18 September 2009

Mr S.S. Teo, President, Singapore Shipping Association (SSA),
SSA Council Members,
Ladies and Gentlemen,

1. When I addressed you at SSA's 23rd Anniversary dinner in October last year, our nightmare has just begun. The financial crisis was still unfolding in the United States and Singapore was just starting to feel the ripples. The past year has indeed been stormy seas for many in the shipping industry. Orders are down and freight rates remain weak. I understand that a key issue for many of you is that liquidity has tightened and financing remains foremost on your minds.

2. It is still too soon to tell when full recovery would happen. Some economists continue to predict a double-dipped recession. But there are glimmers of hope. For shipping, the fundamentals are strong. We are seeing some encouraging numbers. August 2009 saw the highest number of containers handled in a month since November 2008. Shipping tonnage for January-August 2009 rose by 9.2% over the same period last year, crossing 1 billion Gross Tons in July 2009-a full month earlier than last year. Correspondingly, bunker sales grew by 2.1% year-on-year for this period.

3. So while last year's dinner coincided with the start of the economic downturn, I certainly hope that this year's dinner will mark the start of an upturn.

Preparing for the Upturn

4. In Singapore, one of our key competitive advantages comes from planning for the long term. Even as we deal with today's problems, MOT and MPA have been working hard to ensure that maritime Singapore emerges stronger after the downturn. In the past year, we have rolled out industry-specific initiatives to help lower business cost, such as the port dues concession and the extension of waiver of withholding tax on interest payment. This is in addition to economy-wide initiatives such as the jobs credit scheme and the special risk sharing initiative. We have allocated extra funds: some $45 million to facilitate the setting up and expansion of new lines of maritime-related businesses; and some $25 million to support maritime research and development efforts.

5. Infrastructure-wise, we are pressing on with the development of a new cutting-edge Port Operations Control Centre at Changi. Expansion of Pasir Panjang Container Terminals, construction of new lighter facilities at Marina South, and the dredging of fairways and channels are also on schedule. These facilities will allow us to better support an even busier port after the economy recovers.

6. Further, we have examined how we can be even more pro-business in our maritime administration to help companies. We have abolished yearly renewal fee for harbour craft licence in favour of a more cost effective one-time renewal fee.

7. We have also introduced a new 6-month permit for harbour craft working on marine projects in our port waters. This will fill the gap as currently, the temporary licence is valid for either one day or one year. This is expected to benefit some 61 companies and lead to projected savings of about $2 million over 6 months. MPA is committed to being responsive to the industry, consistent with its top ranking among the public agencies in the Pro-Enterprise Ranking Survey, for the past 3 years running.

Update on Human Capital Development

8. One specific longer-term effort that I would like to touch on is developing human capital. This is an integral part of preparing for the upturn. I spoke about this last year and would like to give you a quick update.

9. MaritimeONE continues to be the joint platform for the Government, SSA and other industry players to address the various aspects of maritime manpower development. It reflects the synergistic partnership between MPA and the industry to develop Singapore's pool of maritime talent. Despite the economic downturn, we continued to receive good support from our industry partners. Recently, 40 scholarships were offered under the MPA and MaritimeONE programmes. The scholars will pursue diplomas or degrees in various disciplines in local and overseas institutes of higher learning and return upon graduation to work with our companies.

10. MaritimeONE also serves as a platform for students to network with the industry. I was told that the 3rd Maritime Leaders Speakers Series which was held yesterday featured prominent industry leaders and attracted over 200 students from various local universities and polytechnics.

11. In addition, you will be pleased to note that in spite of the adverse economic situation, 86% of this year's graduating class in NTU's Bachelor of Science in Maritime Studies secured employment within three months upon graduation. 9 out of 10 were employed within the maritime industry. We remain committed to grooming talent for this industry.

12. The Business Times has been running a steady stream of stories featuring developments in the maritime industry and key industry players. We remain committed to raising general awareness of the maritime industry, through this and other means.

Some Success in the Downturn

Ladies and gentleman,

13. I am happy to share tonight that our collective efforts to improve various aspects of maritime Singapore are paying dividends. Companies continue to start and expand operations here. For example, Livestock carrier Oceanic Lifestock, a subsidiary of the Australian Wellard Group, has recently chosen Singapore as its operations base. As a reflection of its confidence in Singapore, Norway's DnB NOR has recently formed an 11-strong equity research and securities sales team here, at a time when other financial institutions are downsizing or freezing headcount. International shipbroker, Clarkson, recently consolidated some of its Asian operations here.

14. We also made further inroads in marine insurance. Earlier this year, the world's second-largest reinsurer, Swiss Re, decided to make Singapore its Asian marine reinsurance base. Two new Lloyd's Syndicates, Atrium and Argenta, have recently established their presence here. Shipowners' Club, a member of the 13-strong International Group of P&I Clubs, has also decided to set up its only Asian office in Singapore to provide a full suite of services. This brings the number of Lloyd's Syndicates and International Group P&I Clubs in Singapore to 13 and 4 respectively.

15. Hub-port wise, Singapore continues to be the world's busiest container port in the first half of 2009, and was recently named the Best Seaport in Asia for the 21st time at the 23rd Asian Freight and Supply Chain Awards.

16. Many of you who have contributed to this achievement are in the audience tonight. I thank you for your confidence in Singapore and look forward to working with you to further improve our maritime landscape.

Conclusion

17. Finally, let me end with this wish: that when we celebrate SSA's 25th anniversary dinner next year, it will be on a wave of strong economic recovery and good growth for the sector. That will truly be something worth celebrating. I wish you calm seas and smooth sailing ahead.

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