ince the establishment of Singapore’s first refinery in the 1960s, the energy and chemicals industry has grown from strength to strength and now boasts an extensive and diversified chemicals value chain with over a hundred global companies. In 2017, the industry in Singapore contributed S$84.4 billion in total output and 3.5% to gross domestic product.
The specialty chemicals sector alone was estimated to have grown 8% in 2018. Looking ahead, we see opportunities for further growth of the sector on two fronts – the rise of Southeast Asia as well as the advent of the fourth industrial revolution.
Growth of Southeast Asian Cities
Southeast Asia is a rapidly growing region with over 600 million people. By 2025, a significant portion of its people will live in cities. In fact, it is projected that Southeast Asia will be home to 36 cities, each with a population of more than 1 million, of which six would be larger than Singapore today. These cities will accelerate demand for infrastructure, real estate, healthcare, transport, technology, nutrition and consumer goods. And in turn consume speciality chemicals ranging from construction chemicals, fine chemicals, electronic chemicals to food ingredients and plastic additives. Singapore is a global city state in the heart of Southeast Asia. Hence specialty chemical companies can leverage on Singapore as a strategic base in the region to orchestrate their investments and efforts across innovation, manufacturing, supply chain as well as sales and marketing.
For example, Afton Chemical expanded its lubricant additive manufacturing facility on Jurong Island to cater to the region’s growing demand for transport fuels and lubricants; while Evonik established its Asia Research Hub in Singapore to drive innovation in specialty chemicals for areas such as functional surfaces.
The Fourth Industrial Revolution – Digitalisation and Advanced Manufacturing
The fourth industrial revolution heralds an unprecedented level of harvesting and analysing data as well as connected plants, automation and manufacturing techniques such as 3D printing. This phenomenon will impact speciality chemical companies and their industrial customers alike. In response, the Economic Development Board (EDB) developed the Singapore Smart Industry Readiness Index (SSIRI) to partner companies as they embraced the revolution. The index serves as a diagnostic tool that companies across all industries can use to assess their current processes, systems and structures in order to better prioritise and execute their digital and advanced manufacturing initiatives. It is just one of the examples of how Singapore is leveraging on its highly educated, skilled workforce as well as strengths in technology and innovation to take advantage of the fourth industrial revolution and transform its industrial base to meet the future.
Specialty chemical companies like Syngenta, Linde and Chevron Oronite are tapping on these Singapore’s strengths to ensure that digitalisation and advanced manufacturing allow them to deliver more innovative products, respond better to customers and drive operational excellence.
Syngenta opened its digital innovation laboratory for Southeast Asia in Singapore to develop advanced digital solutions to support farmers. These solutions help the company and its agrochemical products respond to farmers in Southeast Asia more timely and effectively.
A leading player in colour masterbatches is also digitalising its colour matching and production services by partnering a Singapore-based startup to harness machine learning to shorten product development and sales cycle.
Finally, Chevron Oronite utilised the SSIRI to chart the transformation of its plant on Jurong Island. The company has rolled out sensors to enhance personnel tracking and safety; and adopted technology and data to allow for predictive maintenance of its facility.
Partnering for Success
I am confident that Singapore will continue to serve as a strategic hub for specialty chemical companies in a dynamic and growing region. We at the EDB look forward to partnering you to ride the exciting trends in the sector and multiply your business in Southeast Asia and the rest of Asia.
Mr Ow Kai Onn
Director, Chemicals & Materials
Singapore Economic Development Board