Monday, Dec 10, 2018
Industry & Trade | Asia-Pacific | Singapore

Chemical Industry, Singapore

Driving the digitalization of the chemical industry


4 months ago

Mr. Terence Koh, Executive Director of The Singapore Chemical Industry Council Limited (SCIC)
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Mr. Terence Koh

Executive Director

The Singapore Chemical Industry Council (SCIC) is the unified voice of the chemical manufacturing industry, which one of the key pillars of the city-state’s economy. Speaking to the Worldfolio, Terence Koh discusses Singapore’s role as one of the world’s top chemical and petrochemical exporters, the emergence of Industry 4.0 technologies, and how SCIC is helping its members to adapt in this era of rapid technological advancement.

 

In the past five decades, ASEAN has made remarkable progress to become an economic powerhouse and is expected to become the fourth-largest economy by 2030. In 2018 Singapore assumed the chairmanship of the economic bloc under the motto “Resilience and Innovation”. What are your expectations for ASEAN in the coming years and what impact do you expect from Singapore’s chairmanship?

The population growth in ASEAN is rapid and we expect to have close to 730 million people by 2030. Building affluency among ASEAN member economies is key to sustaining consumption in this region. Economies in the ASEAN region achieved an average growth rate of 5.3% between 2007 and 2015. For economies in transition, investments and infrastructure developments support comes mainly from ASEAN member states, China and Japan.

There are five key areas that Singapore hopes to deliver with fellow ASEAN member states as chair of ASEAN in 2018. For the energy and chemical sector, the drive by ASEAN governments to encourage innovation and the use of disruptive technologies are crucial for the industry’s success and sustainability. Promoting trade facilitation and market access continue to be very important for this growing region. These initiatives would be difficult to achieve if we are not able to cultivate a conducive and coherent regulatory environment among member states.

 

What has been the impact of the Asean Economic Community (AEC) on the chemical industry?

ASEAN member states have been working effortlessly to achieve the 2025 timeline for the AEC blueprint.With the AEC goal of achieving a single market for the region, the free flow of goods, services, investments, capital and labor would result in a more competitive ASEAN. Realization of this integration would not only benefit ASEAN member states but also trading partners and investors around the world. Whilst economies in this region recognize that we have to transform to cope with population growth, food, water and energy security, technology advancement, climate change and environment concerns, we are also conscious of the fact that chemistry is the backbone of manufacturing and provides solutions to solve many of the issues mentioned above. As ASEAN advances, chemistry will continue to play a very important role in this transformation.

 

To secure Singapore’s economic future, the government, through the Committee on the Future Economy (CFE) has outlined seven strategies to help the country stay open and connected, ensure its people acquire skills for future jobs, and help companies scale up through innovation and transformation. On the one-year anniversary of the Committee on the Future economy report, what is your analysis of its success so far and your expectation moving forward?

It has only been a year and it is too early for us to make an assessment. To my knowledge, most if not all of the seven strategies put forth in the CFE have been worked on. The Energy and Chemical Industry Transformation Roadmap (ITM) for example, was launched in October 2017. Together with Economic Development Board (EDB), SCIC has since been embarking on various initiatives to help the industry build capacity and capability in integrating digitalization into its organization and processes. We also encourage companies to invest in refreshing and providing deep skilling for their workers to stay relevant. We are all going through a phase where we know we have to be digitally confident and future ready for the ever changing industry landscape.

 

What are the impacts and implications of the Energy & Chemical ITM on your sector?

For the Energy and Chemical ITM, we have been talking about IoT and digitalization. When 3D printing came to Singapore, it was no surprise to us as we were already looking ahead on how smart manufacturing would evolve. Our industry is no stranger to using sensors, robotics and drones. Since the launch of the Energy & Chemical ITM in October 2017, we have since formed a committee within SCIC to look into how we could help our members with this digital transition.

EDB launched the Smart Industry Readiness Index in November 2017. This is a world’s first 4.0 tool to catalyze the transformation of industrial sectors during this 4th industrial revolution. The launch included the provision of 300 funded assessments across the manufacturing industry to help SMEs and MNCs to level in their index. This is something we are inspired by and we try to do the same with our members at SCIC. Companies should start to work on integrating vertically, especially when the core activityof our industryis manufacturing. We encourage the entire value chain we partner with to work in parallel on vertical integration in terms of digitalization within their operations.

This is the future that we are working towards to and we do believe with the impetus and support coming from the government and the will of the industry to transform, we are optimistic about achieving our goals.

 

Today, Singapore is the world's 5th largest refinery export hub and ranks within the top 10 globally by volume of chemical exports. The city-state represents an extensive chemicals value chain, spanning refining to olefins production, to chemicals manufacturing, supported by innovation and research. Can you tell us the key drivers which have allow Singapore to be where it is today?

Singapore has good physical and financial infrastructure, social and political stability and of course a very strategic location with allows for great connectivity. Singapore is the largest bunkering port in the world with refineries catering to the supply.

Last year we exceeded sales of 50 million tons of bunker fuel. Due to the low sulphur requirement for bunker fuel, we are also promoting LNG as an alternate fuel for vessels. Singapore is also a global top ten petrochemical hub. With our traditional crude refining activities, the naphtha goes to the cracking of olefins which in turn is converted to polyolefins. Today, Jurong Island plays host to more than 100 companies comprising upstream to downstream chemical plants, power plants, logistics & warehousing companies, toll blenders, a national chemical engineering and sciences research center and many others.

 

The sector is currently facing rapid technology advancements which are disrupting the value chain. What are the challenges and opportunities you see as a result?

As mentioned earlier, the bigger picture is of course the ITM, which looks beyond IIoTs and digitalization. There is a rapid growth of technology to drive the industry towards the acceptance of a transformation from working in a conventional manner to one where they have to digitalize their operations.

Technology would also help manage complexities of operations in this industry. Sensors installed in the process plants assist in predictive maintenance, plant monitoring and protection. Information collected through the sensors goes into the cloud. Information captured over time allows data to be analyzed to solve issues. This would grossly cut down the amount of time when solving problems through conventional methods.

 

Could you tell us more about SCIC’s inception and your current objectives?

The evolution and growth of the Singapore Chemical Industry saw the need for an official association to represent the interest of the manufacturing sector. Formed under the umbrella of the former Singapore Manufacturers’ Association in 1979, SCIC was eventually incorporated as an independent entity in 2007 to better serve members’ needs and interests.

As the chemical industry is one of the key pillars to Singapore’s economy, we need to continue to represent our members’ interests in ensuring the competitiveness of their business operations in Singapore.

This is important in view of the evolving operating environment such as regulatory landscape changes and the ITM implementation. Our role in addressing advocacy issues as well as driving industry capacity and capability building initiatives for members will remain our key focus. Our presence at various regional and international platforms also provides the opportunity for our voice to be represented and to be able to bring initiatives on global positions to a national level for implementation. 

Through our newly formed Industry Sustainability Committee, we also raise awareness on the usage of plastic in Singapore. Indeed the world over do have a plastic issue that we need to address. We do believe we are able to find good solutions through a recycling program and a strong advocacy and education drive to communicate responsible use of plastics to the consumers.

 

How do you collaborate with both the public and private sector to promote the agenda of the chemical sector?

SCIC has always played a proactive role in engaging our stakeholders. Over the years, we have been recognized as the single voice for the chemical industry. We work closely with the government agencies on addressing advocacy issues and implementing various industry initiatives. We also work with the industry to reach out to the general public, including students to enhance awareness of the industry through various outreach programmes. These outreach efforts will be important in providing a communication platform to allow our stakeholders to be better informed about the chemical industry. 

 


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