Ronnie Lim, Business Times 11 Feb 08
The EDB edge: Gearing up for more oil refineries, biomed projects
EDB also hoping to tap new growth area of health, wellness and ageing
(SINGAPORE) From more oil refineries and planning for a third biomedical park in Tuas for drug-makers, to securing lifestyle projects like big-name, international wellness centres - that's what EDB assistant managing director Aw Kah Peng and her team of 70 are working on this year.
Singapore's oil refining centre - currently the third largest worldwide, but in danger of losing this position to new emerging hubs like Jamnagar, India - could see new greenfield refinery investments, as well as expansions by existing players, she says.
An influx of downstream petrochemical investments is also expected in the coming six to nine months to make use of feedstocks from the new Shell and ExxonMobil crackers starting up in 2009-2011, the old energy hand at the Economic Development Board adds.
Ms Aw has just this year taken on biomedical sciences in her expanded portfolio, which also covers education, and consumer and professional services as well as energy. She says Singapore is already starting to plan a third biomedical park in Tuas to accommodate new pharmaceutical investors.
This is forward planning, as the spanking-new 188-hectare Biomedical Park 2 is just starting to take in its first tenants, including US healthcare group Abbott, which is building a $450-million plant. The 183-ha Biomedical Park 1 has practically run out of space.
In an interview on what's ahead this year, Ms Aw says that 'there is still a lot of excitement in energy and chemicals, especially with oil prices and demand holding up'.
While ExxonMobil's second cracker, reportedly costing over US$5 billion, was a big catch last year, she said that 'it's hard to tell if there will be no more big bangs this year'.
'While the Middle East is building new greenfield refineries, Asia is where the actual markets are. That's why there is new building like Reliance's,' she said, referring to the Indian refiner's move to double capacity to 1.24 million barrels per day at Jamnagar.
There, another company, Essar Oil, is also tripling its capacity to 700,000 bpd by 2010 - which means that Jamnagar will have over 1.9 million bpd capacity, overtaking long-time refining hubs like Singapore and Rotterdam with around 1.3 million bpd each.
'Is there room for more refineries in Asia? I think so,' she says. 'I think there will be something happening in this sector ... yes, we are talking to some companies for greenfield refining investments, as well as expansions.
'The ones here have also room to upgrade and expand - both in volume and higher specifications ... so this is a sector to watch still.' The refiners here are ExxonMobil, Shell and Singapore Refining Company.
In the biomedical sciences sector, comprising pharmaceuticals, medical technology (devices and instruments) and healthcare services, Ms Aw says: 'We will see good growth in medtech but from a smaller base, and also good growth in pharmaceuticals for the next few years. The latter is because quite a number of projects have been announced in the last one to two years, so we will see hiring and new jobs being created.'
The 'big one' last year was by Swiss pharmaceutical giant Novartis which is building a $1 billion biotechnology facility which will be its biggest single manufacturing investment employing 300 workers, when it is ready, in 2012.
Novartis also represents an interesting change in the technology platform used by industry - to biotechnology, from chemistry earlier - to produce pharmaceuticals, she said.
'The growth is in the biotech platform, or biologics. So that's a new area for us in pharmaceuticals in which we quickly need to build up a base.'
There will also be opportunities in biomedical R&D which Singapore's Biopolis can tap.
'Globally, the industry is facing certain challenges, like how to increase R&D productivity, because the challenge is always in finding new drugs. But if you look at the rate of approval of new drugs by the US Food and Drug Administration in 2007 versus 2006, it's slow. Why? Everybody is making guesses. There were a couple of recalls, people get jittery, and regulators look harder.
'So all these things are coming to play now and it's putting a lot of pressure on the sector ... like how else can they do R&D and how do they bring down manufacturing costs. It can be both an opportunity and cause of concern for Singapore.
'But if the companies increasingly look outwards, rather than try to do everything themselves in the race for productivity, I think they will look to Singapore's Biopolis, which has built up quite a strong reputation because of good R&D, and which is also now focusing on translational (from the laboratory to hospital bed) research.'
In the area of consumer businesses - which Ms Aw says is an interesting segment because of the fast-growing middle class - EDB also covers consumer care companies, those making food and nutrition products like Procter & Gamble and Johnson & Johnson, and even the lifestyle ones.
Health, wellness and ageing is a new growth area which EDB hopes to tap, and here Ms Aw said that 'we are test-bedding ideas, and hopefully by the second half of this year, we can share our thinking and plans in greater detail'.
Lifestyle products and services is another new area pitched at the middle class which is rising in Asia.
'Here, we are talking to quite a number of companies, nutritional and also wellness centres. They are not medical centres but have doctors and nurses on the staff, and help you to treat certain illness and change your lifestyle, like what you eat and how often you exercise ... like the Chopra Centre for Wellbeing in Deer Park, California and the Pritikin Center in Florida. Some are quite impressive, they do research and even have clinicians on their staff.
'By the later part of this year, when we get a better sense, we can start to bring in some projects,' she said.
