Mr Wong Kok Siew, Deputy Chairman & CEO of SembCorp Industries and Chairman of SembCorp Marine,

Mr Lim Chin Siew, Executive Secretary, Shipbuilding and Marine Engineering Employees Union

Mr Tan Ah Chye, Chairman of Shipbuilding and Marine

Engineering Employees Union, Jurong Shipyard Branch

Ladies and gentlemen,

I am happy to join you today to celebrate our 37^th National Day.

Jurong Shipyard was set up in the newly created Jurong Industrial Estate in April 1963 through a joint venture between Ishikawajima-Harima Heavy Industry of Japan and Temasek Holdings. In 1968, the Government took advantage of the naval dockyard facilities left behind by the British Forces to create the Sembawang and Keppel Shipyards. Almost 30 years later, in July 1997, Jurong and Sembawang shipyards merged to form SembCorp Marine, the largest shipyard group in Asia Pacific. Under the new corporate structure, Jurong Shipyard maintains its identity as the largest of SembCorp Marine’s four shipyards in Singapore in terms of dock capacity.

The conception of Jurong Shipyard is therefore embedded in the history of our nation. Over the years, Jurong Shipyard has grown and transformed itself together with the country.

The same factors drove the growth of the marine industry and of Singapore. Our domestic market is too small. We have had to regard the world as our hinterland. We attracted multi-national companies to set up plants here to supply to the international market. The MNCs created many jobs for Singaporeans and fed many smaller local suppliers. We also developed our airport and seaport to become premium hubs for the world. We survived and prospered against the odds, because we worked hard as a nation, and took full advantage of the opportunities that the global economy offered us.

The growth of Jurong Shipyard is likewise a result of globalisation. Different economies are becoming more integrated together. World trade is growing faster than world GDP. More goods are transported, by sea and air, between countries and across continents. This has fuelled the demand for shipbuilding and repair. Singapore seized the opportunity and managed to entrench ourselves as a maritime centre.

Over the years, the industry has progressed and matured. It has developed world-class expertise in ship repair, shipbuilding, ship conversion and offshore engineering. It has won a reputation for providing quality and reliable services, and maintaining high standards of workplace safety for its employees. Today, the industry accounts for 22% of the global ship repair market, despite having only 5% of the world’s ship repair facilities. We are the world leader in Floating Production Storage Offloading (FPSO) vessel conversion and the construction of jack-up rigs.

Last year was a very difficult year for Singapore. We were in a deep recession and our economy contracted by 2%. But it was an exceptionally good year for the marine industry. Uncertainties in other parts of the world diverted ship repair business to Southeast Asia, which is relatively calm and stable. The industry therefore grew by over 40% last year. This year it has maintained its momentum, registering a growth of 13% in the first half. This sterling performance of the marine industry shows that despite an overall economic downturn, there will always be pockets of opportunities, where we can continue to thrive and earn a good living. We need to keep our hopes and spirits high, spot these opportunities and make full use of them.

At the same time, we should also be mindful of the challenges ahead.

One major challenge to the marine industry is global terrorism. The 9-11 attacks, and subsequently the discovery of the Jemaah Islamiyah group in Singapore, showed that terrorism is a problem of global scale. Terrorists are operating through international networks. There is growing concern that their next attack may be via ships and shipping containers. This would not only inflict heavy casualties and damage to property, but also disrupt the wheels of international commerce. This can potentially cripple international trade, which will have significant downstream effects on many sectors, including the marine industry.

Terrorism is therefore not an abstract and faraway problem, but one that can affect the security and livelihood of Singaporeans directly. It is a global problem that needs a global solution. Countries need to respond collectively, to secure the international trading infrastructure and network, and to protect the global trading system against terrorist attacks.

Another key challenge to our marine industry is competition from the region. As China progressively integrates itself into the global economy, its lower costs will divert many activities which are land and labour intensive away from Southeast Asia. China already has some very efficient and modern shipyards. Over time, their standards will improve, and they will be formidable competitors.

To respond to these challenges, we need to rethink our policies and strategies. We must upgrade ourselves and our economy, and change old policies that no longer fit in our new environment. Existing industries must move up the value chain, and our people must acquire the right skills to continue contributing to Singapore’s new economy. We need to recognise that China is not just a competitive threat, but also presents tremendous opportunities. Hence the next phase of our economic development must include initiatives to grow new industries and expand our external wing.

The marine industry therefore cannot sit still. The merger of Jurong and Sembawang Shipyards in 1997 has brought about greater economies of scale and cost efficiency. As Mr Wong Kok Siew mentioned earlier, the industry will need to further restructure, upgrade and climb up the technology ladder, in order to withstand foreign competition.

Another imperative for the marine industry is to internationalise its business. The industry has made a start in this. Our larger yards are establishing operations in Mexico, China, the US and elsewhere in the world to extend their market reach. Jurong Shipyard has made international forays into China at Bohai and Dalian, and into South America through the Maua Jurong project located at Niteroi, the historic marine centre of Rio De Janeiro.

For 37 years life has improved for all Singaporeans. We have attracted investments and provided good jobs for all. Our industries started by manufacturing simple items like matches and joss sticks, but as we become uncompetitive in these areas, we progressively upgraded to consumer electronics, disk drives, semi-conductors, petrochemicals and pharmaceutical products. Through this process, our workers became more skilled, and our standard of living improved significantly.

Challenges and change are therefore not new to us. We face formidable challenges today, but we are well equipped to tackle them, confidently and successfully. Let us continue to work together as a nation, so that we make Singapore a secure and prosperous nation for many years to come.

I wish you a Happy National Day.

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