSTRY ............................................................................. 16 Biomedical Sciences Companies Strengthen Partnerships with Singapore to Address Industry Challenges ................................................................................... 19 Spore top choice for biomed hires in region: Survey ....................................... 20 2/43
  3. 3. SINGAPORE MARKET REPORT 1/2010 Seeking foreign expertise in innovation ......................................................... 20 Singapore draws global contract clinical research organisations......................... 21INDUSTRY AND COMPANIES ................................................................... 22 Spore banking sector outlook stable: Moodys ............................................... 22 Investment boost seen for electronics this year: EDB ...................................... 22 Singapores dynamic electronics industry is poised for further development ........ 23 Seeking business? Head to Africa, SEA firms urged ......................................... 24 Spore firms reacting to Chinas development ................................................. 25 Big jump in firms’ intangible asset value ....................................................... 25CONSTRUCTION BUSINESS ..................................................................... 26 Construction sector to get $250m boost ........................................................ 26 $15m boost for green building practices ........................................................ 27TRANSPORT ........................................................................................... 27 Marine insurance starts to recover ............................................................... 27 Sharpening S’pore’s maritime edge .............................................................. 28 Bridging Spore and Johor with trains, water taxis ........................................... 28 Strongest growth in 6 years for Changi Airport ............................................... 29TOURISM INDUSTRY .............................................................................. 27 Singapores tourism sector overview ............................................................ 29 Spore, Vietnam work on aviation, cruise tourism ........................................... 30 From mind to heart and spirit ...................................................................... 30 New union for leisure sector ........................................................................ 31 Visitor arrivals rise for fourth straight month .................................................. 31 Spore opens second casino ........................................................................ 32INTERNATIONAL RELATIONS.................................................................. 32 Singapore-KL ties ‘strong and improving’ ...................................................... 32 Irish Chamber of Commerce launched in Spore ............................................. 33 Spore may become AfDB member ............................................................... 33ASIA AND ASEAN MATTERS .................................................................... 34 Reforms needed for Asia to thrive ................................................................ 34 Asia needs to work on institutions for growth ................................................. 35 ADB expects 7.5% Asia growth, but risks remain ............................................ 35 Asean shows way to a single market ............................................................ 36LAW ................................................................... Error! Bookmark not defined. General law will prevail over fatwa .............................................................. 37 3/43
  4. 4. SINGAPORE MARKET REPORT 1/2010TAXATION AND ACCOUNTING ................................................................. 26 Singapore aims to be leading global accountancy services hub.......................... 37 3 ways for accountancy reform .................................................................... 38EDUCATION ........................................................................................... 37 Education R&D centre opens ....................................................................... 38 Schools to develop soft skills ..................................................................... 39 NUS, NTU, SMU raise fees........................................................................... 39 Schools Share Best Practices on Integrating International Students at Inaugural Symposium .............................................................................................. 40MEDIA ................................................................................................... 40 MDA unveils new animation fund ................................................................. 40 Funding boost for large-scale media projects targeting the international market .. 40DEFENCE INDUSTRY ............................................................................... 41 Five new F-15SG fighter jets fly home .......................................................... 41 Malacca Strait threat: How Singapore reacted ................................................ 41 Rise in arms imports means drop in stability .................................................. 42 4/43
  5. 5. SINGAPORE MARKET REPORT 1/2010SINGAPORE MARKETSSpore bets on global and Asia links4.2.2010 The Business TimesSINGAPORE can become the location of choice for businesses outside Asia seeking to tap theregion’s potential and Asian firms looking to expand to the rest of the world, EconomicDevelopment Board (EDB) chairman Leo Yip said yesterday.As it looks to its next phase of growth, Singapore should aim to develop a deep pool of pan-Asia talent, industry knowledge and expertise that isn’t focused on just its own market or itsimmediate neighbours’, to attract more companies to use Singapore as their base to expandin the region, he said. If successful, the strategy could give it an edge over rivals such asHong Kong in attracting firms to set up their Asian headquarters here, even if the firmsalready have country offices in bigger markets such as China, said Mr Yip.As companies come into Asia, initially their focus may be China, India or South-east Asia. Buteventually companies will look to expand to the rest of the Asia and they will need a singlestrategic location to manage their operations throughout the region. The Economic StrategiesCommittee (ESC) has recommended the government seek to lure not just MNCs, but ‘hiddenchampions’ among smaller firms that excel in particular niches, as well as fast-growing Asianenterprises looking to expand outside their home country.Singapore ranked 7th in the world for innovation5.3.2010 The Straits timesSINGAPORE is the seventh most innovative economy in the world, ahead of the likes of Japanand the United States, according to the latest Global Innovation Index (GII). WhileScandinavian nations such as Sweden and Denmark dominated the top 10 rankings, the LionCity emerged as the second most innovative in Asia after Hong Kong, which came in third.The latest rankings put Iceland on top, followed by Sweden, Hong Kong, Switzerland,Denmark and Finland. Singapore managed to outperform the Netherlands (eight), NewZealand (ninth) and Norway (10th). The US – last year’s top innovator – fell to 11th place,while traditional powerhouses like Japan (13th), Britain (14th) and Germany (16th) all droppedout of the top 10. The index measures how specific aspects of an economy can stimulateinnovation.The GII report credited Singapore’s successful free-market economy and its open andcorruption-free environment for its high ranking. The Republic, it added, was an excellentexample of how a visionary and effective government strategy can impact a nation’s progress.The move to encourage business innovation has been a major talking point since Budget 2010was announced on Feb 22. In his Budget speech, Finance Minister Tharman Shanmugaratnamintroduced a new Productivity and Innovation Credit plan, which allows companies to claimadditional tax deductions for spending in areas that make them more innovative.Five steps to a bigger, better Spore9.3.2010 The Straits Times1 Broaden expertise in fast-moving technology sector2 Seize new opportunities as old sectors merge 5/43
  6. 6. SINGAPORE MARKET REPORT 1/20103 Bring in new types of firms for more vibrant mix4 Tap Asean links to help local companies5 Bank on trade pacts to help firms expandPILL-SIZE cameras that can be swallowed to give doctors images of a patients insides areone of several cutting-edge technologies Singapore has identified as new growth areas. Therewill be an increasing demand in these bioelectronics solutions as the developed world ages,and Singapore intends to position itself to take advantage of that, Trade and Industry MinisterLim Hng Kiang said in Parliament yesterday.Mr Lim cited these products as one way to grow and deepen Singapores key electronicssector, which has been a stalwart of the economy since the 1960s but which undergoes rapidchanges. To keep up, Singapore companies must now also venture into green electronicproducts such as energy-efficient lighting, security technologies like biometric systems, andplastic electronics, including flexible e-book displays, Mr Lim said during his ministrysCommittee of Supply debate yesterday.Broadening expertise in important clusters is one of five growth strategies that the Ministry ofTrade and Industry (MTI) will focus on to grow the economy over the next decade and createbetter jobs. Another policy it will pursue is to seize new opportunities that are emerging asthe traditionally separate manufacturing and service sectors begin to collide. Manymanufacturing firms no longer simply transform raw materials into finished products, Mr Limsaid. Instead, they are moving beyond production to offer a full suite of services includingresearch and development, design and after-sales support - activities that Singapore is wellplaced to capture.A third approach that MTI will take is to bring in new types of companies to create a morediverse and vibrant mix of firms. These include mid-sized companies from developedeconomies that want to expand into Asia, as well as fast-growing Asian conglomerates lookingto step out into the global market, Mr Lim said.The fourth growth strategy is to make use of Singapores links with its Asean neighbours tohelp local companies. This can be done in two main ways, said Mr Lim. First, with a hugemiddle class of more than 75 million people, Asean nations provide an intuitive and growingmarket for Singapore firms, which companies such as fashion retailer Raoul and restaurantchain Crystal Jade have already taken advantage of.The MTIs fifth strategy for growth is to bank on Singapores existing free trade agreements -and pursue new ones - to help home-grown firms internationalise. Last year, companiesbased here saved more than $700 million in tariffs as a result of these agreements, noted MrLim. This year, new trade pacts are being signed: with the European Union, and with sevenother Asia-Pacific Economic Cooperation (Apec) economies.Asia’s ageing population presents investment opportunities6.4.2010 The Straits TimesTHE ageing population, often seen as a looming time bomb for Asia, has been repackaged asa business opportunity. The soaring number of elderly people in the region means more jobsand investment openings, said speakers at the Ageing Asia Investment Forum.It was Asias first integrated retirement living forum designed to discuss the businessopportunities arising from the silver tsunami. Estimates suggest 857 million elderly peopleaged 65 and above will be living in Asia by 2050. That prospect has led to rapid job creationin the health and social service sectors. Property developers are also cashing in by building 6/43
  7. 7. SINGAPORE MARKET REPORT 1/2010multimillion-dollar integrated retirement villages and private residences catering to the needsof the elderly.With better health care and low birth rates, Singapore is no exception to this greyingphenomenon. The Republic is expected to be among the 10 fastest ageing economies globally,together with Hong Kong, Japan and South Korea, according to a UBS report in 2008.However, local developers have not found it easy to ride this wave by developing integratedretirement homes. Land scarcity here has led to high bid prices, which have made thecommercial viability of such projects difficult since affordability is key, say developers.Singapores successful public housing policy - with studio apartments having 30-year leasesfor the elderly and newly launched inter-generational homes - was also cited during the forumas factors that have muted demand here. Property developer Daniel Teo, however, insiststhat with Singapores strong medical care and safety record, there is a ready market ofpotential buyers for a retirement village housing concept here.S’pore up two notches in office costs ranking6.4.2010 The Business TimesSINGAPORE has risen two notches on the latest bi-annual list of the world’s most expensiveoffice locations. But Singapore’s competitiveness – in terms of office occupancy costs –continued to improve, as the gap between rents here and in the other major financial centreswidened, the report by Colliers International found.Colliers’ second-half 2009 global office real estate review tracked space in 154 citiesworldwide from June to December last year. Singapore was ranked 24th most expensive – uptwo notches from 26th in the H1 2009 survey. Hong Kong was again the most expensive officelocation, followed by London’s West End and then Tokyo.Although Singapore’s ranking rose, the gap between office rents and those in rival centresgrew bigger. This is because Singapore is a laggard – worldwide and regionally – in the officemarket recovery, Colliers said. Many cities posted gains or recorded milder declines in officerents in H2 2009.‘This phenomenon is to Singapore’s advantage,’ said Tay Huey Ying, director of research andadvisory at Colliers. ‘The resultant growth in the gap in office occupancy costs against otherkey financial centres improves our competitiveness and makes Singapore the choice locationfor business set-ups.’ Rents for Grade A office space in central business district bottomed outin Q1 2010, rising 0.5 per cent quarter on quarter to end the quarter at $6.38 per sq ft permonth, Colliers said.ECONOMYSales of private homes up 130%18.3.2010 The Straits TimesPrivate home transactions – for both new and resale homes – jumped by more than 130 percent last year, despite the downturn. Singaporeans were the main drivers of the surge: Therewas an overall rise of 144 per cent in private property transactions by them last year –23 516 compared with 9649 in 2008. In the non-lended segment, Singaporean purchasesrose almost 159 percent. The rise in lended property purchases was nearly 83 per cent. 7/43
  8. 8. SINGAPORE MARKET REPORT 1/2010But comparatively lower prices here as a result of the credit crunch, the influx of expatriatesand the attractiveness of Singapore property also led to more purchases by foreigners. Thenumber of purchases by foreigners, including permanent residences, rose 114 per cent overalllast year. The bulk of the increase was in the non-landed segment, which rose by 118 percent.MAS Monetary Policy Statement14.4.2010 The Monetary Authority of SingaporeThe recovery of the Singapore economy has been stronger than expected, and moreentrenched since the beginning of this year. External demand has picked up appreciably,particularly for IT-related products. According to the Advance Estimates released by theMinistry of Trade and Industry today, Singapore’s GDP surged by 32.1% on a quarter-on-quarter seasonally adjusted annualised basis in Q1 2010. The growth was broad-based, withstrong performance recorded in the manufacturing and services sectors. With the Q1expansion, the Singapore economy has now fully recovered the output lost during therecession, and economic activity in a broad range of industries has exceeded its pre-crisispeak. As a result, the economy’s output gap turned positive in Q1 2010.Looking ahead, domestic economic activity is likely to be sustained at a relatively high level,even as the growth momentum slows in the coming quarters. External demand conditionsare expected to be supportive in the transition towards more sustainable private sector-drivengrowth as governments around the world exit from their expansionary policies. Growth inAsia will likely remain firm, supported in part by robust domestic demand. Against thisbackdrop, and in view of the surge in growth seen in Q1, Singapore’s GDP growth forecast for2010 has been revised upwards to between 7% and 9%, from 4.5% and 6.5%.Domestic CPI inflation averaged 0.6% in the first two months of 2010, increasing from -0.3%and -0.8% in the last two quarters of 2009 respectively. On a sequential basis, consumerprice inflation has trended higher since Q3 last year, largely due to the rise in globalcommodity prices and private road transport costs. These two factors will continue to driveheadline inflation rates up for the rest of 2010. Meanwhile, other domestic sources ofinflationary pressures, though subdued presently, could be expected to emerge in the comingquarters. The labour market has tightened, with the seasonally adjusted residentunemployment rate falling from 5% in September 2009 to around its pre-crisis rate of 3% inDecember. Wage growth will begin to pick up this year, while commercial rentals are alsolikely to rise given improved economic conditions. Overall CPI inflation in 2010 is projected tobe between 2.5% and 3.5%, slightly higher than the 2-3% forecast earlier.The Singapore economy has rebounded from the downturn and is expected to continue on itsfirm recovery path given the more favourable global economic outlook. At the same time,inflationary pressures are likely to pick up, driven by rising global commodity prices as well assome domestic cost factors.S’pore ‘to benefit from the recovery in Asia’14.4.2010 The Business TimesTHE global financial crisis and slump in world trade had a deep impact on Singapore’s’exceptionally open economy’ but the recovery in global trade projected for this year alongwith a pick-up in financial flows ’bode well for Singapore’s outlook’, the Asian DevelopmentMank (ADB) said in its Asian Development Outlook 2010. 8/43
  9. 9. SINGAPORE MARKET REPORT 1/2010‘In particular, the economy will benefit from the V-shaped recovery in Asia, a region thataccounted for about 60 per cent of Singapore’s total exports in 2008. The share of exportsshipped to industrial economies, including Japan, was about 30 per cent.‘Merchandise exports surged by 35 per cent and imports by 31 per cent on a customs basis inthe first two months of 2010, from a relatively low base in the prior-year period. Strongerexternal demand for goods and services will have spillover effects throughout the economy.’Manufacturing production in Singapore rose by just over 29 per cent in the first two months ofthis year, the ADB noted. Fiscal policy has shifted focus from dealing with the recession andthe immediate recovery to the medium and long-term goals of upgrading the economy andreducing dependence on foreign labor. Fiscal stimulus is being gradually removed.‘Investment is forecast to rebound in 2010, stimulated by the better global trade and financialclimate and an accommodative monetary environment. Business confidence strengthened inthe second half of 2009. In particular, investment is expected to strengthen in financial andbusiness services, tourism, and manufacturing. Construction investment will be supported bystrong demand for residential property and the infrastructure projects.Stronger Sing dollar wont hurt exports27.4.2010 The Business TimesA stronger Singapore dollar will not hurt Singapores exports and turn away tourists,according to Lim Hng Kiang, deputy chairman of the Monetary Authority of Singapore. He toldParliament yesterday that a big chunk of the inputs that go into producing Singaporesexports are imports that will become cheaper because of the appreciation of the Singaporecurrency.So lower production cost will help keep Singapores export prices competitive in the long run,even with a stronger Singapore dollar, Mr Lim said. For tourists, Mr Lim, who is also theMinister of Trade and Industry, said while the exchange rate is a big factor that draws themhere, a bigger reason is Singapores attractions. In the longer term, the steady appreciationof the exchange rate is in line with our strong economic fundamentals, he said. It keepsinflation low and stable, which helps to preserve the purchasing power of Singaporeansincome and savings.A stronger Singapore currency is expected to stem from the shift to tighter monetary policyearly this month. This also offers a stable and conductive environment for long-terminvestments, boosting Singapore competitiveness and providing the basis for sustainedeconomic growth, Mr Lim said.He said that being an open economy, Singapore adopts an exchange rate-centred monetarypolicy to keep prices stable for economic growth over the medium term. Given the small andopen nature of our economy and our dependence on trade, the exchange rate has asignificant influence on domestic prices which, in turn, is critical for the economic decisions ofhouseholds and businesses, Mr Lim said.MASs shift to a tighter monetary policy position is in keeping with a strong economic recoverythats expected to continue, given an improved prospects for the global economy, he said.The move was also timely to counter inflationary pressures that are likely to pick up withrising global commodity prices and domestic costs, according to him. Mr Lim also said theupward revision in economic growth projection for 2010 - from 4.5-6.5 per cent to 7-9 percent - doesnt suggest that, if realised, the economy will grow beyond its potential, which isabout 4-6 per cent. 9/43
  10. 10. SINGAPORE MARKET REPORT 1/2010INTERNATIONAL TRADESingapore and EU complete first round of negotiations on free tradeagreement12.3.2010 European Commission & Ministry of Trade and Industry, SingaporeSINGAPORE and the European Union (EU) completed the first round of negotiations on theEU-Singapore Free Trade Agreement (EUSFTA), held in Singapore from 8 – 12 March 2010.The EUSFTA marks a milestone in the EU’s longstanding relations with Singapore.Negotiations on the FTA were officially launched by Minister for Trade and Industry Lim HngKiang and EU Trade Commissioner Karel De Gucht in Singapore on 3 March 2010. The twosides had constructive discussions on a range of issues. These include trade in goods, rules oforigin, trade remedies, trade in services and investment, intellectual property, governmentprocurement, customs procedures, sanitary and phytosanitary measures, technical barriers totrade, competition, sustainable development and dispute settlement.Singapore and the EU enjoy close economic ties, which will be boosted by the EUSFTA. TheEU is Singapore’s largest trading partner and foreign investor. Bilateral trade exceeded € 55billion in 2008. Conversely, Singapore is the EU’s 15th largest trading partner and largesttrading partner among ASEAN states. Both sides also enjoy robust bilateral investment ties.Over the years, Singapore and the EU have invested over € 100 billion in each other’seconomies.Already today EU companies in many sectors have chosen Singapore as a hub from which toserve the Pacific Rim region, and the FTA would seek to create additional trade andinvestment opportunities. The ASEAN markets have been identified as priority markets for EUexporters. Last December, EU Member States gave the green light for the Commission topursue negotiations towards free trade agreements with individual ASEAN countries,beginning with Singapore.Gazprom among big boys eyeing S’pore LNG trade23.3.2010 The Business TimesTHE Big boys – such as Russia’s Gazprom, which has just set up operations here – are eyeingtrading liquefied natural (LNG) gas here, just as Singapore prepares to break ground at the enof this month for its $1,5 billion LNG terminal. Gazprom Marketing and Trading (GM&T), asubsidiary of the world’s biggest gas producer, is among several new Middle East and Russianupstream players which reportedly entered the oil trading hub here recently.Lawrence Wong, the CEO of Energy Market Authority – which took over the LNG project –disclosed last November that it was in discussions with several international players which arekeen to trade LNG on a spot basis here, once the Jurong Island terminal starts up in 2013.The LNG terminal here will have additional capacity from the start to allow traders to leasecapacity for temporary storage of LNG while waiting to re-export it to other marketsworldwide. There are also provisions in the terminal’s design for LNG reloading, the EMA said.Singapore is well-placed to become a major player in the Asian LNG trade, Gazprom said,adding that its new trading office here will allow it to leverage on Singapore’s strengths as amajor global shipping hub to LNG suppliers and customers in the region. Singapore’s LNGterminal will have an initial capacity of 3.5 million tonnes per annum, with an option toexpand to 6 million tpa, especially if LNG trading ex-Singapore takes off. 10/43
  11. 11. SINGAPORE MARKET REPORT 1/2010Singapore signs FTA with Costa Rica7.4.2010 the business timesSINGAPORE and Costa Rica yesterday signed the Singapore-Costa Rica Free Trade Agreement(SCRFTA), strengthening bilateral ties between the two countries. The agreement was signedby Costa Ricas Minister for Foreign Trade, Marco Ruiz, and Singapores Senior Minister ofState for Trade & Industry and Education, S Iswaran.Both countries announced in December 2008 that they would negotiate a bilateral free-tradeagreement (FTA). Formal negotiations started last April and concluded after four rounds.Under the agreement, Costa Rica will eliminate customs duties for 90.6 per cent of its tarifflines, with the tariff on the remaining products to be eliminated over a period of 10 years.Singapore will grant all imports from Costa Rica immediate duty-free access.The agreement also covers increased trade facilitation, a liberalising framework, thepromotion of socio-economic development in both countries, and mutual commitment toensure that companies from either country can compete on an equal footing with domesticsuppliers for government procurement contracts, above certain thresholds. Costa Rica isSingapores eighth largest trading partner in Latin America, with trade in 2009 valued at$413.7 million. Singapore is Costa Ricas second largest trading partner in South-east Asia,and the largest destination for Costa Rican intelligent cards and medical prostheses in theregion.Spore and China commence review of China-Singapore FTA15.4.2010 Ministry of Trade and IndustrySingapore and China have commenced the initial round of the 1st Review of the China-Singapore Free Trade Agreement (CSFTA). The review was held in Singapore from 14-15 April2010.The CSFTA came into force on 1 January 2009 and is the first comprehensive bilateral FTAthat China has signed with an Asian country. The agreement marked a major milestone inSingapore-China bilateral relations. Underscoring the strong bilateral relations between Chinaand Singapore, the CSFTA has brought significant benefits to both countries.China is currently Singapore’s third largest trading partner and largest investment destination.The review reaffirmed Singapore and China’s commitment to improve the quality andsmoothen the implementation of our bilateral trade agreement. During the review, officialsfrom both sides welcomed the CSFTA’s continued progress in boosting flows of goods,services and investments in both directions.RESEARCH AND INNOVATIONSDNV Establishes Clean Technology Centre in Singapore18.3.2010 Economic Development Board SingaporeThe DNV Clean Technology Centre (CTC) in Singapore is a proposed 100-researcher centrethat will undertake R&D to help DNV develop new, Cleantech-specialised risk managementservices in Singapore. These services include: (1) Technology qualification & certification; (2)Risk Assessment; and (3) Asset Management. DNV plans to offer these services out of the 11/43
  12. 12. SINGAPORE MARKET REPORT 1/2010CTC with a view that Singapore will be the designated Asia-Pacific hub for the incubation &provision of these servicesThe DNV CTC will cover the following 6 cross-sectoral focus areas: (1) Clean Energy (Newtechnology areas include: Offshore wind, carbon capture & storage, etc); (2) Green Shippingand Offshore Design; (3) Green Ports; (4) Climate Change Adaptation; (5) Carbon MarketServices; (6) Sustainable Cities and Urban SolutionsS’pore to host Asean economic research unit10.4.2010 The Business TimesSINGAPORE will be a home to a new independent economic surveillance office next year thataims to prevent South-East Asia from falling into a financial crisis similar to the one thatgripped the region back in 1997.This research unit – called the Asian-plus-three Macroeconomic Research Office (Amro) – willbe a ‘professional, objective and rigorous’ organisation, Prime Minister Lee Hsieng Loong saidyesterday as he described broadly what he hopes it can achieve. ‘It should be able tocommand respect, give useful advice and be accepted as a basis on which countries can makedecisions, and whether or not and how to help a particular country in distress, ‘ he told theSingapore media in Hanoi.On Thursday, finance ministers from the 10-member Asean bloc announced that they werecommitted to setting up Amro – the first such organisation in East Asia – by May 2011 inSingapore. The high-power unit will see to the interests of the 10 Asean members togetherwith China, South Korea and Japan.Eye research institute aims to be among world’s top 515.4.2010 The Business TimesTHE Singapore Eye Research Institute (SERI), an arm of the Singapore National Eye Centre(SNEC), aims to be one of the world’s top five eye research institutes in five years.As Asia plays a growing role in worldwide economic growth, the same thing will happen inresearch, says SERI director Wong Tien Yin. ‘Asia is very important part of the equation andSingapore has the ability to lead it,’ he says. ‘SERI prepared the ground for this for about 15years before bio-medical research was identified in Singapore as a useful engine for growth.’SERI is one of the largest eye and vision research institutes in the Asia-Pacific in terms ofstaff numbers, grant income, the number of research initiatives and the output from suchprojects, according to Prof Wong.One area in which Singapore has an edge over other Asian countries is its multi-ethnicpopulation, he reckons: ‘Therapeutics and diagnostics that have been tested in the West maynot be directly applicable to Asia. While bigger and emerging markets such as China and Indiaoffer lower costs, there are other issues to contend with in these countries, such as theregulatory and legal framework and protection of intellectual property (IP) rights, he says.Singapore, in the other hand, is known for clear government guidelines and strong IPprotection. 12/43
  13. 13. SINGAPORE MARKET REPORT 1/2010Panasonic sets up R&D centre for new growth areas23.4.2010 The Business TimesPANASONIC Electronic Devices (PED) will spend $20 million over five years on a research-and-development centre here that will be the first outside Japan to focus on new growth areassuch as medical and green electronics. ‘We are currently engaged in the audio-visual,automotive, and computer and communications sectors,’ said PED managing director HirojiOkamoto. ‘Our strategy is to expand our services to the energy-oriented and medicalelectronics industries. By serving these five different industries, we aim to be the world’s No 1electronic devices manufacturer.Trade and Industry Minister Lim Hng Kiang said at a ceremony yesterday that new growthareas make for exciting times in the electronics industry. ‘These smart products currentlycontribute about 10 per cent of Singapore’s electronics output,’ he said. ‘By 2020, we hope tosee that figure increase to 30 per cent. PED – through its Technology Development Centreand focus on medical, energy and environmental applications – is well positioned to capitaliseon these growth areas.’A*Star launches MEMS group for joint research9.4.2010 The Business TimesTHE Institute of Microelectronics (IME), a research institute of the Agency for Science,Technology and Research (A*Star), has announced the launch of the Micro-Electro-MechanicalSystems (MEMS) Consortium. The MEMS Consortium will bring together eight multinationalcorporations and local enterprises from the MEMS supply chain in public-private sectorresearch collaboration with the aim of growing the MEMS industry in Singapore.The consortium has a wide spectrum of deep capabilities in research and development, waferfabrication, integrated device manufacturing, assembly and test, design and computer- aideddesign, and equipment and materials. Supported by A*Star and the Singapore EconomicDevelopment Board (EDB), the Consortium will develop a platform to share information andtechniques on standardising MEMS design, developing technical expertise to facilitate MEMSdevelopment in Singapore, promoting collaboration among companies for an integratedsolution to MEMS manufacturing, and training manpower in MEMS-related technology.The MEMS device market is an area experiencing rapid growth. Worth US$6.9 billion last year,it is expected to grow at a compound annual growth rate of 12 per cent until 2014.ENERGYExperts recommend differentiating strategies for Singapores CleanEnergy industry3.3.2010 Economic Development Board SingaporeThe International Advisory Panel on Clean Energy concludes that the Republic’s green plansare well on track, and identifies focus areas to further strengthen the industry. Increasingdemand for cleaner and more sustainable technologies and solutions to combat global trendslike climate change, fossil fuel depletion and urbanization, has led Singapore to identifyCleantech as a strategic economic growth area. 13/43
  14. 14. SINGAPORE MARKET REPORT 1/2010With the Republic globally recognised as a city-state that has attained world-class standardsin environmental sustainability, Cleantech companies can leverage the nations stronginfrastructure, capabilities and skilled manpower in electronics and semiconductor, chemicalsand precision engineering to develop, test and commercialise cutting-edge Clean Energysolutions.Identifying Electric Vehicles (EV), Smart Grids, Green Buildings and Districts, and Waste-to-Energy as burgeoning sectors, the Panel urged Singapore to move quickly to captureopportunities arising from these promising areas. Using the EV sector as an example, the IAPsuggested that the city-state take advantage of its strengths in infocomm technology,electronics and power engineering to develop competencies in EV charging infrastructure,vehicle diagnostics and energy storage. The IAP also affirmed the recent launch of anIntelligent Energy Systems pilot in Singapore as an important test-bed that would helpadvance the development of smart grid solutions in demand management, smart pricing andcreate export opportunities.Another promising area the IAP pointed out was Singapore’s expertise in systems-levelinnovation. In this respect, the country can create a distinctive advantage by invitingcompanies to use the nation as a “Living Lab” to create, demonstrate and commercialisecutting-edge solutions here, before scaling-up for the rest of the world.Lastly, the IAP urged Singapore to capitalise on its status as a model for sustainable urbandevelopment in the region. Citing the nation’s success in water technologies as an example,the Panel recommended that a framework be created to allow the nation to export itsexpertise in sustainable development.The IAP also endorsed the establishment of the Solar Energy Research Institute of Singapore(SERIS), a world-class research facility jointly supported by the Singapore EconomicDevelopment Board (EDB) and the National University of Singapore (NUS). With a totalbudget of S$130 million (US$93.5 million), SERIS will be a technology vanguard for Singaporein the area of industry-oriented research and development, and engage in collaborations withthe international solar industry. SERIS will also strengthen the country’s Clean Energyindustry ecosystem, developing cost-efficient, commercially viable solutions for solarelectricity generation (photovoltaics) and for energy-efficient buildings.Best long-term options - solar, nuclear power9.3.2010 The Straits TimesSOLAR and nuclear power are among Singapores best options for electricity generation in thelong term. The two are part of the range of options to meet the challenges of the future, saidSenior Minister of State for Trade and Industry S. Iswaran. He told Parliament yesterday thatthe nation remains exposed to the vicissitudes of global energy markets because it importsalmost all of its energy. This means it will be affected by price volatility even as energy pricescontinue to rise over the long term. Singapore is also affected by competition for energysupplies and carbon constraints as part of a global climate change deal.Solar energy has been touted as the best option for Singapore given the climate, althoughthere are obstacles as the cost of solar-generated electricity is still about twice that of gridelectricity and heavy cloud cover means it is unreliable.The idea for studying the feasibility of nuclear energy was raised by the Economic StrategiesCommittee and backed by the Government, but it has generated some public concern. MrIswaran said the Government is considering the nuclear option now because it meets all three 14/43
  15. 15. SINGAPORE MARKET REPORT 1/2010of its energy policy objectives: enhancing energy security, reducing carbon emissions andmitigating the impact of volatile oil and gas prices.The Ministry of Trade and Industry will lead a multi-agency effort to undertake the feasibilitystudy, which will commence later this year. Mr Iswaran also said electricity imports could helpthe country gain access to alternative energy sources such as hydropower and so free upvaluable land.S’pore to still consider use of nuclear energy15.4.2010 The Straits TimesMOVES for greater global efforts to tighten nuclear security would not affect Singapore’s plansto consider the possible use of nuclear energy, Prime Minister Lee Hsien Loong has said inWashington. A two-day summit nuclear security there ended on Tuesday with 47 worldleaders adopting a communique and work plan that would boost efforts to lock down ordestroy vulnerable atomic materials. Tjhe summit is part of United States President BarackObama’s broader plans to toughen the international regime against nuclear proliferation, andto eventually rid the world of atomic weapons.Asked if these developments would in any way affect Singapore’s plans to consider nuclearpower as a source of energy supply, Mr Lee said: ‘No, it doesn’t. Many countries use nuclearpower, and more wish to study the possibility. But there must be a proper safeguards as tohow the reactors work, how the materials are secured, and in fact what sort of materials touse because there are reactors which use highly enriched uranium which can be used to makebombs. ‘So these are considerations which we have to take seriously. But they should nothinder the project.’He stressed that final decision had not been made, and that government was just beginningto study long term feasibility of nuclear power for Singapore.Nuclear energy: Learning the ropes19.4.2010 The Straits TimesPRIME Minister Lee Hsien Loong announced at the Nuclear Security Summit in Washingtonrecently that Singapore would soon begin a careful and rigorous examination of the technical,economic and safety aspects of nuclear energy.Since both the technology and the economics of the energy industry are constantly changing,the outcome of such a feasibility study is uncertain. But if Singapore does decide to go ahead,the country will need to embark on capability building and manpower training immediately. Adecision not to go ahead, however, will not necessarily mean that the country has turned itsback on the nuclear energy option forever.Nuclear power reactors are being built all over the world to satisfy electricity demand, ensureenergy security and address climate change concerns. Whatever the outcome of the feasibilitystudy, Singapore should build up its nuclear science and engineering capability in case itneeds to exercise the nuclear energy option in the future. A nuclear research reactor would bea practical tool for training manpower. It would also provide opportunities for a variety ofpeaceful applications.Typically a nuclear power reactor costs $3 billion to $5 billion per installed gigawatt ofelectrical generating capacity. International nuclear agencies expect nations constructing suchreactors to meet high safety standards. They are also required to have a disaster 15/43
  16. 16. SINGAPORE MARKET REPORT 1/2010management plan, deal with radioactive waste, and comply with the international norms andconventions. Regulators also require countries that construct such reactors to comply withnon-proliferation safeguards.Vendors expect the host nation to provide the specifications, select a design and share thefinancial risks and responsibilities. This implies that any nation aspiring to generate electricityfrom nuclear power reactors needs to have a high level of in-house nuclear capability.The best way to nurture such in-house capability is by learning by doing - that is, byinvesting in a reactor for research. Research reactors are designed to operate using lowenriched uranium so as not to pose nuclear proliferation threat.According to the World Nuclear Association, the nations with the most nuclear power reactorsare the United States (104), France (58), Japan (54), Russia (32) and South Korea (20). All ofthem began with research reactors. Asean countries such as Vietnam, Thailand, Indonesiaand Malaysia have been operating nuclear research reactors for decades.Asia is now the most important builder of new nuclear power plants. This means thatSingapore needs to possess advanced sensing capabilities to detect nuclear accidents.Singapore, being a major hub for international trade and best shipping practices, will alsohave to further upgrade its ability to detect illegal transshipments of unauthorised nuclearmaterials. Experienced staff working in a local research reactor would be able to help thecountry meet many of these requirements, while ensuring that the country is well placed toparticipate in the regions growing nuclear industry.ENVIRONMENTSingapore to go ahead with carbon emission cuts12.1.2010 The Straits TimesTHE Failure to reach a deal on climate change at Copenhagen last month will not stopSingapore from implementing steps to reduce its carbon emissions, said Dr Yaacob Ibrahim,the Minister for the Environment and Water Resources, yesterday. These measures,announced under the Sustainable Singapore Blueprint launched last April, will reduce about 7per cent to 11 per cent of Singapore’s emissions below business-as-usual (BAU) levels by2020.When legally binding climate change deal is finally reached, Singapore will implementadditional measures to achieve the full 16 percent reduction below BAU by 2020, as itpreviously pledged to do, Dr Yaacob told Parliament. Still, climate change is a key issue formany Asean countries as ‘we are collectively and individually vulnerable to the adverse impactof global warming’, he added.But Singapore is doing what it can to improve its resource efficiency and reduce carbonfootprint. In response to a request by NMP Mildred Tan, Dr Yaacob highlighted that $1 billionhas been set aside over five years to implement initiatives under the sustainable blueprint.And since last April, various incentive schemed and other investments in sustainabledevelopment have been announced. These include $100 million to improve the energyefficiency of existing buildings, $43 million to implement cycling infrastructure in some HDBtowns, and $31 million to test-bed solar technology. A further $680 million has been allocatedto build new capabilities in clean-energy and water technologies – sectors that could create aneconomic value-add of $3,4 billion and generate employment of 18 000 by 2015, he noted. 16/43
  17. 17. SINGAPORE MARKET REPORT 1/2010Confucianism and moral sentiments20.3.2010 The Straits TimesGO TO the website of any major corporation: You will definitely find somewhere the phraseCorporate Social Responsibility or CSR for short. The perception is that CSR is a Westernvalue. In fact, it is not an alien concept in the East. In a way, the idea of being morallyresponsible is echoed throughout Confucian literature.Confucianism calls upon government to be responsible for the lives of its people, urging it tofocus on their natural morality rather than impose rules on them. This idea pre-dates AdamSmiths in the Theory Of Moral Sentiments, where Smith explains that shared values andmutual understanding are necessary, if society is to function properly. The gambit of CSR mayhave changed over the years but clearly the core values of being responsible resonatestrongly in both Eastern and Western thought.As the world is now emerging from the global financial crisis, CSR is not only relevant, but itis also more important than it has ever been. The central question now is trust: The extent towhich we trust enterprises to be acting in the general interest of society will be key inrebuilding confidence in market economies. Certainly, in Europe there is a firm belief that CSRmust be at the heart of strategies for growth, jobs and competitiveness.CSR is essentially about companies going beyond minimum legal requirements; they must beallowed the freedom to experiment and innovate. This approach is also reflected in thepolicies of the Singaporean Government.CSR does not need to be imported into Asia from Europe. The CSR movement is alreadystrong in Asia. Organisations in both regions understand that CSR is more than a question ofphilanthropy and acknowledge the value of engagement with other businesses, publicinstitutions, community and development organisations.Since the launch of the National Tripartite Initiative (NTI), Singapore has begun to focus onthe importance of CSR. More can always be achieved and Singapore is no stranger topunching above its weight. More businesses and organisations need to realise that CSR is akey to increased productivity and recognition. It represents a qualitative approach that makesthe most of the resources available to an organisation.In the broader context, Asian and European companies can learn from one another. In todaysworld, enterprises are born global even if they act locally. There needs to be a concertedeffort towards globally accepted standards in the complex field of CSR. Action in this area willundoubtedly make businesses more competitive.A convergence of views will also help to shape the nature of that competitiveness.Competitiveness that comes with high social and environmental costs is neither desirable norsustainable. We need competitiveness models that are more sustainable and more equitable,economically, socially and environmentally.The concept of Responsible Competitiveness helps to frame some of the challenges nowfacing enterprises. It can help to address citizens concerns over issues such as environmentalsecurity and product safety. It can contribute to a healthy and harmonious domestic economyand society. Any discussion about CSR cannot ignore the greatest challenge facing us today -climate change. CSR activities can be important in minimising negative environmental actions. 17/43
  18. 18. SINGAPORE MARKET REPORT 1/2010Benefits from riding the green wave29.3.2010 The straits timesEco-friendly workplaces are healthier and can result in cost savingsGOING green is all well and good - helps the planet and all that - but Singaporeans do not likebeing denied their air-conditioning. Working in an eco-sound building can often seem morelike an endurance test in a sweatbox with desks. But employees at the Standard Chartered(Stanchart), Citi and Xilinx offices at Changi Business Park have found that going green doesnot have to be an ergonomic compromise. For them, working in a well-designed green officemeans embracing the environment outside rather than being boxed in and away from it. Itmeans more windows to maximise natural lighting and ventilation, which also means the endof jostling for once-rare window seats.Going green makes good business sense both financially and as part of a corporates socialresponsibility, said Mr Ho Twee Teng, managing director of technology and operations at DBSBank. With better and cleaner surroundings, our organisation will benefit from healthieremployees.Indeed, more companies are starting to ride the green wave. Mr Tan Swee Yiow, chiefexecutive of Singapore Commercial at Keppel Land, observes an increasing trend formultinational companies to include green as one of the selection criteria when choosing officebuildings. Keppel Land has pledged to achieve a minimum Green Mark Gold certification or itsequivalent for all its developments in Singapore and overseas, as a form of productdifferentiation. Keppel does not charge higher rental costs for companies that choosesustainable developments, Mr Tan said.The Green Lease is a two-way collaboration with the tenants whereby the landlord helpsthem reach the centres sustainability aspirations by providing consultancy, sustainabilitytools and access to sustainable vendors and materials, said Mr Philip Yim, developmentmanager of Lend Lease Retail.The S’pore way of going green22.4.2010 The Straits TimesCan Singapore play a significant role in todays worldwide green effort? It is often said thatSingapore is too small to matter globally. The Republic contributes less than 0.2 per cent oftotal global carbon dioxide emissions and even if it were to achieve zero emissions, the effecton climate change would be minuscule.But Singapores size has not prevented it from wanting to be, and being, environmentallyfriendly. Singapore increased its green spaces by 10 per cent between 1986 and 2007. It alsoreduced carbon intensity by about 30 per cent since 1990 by limiting transport growth;switching from fuel oil to natural gas, the cleanest fossil fuel available, to produce electricity;and by recycling more than half of Singapores waste and incinerating much of the remainderto provide electricity and reduce methane emissions from its landfill.At the recently concluded Copenhagen Summit, Singapore committed itself to a 16 per centcut in increased emissions contingent on a legally binding global agreement being reached.Singapore also signed and ratified the Kyoto Protocol.Singapore can further advance the environmental agenda in two ways: First, by exporting theSingapore model. The Republic can showcase how economic development can be pursuedwhile maintaining a certain degree of concern for the environment. Most of the future world 18/43
  19. 19. SINGAPORE MARKET REPORT 1/2010population is likely to live in mega-cities. The key to sustainable development would lie in howwell these mega-cities balance economic and environmental needs. As a city-state that hasmaintained environmental standards despite increasing affluence, Singapore offers ideas onhow to achieve success in both pursuits. Singapore is one of the first countries in the world toexperiment with managing traffic growth and road use via a quota and tax system. While thevarious transport schemes primarily target congestion problems, they have also reduced airpollution.The second way in which Singapore can contribute to the green movement is to build up itscapacities in evaluating project proposals, and in monitoring and collecting environmentaldata, especially where related to Singaporeans attitudes. Successful environmentalprotection entails lifestyle changes, which in turn requires peoples cooperation. Singaporeshigh recycling rate is due largely to industrial recycling; more needs to be done by thehousehold sector.Nonetheless, there is some cause for optimism. Singaporeans are participating more activelyin environmental conservation and demanding a higher quality of life, including a greenerenvironment with more open spaces. Together with projected rising income levels, thedemand for a greener environment should continue to increase.CHEMICAL INDUSTRYBiomedical Sciences Companies Strengthen Partnerships withSingapore to Address Industry Challenges17.3.2010 Economic Development BoardGlobal biomedical sciences companies strengthened their partnerships with Singapore toaddress the industry’s challenges in 2009, and Singapore is well-positioned to be their home-base to harness Asia’s growing opportunities. Last year, Singapore’s biomedicalmanufacturing output grew steadily to about S$21 billion and employed more than 13,000people.“The global biomedical sciences industry is confronted with the need to improve R&Dproductivity. At the same time, they need to navigate Asia’s complexities and diversity toeffectively tap into the region’s fast-growing markets. As Asia’s leading bio-cluster, Singaporeis well-positioned to help biomedical sciences companies accelerate their innovation andcapitalise on Asia’s growth story,” said Mr Julian Ho, Assistant Managing Director, SingaporeEconomic Development Board (EDB).In 2009, global biomedical sciences companies have located strategic functions in Singaporethat include regional headquarters (e.g. Medtronic, Quintiles, Takeda), first-in-Asia and globalmanufacturing facilities (e.g. GlaxoSmithKline, Illumina, Lonza, Medtronic, ResMed, Roche)and R&D bases in Asia (e.g. Abbott, 3M, Merck, Roche, Inviragen, FORMA). Theseinvestments will strengthen Singapore’s position as a strategic home-base to drive biomedicalsciences companies’ business expansion and innovation in Asia.Biomedical sciences investments amounted to S$1.2 billion in total fixed asset investment andS$700 million in total business spending in 2009. When fully implemented, they will createmore than 1,600 jobs for professionals, managers, engineers, research scientists andengineers, and skilled workers. The investments will also contribute S$1.3 billion in value-added per annum.“The biomedical sciences sector provides exciting and meaningful jobs in a broad spectrum of 19/43
  20. 20. SINGAPORE MARKET REPORT 1/2010activities across manufacturing, R&D and business management in headquarters forSingaporeans across all education levels. It is an opportunity for Singaporeans to participatein shaping the future of human healthcare,” added Mr Ho.Spore top choice for biomed hires in region: Survey19.3.2010 The Straits TimesSINGAPORE is the top destination for biomedical science professionals in the region, accordingto a recent survey by recruitment agency RSA Singapore.The countrys strong biomed industry, good standard of living, security and favourable taxregime propelled it to first place in the survey. China was second, and Australia third. RSASingapore, which recruits for the sector, conducted two surveys - one regional and oneinternational - earlier this year and polled more than 420 professionals. It said the findingssupport a trend it has observed over the past several years showing that Asias biomedindustry continues to grow despite firms in Europe and the United States consolidating ordownsizing.The regional survey also found that respondents were positive about the outlook for thebiomedical sciences industry this year, with all expecting salary rises. Half of those surveyedexpected pay rises of 30 per cent to 50 per cent. This compares well to the last two years,when biomedical companies both locally and around the region saw salary and headcountfreezes, said the report. In its international survey, an overwhelming 90 per cent ofrespondents cited talent management as a top priority.The robust job market in Singapore was underlined by the Economic Development Board(EDB) this week, when it noted that there were about 900 new positions in biomedicalmanufacturing alone last year. The jobs included both senior and entry-level positions. TheEDB tipped that the industrys output - which was $20.7 billion last year - should hit its targetof $25 billion by 2015. Growth this year could also come in at 5 per cent to 10 per cent.While there is no lack of opportunities, the question of talent is a potential stumbling block,according to ScienTec Consulting, a human resource specialist in biomed. It reported a 65 percent increase in the last two years for senior hires in the local biomed industry. Lack of talentwith both leadership and specialised biomedical sciences background are the main reasonscompanies look for talent from places like Australia, Europe and the US, said ScienTecmanaging director Karen Tok.Seeking foreign expertise in innovation23.3.2010 The Business TimesSINGAPORE’S ambition to become the Biopolis of Asia – an international biomedical sciencescluster – requires establishing key building blocks in various related sectors, one of which ismedical technology (meditech) industry.As far back as a decade ago, the Economic Development Board was working towards this goalby encouraging overseas partnerships to facilitate innovation and knowledge transfer.According to Leow Swee Heng, managing director of MEMS, EDB facilitated businessnetworking in the life sciences sector by helping match local SMES with potential overseascustomers and partners. 20/43
  21. 21. SINGAPORE MARKET REPORT 1/2010The drive to encourage collaboration with overseas experts gave Mr Leow the opportunity toapply his precision engineering skills from close to 10 years in the hard disk drive sector tothe fast-growing industry.MEMS, set up in 2003, aims to provide automation solutions through a small and highlyskilled work force made up of professionals from the biomedical, precision engineering andmanufacturing industries. Its services include mechanical design, software development, IPdevelopment and build-to–print projects.Asked about the challenges faced buy local medtech manufacturing companies, Mr Leow saidone is the inclination of local hospitals and clinical laboratories to turn to overseasmanufacturers for equipment. Due to lacjk of awareness about the capabilities of localmedtech manufacturing companies, these companies often have to test their productsoverseas. To overcome this, Mr Leow encouraged companies to establish overseaspartnerships to facilitate technology transfer.Singapore draws global contract clinical research organisations3.3.2010 Singapore Economic Development BoardThe Republic presents a home base for these companies to effectively harness Asia’s fastexpanding markets.Global contract clinical research organisations (CROs) are presented with tremendous growthopportunities, as pharmaceutical and biotech companies increasingly tap on external researchresources, and Asia’s demand for cost-effective and efficacious medicines continue to expand.Amidst these developments, Singapore is well positioned to offer innovative supporting toolsand strong capabilities in clinical research. Recognising the Republic’s advantages, leadingpharmaceutical and biotech companies and CROs are expanding their operations in thenation, and locating strategic regional headquarters functions to drive their businessexpansion and innovation in Asia.Today, Singapore has established a core base of 20 leading CROs and pharmaceuticalcompanies (e.g. Quintiles, Covance, Bayer, Merck, Pfizer) that manage regional clinical trialsfrom the city-state. These international CROs offer a wide range of services, ranging fromPhase I to pharmacovigilance studies, while some are setting up innovative biomarkerdiscovery and validation services. As these companies seek to harness the growing base ofclinical research carried out in Asia, they are expanding their operations in Singapore, wherethey can better leverage the region’s growth opportunities.“Singapore has become a regional hub for drug development in Asia-Pacific and we now havethe capacity, the range of testing services and, above all, a highly experienced team of labprofessionals to support the growth of clinical trials in the region,” says Bob Scott-Edwards,President, Icon Central Laboratories.Besides growing their presence in Singapore, global pharmaceutical companies and CROs arealso locating and expanding their regional headquarters in the country. As companies expandtheir clinical research activities in Singapore, they can now be assured that data from pre-clinical trials conducted in Good Laboratory Practice (GLP)-compliant facilities will be acceptedby 30 OECD and non-OECD members that include the United States, European Union andJapan.Companies can now fully leverage Singapore’s GLP-compliant testing facilities to acceleratetheir drug discovery and development activities, and shorten their time-to-market for newproducts. Maccine, an internationally recognised contract research organisation, is one of theGLP-compliant facilities that companies can work with in Singapore. 21/43
  22. 22. SINGAPORE MARKET REPORT 1/2010“This affirmation enhances Singapore’s reputation for quality. Companies in thepharmaceutical and biotechnology businesses can now submit safety data generated bySingapore-based research organisations to regulatory bodies in OECD countries. This willaccelerate companies’ R&D across markets,” says Tan Choon Shian, Deputy ManagingDirector, Singapore Economic Development Board.INDUSTRY AND COMPANIESSpore banking sector outlook stable: Moodys17.3.2010 The Business TimesTHE long-term credit ratings of the three Singapore-listed banks are still at risk despite therecovery of the economy, mainly due to the banks large overseas exposure, rating agencyMoodys said yesterday.The outlook for the Singapore banking sector over the next 12-18 months is stable, but theoutlook for the long-term credit ratings of all three Singapore banks is negative, MoodysInvestors Service said in a new report. Fourth-quarter earnings at DBS Group, OCBC Bankand United Overseas Bank exceeded analysts expectations last month, boosted by a mix oftrading gains and a steep drop in charges for bad loans as economic conditions improved. Allthree banks signaled improved earnings prospects for 2010 and a renewed push for loansgrowth.The banks have been more resilient than some of their larger international rivals throughoutthe financial crisis and have maintained very liquid and well-capitalised balance sheets,Moodys said. But all three banks also have significant exposure outside of Singapore - mostlyin East Asia, but also in the other parts of the world, said Christine Kuo, a vice-president andsenior analyst at Moodys in Singapore.The report also highlights the Singapore banks large exposure to the property sector as arisk. We are wary of the negative impact a return of inflationary pressures could bring tobanks asset quality, as the pace of recovery picks up in the regional economies over the next12-18 months, Moodys said.Overall, however, the ongoing economic recovery in Singapore and elsewhere means betterprospects for the banks, Moodys said, with demand for loans and trade financing expected torise in the coming months, even as bad-loan charges fall.Investment boost seen for electronics this year: EDB29.3.2010 The Business TimesVital electronics sector is back in growth mode and companies are expected to makesignificant investments in manufacturing activities this year, according to the SingaporeEconomic Development Board (EDB). Damian Chan, EDBs director for electronics, told BTthat Singapore can expect to see companies making significant investments in capital andknowledge-intensive manufacturing activities such as wafer fabrication and hard disk mediathis year and beyond. Data released by EDB last Friday showed that the electronics clustergrew 56.5 per cent in February on a year-on-year basis. For the first two months, thecumulative output of the electronics cluster was 68.8 per cent higher than for the same periodlast year. 22/43
  23. 23. SINGAPORE MARKET REPORT 1/2010The semiconductor segment continued to perform strongly, growing 96.7 per cent in Februaryon the back of higher export demand, coupled with the low-base effect in the same period lastyear. As BT reported earlier, the semiconductor industry body, SEMI, has said the South-eastAsian semiconductor capital equipment market - of which Singapore is an importantcomponent - is expected to grow 65 per cent to US$2.31 billion this year, after shrinking 46per cent in 2009. This signals new capacity building will happen this year and a lot of it islikely to be in Singapore, the regions biggest market. Februarys NODX (non- oil domesticexports) data showed the electronics sector grew a healthy 26 per cent. And this came on topof 23 per cent growth in January.Increased exports directly lead to more investment and job creation, which is what manyindustry watchers are hoping to see this year. Mr Chan noted that manufacturing activities areimportant for Singapore due to their capital, knowledge and innovation-intensive nature. Inaddition, they create spin-offs for other support sectors, such as precision engineering andspeciality chemicals, he added.Despite a weak economy last year, Singapores electronics industry held up relatively well.The announced investment projects in 2009 are expected to contribute $4.9 billion in fixedasset investment (FAI), $1.8 billion in total business spending and $1.8 billion in value addedper annum to Singapores GDP when they are fully implemented. Notably, FAI commitmentsin electronics accounted for 41.5 per cent of Singapores total manufacturing FAI in 2009.Some 2,800 skilled jobs are also expected to be created, Mr Chan said. The EDB official notedthat manufacturing will continue to be a cornerstone of Singapores electronics industry.Singapores dynamic electronics industry is poised for furtherdevelopment3.3.2010 The Singapore Economic Development BoardThe Republic’s full value chain of activities, supportive government and new growth areas lookset to seal the countrys industrial future.Singapore’s electronics industry has been an important pillar of the country’s economy overthe last 40 years. It is also a key demand driver for the chemicals, logistics and precisionengineering industries, as well as an important capability enabler for various sectors likeavionics, medical technology and clean energy.As a testament to its strengths, top electronic companies have chosen the city state as a basefor their activities in manufacturing, supply chain management and regional headquartersresponsibilities. The country holds global leadership positions in several sectors likesemiconductors and hard disk media, while it also hosts a range of R&D activities, such ascomponent and product development.Thanks to Singapore’s capabilities, the city-state has attracted more high quality projects in2009 which are capital-, knowledge- and innovation-intensive. And with the SingaporeEconomic Development Board’s (EDB) continued focus on R&D and product developmentprojects, high-paying jobs and careers for the countrys workforce will be created.Riding on Asia’s manufacturing wave, Singapore has become a world-class electronicsmanufacturing hub with end-to-end R&D capabilities. Presently, the industry is made up ofvarious important strands. The biggest area is in semiconductors, which consists of integratedcircuit (IC) design, wafer fabrication and assembly and test activities. The sector employsaround 3,500 R&D engineers working on IC design, process development, packaging and testengineering and embedded software development. 23/43
  24. 24. SINGAPORE MARKET REPORT 1/2010Another sector is electronics components, which is composed of six groups: advancedsubstrates; batteries and power electronics systems; display; passive components; storage;and peripherals. The electronics systems industry, responsible for network storage solutions,electronics manufacturing services (EMS) and consumer electronics and lighting, is anothercontributor to the success of Singapore’s electronics industry.The fourth pillar in this industry is infocomm product manufacturing, which includescomputing hardware like PCs, servers, point-of-sales equipment, mobile phones and datanetworking equipment. The nation’s strong capabilities in this sector mean that it will continueto be the preferred location for companies to create and manage new markets, products,processes and applications.Looking ahead, EDB has identified four growth areas for the industry – green electronics,bioelectronics, plastic electronics and security products. Currently, these smart productscontribute about 10 per cent of the country’s electronics output, but that figure is nowtargeted to increase to 30 percent by 2020.Green electronics refer to energy efficient solutions for applications such as lighting,automotive and computing. Another novel method of reducing reliance on traditional sourcesof energy is through energy harvesting. Such IC designs are able to capture and convertambient energy into electricity.Improving healthcare remains a top priority, and developing bioelectronics will be beneficialfor all. Singapore is ready to propel this new growth segment forward with its base of coreelectronics capabilities and existing strengths in material physics and biotechnology.Plastic electronics refer to circuitry created out of conductive ink which uses a wide variety ofprinting technologies. It is used in next generation devices such as portable multimediadisplays, low-cost solar cells, photo-sensors and printed flexible batteries.Another type of electronic product that will be in demand are those for security purposes.Developing this area means incorporating electronics into sophisticated security solutions suchas video surveillance cameras and biometrics or access control. What’s more, these productsaim to increase the safety that surrounds electronically transmitted information and createmeasures to protect people and equipment.Seeking business? Head to Africa, SEA firms urged6.4.2010 The Straits TimesBUSINESS opportunities abound in Africa, speakers at an Africa and South-east Asia BusinessForum said yesterday. They urged South-east Asian firms to capitalise on hot investmentopportunities on the continent in fields like renewable energy, the management of seaportsand airports and water treatment.Yesterday’s forum heard that Togo, which is expanding the capacity of its seaports, is seekingpartners for their construction and management. With the deepest seaports in West Africa,the country is a regional commercial and trade centre, exporting goods to landlocked Africannations. In another West African nation, Mali, Singapore firms could seek a role in buildingand running a proposed new airport.Singapore firms in the renewable energy sector can look to a US$1 billion (S$1.4 billion) fundset up by the government of South Africa, African Development Bank, World Bank and theInternational Finance Corporation among others, intended for investment in energy efficiency. 24/43
  25. 25. SINGAPORE MARKET REPORT 1/2010Companies operating in the areas of banking, software development, agriculture andpetroleum are also greatly sought after in Africa, speakers said. No other market offers ashigh a rate of return as Africa, Singapores High Commissioner to Nigeria, Mr ShabbirHassanbhai, said, citing investment returns of between 20 and 30 per cent.Many companies strike off Africa as an investment option owing to a negative impressioncreated by the media, speakers said. However, many African nations have seen anexponential improvement in the past decade, and the risk of doing business there is the sameas in any other emerging market. Those planning to invest in Africa are advised to: first,develop a strategy; second, make the right business connections; and third, gain moreknowledge by personally venturing to the continent.Spore firms reacting to Chinas development22.3.2010 The Business TimesForeign investments flowing into China increasingly head for its rapidly developing non-coastal regions. Singapore companies have been part of this shift - though not as quickly.Western and northern provinces such as Tianjin, Sichuan and Shaanxi ranked among the top10 destinations for Singapore investments in China in 2008, according to figures from therespective provinces and municipal cities. Just five years ago, none had made that list. Otherssuch as Liaoning and Shandong have also risen in the ranks.But there is much potential yet for Singapores investments to grow in these regions. In westChina, Singapore is now Sichuans top country investor as investment growth mirrored therecent sharp spikes in worldwide foreign direct investment (FDI) into the province. ButSingapore investment into Shaanxi, whose capital Xian is set to be a high-tech base, andhigh growth Chongqing, has not risen as quickly as total FDI from elsewhere in the world.Chinas central governments regional development plans - the Go West strategy andpreferential policies to revitalise the north-east - have a large part to play in the shifting FDIflows. IE Singapore group director for China Ignatius Lim observed three sweeping trendsparallel to these developments, which Singapore companies might capitalise on: rapidurbanisation, changing demographic anchors of consumption, and shifts in the geographicalcentres of production.Soh Swee Ping, IE Singapores regional director for West China, China Group, said thatchanges in local authorities stance are favorable to Singapores SMEs too: In the past, theywere more focused on the big MNCs and huge projects, but now they are willing to speak tocongregated players from a single country as the government recognises that thesecompanies good experiences of investing in the city would be a good marketing tool for thecity as well. For north China, key opportunities arise out of the rising urbanisation andaffluence of the population.Big jump in firms’ intangible asset value23.3.2010 The Straits TimesAN ANNUAL study has revealed a strong post-crisis rebound in the increasingly importantintangible asset value of Singapore’s listed companies. These non-physical assets include acompany’s reputation, branding and intellectual property.This figure had shot up 38.8 per cent to US$163 billion (S$227 billion) as of the end of lastyear, consultancy Brand Finance said. Although the figure has not returned to pre-crisis 2007levels, the rebound is in line with the economic recovery. 25/43
  26. 26. SINGAPORE MARKET REPORT 1/2010The report also highlighted the growth in intangible assets disclosed on company balancesheets, such as trademarks and licenses, to US$27 billion, a rise of US$1.6 billion from thefigure in 2008. ‘Slowly but steadily, Singapore companies are acknowledging the importanceof acquiring intellectual property for growth and expansion,’ said the report.The study also found that the total enterprise value of Singapore’s top 10 sectors had grown.The top 10 sectors here are banking, agri-business, real estate, telecommunications,engineering and construction, hospitality, transportation, distribution, holding companies(diversified businesses), and electronics. This figure now stands at US$299 billion,representing 71.5 per cent of Singapore’s total enterprise value of US$418.5 billion. It is just5 per cent short of the pre-recession levels in 2007.Banking, the worst hit sector during the global financial crisis, remained the largest sector lastyear with an enterprise value of US$84.7 billion, a rise of 92 per cent from the previous year’sfigure. The agri-business sector saw the largest growth, with a 113 per cent rise in enterprisevalue. This makes it the second largest sector here at US$44.3 billion.The Brand Finance report also revealed the top 100 brands in the Republic, with SingaporeAirlines once again topping the chart with a brand value of S$5.135 billion. Rounding up thetop five brands here are Wilmar International, DBS Group holdings, Keppel Corp and SingTel.CONSTRUCTION BUSINESSConstruction sector to get $250m boost9.3.2010 The Straits TimesTHE construction sector, under pressure from impending hikes in foreign worker levies, willsoon get a $250 million shot in the arm to adopt new technology and upgrade its capability.The money will be spent on upgrading courses, skills assessments of workers, as well asscholarships to attract more local professionals, managers, executives and technicians to jointhe sector.Companies will get funds to adopt new technology and equipment, like moving scaffoldsinstead of static ones, or cable-pulling machines that reduce the number of workers needed tolay underground cables. Firms will also get aid to take on higher-value and more complexprojects, through funding for postgraduate scholarship programmes and immersionprogrammes. All the money will be disbursed on a co-funding basis, to encourage firms totake ownership of their upgrading.The construction sector is the biggest target of a concerted push by the Government to makethe economy more efficient. It employs more than 200,000 mostly low-skilled foreignworkers. The easy availability of cheap foreign labour, coupled with reluctance by locals to gointo the trade, has caused the industry to lag behind others in productivity.The $250 million devoted to the construction sector makes up a quarter of the new $1 billionNational Productivity Fund announced last month. This is on top of a new 250 per cent taxdeduction on any investments companies make on innovation.The construction sector is widely expected to be hit hard by the increased foreign worker levy,which will be raised in phases over the next three years. From July 1, the levy for most workpermit holders will go up by between $10 and $30 a month. A new tiered structure - to kick in 26/43
  27. 27. SINGAPORE MARKET REPORT 1/2010by next year - will also make it more expensive for construction firms to hire less-skilledworkers. Ms Fu yesterday estimated the levy hike could cause 1 per cent to 2 per centincrease in costs for the construction industry.Other than increasing the levy, the Building and Construction Authority intends to nudgecontractors towards efficiency in another way: by cutting the number of workers they canimport for their projects. These manpower entitlement cuts will be phased in from July, to hit25 per cent by 2012. Singapores construction demand peaked at $36 billion in 2008 anddropped to $21 billion last year. For the next three years, it is expected to range between $18billion and $27 billion.$15m boost for green building practices23.3.2010 The Straits TimesTHE building industry got a leg up in its recycling efforts yesterday with the launch of a $15million fund to help companies adopt more sustainable processes. Demolition contractors,recyclers and ready-mixed concrete suppliers can now tap the Sustainable ConstructionCapability Development Fund to introduce and upgrade their recycled building products, saidSenior Minister of State for National Development Grace Fu. If need be, the Government maylook into topping up the fund in the future, she said, speaking at the opening of a recyclingtechnology project by local company Samwoh Corporation.The Building and Construction Authority plans to increase demand for recycled materials byrequiring building owners aiming for the top grades of its environmentally friendly buildingprogramme to adopt sustainable construction methods. Currently, those aiming for theGoldplus and Platinum standards under its Green Mark scheme can opt out of thesemeasures by beefing up other areas such as greenery and accessibility to public transport.But the changes make mandatory a prescribed minimum level of effort in this regard.To give users more confidence in the reliability of recycled concrete, the Government will also,from October, require all ready-mixed concrete makers for the Singapore market to becertified according to new standards. Ms Fu said the industry has a long way to go inadopting more sustainable processes. We need both the regulators as well as industryplayers, both the suppliers as well as developers and constructers, to come together, sheadded.Singapore imports almost all of its construction materials like granite aggregate and sand,which are major components of concrete. Recent supply disruptions, rising material costs andshrinking landfill space have made the task of recycling demolition and construction wasteurgent. The National Environment Agency said 98 per cent of construction and demolitionwaste was recycled last year.TRANSPORTMarine insurance starts to recover17.3.2010 The Business TimesNOT spared the rippling effects of last years global recession, marine insurance took abeating as trade and cargo volumes plunged. It is only gradually beginning to recover.Last year, marine cargo premiums fell nearly 30 per cent from 2008, says Satoshi Hanzawa,managing director of Sompo Japan (Singapore). 27/43
  28. 28. SINGAPORE MARKET REPORT 1/2010Anwar Bin Saadan, regional marine risk manager for QBE International, Basically, you haveless cargo move, which means we underwrite less cargo. On the vessels end, if they haveless cargo to ship and are laid up not doing anything, we will see lower volumes too. Heestimates that premiums fell about 10 per cent last year too, but compared to the larger dropin cargo volumes, it wasnt so bad, and his unit still managed to turn in a profit. Marineinsurers are now counting on revived consumption to trigger a resumption of production atthe manufacturers end, which they hope will lead to more trading.Mr Hanzawa thinks that the sharp decline of the motor industry this recession has had anespecially large impact on marine cargo insurance. And, as that industry has not recovered asquickly, recovery in the marine insurance sector has been tepid too. At the moment, thehome electronics industries are picking up rapidly and helping marine cargo insurance, butnot motor.Sharpening S’pore’s maritime edge24.3.2010 The Business TimesThe government is continuing its efforts to make S’pore a one-stop shop for all in the cluster– one of its backbone industries.A leading international maritime centre (IMC) comprises many components. Among thesewould be a large port, serving a hinterland as a transshipment hub, a thriving cruise andrecreational sailing market, busy shipyards and a strong representation of international ship-owners/operators.Underlying all these would be a comprehensive community of specialised maritime serviceproviders providing ship financing, ship broking, accounting and legal services (includingarbitration), ship management, insurance, ship classification services, etc. There should alsobe the presence of reputable training institutions to ensure that the IMC sector is suppliedwith the right caliber of well trained people.The most helpful role of the government has been to provide attractive business policies tostrengthen Singapore as a leading IMC. This cluster contributes at least 7 per cent toSingapore’s annual GDP. As Singapore’s ports, shipyards and shipping industry are welldeveloped and world-class, the 2010 Budget announcements for the maritime sector weremeant to give a leg-up for the ancillary support services sector in the field of ship financing,ship management and ship broking, as well as that of trading of forward freight agreements(FFAs).Bridging Spore and Johor with trains, water taxis26.3.2010 The Business TimesEFFICIENT trains and water taxis - not building another bridge - are the best solutions toenable more people to commute between Johor and Singapore quickly. This is the view ofIskandar Investment president and chief executive Arlida Ariff, who said that the futuregrowth of the tourism sector for both places would largely depend on jointly providing anefficient public transportation system that could cater to the ever-increasing numbers ofpeople making the trip across.People choose private transportation because its the easiest, but future growth cannotdepend on this. We need public systems that include the rail and waterways, she said. Johorruler Sultan Ibrahim Ismail ignited a long-standing debate recently when he suggested that abridge should replace the Causeway to boost connectivity between Malaysia and Singapore. 28/43
  29. 29. SINGAPORE MARKET REPORT 1/2010Said Ms Arlida: Trains would be the best because its fast, easy and safe. The trains can takeyou right into the city. The biggest stumbling block, however, is how to connect (the twosides), which makes it a bilateral issue.An idea bandied about by her team at Iskandar Malaysia is having a water taxi service thatcan ferry tourists from hotels in Iskandar to major tourist attractions in Singapore, such asthe two integrated resorts.Strongest growth in 6 years for Changi Airport26.3.2010 The Business TimesChangi Airport registered the strongest growth in six years in February, when passengernumbers shot up 21.5 per cent year on year to 3.11 million, helped by the Chinese New Yearholiday and the Singapore Airshow. It was the seventh straight month of growth as theindustry rebounds from a slump that began in late 2008.In January, Changis passenger throughput grew 10.1 per cent to 3.38 million people. At 6.49million passengers, combined throughput for January and February translates to a 15.3 percent jump from the same period in 2009.Februarys growth was driven by full-service carriers (FSCs) and low-cost carriers (LCCs).FSCs chalked up the first double-digit increase - a 12.8 per cent rise in traffic - since theeconomic downturn began. Last year, LCCs provided solid support as they continued to addflights and launch new routes during the downturn, when the FSCs were grounding planesand cutting capacity.Traffic to and from all of Singapores top 10 country markets posted year-on-year growth inFebruary. Services to and from Indonesia, Malaysia, Thailand, Hong Kong and China chalkedup particularly strong growth. Aircraft movements were also up, climbing 11.4 per cent yearon year to 19,617 for the month, with FSCs and LCCs showing increases. LCCs accounted foralmost 28 per cent of all flights at Changi in February. On the cargo front, air-freightthroughput in February was up 16.2 per cent year on year to 130,578 tonnes. For Januaryand February combined, air freight was 271,637 tonnes, which was 18.4 per cent higher thanthe same period in 2009. As at March 1, Changi was served by 84 airlines operating 5,000flights to some 200 cities in 60 countries and territories.TOURISM INDUSTRYSingapore’s tourism sector overview19.2.2010 Economic Survey by Economics and Strategy Division, Ministry of Tradeand IndustrySingapore’s tourism sector has shown a certain degree of resilience during the recentrecession. Visitor arrivals recovered strongly in the second half of 2009 on the back of theglobal economic recovery and various initiatives implemented by the Singapore TourismBoard to promote Singapore as a tourist destination. In fact, monthly visitors to Singapore hitan all-time high of 971,452 pax in December 2009. Compared to the 1997/98 recession, thedecline in visitor arrivals during the recent crisis was less severe and the recovery was faster.This can largely be attributed to the resilience seen in visitor arrivals from ASEAN sourcemarkets which helped to cushion the slowdown in other markets. 29/43

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