The right mix - the chemicals industry in Singapore
The right mix of good geographical location, strong regional economic growth and strong government support has produced white hot growth in Singapore’s chemicals industry. There has never been a better time to work in this industry than now.
By John Yip
What is the first image that comes to your mind when someone mentions the word “chemicals”? Scientists in white lab coats working hard to get the right mix of different coloured substances in rows of funny-looking beakers and test tubes?
You aren’t wrong to think so. Research and development (R&D) is certainly a very important part of the chemicals industry, and it does certainly involve a fair amount of laboratory work.
However, look closer and you will quickly find a much wider range of jobs and occupations in Singapore’s second-largest manufacturing cluster after electronics. The chemicals industry achieved a total output of S$66.5 billion (32% of total manufacturing output) in 2005, even though Singapore doesn’t produce a single drop of crude oil.The specialties sector, where you are most likely to find “chemists in white lab coats”, accounted for only around S$6.5 billion of that total figure.
The petrochemicals sector contributed S$20 billion, while the remaining S$40 billion came from the petroleum sector. The engineers and technicians who work in these sectors dress in overalls and hard hats, and they perform a wide range of process-related and operational roles. And there are many more professionals who study oil and energy trends, and find ways to enhance their companies’ profitability.
The chemical industry in Singapore is huge and varied, and more importantly, it is growing at a white hot rate.
Since 2004, Asian economies have enjoyed their best economic performance in about a decade. Correspondingly, there is soaring demand for energy and chemicals in this region, especially in China and India. Companies are therefore flocking to Singapore to take full advantage of our country’s proximity to these massive growth markets.
But our favourable location is only part of the explanation. The chemicals industry is characterized by strong upstream and downstream linkages. Any location that can provide such linkages will greatly help chemical companies reduce their costs of production, and provide more growth opportunities at the same time.
And Singapore’s Jurong Island is the one-stop solution that addresses all these needs. This 3,000-hectare island formed from reclaimed land is the centrepiece of Singapore’s chemical industry, housing around 80 companies that collectively participate in all the different stages of chemicals manufacturing — these companies can literally buy and sell raw materials and finished products over the fence!
This network of partnerships allows companies to shave 20-30% off their capital costs, and 10-15% off logistic costs. These savings are further enhanced by Jurong Island’s superb infrastructure of services, utilities, and third-party logistics services. Companies can literally “plug” into a common pipeline to transfer raw materials, finished products and obtain utilities services seamlessly, and save up to 20% in costs.
In addition, plans are already in place to create a 1.47 million cubic metre underground cavern beneath Jurong Island to cater to the industry’s storage needs, with a further 1.73 million cubic metres planned for construction if demand persists.
Big names on the move
All these factors combine to make Singapore an extremely attractive location for chemical companies. In 2005, it seemed a month didn’t pass without the announcement of a multi-million dollar expansion. Companies that have expanded include Singapore Refining Company, Vopak (Netherlands), Petrochemical Corporation of Singapore (Japan), and Polyxylenol Singapore.
Fifteen new companies were set up in 2005, compared to the total of 19 companies over the previous five years. In 2005, the chemicals industry committed S$2 billion in investments. Once completed, they will add another 500 jobs to the current total of 6,500 on Jurong Island alone.
Other exciting developments include Shell’s commitment to construct a new world-scale ethylene cracker on Bukom Island, which is set to become Singapore’s second largest multi-billion collar cracker. Christened the Shell Eastern Petrochemicals Complex (SEPC), the groundbreaking ceremony was held in October last year.
In the meantime, the US giant, Exxon-Mobil, is in the midst of conducting feasibility studies to construct a world-scale steam cracker on Jurong Island as well. If the project materialises, Singapore is well on its way to doubling its chemical output in the next five years.
Right talents needed
Shell and Exxon-Mobil are very familiar names in Singapore, and both have operated major oil refineries here since some time ago.
When it comes to refineries and crackers, chemical engineers and technicians are always in high demand. The role of a chemical engineer or technician ranges from operational support to project engineering. Operational support includes day-to-day plant optimization and troubleshooting processes that are not working normally, while project engineering covers the conceptualisation of new projects that would add value to the refining process and its eventual execution.
Mechanical engineers are also needed for a range of roles such as checking equipment integrity and reliability, maintenance, plant turnarounds, engineering design and construction. They ensure equipment reliability and safety through regular tests and equipment studies.
In the meantime, much has also been done to train future talent for the industry. The Chemical Process Training Centre was set up on Jurong Island in June 2004 to allow as many as 800 students to gain hands-on experience on actual manufacturing processes. It is the first industry-scale “live” training plant in the world, and is capable of providing 8,000 man hours of training for workers annually.
The Institute of Chemical and Egineering Sciences was also set up on Jurong Island in September 2004 to support the industry’s continuous efforts in developing new products, processes and technology. With all these infrastructure and industry growth in place, it’s clear that if you’ve got the right mix of skills and interests, there is definitely a career waiting for you in the chemicals industry today.