Singapore Economy Buoyant on Pharma, IT and Oil & Gas

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Researched by Industrial Info Resources (Sugar Land, Texas)--Singapore is an island nation with an economy that is poised to experience vigorous growth. The country's Ministry of Trade and Industry (MTI) recently announced that the Singapore economy is set to grow between 3% and 5% this fiscal year. The ministry went on to say that global assessments show that Singapore is well out of the recession, and the economy and outlook for this year was extremely good. Based on positive growth rates being shown across Southeast Asia, the MTI seems certain that Singapore will show growth in the coming fiscal year as well.

Certain industries, such as the information technology, petroleum and pharmaceutical industries, are contributing significantly to the country's growth. These industries are sensitive to global trends and have done well in the country, as Singapore is increasingly becoming the hub in Southeast Asia for each of them.

Singapore plays a significant role in the oil and gas sector. Jurong Island, a manmade island off the coast of Singapore, processes approximately 1.3 million barrels per day (BBL/d) of crude oil and stands testimony to the strength of Singapore's Refining Industry.

Singapore is also recognized as a global leader for tanker conversions into Floating Production, Storage and Offloading vessels (FPSOs), as well as Floating Storage and Offloading vessels (FSOs). In fact, the nation has 70% of the international market share of FPSO conversions and jack-up rig constructions. While the global economic slowdown brought a drop in demand for production floaters in the first quarter of 2009, this was only a temporary demand decline caused by global economic conditions. The same year also saw the entry of large names such as ABB Limited (NYSE:ABB) (Zurich, Switzerland) placing orders. The company opened an engineering center in the country to carry out the engineering for FPSO projects. CD-adapco (Melville, New York), which provides engineering analysis software and services, also opened shop in Singapore. Rolls-Royce Group plc (LSE:RR) (London, England) also announced that it would shift its global marine headquarters to Singapore.

Officials from the Chemicals and Energy department of Singapore's Economic Development Board (EDB) have said that the company has a seen a strong, post-recession investments from companies this year. For example, Lanxess AG (ETR:LXSG) (Leverkusen, Germany) announced that it was pushing forward its butyl rubber project plans in Singapore. Production will now start in 2013 instead of 2014. Likewise, major chemicals projects, including the Shell Eastern Petrochemicals Complex, belonging to Shell plc (NYSE:RDS.A) (The Hague, Netherlands), was successfully inaugurated earlier this year.

Moving forward, the government of Singapore and the EDB will continue to enhance the competitiveness and sustainability of the chemicals industry. A key initiative that the government has embarked on is the Jurong Island version 2.0 master plan, which will focus on new infrastructure developments and system-level optimization of valuable resources like energy, carbon, water and land.

The outlook for Singapore's energy and chemical industries remains positive. Underlying this optimistic sentiment is EDB's belief that the long-term growth of this industry will be driven from Asia, fuelled by strong growth in India, China and the Southeast Asian region. Companies such as Shell, Lanxess, Huntsman Corporation (NYSE:HUN) (The Woodlands, Texas) and Mitsubishi Corporation (OTC:MSBHY) (Tokyo, Japan) have recently set up global headquarter for their various business units in Singapore. Officials at the EDB are also seeing strong interest from Asian enterprises seeking to leverage Singapore as a launch pad to internationalize business growth from Singapore.

In the information technology (IT) industry, the World Economic Forum's "Global Information Technology Report 2009/2010" ranked Singapore as the second-most network-ready nation after Sweden. Singapore has rigorous laws regarding the protection of intellectual property, excellent logistics and connectivity, and an immense pool of international talent. About 80 of the world's top IT software and services companies have offices in Singapore.

In regard to the Pharmaceutical Industry, manufacturing output has expanded 31.9% for the first nine months of this year, compared to last year. The EDB said the output of the biomedical manufacturing sector last month increased production 47.5% year over year, after posting output declines in the previous two months. The strong performance was attributed to the 53.8% increase in the pharmaceuticals segment, on the back of higher production of active pharmaceutical ingredients.

Speaking on the performance of the pharmaceutical industry, Beh Kian Teik, the EDB's director of biomedical science, said: "Today, leading pharmaceutical, biotechnology and medical technology companies have invested in more than 50 commercial-scale facilities, and continue to partner Singapore in enhancing manufacturing excellence in areas such sustainable manufacturing, process development as well as upgrading suppliers' capabilities to address niche requirements. Also leading pharmaceutical, biotechnology and medical technology companies have invested in more than 50 commercial-scale facilities, and continue to partner Singapore in enhancing manufacturing excellence in areas such sustainable manufacturing, process development as well as upgrading suppliers' capabilities to address niche requirements."

Commenting on the concentration of global talent in Singapore, EDB says, "As one of the most globalised industries in the world, the chemical industry requires in-depth knowledge across disciplines in science and engineering to manage complex, high-end manufacturing processes and technologies. Singapore's positioning as a global city has made us an attractive location in attracting world-class talents from diverse backgrounds. We will continue to invest in developing manpower capabilities, so that we remain a competitive business base for companies to recruit, deploy and develop talent out of Singapore."

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.