Mr Paul Madden, Acting High Commissioner, The British High Commission

Counsellor, Mr Roland Herrmann, Embassy of Germany

Mr Marcel van der Kolk, Deputy Head of Mission, Royal Netherlands Embassy

Mr Evert Henkes, CEO & President, Shell Chemicals

Dr Jurgen Hambrecht, Member of the Board of Executive Directors, BASF
AG

Distinguished Guests

Ladies and Gentlemen

I am delighted to join all of you this morning for the opening ceremony of Ellba Eastern’s styrene monomer/propylene oxide (SM/PO) plant. I was here in January 2000 when construction work first began. The project was not only completed within the time and budget allocation, it has been accident-free since the beginning, translating into 15 million accident-free work-hours. Congratulations to all involved!

Today’s opening of this US$500 million Ellba plant is an important milestone for us in Singapore. It represents the first manufacturing investment in Singapore by BASF, a global industry leader. It reaffirms the continued confidence in Singapore of our long-term partner, Shell. The project also shows the competitiveness of Jurong Island as a global chemical hub.

We warmly welcome BASF into our community of global chemical companies on Jurong Island. We hope that BASF will treat this as your home away from home and regard Jurong Island as one of your verbund or "integrated" sites. We look forward to the continued strengthening of ties between BASF and Singapore.

We would also like to express our appreciation to Shell for its strong confidence in Singapore. It is well-known that Shell was the first recipient of the Pioneer Status incentive in 1961 when it set up Singapore’s first oil refinery on Bukom. Over the last 40 years, Shell has grown with Singapore and remains one of our top foreign investors.

Singapore is delighted to host this significant partnership between these two chemical giants. The decision to proceed with this investment was made when the Asian economies were badly affected by the economic crisis in 1998. This showed the confidence BASF and Shell had in the economic fundamentals of Singapore and the growth prospects of the region. The companies took a long-term view. I remember meeting Mr Henkes in 1997 to encourage him to invest in this plant. I assure BASF and Shell that we will not betray the trust you put in us.

The Ellba plant benefits from Jurong Island being a hub for chemical activities with high industry integration and strong logistics infrastructure. The plant sources most of its key feedstocks from ExxonMobil’s cracker located nearby and sells some of the styrene produced to polystyrene manufacturers such as Denka and Atofina, which are located right on the island. The propylene oxide that is also produced is a key feedstock for Seraya Chemical’s polyols plant. For raw materials and products that are not sourced or supplied locally, Ellba is supported by Oiltanking, a logistics provider.

We will keep working to improve Jurong Island as a global chemical hub. We are concentrating on three areas. First, we will try to achieve maximum economies of scale. When Ellba operates at its full capacity, it will produce 550 thousand tonnes per year of SM. This will make it the largest SMPO plants in Asia. As it is tightly integrated with the Seraya Chemical’s SM/PO plant, the Seraya/Ellba complex will be one of the most competitive SM/PO sites in the world.

Second, we will continue to strengthen the infrastructure for supply chain management to support existing and new companies on Jurong Island. To do this, we are establishing a dedicated logistics hub at Banyan on Jurong Island. A cluster of third party logistics (3PLs) service providers offers a comprehensive range of logistics services to chemical companies. Banyan will have its own berths, jetties and other marine facilities. Apart from handling bulk liquid and solid chemicals, including hazardous chemicals, the hub will provide services such as storage tanks, chemical warehouses, tank filling, cleaning and maintenance, drumming, testing and waste treatment facilities. Banyan will also function as the leading transhipment hub for oil and chemical break-bulk activities.

We are also upgrading Jurong Port into a container port that will complement or compete with PSA Port to serve better the needs of the chemical industry. Over the past 12 months, Jurong Port has invested significantly to expand its capability, capacity and connectivity to the region. With its proximity to Jurong Island, it is well-placed to serve the chemical industry.

Another important step is the establishment of a common pipe grid. We are looking into the feasibility of expanding the current pipeline corridor on Jurong Island into such a grid which will be integrated with common product storage and terminalling facilities. This will support comprehensive supply chain management for companies.

The third area that we are concentrating on to keep our competitiveness is human resource development. We will ensure a steady supply of talent for this knowledge-intensive industry.

For production, the Singapore government has invested $40 million in the Chemical Process Technology Centre (CPTC). CPTC will be unique in its ability to provide hands-on live plant training to equip technicians in Singapore with the skills to operate highly sophisticated chemical plants. The technicians joining the chemical industry will thus have a high level of "operational readiness".

For research, the Institute of Chemical Engineering Sciences (ICES) is currently under construction on Jurong Island and will focus on research in chemical and process engineering. ICES will work with chemical companies to become a focal point of innovation and technology development.

We will do everything we can to ensure that Jurong Island continues to be a leading hub for the global chemical industry. We will strive to create an operating environment that is driven by excellence, innovation and partnership. To borrow BASF’s concept for competitiveness, what we want to achieve is "verbund" on a large scale.

To mark this occasion, BASF and Shell are making a generous donation to the KK Regional Outreach To Kids Fund today which will provide better surgical care to sick children in the region who are financially disadvantaged. I thank BASF and Shell for this kind gesture.

On this happy day, I congratulate the owners, management and staff of Ellba on the opening of your new plant and wish you great success in the years to come. Thank you.

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