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04 Dec 2003
Speech by Minister of State, Mr Raymond Lim, at the Marine Group Local Industry Upgrading Programme Event on 4 December 2003, 3pm, Shangrila Hotel
Ladies and Gentlemen:
- The Singapore marine industry is recognised today as amongst the global leaders. It has not always been smooth sailing. The industry has had to weather many storms over the past 20 years. However, thanks to its resilience and innovation, it has emerged stronger than ever before, occupying the lead position in several areas. The road ahead will not be easy. The global environment remains challenging and there will be no let up in competition. We have no choice but to face these challenges head on. In the short time that we have, I would like to share with you, a few thoughts about the challenges and how we can prepare ourselves to meet them. But before that, let's look at what we have achieved so far.
Singapore's Maritime Roots
- Singapore has always been a maritime nation. We may not have had a large fleet of trading vessels or commercial fishermen going out to sea but we were certainly the main port of call for the traders plying the seas between East and West. As a result of our strategic location along major trade routes, Singapore has always been a natural location for shipbuilding and repair activities. Our first shipyard, Hallpike Boatyard, was set up in Boat Quay in 1823, just 4 years after modern Singapore was founded.
- In the beginning, our shipyards specialized in the repair of simple vessels. Over the years however, Singapore's marine industry has moved from being a low cost ship repair centre to a leading marine hub, undertaking complex projects such as rig building and Floating, Production, Storage and Offloading (FPSO) conversion projects.
- Singapore yards today account for about 70% of the FPSO conversion market and 60% of Jack-Up Rigs. Our shipyards continue to take on more technology intensive projects and have gained a reputation for efficient, high quality work and fast turn around times, contributing to Singapore's position as an International Maritime Centre.
Challenges Ahead, particularly China
- But there are new challenges on the horizon. The industry faces keen competition from other regional shipyards. In particular, China will be aggressively expanding its shipyard capacity over the next 10 years, and targets to challenge Japan and Korea as the major shipbuilding nation. However, such challenges are not new to us. While we must continually upgrade our capabilities to retain our leadership position in our niche areas, we must at the same time look at the regional developments as new growth engines for our industry. We need to examine how we can ride on the region's growth, leveraging on our strong technical expertise developed over years of experience. Through your ingenuity demonstrated time and again in the past, I am sure we can turn these challenges into opportunities.
Marine Group LIUP Affiliates Programme
- I am happy to note that the Marine industry has been taking proactive measures to ensure that it maintains its leading edge. One excellent example of this is the Marine Group Local Industry Upgrading Programme or LIUP initiative that was started in 1996 with the support of the EDB. This programme has played a critical role in upgrading the capabilities of the SMEs who support the larger shipyards. Today, there are more than 300 SMEs in this industry who work in symbiotic relationships with the larger yards.
- I am glad to announce the launch of another initiative under the Marine Group LIUP-The Marine Group LIUP Affiliate Program. Under this Affiliate Programme, the 7 larger shipyards will identify about 30 of the most promising SMEs and assist in three main areas - entrepreneurship promotion, innovation management and human capital development. The LIUP Managers from the larger shipyards will work with and help the participating SMEs to identify and develop their capabilities in these areas. I am sure that with these programmes in place, some will be able to venture overseas to pursue new markets, together with the larger yards.
- SMEs play a key role in the marine industry, providing a large and diversified support base. The larger yards sub-contract as much as 70% of their work to these 300 maritime SMEs. It is therefore critical that our Marine SMEs be up-to-date in capabilities whilst maintaining their competitiveness on a global front. With the strong support from the larger shipyards, I am confident that the continual upgrading and improvement that would be offered by the Affiliate Programme will benefit those who are participating in this programme.
Conclusion
- The Marine industry is an important industry for Singapore, with an output exceeding $4.4b and employing some 33,000 workers. In order for the industry to stay ahead of the competition it is important for the sector as a whole to work in close partnership. With initiatives such as this LIUP and the industry's determination and drive towards innovation, I am confident that the Singapore maritime industry will continue to grow and have a rosy future for many more years to come. I wish all of you here every success as you work together in partnership to uncover new opportunities.
- Thank you.
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