14 October 2009

"Positioning for Recovery"
Strategies & Challenges for the International Bunker Business

Mr Chris Fisher, Chairman of IBIA [pronounced as "E-Bia"]
Distinguished guests,
Ladies and gentlemen,
Good morning,

1 It is my pleasure to join you here for the opening ceremony of the International Bunker Industry Association or IBIA [pronounced "E-bia"] Convention. I also understand that this is the first time that the IBIA convention is being held in Singapore. Judging by the level of interest, I am hopeful that it will not be the last. To our guests from overseas, let me wish you a very warm welcome to Singapore.

Positioning For Recovery

2 The memories of the events that 13 months ago brought the world to the brink of financial collapse must still be vivid on many of our minds. Much of the world is still feeling the effects of the economic slowdown even though some financial markets have recovered. Shipping, like most real sectors, has been hard hit and recovery is at best still nascent. Orders remain low; and freight rates, weak.

3 However, even in the dark clouds of the crisis, the most entrepreneurial and innovative ones in the industry have managed to find a silver lining by seizing the opportunity to expand their global reach. India's Essar Energy acquired a 50 per cent stake in Kenya Petroleum Refineries. Vopak, an independent storage player, is in talks to build tank storages in Malaysia and Vietnam. In Singapore, Total, the French oil major, is expanding its marine fuel operations. Danish company, Dan-bunkering has also just established its Asian office here.

4 No one can tell when a full recovery will take place, but we have some reasons to believe that the worst is over. The International Energy Agency or IEA has revised its global oil demand forecast upwards, by 0.5 per cent for both 2009 and 2010; with a projected growth of 1.5 per cent in 2010. This is based on better-than-expected data from OECD North America and non-OECD Asia. In its September report, IEA described the global economy as stabilising.

5 Overall, the more positive outlook has filtered to the bunkering industry. Bunker prices have more than doubled from its lows; corresponding to improved demand. Today, the 380-centistoke fuel grade trades in Singapore at about USD$430. This is an increase of more than 100% from the low of USD$210 recorded in November last year.

6 Nevertheless, we are still not out of the woods. Jobs data from the US remains weak and could exert a significant drag on the recovery. We will do well during this period to take stock and discuss how we can watchfully position ourselves for the recovery. Green shoots can still wither if they are not properly nurtured.

7 This gathering of industry leaders in Singapore is also very timely, given the on-going debate on the use of market-based instruments for controlling carbon emissions from shipping. The International Maritime Organization or IMO has already developed technical and operational measures to reduce shipping's contributions to global greenhouse gas emissions. Going foward, I am confident that the IMO has the expertise and will to work together with the industry to come up with effective and implementable solutions. Your discussions at this Convention can contribute much to that effort.

Singapore - Positioning for Growth

8 In spite of the slowdown in economic activity, bunker sales in Singapore for the first 9 months of this year grew by 2 per cent compared to the year before, to reach 27 million tones. We are on track to retain our position as the world’s top bunkering port for 2009.

9 Such an achievement would not have been possible without the strong partnership between the government and bunkering industry players. Over the years, we have been making concerted efforts to enable us to stay ahead of the curve. For example, we pushed ahead with the implementation of the SS 600 in July. This is a bunkering standard that we launched at the Singapore International Bunkering Conference (SIBCON) a year ago.

10 We are also continually looking for ways to leverage on technology to improve the overall efficiency of bunkering services in the Port of Singapore. One such project is the assessment of Mass Flow meter technology in bunker delivery operations. Trials for the mass flow meters are already under way. The Technical Committee on Bunkering which includes the Maritime and Port Authority of Singapore (MPA) and industry players are gearing towards establishing a standard for the mass flow meters by next year. The MPA is also developing a community-based IT platform called BunkerNet with the Infocomm Development Authority of Singapore and the bunker industry. When launched, BunkerNet will automate processes and improve communications between various parties across the bunker supply chain.

11 Improved efficiency cannot be attained in isolation of investment in human capital. In this regard, MPA works closely with various service providers to develop and enhance the skills of the maritime workforce. In fact, the IBIA Convention is supported by MPA under its Maritime Cluster Fund.

Conclusion

12 Ladies and gentlemen, I have shared with you some of the efforts that Singapore is undertaking to position for growth in the bunkering sector. Over the next two days you will have many opportunities to network and share ideas. I hope that you will leave the convention with fresh insights and expanded networks to bring your businesses forward.

13 On this note, let me wish all of you a fruitful convention.

14 Thank you.