with Jit Say Lim, Executive Director, Association of Process Industry (ASPRI)
As an introduction for our readers, could you please explain to us the rationale behind the creation of ASPRI as well as the main milestones and achievements since the start of the association?
Singapore has been attractive for a lot of first class investors such as ExxonMobil, Shell, etc and as a consequence, the service industry wants to prove its capabilities in order to support these large players. The association was established in 1997 and the biggest milestone so far has been the establishment of the 13 skills set, which was developed together by Singapore Economic Development Board (EDB), the process plant owners, ASPRI and the Institute of Technical Education (ITE). The process industry in Singapore is classified into four main clusters: petroleum, petrochemical, special chemical and pharmaceutical. ASPRI hopes to expand the process industry into other clusters such as clean energy.
How much importance is given to the oil & gas cluster relatively to the other areas of expertise?
In the oil & gas industry, there are upstream and downstream activities Our association obviously focuses on the downstream part. For example, whereas refining is onshore, marine activity will typically be offshore. Hereto related, it is the maintenance, construction and other support services that make up the process industry here in Singapore
What do you consider to be the biggest area of expertise of ASPRI members. For example, is it related to the marine industry, construction, plant expansion, etc. and how do these SMEs play a role in an industry driven by giant international players?
The bigger areas of expertise lie in the construction, maintenance and Addition and Alteration (A&A) of the process plants. This range of competences is also referred to as PCM: Process Construction and Maintenance. The large companies are indeed the main Engineering Service Providers (ESPs) but the Small Medium Enterprises (SMEs) are needed to support them and function as implementers. As an association, ASPRI wants to see its members moving up the value chain. Nevertheless, this is a process that takes a lot of time.
Many of these large investments in the process industry in Singapore bring spin-off projects that benefit local SMEs. However, is there any strategy in place to prevent such SMEs from becoming too dependent on a few large business partners?
Two elements are important for ASPRI. Firstly, helping its members to develop a knowledge–based industry, so that they can compete in niche areas of expertise where the larger companies might not want to focus on. Secondly, ASPRI helps its members to expand their business beyond Singapore in order to make sure that they do not depend too much on the local market. ASPRI further helps to develop their capabilities by providing training as well as the development of expansion strategies through the creation of networking opportunities and seminars.
Where can ASPRI members make a difference internationally and where do they have a competitive edge? And how do you manage to be competitive in the region considering the high overhead in Singapore?
The industry first needs to develop regionally by upgrading knowledge, skills and capabilities. In order to move up the value chain, it is important to keep working on improving productivity. Most of the SMEs look at expanding their businesses into the neighbouring countries (e.g: Vietnam, Thailand, Indonesia, Malaysia, Philippines and so on) before exploring the international market.
When talking about competitive edge, the local companies here in Singapore are well- positioned and knowledge-rich for construction and maintenance contracts. Nevertheless, they cannot compete on price in the long run. Singapore is relatively high cost compared to its neighbours, but it offers high quality outputs. Safety is a good example, with Singapore offering very high standards compared to its regional competitors.
Do you think the Singaporean government does enough to support its local businesses to become active at an international level?
The Local Enterprise and Association Development (LEAD) programme has been a successful initiative that partially funds projects to support the expansion and growth of Singaporean businesses. The government put in a lot of effort but there is always room for more assistance. Despite their budget constraints, they are open-minded and of great help.
What are the current hot topics within the networking platform of ASPRI and what are the biggest challenges in the industry at the moment?
The current hot topics and challenges of the industry include productivity improvement, business expansion, cost efficiency improvement, energy saving methods, government policies and initiatives as well as manpower challenges.
Talking about safety standards, does the Singaporean industry use its own standards or is it rather an implementation of international regulations, and how can international investors be convinced of the fact that the companies here are up to the standards?
Safety measurements usually depend on the specific plants. For the chemical industry, the process plant owners recently adopted Singapore’s own safety standards, SS506 Part 3. In addition, the process companies also comply with ISO norms and in order to persuade international companies, the excellent safety record functions as a key element of attraction. It is clear evidence that can be shown. Moreover, the country as a whole is generally perceived as a safe country with good security.
Talking about the environment, Singapore is also going green. This creates new projects for the industry. How do you see this trend affecting the process industry and how do you perceive its role in the future?
It is a very prevalent trend that the government tries to push but changes will not simply happen overnight. We focus a lot on possible reduction of energy use, but it is important for the plant owner to also buy in. There are new technologies available to reduce the use of energy but the cost is quite substantial. ASPRI tries to encourage such initiatives. However, cost always needs to be taken into account.
One of ASPRI’s members was in fact a main ESP for the new terminal on Jurong Island. In general, it is our desire to be more green and clean. There will have to be mutual efforts from the process industry, the ESPs, as well as the plant owners.
ASPRI members are encouraged to tap into outsourcing opportunities from multinationals and form strategic consortia and economic groupings. When forming strategic partnerships, how far do national interests and protectionism play a role in the decision of these local players?
ASPRI mainly tends to look beyond Singapore when looking for collaboration within the ASEAN region. Also at the association level, we are exploring the possibilities of forming an ASEAN Federation of the Process Industry by forming similar trade associations in the ASEAN region (e.g. Malaysia, Vietnam) This ASEAN Federation will serve as a good platform to form possible business alliances, share and maximise resources, best practices and technology know-how.
Finally, what do you see as essential for Singapore to remain a key player for the oil & gas industry in the next 50 years and how do you see the role of ASPRI in its development?
Singapore has been able to become the third largest refinery with significant new projects such as the LNG terminal. At the same time, the nation managed to attract a lot of investment from pharmaceutical companies. At ASPRI we need to work on improving productivity and helping our members moving up the value chain, so that the MNCs will find an attractive cost-efficiency ratio when they come to invest.