Republic's share of bustling industry up by 50% in just three years, survey shows
Michelle Tay, Straits Times 13 Jun 08;
SINGAPORE is making waves in the lucrative global environment and water industry covering water recycling and pollution control.
Although the Republic's global market share is still relatively modest, it is growing rapidly, a new survey by Deloitte Singapore has found.
Singapore's share shot up 50 per cent in just three years from 0.24 per cent in 2004 to 0.36 per cent in 2006.
That represented a compounded annual growth rate of 24 per cent - almost five times faster than the global figure of 5 per cent.
The industry's impressive strides have been strongly driven by a willingness among local firms to expand abroad.
Out of 155 Singapore-based firms polled in the survey, 42 per cent cited 'expansion to overseas markets' as their key growth strategy over the next three years.
The survey also found that in 2006, 67 per cent of the overall revenue of firms operating in the sector came from their overseas operations.
Mr Sam Ong, the group deputy chief executive of Singapore-
listed Hyflux, said his firm's overseas revenue saw a 44.9 per cent jump from 2004 to 2006.
Hyflux has projects involving water recycling and desalination plants at various sites around the globe, including China and the Middle East.
Just two months ago, Hyflux won a $632 million contract to build the world's largest reverse osmosis desalination plant in Algeria.
Mr Ong said in expanding abroad, Hyflux increased its local workforce by about 48 per cent, and its overseas workforce fourfold, from 2004 to 2006.
Said Mr Tham Poh Cheong, the director for environmental services at International Enterprise Singapore: 'It is clear that overseas expansion is a key strategy companies are adopting to grow their business, given the limited room for growth locally.'
Singapore-based companies operating in the sector have established operations all over the world, from China to Saudi Arabia to Mexico.
They are also making a splash in the Middle East and North Africa, as a result of the growing demand for water and environmental services in those regions.
For instance, in October 2006, Keppel Integrated Engineering won an integrated solid waste management deal in Doha, Qatar, worth $1.7 billion.
And just yesterday, Keppel Corp announced it had formed a joint-venture company called Tianjin Eco-City Environmental Protection Co that would focus on the investment, construction and operation of infrastructure for environmental restoration and improvement in the Sino-Singapore Tianjin Eco-City.
Keppel is leading the Singapore consortium for the project, which aims to promote sustainable development and green living on a variety of land sites for residential, commercial, institutional and business park uses.
According to the survey, the global environment and water industry was worth about US$629 billion (S$863.24 billion) in 2004, with Singapore's share totalling S$1.4 billion.
By 2006, however, Singapore's industry revenue had soared 69 per cent to $2.3 billion.
Said Mr Tham: 'There is great potential for further growth in the overseas markets. With the growing worldwide emphasis on sustainable development, Singapore players can offer a suite of urban solutions that encompasses urban planning, green buildings, management of water, used water and waste - and more.'
Growth of environment and water industry lies abroad
Two-thirds of 2006 revenue, or $1.5b, come from outside Singapore
Chuang Peck Ming, Business Times 13 Jun 08;
THE huge presence of multinational corporations in Singapore has helped to spawn a fast-growing multi-billion dollar environment and water (E&W) industry here that has been spreading its wings overseas.
Homegrown E&W companies such as Hyflux, SembCorp Industries and Keppel Integrated Engineering have left their footprints in many parts of Asia and are moving rapidly into markets in the Middle East.
A survey of the local E&W industry - the first of its kind - released yesterday by the government shows the industry expanding into a $2.3 billion business at a compound annual growth rate (CAGR) of 24 per cent in 2004-06.
'The E&W industry has supported the key economic engines for Singapore - the electronics, petrochemicals, chemicals and pharmaceuticals industries,' said Michelle Tan, head of the environmental services division at IE Singapore.
'Singapore has attracted many MNCs in these industries,' she noted. 'Some of these industries, such as semi-conductor and petrochem, require huge volumes of water for their operations and some local E&W companies have taken this opportunity to serve these MNCs in the treatment of industrial wastewater.'
It is still tiny relative to the US$629 billion global E&W market but International Enterprise Singapore noted that the industry - which covers water, waste management, alternative clean energy and pollution control and multi-sector - has expanded faster than the global CAGR of 5 per cent in 2004-06.
IE Singapore, the government's trade promotion arm, along with the E&W Industry Development Council and the Economic Development Board, commissioned the survey which was done by consultancy firm Deloitte Singapore.
The fortunes of the E&W industry lie increasingly abroad - two-thirds of its revenues, or $1.5 billion, came from outside Singapore in 2006, up from 59 per cent in 2004, according to the survey covering about 55 companies.
'The (local) industry is growing rapidly, with Singapore steadily gaining a foothold in the global market,' IE Singapore said in a press release highlighting the main findings of the survey.
The survey shows that Singapore's share in the global E&W market edged up from 0.24 per cent in 2004 to 0.36 per cent in 2006.
'Albeit a small growth, this shows that global players are appreciating the expertise and the value-added of Singapore companies,' IE Singapore said.
The key strengths of Singapore E&W players lie in their designs, research & development, and systems integration expertise, as well as a knack for customising solutions to meet clients' needs.
'There is great potential for further growth in the overseas markets, given our local industry players' expertise and experience in environment and water management,' IE Singapore said. 'With growing worldwide emphasis on sustainable development, Singapore players can offer a suite of urban solutions that encompasses urban planning, green buildings, management of water, used water and waste, and more.'
Added Sam Ong, Hyflux's group deputy chief executive: 'The world will always need good clean water at affordable prices, whether for drinking, industrial or agricultural purposes.'
Internationalisation is already the top business strategy for the local E&W companies, with 42 per cent of those surveyed citing 'expansion to overseas markets' as their key thrust in growing the company in the next three years.
China is currently the biggest market abroad for Singapore's E&W industry, accounting for 67 per cent of overseas revenues in 2006. South-east Asia contributed 20 per cent of the overseas sales.
Future hot spots for the industry are in India and the Middle East, according to the survey.
In April, Hyflux won a $632 million deal to build the largest reverse osmosis desalination plant in Algeria. Last October, Keppel secured a $1.5 billion contract in Qatar to construct the largest wastewater treatment plant in the Middle East. The year before, SembCorp acquired a 40 per cent stake in Fujairah Independent Water and Power Plant in the United Arab Emirates.
