13 January 2005

ReedHycalog pumps in S$22 million to expand Singapore facility
By Chua Chin Chye, Channel NewsAsia

SINGAPORE : The US-based oil and gas drill-bit maker ReedHycalog has pumped in an additional S$22 million to expand its facility and upgrade its technology in Singapore.

It will also set up a 10-person design and materials team to develop new products.

The new investment will result in 110 new jobs, bringing ReedHycalog's total headcount here to 236.

With the expansion, ReedHycalog says its annual output in Singapore will double to US$100 million, from US$50 million.

And the number of drill bits produced here will also jump to 17,000 annually from the current 9,000.

Singapore's Senior Minister of State for Trade and Industry, Dr Vivian Balakrishnan, said, "Making rollercone bits is a sophisticated process, involving high-tech equipment, precision machines and processes. Besides manufacturing, I've been told you will also establish a 10-man product design and materials team, capitalising on well-qualified manpower available in Singapore.

"We are delighted, we're very proud that you've decided to site this high-value investments in Singapore."

ReedHyCalog is based in Houston, Texas and the company also has related facilities in the UK; but it decided to expand here for two reasons.

Its president John Deane said, "We have a very skilled, very experienced workforce here, and an existing footprint. The second key component is that we have some technology that we wanted to bring to this factory, and one of the enabling elements of that was the ability of natural gas on this island, which occurred two or three years ago.

"That availability of natural gas -- economical and reliable natural gas -- allowed us to install this metal-treating technology, that we've installed during this expansion."

With the expanded capacity, the Singapore plant will manufacture 70 percent of all of ReedHyCalog's rollercone drill bits worldwide. - CNA

Copyright © 2004 MCN International Pte Ltd

Strains?

Published January 12, 2005

'China syndrome' gives PSA its best year ever

Its Singapore terminals handled 20.6m TEUs in '04, but strains showing

By DONALD URQUHART

(SINGAPORE) Surging cargo volumes out of China during 2004 have helped make it a record-setting year for PSA Corporation, after its Singapore terminals handled 20.6 million TEUs, a sizeable 14 per cent increase over 2003.

The container terminal operator attributed the healthy throughput growth to 'a rebounding regional economy led by China's rapid rise as a manufacturing base'.

A healthy global economy saw rising demand, particularly in North America and Europe, for Chinese exports resulting in escalating demand for containerised shipping capacity, in what is often referred to in the shipping industry as 'the China syndrome'.

This demand gradually outpaced available supply on key trade lanes, pushing freight rates to near unprecedented levels and resulting in record profits for many container shipping lines, including Singapore's Neptune Orient Lines (NOL).

A total of 36 new services from 28 shipping lines - more than double the previous year's - also initiated calls at PSA's Singapore terminals last year, adding to the volume growth. The buoyant industry also pushed up PSA International's overseas volumes by 18 per cent, with its 16 container ports in 11 countries handling a record 12.48 million TEUs for 2004, up from 10.61 million TEUs the year before.

PSA did not provide a breakdown of the volumes handled at its various overseas operations.

For the year, the group handled a global total of 33.1 million TEUs compared with 28.7 million a year earlier.

'I am very encouraged by the record 2004 container throughput of the PSA Group in Singapore, Europe, China and India,' said PSA International Group CEO Eddie Teh.

'Worldwide, we have successfully delivered quality services to our customers in a year of exceptionally high volumes which stretched our resources.'

China's massive container cargo bonanza, while giving shipping lines perhaps their best year ever, also exposed the serious inadequacies in container facilities around the world.

Asian container volumes to the US and Europe may have risen nearly 16 per cent in 2004, over the previous year, compared to global growth forecasts of about 8 per cent, according to earlier data from London-based Drewry Shipping Consultants.

This taxed container terminals from the Pearl River Delta of China, to Singapore, Europe and North America.

The US West Coast ports of Los Angeles and Long Beach were particularly overwhelmed by surging imports from China which grew by over 33 per cent in the first six months of 2004.

Delays became commonplace with vessels taking up to a week to turnaround at Los Angeles and Long Beach.

PSA's Singapore terminals were caught off guard in late May/early June when mounting China volumes resulted in unprecedented berthing delays at PSA's Tanjong Pagar, Brani and Keppel terminals.

A 17 per cent surge in average daily volumes handled in the first three weeks of June resulted in berthing delays of anywhere from two to 24 hours. These high volumes of westbound Asia-to-Europe cargoes out of North Asia and China were exacerbated by the early arrival of the peak season.

While typically the peak season arrives after the first half of the year, in 2004 it arrived nearly a month early and continued well on after its normal tapering off by mid- to late-November.

Extra manpower and equipment, dialogue with the industry and an acceleration of terminal development plans were quickly implemented by PSA to help deal with the mounting problem.

This will see PSA add nearly 60 per cent more capacity to its local terminals by 2011, as part of its strategy 'to sustain long-term growth and maintain Singapore's premier status as the world's largest transhipment hub'.

This will lift its annual throughput capacity to 31 million TEUs from 20 million TEUs currently. The expansion will include 15 new berths at Pasir Panjang, of which three will be operational this year.

Hey people...check out this article posted in the HK Port tread! :D

Kwai Chung needs to reverse the tide

14 January 2005
South China Morning Post

It's official. For the first time last year Shenzhen handled more of south China's direct shipments of manufactured goods than the main terminal operators at Kwai Chung.

Although the writing has been on the wall for years, when the official figures are released tomorrow they will reveal that Kwai Chung handled just under 13.4 million boxes last year, up a comparative 11 per cent, against 13.66 million units in Shenzhen, up 28 per cent.

The chart above maps out Shenzhen's rising share of south China's deep-sea trade over the past five years; look at it another way and Hong Kong's declining recent fortunes in the region's highest-value sector of maritime trade is just as starkly illustrated.

Moreover, analysts believe Kwai Chung's rate of growth will slow to mid-single digits this year because its operators are unlikely to repeat the one-off boost they generated from substantially dropping box-handling fees to attract more river trade.

If they are right, it would open the door next year for Singapore to regain its title of the world's busiest container port, a moniker it has held just once - 1998 - in the past decade.

Given up as a port entering its sunset years in 2002 when Maersk Sealand and Evergreen Marine left the Lion City for the cheaper confines of Malaysia's Tanjung Pelepas (PTP), the PSA Corp is back.

The world's No2 port operator by volume moved 20.6 million boxes across its Singapore docks, up a comparative 14.1 per cent. Tack on the contribution from the independent Jurong Port development and Singapore reached 21.34 million boxes, up 15.9 per cent, and just a hair under the 22 million boxes Hong Kong will post later this week.

PSA engineered its resurgence by facing some home truths, chief among which was that its container handling prices were going to have to come down if it was going to stop the exodus of cargo across the Johor Strait.

Hong Kong needs to grasp the same nettle, but the signs are not promising.

For one, it was always a zero-sum game for PSA: any cargo that moved to PTP came 100 per cent off its bottom line. With Hong Kong's main operators also controlling the ports across the border, there is less incentive to keep the cargo in Kwai Chung.

Worryingly, while there is prima facie evidence, the cost of calling at Hong Kong's main terminals has gradually declined in the past five years, operators say there is no need to further reduce their fees as they are now roughly equal to those in Yantian, Shenzhen's biggest port.

Those fees put the biggest dent in local shippers' pockets, but the terminal operators are not responsible for all cost disadvantages foisted on traders opting to use our port.

Rules governing the trucking industry have put Hong Kong at a US$200 per box disadvantage vis-a-vis our cross-border rivals, as has the government and industry's inability to come to grips with US$100 higher terminal handling charge (THC) levied by shipping lines.

The government, led by the permanent secretary for economic development Sandra Lee Suk-yee, appears to want to tackle the problem alone. According to a member of our port community, her ministry has declined the private sector's offers of help.

Early indications are that Shenzhen and Beijing are open to dismantling two of the regulations - known as 4-up-4-down, and 1-truck-1-driver - artificially inflating the cost of cross-border trucking.

However, dissolution of the licensing cartel is thought to be unlikely.

Elimination of the two regulations would cut US$132 off the overall US$300 per box cost disadvantage, according to last year's McKinsey report.

Reducing the US$100 THC differential remains the furthest from our grasp: the terminal operators and shipping lines have no interest in solving the issue and the government lacks the steel to hold them to account.

The level of the THC, a basket of costs that the carriers pass on to customers for calling in Hong Kong, has not changed here for more than a decade, despite clear evidence port costs have dropped.

A quick scan of the results for Cosco Pacific - the port's No4 operator - appears to prove container handling charges fell for the six years to 2003: revenues per box at CT8 East were $814 in 1998 against $668 in 2003.

A different cargo mix could account for some, but not all, of that difference.

However, eliminating any one of the myriad of our cost disadvantages is not going to solve the problem, which is why Hong Kong is really behind the eight-ball this year if it wants to remain the world's top container port.

Instead of following tradition and pointing to causes outside their domain, each sector, public or private, will have to ask what they can do to this year to maintain the long-term economic health of the port where they have made their billions.

For the government that means getting a backbone; for the carriers it means coming clean on the THC; and for the terminal operators it means a further cut in container handling charges.

Otherwise, at the end of the year, we'll be able to hear Singapore's celebrations from Kwai Chung.

Woah.....container volumes between the 2 has become that close this year.........:eek:

Posted: 15 January 2005 1940 hrs

Singapore awards budget air terminal contract, to raise ports' handling capacity

By Asha Popatlal, Channel NewsAsia

SINGAPORE: A S$24.7m contract to build Singapore's new budget air terminal has just been awarded.

The government also plans to increase the ports' handling capacity by more than 60 percent by adding 16 berths to Pasir Panjang Terminal's current 26.

These berths will be able to accommodate mega-vessels.

Meanwhile, a transport network is being developed for the New Downtown at Marina Bay.

The Ministry of Transport outlined these plans in its Addendum to the President's Address in parliament charting the future direction for Singapore.

The ministry also said the 3 percent cap on vehicle population will be looked at as part of an overall review.

But that cap has not been reached in the last seven years, and with COE prices falling, dealers and analysts don't expect major changes.

The contract to build the budget air terminal at the Changi airport was awarded to Sanchoon Builders.

Building will start this quarter with the terminal expected to be ready within a year.

It will be able to handle 2.7 million passengers for a start and will be able to expand if the need arises.

The Departure and Arrival buildings for the budget air terminal will be side by side and connected by linkways.

Departing passengers will clear immigration and security and head to one of six boarding areas.

And they'll walk - rain or shine - about 20 metres to the aircraft.

Arriving passengers will also walk back to the Arrival building which will have money changers, food stalls and duty-free shopping.

There will be no skytrain.

Instead, a shuttle bus service will ferry passengers to existing terminals.

With associated building works like taxi-ways and aircraft parking stands, the total price tag for the budget terminal will come up to S$45m.

Commenting on the review of the 3% limit on vehicle population, Gerard Ee, president of the Automobile Association, said: "A review does not necessarily mean any adjustment. The current car market is so weak and demand pretty low as indicated by falling COE prices, there's no compelling need to increase."

The ultimate aim of the government, of course, is to reduce upfront vehicle costs and shift more to usage costs.

So, the ERP cordon is expected to be increased and at different times.

But, analysts caution that this is a delicate balancing game - price it too high and Singapore's expensive roads will be under-utilised. - CNA

Business Times - 17 Jan 2005

US energy firm plans biodiesel plant in S'pore

It cites tax breaks, IP rights and lower operating costs

By CHEN HUIFEN

NEW Jersey-based Pure Energy Corp has developed a technology that can produce low-cost biodegradable diesel and is eyeing Singapore for its first commercial plant in Asia.

'One of the largest source of biodiesel production raw material is palm oil,' said Pure Energy Corp CEO and president Irshad Ahmed. 'Probably the biggest concentration of palm oil in the world is in Malaysia. So our idea is to build a biodiesel plant in Singapore and have the feedstock come in from Malaysia.'

Biodiesel refers to a type of fuel manufactured from vegetable oils, recycled cooking grease, or animal fats. It is a cleaner-burning alternative fuel produced from renewable resources.

Apart from the tax incentives here, the company is attracted to Singapore because of the strict intellectual property (IP) regime. 'We have a significant number of patents on our technology, but we feel very nervous in certain countries with regards to our IP,' he said. 'So we feel Singapore is a more secured platform from that perspective.'

The company already has a similar plant in California with a production capacity of 10 million gallons per year. The goal is for the Singapore plant to add on another 30 million gallons of annual production.

Mr Ahmed estimates that a new biodiesel plant of that capacity would cost about US$22-25 million to build in the US, but he's hoping that it would be 20-30 per cent cheaper in Singapore.

If the plans go through, the plant could be operational by mid-2006 and create direct employment for about 40-45 people. It may potentially be Asia's first large-scale biodiesel plant manufacturing for a global market.

But Mr Ahmed revealed that dialogues with the relevant authorities are still underway. From what BT understands, Pure Energy is in the process of incorporating its office here.

The additional biodiesel capacity is in response to regulatory developments in the European Union. Starting from this year, all EU members must use a minimum of 2 per cent biofuels in their fuel mix. Pure Energy aims to service that European demand, first from its biodiesel plant in California, and then from Singapore.

Apart from the biodiesel plant, Pure Energy is also interested in pursuing a biomass-to-ethanol production facility. Based on its proprietary technologies, the company claims that it is capable of producing ethanol - another type of clean burning automotive fuel - from 42 different types of feedstocks, including municipal waste, agricultural waste, and even sawdust from lumber mills.

The other advantage about Pure Energy's technologies is that all its biofuels output are compatible with existing infrastructure.

'All our fuel formulations are compatible with existing engine technologies, fuelling pumps and fuelling infrastructure,' explained Mr Ahmed. The goal is to promote renewable energy that can be affordable and acceptable in the long run.

In Asia, Pure Energy also has a project in South Korea, where it is working with partners to convert Seoul's food waste into ethanol. It is currently the largest supplier of biodiesel from US into India. The company's plans in Asia underlines the fact that the region could be a potential big market in future.

'In countries like China and India, the demand for fossil fuels, gasoline and diesel is growing at about 8-10 per cent per year, whereas the world average is about 2 per cent,' said Mr Ahmed.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Woah.....container volumes between the 2 has become that close this year.........:eek:
Yeah I did not realise that until I saw that article as well. In fact, notice HK is begining to loose the fight to even Shenzhen as well?

Looks like Singapore is getting closer to regain no.1 title on that criteria, competition from neighbours notwithstanding :cool:

Hm...ever wondered what it would have been like if PTP didnt exist?

Business Times - 25 Jan 2005

Exxon to expand ethylene capacity in S'pore

SINGAPORE - ExxonMobil is to increase its output of ethylene to 900,000 tonnes a year by the fourth quarter of 2006, the company said on Tuesday.

It'll expand the capacity of its Singapore naphtha cracker by 75,000 tonnes a year, it added.

'The economic growth in Asia Pacific has been robust, and the demand for petrochemical products closely mirrors this trend. This expansion will help position us to continue to meet the growing demand in this region,' Lynne Lachenmyer, regional manufacturing director for ExxonMobil Chemical, said in a news release.

Ethylene is a basic building block for a variety of chemicals and plastics such as polyethylene, which is used for making plastic containers and bags.

The Singapore chemicals plant, ExxonMobil Chemical's biggest investment in the world, started up in 2001.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 25 Jan 2005

NOL cargo volumes jump 17% in six-week period

By DONALD URQUHART

(SINGAPORE) Singapore's Neptune Orient Lines (NOL) said it transported 17 per cent more cargo during a six-week period from mid-November to end-December compared with a year earlier, as the container shipping industry continues to enjoy buoyant volumes and freight rates.

The group, which operates the world's sixth biggest container line, APL, by capacity, said the volume growth was based on 'robust' cargo flow and additional services introduced in 2004.

Average freight rates grew by about 9 per cent (based on a seven-week period in 2004 compared with only six weeks in 2003), to an average revenue of US$2,532 per FEU (40-foot container). APL carried 244,700 FEU of cargo during the seven-week period.

NOL also said in its operational update that total revenue from its logistics unit had risen 25 per cent to US$149 million. The healthy revenue growth 'reflects the expansion of scope and service offerings to existing customers, as well as a growing customer base,' it said.

NOL, along with fellow member lines of the Transpacific Stabilisation Agreement, is forecasting 10-12 per cent growth for 2005 on the key transpacific trade lane which is an important revenue driver for APL.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Hm...so all of NOL's shipping business is under the APL name meh?

Singapore, China Ports May Raise US$3.8 Billion In IPOs-Sources

Thursday January 27, 2:32 AM EST

SINGAPORE -(Dow Jones)- The operators of two of the world's busiest ports could raise as much as US$3.8 billion this year as Singapore's PSA Corp. and China's Shanghai International Port (Group) Co. both steer toward stock offerings, bankers familiar with the situation said Thursday.

The expected initial public offerings would take advantage of a regional shipping boom, helped by a fast-growing China that's sucking in more raw materials to fuel both domestic expansion and export growth.

Singapore government-owned PSA Corp., the operator of the world's second biggest port after Hong Kong's Hutchison Whampoa Ltd. (0013.HK), is looking to revive long-delayed plans for a US$3 billion stock offering in Singapore this year, bankers say. PSA has recently been talking to investment bankers regarding fund-raising proposals but hasn't decided on the course of action yet, they said. No "beauty parade", where investment banks formally present their proposals, has been scheduled yet, one banker said. PSA declined to comment.

PSA twice shelved plans to list in Singapore in 2001 and 2002. Temasek Holdings Ltd., the Singapore government investment company that owns PSA, in 2002 cited unfavorable market conditions and a need for PSA to have in place " long-term competitive strategies."

Since then, PSA has undergone a companywide restructuring involving sacking 496 staff and wage cuts and has sought to expand overseas. Facing stiff competition from neighboring Malaysia in recent years, PSA has looked to expand elsewhere, the latest being a joint venture in Tianjin, northern China in December. The operator moved a record 20.6 million 20-foot equivalent units last year, up 14% from 2003, due to a resurgence in seaborne trade.

At the same time, Shanghai International Port, which operates the world's third-busiest port, looks set to raise about US$800 million in a Hong Kong listing this year, sources said. Major investment banks have been asked to pitch for the mandate, however formal presentations won't likely take place until March, after the Chinese new year break, the sources said. Shanghai International handled 14.6 million 20-foot equivalent units last year, up 29% from 2003. Some if its assets are listed already in Shanghai as Shanghai Port Container Co. (600018.SH).

An official at Shanghai International Port declined to comment on the IPO plan.

"It's too early to talk about this, the shareholding company hasn't been set up yet," he said.

But maritime trends haven't helped Singapore shipping company IMC Group, sources said. IMC has put its US$400 million share sale plan in Singapore on hold, following a shipping disaster in December when one of its cargo ships carrying soybeans ran aground off Alaska resulting in six deaths and a major oil spill.

Bankers say the deal, which was expected to surface in the first half of the year, was thrown into doubt following a criminal probe into the incident and concerns over potential liabilities. IMC and lead managers Goldman Sachs Group Inc. (GS) and BNP Paribas SA (13110.FR) declined to comment. -By Sai Man, Dow Jones Newswires, 65-6415-4045; sai.man@dowjones.com

(Zheng Jin in Shanghai contributed to this article.)

-Edited by Costas Paris

28 January 2005

Star Cruises to expand fleet, banks on fly-cruise packages
By Frederick Lim, Channel NewsAsia

SINGAPORE : Star Cruises is seeing a strong potential for growth in the regional cruise industry.

It is looking to add another three ships to its fleet over the next few years to cope with growing demand.

The company is seeking to position itself not just as a cruise operator alone, but also as a fly-cruise specialist.

Last month Star Cruises took a strategic 20 percent stake in Valuair and it will launch its first fly-cruise deals with the budget carrier from March onwards.

The company is also hopeful that it will benefit from Singapore's initiatives to double tourist arrivals by 2015.

Over the last five years, Star Cruises has seen its passenger loads climb by an annual compounded rate of 16 percent.

On average it brought in 130,000 passengers per year from as far as Japan, China, Australia and India to sail on its cruise ships.

And it expects demand to rise even more strongly as it sees Singapore as having tremendous potential to become a cruise hub for the region.

Said Chong Chee Tut, Star Cruises chief operating officer, "Singapore has got several advantages. It is not just in terms of climate -- an area where you can cruise year round, very much like Miami. Of course in some other countries, especially during winter, it gets cold, the sea gets rough, they are not suitable to be a year round cruise hub. Singapore is ideally suited for that. Traditionally Singapore is also a major air hub and that's important if you want to develop the inbound fly-cruise market."

And it is in the fly-cruise market that Star Cruises is charting its future growth plans.

With its newly-formed partnership with Valuair it sees itself as being well-positioned to capture a large slice of the market.

Mr Chong said, "The people who want to come and cruise out of Singapore, it offers them a slightly cheaper alternative, to fly a cheaper airline into Singapore. And from our perspective it also provides a more seamless air-sea packaging for people. All they need to do is call one call centre and they can book the air component, the hotel component, and cruise component."

Star Cruises says it will be adding one ship this year, to be followed by another in 2007 and one more the following year.

As for earlier media reports that it was planning an integrated cruise centre and casino resort in Singapore, Star Cruises says it is still evaluating its options and has yet to make a final decision. - CNA

Copyright © 2005 MCN International Pte Ltd

So long that the linkages are via Singapore, I am happy. :D

So long that the linkages are via Singapore, I am happy. :D

but you would be more happy if you got a free ticket on the Star Cruise right?;) :D :)

Jan 31, 2005
$10m container depot opens on Jurong Island

By Rachel Chang

SINGAPORE'S fast-growing chemicals industry has been given another boost by the opening of a $10 million tank container depot on Jurong Island by a Singapore-Norwegian joint venture.

The Stolt Container Terminal is the result of a tie-up between Poh Tiong Choon (PTC) Logistics, a local pioneer in the chemical logistics sector, and the Stolt-Nielsen Transportation Group, a Norwegian tank container operator.

The two have combined their expertise 'to provide a comprehensive and integrated set of logistics services' to clients such as oil giants ExxonMobil and Shell, said the chief executive of PTC Logistics, Mr Poh Choon Ann, at the opening ceremony last Thursday.

The depot - which will provide services such as tank container cleaning, heating, repairs and refurbishment - is located next to PTC Logistics' $35 million chemicals logistics complex.

This creates 'a uniquely integrated one-stop Asia-Pacific hub concept' incorporating depot and warehousing services, said a joint statement by PTC Logistics and Stolt-Nielsen.

The result is a seamless service transferring a customer's products 'from tank, to drum, to warehouse'. Products could include liquid chemicals such as solvents, and petrochemicals.

The chemicals industry is Singapore's second-largest manufacturing sector.

Jurong Island already has several state-of-the-art logistics facilities. These include terminals by independent operators Vopak and Oiltanking.

There is also the Banyan LogisPark, an integrated chemical logistics and transshipment hub, which was started by the Government in 2003.

Emirates-based Horizon Terminals recently announced new terminal projects in Banyan.

The guest-of-honour at last Thursday's opening, Senior Minister of State for Trade and Industry Vivian Bala- krishnan, hailed these developments as being 'very valuable'.

Copyright © 2004 Singapore Press Holdings. All rights reserved.

Business Times - 02 Feb 2005

Go-ahead likely for huge underground oil storage

By RONNIE LIM

(SINGAPORE) The plan to build an underground oil and/or natural gas storage complex at Jurong Island has been found to be technically feasible and the green light is expected in a month or two, BT has learned.

'We are at the tail-end of the phase two feasibility study and are awaiting the final decision by the committee in charge,' a JTC Corporation official said yesterday.

'The project has been found to be technically do-able' and the main consultants are working on engineering details, the official said. 'They are also working on the strategic and commercial viability issues.'

The official was responding to BT queries on talk in the industry that JTC is poised to go ahead with the project. If the nod is given, the complex could be completed by 2008.

French cavern specialist Geostock, the main consultant, has been studying the technical and economic viability since June last year, after pre-feasibility studies by JTC and Nanyang Technological University in 2001 and a phase one study that found suitable underground locations adjacent to Banyan LogisPark on Jurong Island.

JTC previously indicated that the rock at the site can support up to 32 caverns with storage capacity of four million cubic metres, or about 25 million barrels.

The massive project, estimated to cost S$760 million, would add almost a third to Singapore's current oil storage capacity of 88 million barrels, about 72 per cent of which is in the hands of the three oil refiners here - Shell, ExxonMobil and Singapore Refining.

The thriving oil trade has led to a squeeze on storage capacity, which in turn has spurred independent oil traders to venture into oil terminalling.

Emirates National Oil Company's Horizon Terminals, for instance, is building an 840,000 cu m (5.25 million barrels) tank farm costing US$200 million on Jurong Island - almost double its initial plan, and expected to be completed in mid-2006.

BT understands that local 'big boy' Hin Leong is also proceeding with plans to build a terminal there, said to be of one million cu metres (6.25 million barrels) capacity and costing about S$500 million.

This is in addition to independent terminal operator Vopak's project to add 2.1 million barrels of new storage to its 9.3 million barrels tank farm.

Industry officials, however, argue that underground storage like that planned by JTC, may be more suited as strategic long-term storage for the likes of power stations, rather than as commercial storage for oil traders, who want quick turnarounds as they buy and sell cargoes.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 02 Feb 2005

Skaugen transfers nine vessels to Singapore RHQ

Two of the petrochemicalgas tankers to fly S'pore flag

By DONALD URQUHART

(SINGAPORE) Oslo-listed petrochemical gas and crude oil transportation company IM Skaugen ASA has transferred ownership of nine vessels to its newly established regional headquarters here, reaffirming the growing maritime significance of Singapore and the region.

The nine petrochemical gas tankers - two of which will be registered under the Singapore flag - are the first of more to come as the Norwegian-based shipping group gradually scales down its European presence to be closer to its key markets.

'We are shifting responsibilities from Europe to Singapore, basically taking functions and transferring them to Singapore,' Skaugen president and CEO Morits Skaugen Jr told BT.

He added that the winding-down of operations in Oslo was 'almost inevitable', but added that they would not be completely eliminated.

The main driver behind this is 'the need to be in Singapore to service our customers in Asia', which now account for 60-70 per cent of Skaugen's US$150 million annual revenue, according to Mr Skaugen.

'Singapore is definitely the best place to be if you have substantial business in Asia,' he added, noting that his group counts substantial customers among Singapore's petrochemical cluster.

The Skaugen group, which first established operations here a decade ago under its wholly owned subsidiary, Norgas Carriers Pte Ltd, operates a global fleet of 44 vessels. This includes nine Aframax tankers used in the US lightering trade (carrying 10 per cent of US seaborne oil imports), and 19 petrochemical tankers carrying primarily ethylene used in manufacturing plastics, along with LPG.

The group also has six aframax tankers on order for delivery in 2007.

Although Skaugen, started by Mr Skaugen's grandfather in 1916, has a significant precence in China's Yangsi River gas trade with an office in Shanghai, the conditions were not right to set up a regional office there.

'There is a lot of talent that is needed that is still not available in sufficient supply in China and which we found we can do better from Singapore,' said Mr Skaugen.

While the move will afford no cost savings on the vessel operation side, and only marginal if any on the shore-based side, it is the 'more ample supply of clever and highly motivated talent' that is crucial.

He also cited a more stable tax environment in Singapore where 'for a good 10-year period, you basically have a predictable tax regime', compared to Norway where the tax regime changes frequently.

The Maritime & Port Authority (MPA) of Singapore, which hosted Mr Skaugen's visit, has been actively promoting Singapore as an international shipping hub, with its flag registry growing over 8 per cent last year - making it the largest in Asia and the world's sixth largest.

In Singapore, Skaugen shares an office with AP Moller-Maersk's gas tanker subsidiary with whom it operates a revenue sharing alliance known as Maersk Norgas Gas Carriers.

'In the case of Maersk, we were competing head-on for a number of years and we saw that if we joined forces, together we could service our clients in a better way in as much as we could meet their global needs,' Mr Skaugen said.

The group will also focus on expanding in China where last year it was awarded a licence to operate along its vast coastline.

With several world scale petrochemical plants beginning operation in 2005 through to 2007, 'that is going to open up business on a trade that never existed before', Mr Skaugen said.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

07 February 2005

Singapore's PSA International buys HK port assets

SINGAPORE: Singapore's port operator PSA International has bought NWS Holdings' port assets in Hong Kong, giving it a foothold in the world's biggest container port.

"PSA International Pte Ltd confirms that it has agreed to buy NWS Holdings Limited's Hong Kong port assets," said a PSA corporate spokesperson, without giving details.

Earlier Monday, NWS Holdings said it has agreed to sell its port assets in Hong Kong to PSA International for HK$3b (US$384.6m).

NWS, a unit of New World Development, said it would sell its entire 31.4 percent stake and shareholder loans in Asia Container Terminals (ACT) Holdings to PSA International for HK$1.9b.

It would also sell its 33.34 percent indirect stake in CSX World Wide Terminals Hong Kong to PSA International for HK$1.1b.

The HK$3b deal would allow PSA International to grab a slice of Hong Kong's container traffic business after its earlier offer for a 57% stake in ACT in November was thwarted last month by existing shareholders, including NWS Holdings. - CNA

Copyright © 2005 MCN International Pte Ltd

Eeek.....that must be one of the most over-paid investments ever!

Business Times - 08 Feb 2005

Two petrochem firms to invest US$65m to boost S'pore output

Investments on Jurong Island fuelled by strong demand from China

By RONNIE LIM

(SINGAPORE) More petrochemical investments exceeding US$65 million were announced yesterday to enable the Singapore industry to ramp up output quickly to meet strong demand, especially from China.

The investments - by Petrochemical Corporation of Singapore (PCS) and the Polyolefin Company - come after ExxonMobil announced in late-January that it will spend 'tens of millions of dollars' boosting its local output of ethylene by 75,000 tonnes to 900,000 tonnes per annum (tpa).

PCS, which is half-owned by Shell and half by a Japanese consortium led by Sumitomo Chemicals, said yesterday it will build a US$50 million metathesis plant on Jurong Island to boost propylene output by 200,000 tpa to help meet growing demand, ahead of Shell's own plan to build a multi-billion dollar cracker here. The metathesis plant is expected to start operating in Q3 2006.

PCS will also 'de-bottleneck' its PCS 2 cracker to further increase propylene output by 30,000 tpa, as well as its C4 facilities to boost output of butene and MTBE - feedstock for downstream plants at the PCS complex - by 10,000 tpa and 6,000 tpa respectively. The projects will raise PCS's total propylene capacity 30 per cent to over 850,000 tpa.

Related to the PCS metathesis plant, downstream operator The Polyolefin Company announced separately yesterday that it will spend US$15 million converting an existing line - used to make linear low-density polyethylene - into a 200,000 tpa polypropylene line. The project, scheduled to start in Q3 next year to dovetail with the PCS plant, will boost The Polyolefin Company's polypropylene output to 650,000 tpa to help it meet regional demand.

PCS deputy managing director Phil Parker said PCS's cracker expansion is aimed at catering to a regional shortage of propylene.

'Even with the new 200,000 tpa metathesis plant, Jurong Island will remain a significant importer of propylene,' he said, adding that Jurong Island alone will need another 100,000 tpa in the next few years.

Asked why PCS is boosting propylene output - and not ethylene output, like rival ExxonMobil - Mr Parker said it's a question of economics. The configuration of the PCS plant would make it extremely expensive to expand ethylene output, he said. 'Besides Jurong Island's ethylene demand today is relatively balanced, although PCS is slightly short of ethylene.'

Mr Parker said that after a major cracker investment, 'the smart thing to do is to make smaller investments to enhance the cracker's competitiveness vis-a-vis rivals worldwide'.

'When we upgrade, we bring higher value-add to the cracker. For example, the new metathesis plant will enable us to upgrade C4, or butene, into higher value propylene,' he said. 'This way, it also helps reduce our overall costs.'

He said prospects for Singapore's petrochemical industry remain bright, with demand - especially from China - staying strong until 2007 at least. There will be a need for new crackers worldwide to cater to this, he added.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

NWS shares surge on port sale

Danny Chung
February 8, 2005

Shares in NWS Holdings, the infrastructure arm of conglomerate New World Holdings, jumped as much as 13 percent on Monday after the company unveiled a one-off gain from selling port assets that was larger than its total net profit in the previous fiscal year.

NWS said it would book a gain of HK$1.8 billion from the HK$3 billion sale of three berths at Kwai Chung terminal port. That compared to the company's HK$1.5 billion net profit for the full year ended June 2004.

The stock reached as high as HK$11.85 when trading resumed on Monday, an increase of 12.86 percent on last closing of HK$10.50 on Thursday. It closed 11.9 percent higher, the biggest gain in one year, at HK$11.75.

``It is positive for NWS to divest its investment in Hong Kong ports as it does not hold a controlling stake and does not have a large scale to compete against HIT (Hongkong International Terminals) and MTL (Modern Terminals),'' JPMorgan analyst Raymond Ngai wrote in a report.

HIT, a unit of tycoon Li Ka-shing's Hutchison Whampoa, and MTL, controlled by Wharf (Holdings), are the two largest port operators in Hong Kong.

NWS is selling its 31.4 percent interest in the Asia Container Terminals (ACT), which runs two berths at Container Terminal 8 West for HK$1.9 billion, in cash and shareholder loans.

It is also selling for HK$1.1 billion in cash the entire share capital of a unit that holds an effective indirect 22.9 percent interest in ACT via a 33.34 percent interest in CSX World Terminals Hong Kong.

CSX World Terminals Hong Kong owns 68.6 percent of ACT and is also the operator of the one-berth Container Terminal 3.

In both transactions the buyer is Singapore's port operator PSA International, which has been expanding into overseas ports, especially in China.

``The transaction is expected to be completed on or before April 5, 2005,'' NWS said. The deals will give PSA a foothold in Hong Kong, but Sylvia Wong, analyst at UOB KayHian, said Dubai Ports International, the other shareholder in CSX World Terminals, could still frustrate PSA plans by exercising its pre-emptive right to become sole owner of ACT.

A more detailed report...

Feb 8, 2005
PSA clinches Hong Kong foothold

It is now set to buy stakes in two HK container terminals for HK$3b in surprise deal
By Nicholas Fang
Transport Correspondent

PORT operator PSA International has clinched a breakthrough deal to buy stakes in two Hong Kong container terminals for HK$3 billion (S$600 million).

That will give it a foothold in a booming market and the chance to challenge its arch-rival, the Hong Kong port giant Hutchison.

The deal also marks a major - and surprising - turnaround on the part of corporate Hong Kong, which only last year blocked PSA's attempts to buy into the territory's ports.

But it was one of those companies - Hong Kong-listed NWS Holdings - that yesterday agreed to sell PSA its port operations for HK$3 billion - a price attractive enough, said some market players, to override any qualms it may have had about letting in the Singapore player.

And this time PSA is virtually guaranteed a slice of the dockside as part of those stakes are not subject to any pre-emption clauses and therefore cannot be overturned.

The reluctance of Hong Kong firms to allow PSA to set up shop in their own backyard is understandable on one level: The territory is the world's busiest port, a bustling market with links to the burgeoning China economy and Hutchison's stronghold.

And while industry insiders said that PSA is unlikely to steal significant volumes from Hutchison, its presence there holds strategic value.

The complex deal is essentially in two parts.

First, NWS, a unit of property developer New World Development, said it would sell its entire 31.4 per cent stake and shareholder loans in Asia Container Terminals (ACT) to PSA for HK$1.9 billion.

ACT operates two berths at Hong Kong's Container Terminal 8.

The second stage involves NWS selling to PSA its 33.34 per cent share in CSX World Wide Terminals Hong Kong, which operates a one-berth terminal at Container Terminal 3 and has a further indirect stake in ACT.

This part of the deal will cost PSA HK$1.1 billion and will give it a total stake in ACT of some 54 per cent.

If the entire transaction goes ahead, NWS will earn an estimated profit of HK$1.8 billion.

The first part of the deal, to acquire the NWS stake in ACT, still hinges on approval from ACT's other shareholder, Dubai Ports International. .

The second part of the deal cannot be blocked and virtually assures PSA its Hong Kong foothold even if Dubai Ports stops PSA from taking over the NWS stake in ACT.

So at the very least, PSA will end up with 33.3 per cent of Container Terminal 3 and 22.9 per cent of Container Terminal 8.

PSA has been there before. Last year, it struck a deal to buy 57 per cent of ACT from Sun Hung Kai Properties for an undisclosed sum, but rumoured to be about HK$2.3 billion.

A month later, ACT's other two shareholders, Dubai Ports and NWS, exercised their pre-emption rights and shut the door on PSA.

Dubai Ports, the overseas arm of state-owned Dubai Ports Authority, gained its ACT stake when it snapped up the international port operations of the United States group CSX, beating PSA in the process.

That deal cost Dubai Ports US$1.15 billion before tax and liabilities and gave a significant boost to its bid to become a global force in port operations.

PSA declined to comment yesterday on the latest deal beyond confirming that it had agreed to buy the Hong Kong port assets of NWS.

NWS said it had invested in the Hong Kong terminals for the long-term but found PSA's offer 'exceptionally attractive'.

Sources close to the deal said it may have reversed its decision to sell its stake to PSA in order to secure a better deal.

One source said: 'It's hard to compare the two deals financially as PSA is getting more this time round.'

PSA's volumes surge 14% in January

15 Jan 05



(SINGAPORE) PSA International continued to benefit from the increasing volume of cargo pouring in from China to Europe and the US as seen by a 14 per cent increase in containers it handled at its terminals worldwide last month.


PSA handled 2.82 million TEUs (20-foot equivalent units) in January, compared to 2.47 million TEUs a year earlier, it said yesterday on its website. Of the total, it handled 1.77 million boxes in Singapore, 13 per cent more than a year ago.

PSA and other port operators like Hong Kong's Hutchison Whampoa are benefiting from the booming trade between Asia and the West, which has also kept freight rates rising.

In an attempt to grab a slice of the container handling market in Hong Kong, PSA succeeded last week in acquiring stakes in Hong Kong terminals when it made a HK$3 billion (S$631 million) bid for the port assets of conglomerate NWS Holdings Ltd.

Last year, PSA Singapore Terminal's port operations handled a record 20.6 million containers, a 14.1 per cent jump over 2003.

PSA said the growth was spurred by a rebounding regional economy led by China's rapid rise as a manufacturing base. Also, measures such as slashing of handling fees and close cooperation with shipping line customers also helped 'sharpen its competitive edge'.

PSA International, with 16 port operations in 11 countries, also set a new record by handling 12.5 million containers, up 17.6 per cent over 2003.

For the year, the group handled a global total of 33.1 million TEUs, compared to 28.7 million a year earlier.

Business Times - 21 Feb 2005

Shell, ExxonMobil working to finalise new cracker plans

They will have to confirm by mid-year to meet 2009 operational deadlines

By RONNIE LIM

(SINGAPORE) Officials from top engineering and construction companies have been filing in and out of the Hague and Houston offices of Shell and ExxonMobil to discuss technologies for new billion-dollar petrochemical crackers the two are planning here.

The oil giants need to finalise the technical details by mid-year so they can start building the crackers by mid to end-2006 to meet 2009 operational targets, industry sources said.

This is because construction will take about two-and-a-half to three years. Shell is also likely to have to reclaim land at Pulau Bukom to accommodate its new cracker, the sources added. BT understands some technical discussions started last year and involve mainly officials from the head offices of engineering and contracting firms from Japan, the United States and Europe.

'At this stage there's a lot of development work going on to decide the plant processes, including proprietary designs, so the oil companies can decide on which to use and pay licensing fees for, etc,' said an industry source.

Stone & Webster of the US and ABB Lummus Global, part of Swiss group ABB, are among names that cropped up during BT checks on which companies the oil giants are likely to have met to discuss how best to combine the latest proprietary processes with the oil companies' own technology.

'While the basic building blocks for producing petrochemicals are traditional, there are always new technologies, such as for the plant furnaces, the cracker itself and special vessels,' the industry source said.

The engineering and contracting firms ultimately chosen by the oil companies will have to sign secrecy agreements on the technology employed for the projects.

And this is where Singapore has an advantage over rival sites for the cracker projects - like China, where the market is.

There are concerns about intellectual property protection in China and the lack of a proper legal framework to enforce it there.

Other engineering issues include the the size of their crackers. 'Whether the oil companies opt for 800,000 tonnes per annum (tpa) projects or one million tpa units will mean added complexity,' the source said.

Shell has indicated it plans a 1 million tpa cracker here, while ExxonMobil - which is de-bottlenecking its existing 800,000 tpa-plus ethylene cracker into a 900,000 tpa unit - is evaluating having another 'world-scale' project in the region, but has not finalised Singapore as the site, nor disclosed the cracker's size.

Besides process designs, the oil giants have also been talking to specialist contractors about construction and procurement of materials.

These contractors include US-based Kellogg Brown & Root and Japanese engineering firm Chiyoda Corp - both of which built ExxonMobil's first cracker - and other Japanese players such as JGC Corporation and Toyo.

'Talks have been going on in Houston since last year,' a contracting source confirmed.

To meet booming regional demand, another petrochemical operator - Petrochemical Corporation of Singapore, in which Shell has a half share - is spending US$50 million on a new plant to boost propylene capacity, ahead of the planned new Shell and ExxonMobil crackers.

Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.

07 March 2005

NOL reports strong freight demand on all its routes
By Joanne Lee, Channel NewsAsia

SINGAPORE : Neptune Orient Lines says sea freight rates have risen in the six weeks to February 11, due to strong overall demand on its routes.

For the period, NOL's average freight rate per forty-foot container rose 9 percent to US$2,802 - from US$2,564 a year earlier.

NOL says it shipped 215,300 such containers during the six weeks, up 24 percent from a year earlier.

Volumes across all the major trade lanes remained strong, and utilisation rates were healthy.

Freight rates for container shipping are at record levels, fueled by strong demand from China.

Last month, NOL reported that volume growth had been strongest on its intra-Asia and Middle East routes - specifically to and from destinations in China. - CNA

Copyright © 2005 MCN International Pte Ltd

14 March 2005

PSA International handled 12% more containers in Jan-Feb
By Melvin Yong, Channel NewsAsia

SINGAPORE: Port operator PSA International handled some 5.4 million standard containers in its global operations in the first two months of this year.

This is an increase of 12 percent from the same period last year, due mainly to soaring trade from China's economic boom.

PSA's Singapore terminals handled 3.4 million twenty-foot-equivalent units (TEUs) in January and February, up 13 percent on year.

Its overseas ports moved 2.03 million TEUs in the first two months of 2005 -- 11 percent more than the year ago period.

PSA has operations in ports located in Belgium, Brunei, China, India, Italy, Japan, the Netherlands, Portugal, South Korea and Thailand.

Last month, it secured a foothold in Hong Kong, when it bought port assets from NWS Holdings for S$630m. - CNA

Copyright © 2005 MCN International Pte Ltd

PSA International's full year net profit up 29.1% to S$881.3m
By Derek Cher, Channel NewsAsia

SINGAPORE : PSA International reported record profits and revenue since it was corporatised in 1997.

The port operator posted a 29.1 percent jump in full year net profit to S$881.3 million - due to booming regional trade.

Even though container throughput grew a strong 15 percent last year, its overall revenue was up just 5 percent.

The company said this was due to the absence of contribution from non-port units - which have been divested.

Going forward, the company is optimistic that growth will continue as it expects higher throughput this year. - CNA

Business Times - 16 Mar 2005

HK's Titan still considering building S'pore oil storage

This is despite plans for second floating facility off Johor, says exec director

By RONNIE LIM

HONG Kong-listed Titan Petrochemicals Group is still considering building on-shore oil storage in Singapore, even though it is considering a second floating facility off Johor.

Titan executive director Patrick Wong yesterday reiterated plans to build storage in Singapore, following recent activity across the Causeway where several oil traders are using floating storage - converted very large crude carriers (VLCCs) - to store fuel oil used mainly to supply ship bunkers here and in China.

'This is due to the tight storage situation in Singapore,' an industry official told BT. 'It's not because of upcoming International Maritime Organisation rules banning transport of crude and fuel oil by single-hull tankers.'

Singapore has adopted the new IMO ruling, effective from April 5. A recent news report suggested that some Chinese trading houses are looking at continuing to use single-hull tankers to call at floating storage facilities in Malaysia, which are anchored outside port limits.

Swiss-based oil trader Trafigura Beheer recently leased floating storage from Malaysia's KIC Oil & Gas at Tanjong Pelepas, which is also being used by another Swiss-based trader, Glencore.

Glencore is in talks about leasing a floating storage facility at Tanjong Pelepas from Titan.

This means that Titan, which supplies bunker fuel here, may need more storage for its own commitments. 'We have two licences (for floating storage), at Tanjong Pelepas and at Pasir Gudang, but we are only operating at one location at the moment,' Mr Wong said.

'We may therefore deploy one of our existing VLCCs for this purpose,' he added, on market talk that Titan is looking to buy an old VLCC to operate at Pasir Gudang.

Titan announced plans this month to raise US$400 million via a bond issue for expansion projects including new vessels and storage facilities in China.

Mr Wong said that Titan was also still considering a 3-6 million barrel terminal here as part of its expansion plans.

He has told BT previously that the group is focused on China and hopes to capitalise on Singapore's infrastructure to cater to that market.

In Singapore, confirmed new oil storage projects include capacity expansion by existing player Vopak and also that by newcomer Emirates National Oil Company, whose Horizon Terminal project will add 5.3 million barrels to today's independent storage of 22.3 million barrels.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

March 26, 2005
PSA staff to get bigger bonus of between two and five months
The goodies, on top of the 13 month pay, come after its good showing last year

By Sue-Ann Chia

PORT worker Malik Pimboel has been wearing a big grin ever since learning from union leaders about the bigger bonus employees will receive this year.

It will be between two and five months this year - higher than last year's bonus, which ranged from one to four months.

The bigger bonus is due to PSA International's better showing in the last financial year.

It chalked up record profits of $881.3 million.

For Mr Malik, 37, a senior technical specialist who has been with the company for 17 years, it is payback time.

'I'm definitely happy. After all the contributions we've made, it is time for the company to reward its employees,' he said.

A PSA spokesman confirmed what Singapore Port Workers' Union president Lee Mun Hou indicated to members: that following the 2003 move to link wages more closely to performance, employees could look forward to between two and five months' extra this year.

And that will be on top of the 13th-month pay they received in December.

'As the company's performance in 2004 was better than in 2003, our staff are able to share in PSA's success by being paid a higher bonus,' the spokesman told The Straits Times.

'PSA is grateful to its staff and unions for their extended cooperation, especially in managing the surge in container volumes at PSA's terminals last year.'

Results showed that the port operator turned in its best performance last year, helped by a continuing surge in export cargoes from China and other Asian countries.

Full year net profit rose 29.1 per cent from $682.7 million in 2003 to $881.3 million last year.

It also handled 15.5 per cent more containers last year, moving 33.1 million 20 foot-equivalent-units (TEUs).

Mr Lee said the impending bonuses would be a 'fitting reward' for port workers.

'They went through various wage reduction measures.

Many workers also had to work on their days off, or put in additional hours to meet the upsurge in work volumes,' he said.

Employees will receive two types of bonuses next month.

The first is the company bonus that all will receive. It is capped at 1.5 months of their basic salary, up from 0.25 months last year, said Mr Lee.

The other payout is made up of individual performance bonuses, and ranges from 0.6 months to 3.5 months.

In fact, Mr Lee believes that news of increased bonuses is also what helped the union persuade the majority of its 4,000 members to agree to contribute $100 each towards a fund to build a new union office.

More than 80 per cent of delegates - who represent the larger membership - agreed to do so when a resolution was tabled at a meeting on March 17. Some, however, were unhappy with having to fork out the $100.

Mr Lee said he understood their frustrations and promised that the deduction would be waived for those who do not receive any bonuses due to poor performance last year.

But members like senior clerk K. H. Wong, 59, who has been with PSA for more than 40 years, do not mind: 'It's not a big matter. Since we're getting more bonus, we should contribute a little bit to get new premises.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.

March 29, 2005
NOL open to buying rival shipping line

LONDON - NEPTUNE Orient Lines (NOL) chief executive David Lim is looking at possible acquisitions to expand both the breadth and size of the company's operations, the Financial Times (FT) reported yesterday.

He told the paper that he could be interested in purchasing a rival shipping line if it met a series of criteria.

Mr Lim, who was in London this month for a meeting of the Box Club - a regular gathering of chairmen and chief executives of large container shipping lines - also warned of the dangers of a downturn following the current boom in the industry.

His comments will fuel speculation that NOL might bid for a rival in an effort to move itself into the same league as the very biggest Asian container shipping operators, such as Taiwan's Evergreen Marine, said FT.

NOL has previously grown by acquisition. In 1997, it bought the much larger, United States-based American President Lines.

Mr Lim said NOL's acquisition strategy had two dimensions: increasing scale and broadening service provision.

'We want to intensify our service offerings to be able to have a denser network of ship operations,' he told FT.

The company also needs to broaden its capabilities in services, covering the whole of a container's journey from factory to destination.

'We want to be able to deliver throughput solutions,' he said.

'I think at the end of the day that's what the customer is interested in, not just the ship.'

Mr Lim said acquisitions in logistics might include investing in facilities to handle and distribute containers.

'If there was an inland container terminal that was for sale in a particular region and it fitted well with our operations, we would consider buying it.'

Any acquisition of a rival shipping line would have to be a good strategic fit with NOL's existing operations, which are mainly transpacific Asia-North America and Asia-Europe shipping, he said.

NOL would have to choose between an acquisition with similar strengths or one strong in north-south trades such as North America-Latin America. 'I would look for somebody else who would add to our east-west trades, rather than diversify away from those trades,' he said.

The acquisition should also be at the right price and it had to be possible to integrate the acquisition's operating culture and philosophy, information technology and other operating systems with NOL's.

On NOL's operations, Mr Lim revealed an apparent change in the company's distinctive policy on ship size.

The company has been almost alone among large container lines in not buying new, larger ships able to carry more than 8,000 20-foot containers.

'In the longer term, we will also be looking at buying the bigger ships,' he said. 'It's a question of when, not if.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.

29 March 2005

China and Singapore sign agreement to facilitate shipping services
By Channel NewsAsia's Ca-Mie De Souza in Beijing

China and Singapore have signed an agreement that will make it easier for Singapore shipping companies to do business in China and vice versa.

Transport Minister Yeo Cheow Tong inked the deal with his Chinese counterpart, Communications Minister Zhang Chunxian in Beijing on Tuesday.

Under the deal, Singapore shipping companies will be allowed to set up wholly-owned subsidiaries in China.

And these firms can also engage in shipping-related services, like ship agency services for the vessels they operate, and sign service contracts with their customers.

Zhang Chunxian, Communications Minister, said: "I believe this will further advance both countries' moves to expand shipping and trade, creating a good environment for shipping and logistics companies to enter both markets."

China already has such an agreement with the US and the European Union.

So Tuesday's deal will open up more opportunities for Singapore companies looking for a greater share of the market.

Yeo Cheow Tong, Singapore's Transport Minister, said: "We were at a disadvantage, so now it's a level-playing field. I think Singapore companies definitely welcome this new development."

Singapore's trade with China last year totalled S$53 billion.

But this is set to increase as Singapore shipping companies are now poised to expand to bustling ports like Wuhan and Chongqing.

They welcomed deal.

Edward Cho, General Manager, China, Pacific International Lines (China) Ltd, said: "In the early days, one of the most difficult things about doing business in the interior was collecting payments. You do a business and don't get your shipping fees, I can sue my agent, that was some degree of protection. But now China is slowly conforming to standards, we don't have to worry about not getting our money. So this enhancement comes at the right time."

China is Singapore's top investment destinations and one of Singapore's top trading partners.

The signing will further strengthen the already strong economic linkages between the two sides. - CNA

Copyright © 2005 MCN International Pte Ltd

01 April 2005

NOL confirms sale of stake in Lorenzo Shipping

SINGAPORE : Neptune Orient Lines confirmed that it had agreed to sell its stake in cargo shipper Lorenzo Shipping to the Philippines' National Marine Corp, as part of its efforts to focus on its core businesses.

NOL will sell 28.7 percent of outstanding common shares and 82 percent of the redeemable preferred shares in Lorenzo.

No financial details were provided.

Neptune Orient Lines shares closed up 2.2 percent to S$3.76 on Friday, following GK Goh's upgrade from Hold to Buy - on expectations of higher volume and freight rate growth. - CNA

Copyright © 2005 MCN International Pte Ltd

March 29, 2005
NOL open to buying rival shipping line

LONDON - NEPTUNE Orient Lines (NOL) chief executive David Lim is looking at possible acquisitions to expand both the breadth and size of the company's operations, the Financial Times (FT) reported yesterday.

He told the paper that he could be interested in purchasing a rival shipping line if it met a series of criteria.

Mr Lim, who was in London this month for a meeting of the Box Club - a regular gathering of chairmen and chief executives of large container shipping lines - also warned of the dangers of a downturn following the current boom in the industry.

His comments will fuel speculation that NOL might bid for a rival in an effort to move itself into the same league as the very biggest Asian container shipping operators, such as Taiwan's Evergreen Marine, said FT.

NOL has previously grown by acquisition. In 1997, it bought the much larger, United States-based American President Lines.

Mr Lim said NOL's acquisition strategy had two dimensions: increasing scale and broadening service provision.

'We want to intensify our service offerings to be able to have a denser network of ship operations,' he told FT.

The company also needs to broaden its capabilities in services, covering the whole of a container's journey from factory to destination.

'We want to be able to deliver throughput solutions,' he said.

'I think at the end of the day that's what the customer is interested in, not just the ship.'

Mr Lim said acquisitions in logistics might include investing in facilities to handle and distribute containers.

'If there was an inland container terminal that was for sale in a particular region and it fitted well with our operations, we would consider buying it.'

Any acquisition of a rival shipping line would have to be a good strategic fit with NOL's existing operations, which are mainly transpacific Asia-North America and Asia-Europe shipping, he said.

NOL would have to choose between an acquisition with similar strengths or one strong in north-south trades such as North America-Latin America. 'I would look for somebody else who would add to our east-west trades, rather than diversify away from those trades,' he said.

The acquisition should also be at the right price and it had to be possible to integrate the acquisition's operating culture and philosophy, information technology and other operating systems with NOL's.

On NOL's operations, Mr Lim revealed an apparent change in the company's distinctive policy on ship size.

The company has been almost alone among large container lines in not buying new, larger ships able to carry more than 8,000 20-foot containers.

'In the longer term, we will also be looking at buying the bigger ships,' he said. 'It's a question of when, not if.'

Copyright © 2005 Singapore Press Holdings. All rights reserved.
The last time they bought they nearly collapsed. They better be more careful this time!

Monday April 4, 7:01 PM

Singapore NOL Freight Vol Up 14% For First 10 Wks Of 2005

SINGAPORE (Dow Jones)--Neptune Orient Lines Ltd. (N03.SG), which operates the world's sixth-biggest container shipping fleet, Monday said sea freight volumes rose 14% on year for the first 10 weeks of the 2005, due to strong trade growth.

During the period, NOL - 69%-owned by the Singapore government - carried 345,100 FEUs (40-ft equivalent unit or container), up from 303,000 FEUs a year earlier.

Its average freight rate per FEU rose 7% to US$2,730 from US$2,549 in the year-ago period.

The company attributed the higher volumes and rates to the "continued momentum in exports from China and world trade growth."

NOL added that volumes increased ahead of the Chinese New Year holidays on Feb. 9 and 10 and declined during the holiday shutdown, which it described as "usual."

Demand for cargo space to North America from Asia is expected to rise as much as 12% this year, according to the Transpacific Stabilization Agreement, an industry grouping which counts NOL among its 14 members.

NOL and the 13 other stabilization agreement members plan to boost freight rates to the U.S. for a third straight year as demand for Chinese goods increases and fuel costs rise.

Varun Shipping to list on Singapore Despository receipts

Mumbai: Varun Shipping Company Ltd is planning to issue Singapore Depository Receipts (SDRs) and utilise the proceeds to acquire two to three vessels for hydrocarbon transporation.

http://www.newkerala.com/news-daily/news/features.php?action=fullnews&id=96061

Business Times - 19 Apr 2005

PSA, P&O Nedlloyd in deal on Voltri Terminal

P&O Nedlloyd confirms letter of intent signed on joint venture

By DONALD URQUHART

(SINGAPORE) PSA International has reached a tentative deal to sell a stake in Italy's Voltri Terminal Europa (VTE) to P&O Nedlloyd (PONL), the world's third largest container carrier.

http://business-times.asia1.com.sg/mnt/media/image/launched/2005-04-19/190405_djpsa19.gif

A spokesman for the Anglo-Dutch line confirmed to BT that the deal, long rumoured within the industry, is 'imminent'.

The spokesman said a letter of intent had been signed, but declined to specify any of the details other than to say that a joint venture agreement would be signed soon by PONL and PSA International's 98.8 per cent-owned Sinport Sinergie Portuali SpA which operates VTE.

BT understands that PONL is likely to take a stake of up to 30 per cent in Genoa-based VTE which includes joint operation of one of VTE's four container berths. PSA International failed to respond to queries prior to press time.

Regional congestion, particularly at the La Spezia port south of Genoa, where PONL and its Grand Alliance partners currently call, is understood to be the key impetus behind the deal.

The PONL spokesman declined to comment on whether the joint venture signalled a complete withdrawal of the alliance, which also includes Hapag-Lloyd, Orient Overseas Container Line and NYK Line, from La Spezia.

It is also not known what impact the deal will have on relations between VTE and its existing major customers: Cosco, Maersk Sealand and Evergreen.

Industry players have suggested that the involvement of PONL may help VTE overcome harsh industry criticism that it has not lived up to performance expectations.

Among the criticisms are charges of poor productivity, delays in berthing, excessively long trailer queues at the terminal gates and investment in the port below the levels agreed to in the 1998 business plan.

PSA International is under investigation by the Genoa Port Authority for possibly failing to meet its obligations under the 50-year concession agreement under which it operates VTE, according to a Containerisation International report.

This could impact the outcome of the awarding of the latest phase of the terminal's development - Module 6 - which is close to completion.

A number of bidders have emerged, including rival terminal operating giant and operator of the competing La Spezia terminal, Contship, as well as a consortium which includes Maersk, Cosco and Evergreen subsidiary Lloyd Tristino.

Located in the north-west corner of the Italian peninsula, VTE is connected to the southern European hinterland by a vast rail and road network.

In 2004, the one-million-TEU capacity terminal, equipped with eight quay cranes, handled nearly 900,000 TEUs, up 2.6 per cent from the year before. By 2009, the terminal is expected to reach an annual capacity of 1.9 million TEUs with an eventual capacity of 2,500 TEUs based on seven berths and 20 quay cranes.

The Voltri terminal is one of 18 port projects PSA International has invested in 11 countries around the world.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

April 20, 2005
Dubai plans marine oil exchange to rival S'pore

DUBAI plans to challenge Singapore in the US$25 billion (S$41.55 billion) market for marine oil by setting up an exchange that will allow futures trading in marine oil at the port of Fujairah, one of the world's top three fuel stops for ships.

The government-run Dubai Metals & Commodities Centre will set up the electronic exchange later this year. The exchange will initially trade in gold and silver, and then in marine oil, Mr David Rutledge, the centre's chief executive, said in an interview in Dubai last week.

'By giving traders more opportunity to play the market, Fujairah could take some business from Singapore, especially for tankers,' said Mr Simon Neo, a marine oil broker with Singapore-based Wilhelmsen Bunkers.

Buyers and sellers of marine oil at Fujairah currently can trade only in physical quantities, unlike Singapore's unregulated informal market, where traders can hedge their risks by betting on future prices.

Fujairah, a member of the United Arab Emirates federation, vies with Rotterdam for the No. 2 slot in the marine fuel market.

Last year, Fujairah handled about 12 million tonnes of fuel oil for ships, worth more than US$2 billion, according to the government-run Port of Fujairah.

Singapore's marine fuel market grew 13.3 per cent last year to 23.6 million tonnes, or almost two times as much as Fujairah.

Still, getting enough companies to use Dubai's planned exchange to ensure that buyers always have sellers, and vice-versa, may not be easy. That is 'because it's very difficult for people to change', said Mr George Gaviotis, director of Oil Marketing & Trading International.

Six companies including Dubai government-owned Emirates National Oil and Sharjah-based FAL Oil have licences to trade in marine oil in Fujairah. The port receives more than 6,000 ships each year at its storage facilities.

Close to 75 per cent of the vessels are oil tankers, including very large carriers, which can haul as much as two million barrels of oil.

Marine oil prices in Fujairah are generally cheaper than those in Singapore because the emirate's supplies come from the oil-rich region.

Regional demand for marine oil may rise as Saudi Arabia, Iran and other Persian Gulf oil producers seek to export more oil and natural gas, said fuel oil traders in Fujairah. \-- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 21 Apr 2005

Fuel oil market: Dubai won't threaten S'pore lead, say analysts

Gulf state's plan for futures exchange not as serious a concern as China

By RONNIE LIM

(SINGAPORE) Dubai will complement, and perhaps challenge, but not threaten Singapore's position as the premier Asian oil trading hub, say oil traders.

Those opinions come as of the Gulf state plans to set up an energy futures exchange to trade fuel oil, or marine bunker, at Fujairah port. Like the Singapore Exchange, which is looking at establishing an energy exchange to trade fuel oil futures and other products, the Dubai Metals & Commodities Centre wants to set up an electronic exchange later this year for the same purpose.

Fujairah, which vies with Rotterdam for the No. 2 spot in the global marine fuel market, handled about 12 million tonnes of fuel oil worth more than US$2 billion last year - or about half of Singapore's 23.6 million tonnes.

But buyers and sellers of marine oil at Fujairah currently can only trade in physical quantities, unlike in Singapore's unregulated swaps market, where traders can hedge risks by betting on future prices. This helps shipping lines that use such futures contracts to manage fuel costs.

Consultant Ong Eng Tong, who was in Dubai recently for an oil conference, said he understands the country wants to trade not only fuel oil futures, but eventually the whole spectrum of products plus crude. 'Because it lies between Singapore and Europe in terms of time zones, it can be an effective trading bridge,' Mr Ong said.

'But it's a totally different market from Singapore, which is the trading centre between India and China,' he added.

Agreeing, Rifaat El Gohary, managing director of Bakri Trading, feels Dubai caters more to the Persian Gulf and will be a complementary market to Singapore.

'Trading of marine fuels makes a lot of sense for Dubai,' he said. 'And if a futures market for fuel oil develops there, it can also complement fuel oil futures trading which SGX is looking at.'

The Singapore market currently sets benchmark spot prices for oil products east of Suez. So Mid-East fuel oil prices, for instance, are based on the Singapore Platts price minus the freight from the Mid-East.

'Potentially, however, the Dubai move to set up a futures exchange could affect Singapore if a separate market there evolves and a Fujairah-price benchmark emerges,' said an international trader here.

This is a sentiment reflected by Omar Najia, a trader with Dubai-based BB Energy, who was quoted as saying that 'having a futures contract for Fujairah will give the Gulf its first marine oil benchmark that will reflect local conditions rather than those in Singapore'.

But the international trader added that 'while Dubai may have the location, logistics and so on, one thing the Middle East lacks is the fact that the end-users are not there.'

'Asia is still the fuel oil centre of the world, and the bigger threat to Singapore will in future come more from China, which also uses Platts Singapore pricing, but which intends to set up its own pricing mechanism based on prices at Huangpu port,' he said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 28 Apr 2005

S'pore vying for Lucite's $500m petrochem plant

By RONNIE LIM

SINGAPORE'S Jurong Island is among several investment sites - including Terengganu, and Houston in the US - which UK-based global plastics producer Lucite International is evaluating for a state-of-the-art petrochemicals plant which will use environmentally friendlier feedstocks to produce acrylic-based products.

The proposed plant - reportedly costing about half a billion dollars - will produce 100,000 tonnes a year of methyl methacrylate (MMA), which is an intermediate used for plastics, paints and coatings. It will be the first to employ the new technology - which will also cut production costs.

Key to the decision will be the availability of cleaner raw materials like carbon monoxide, ethylene and methanol - which the petrochemical crackers like Petrochemical Corporation of Singapore and ExxonMobil can supply.

A major plus is the new 500MW power station to be built by Keppel Energy. Scheduled for completion in 2007, the station will be ready well-ahead of any new petrochemical projects on the island.

Meanwhile, Lucite is 'still evaluating the possible sites' and will consider the 'overall package', sources told BT. It is likely to make its decision before the year-end.

The sources were commenting on a Kuala Lumpur report on Tuesday which said that Terengganu - which is pitching itself as an oil and gas state - is vying with Singapore for the project.

The site offered will likely be the Kertih petrochemical park, one of the largest industrial parks in the state.

'Trengganu has cheaper raw materials. But there are other considerations like Singapore's logistics, skilled manpower, and pro-business environment,' a source said.

The US West Coast, including Houston, is another possible location for the plant, the source added.

Lucite has two acrylic plants in Asia, an older facility in Taiwan, and a 90,000 tonnes per annum one which it just started up in Shanghai.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

April 20, 2005
Dubai plans marine oil exchange to rival S'pore

DUBAI plans to challenge Singapore in the US$25 billion (S$41.55 billion) market for marine oil by setting up an exchange that will allow futures trading in marine oil at the port of Fujairah, one of the world's top three fuel stops for ships.

The government-run Dubai Metals & Commodities Centre will set up the electronic exchange later this year. The exchange will initially trade in gold and silver, and then in marine oil, Mr David Rutledge, the centre's chief executive, said in an interview in Dubai last week.

'By giving traders more opportunity to play the market, Fujairah could take some business from Singapore, especially for tankers,' said Mr Simon Neo, a marine oil broker with Singapore-based Wilhelmsen Bunkers.

Buyers and sellers of marine oil at Fujairah currently can trade only in physical quantities, unlike Singapore's unregulated informal market, where traders can hedge their risks by betting on future prices.

Fujairah, a member of the United Arab Emirates federation, vies with Rotterdam for the No. 2 slot in the marine fuel market.

Last year, Fujairah handled about 12 million tonnes of fuel oil for ships, worth more than US$2 billion, according to the government-run Port of Fujairah.

Singapore's marine fuel market grew 13.3 per cent last year to 23.6 million tonnes, or almost two times as much as Fujairah.

Still, getting enough companies to use Dubai's planned exchange to ensure that buyers always have sellers, and vice-versa, may not be easy. That is 'because it's very difficult for people to change', said Mr George Gaviotis, director of Oil Marketing & Trading International.

Six companies including Dubai government-owned Emirates National Oil and Sharjah-based FAL Oil have licences to trade in marine oil in Fujairah. The port receives more than 6,000 ships each year at its storage facilities.

Close to 75 per cent of the vessels are oil tankers, including very large carriers, which can haul as much as two million barrels of oil.

Marine oil prices in Fujairah are generally cheaper than those in Singapore because the emirate's supplies come from the oil-rich region.

Regional demand for marine oil may rise as Saudi Arabia, Iran and other Persian Gulf oil producers seek to export more oil and natural gas, said fuel oil traders in Fujairah. \-- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.
Hehe...think can post this in the thread on Middle East and Singapore?

May 3, 2005
S'pore and Germany sign maritime transport pact

FURTHER cementing ties between the two countries, Singapore and Germany have signed a framework agreement on cooperation in maritime transport.

The areas of mutual interest include research and development and technology, safety and security, and training.

The pact was signed by Brigadier-General (NS) Choi Shing Kwok, the Permanent Secretary for Transport, and Mr Ralf Nagel, Germany's state secretary for Transport, Federal Ministry of Transport, Building and Housing.

At the signing ceremony on Friday, Brig-Gen Choi said the agreement paves the way for collaborative projects between government agencies, research institutes and private sector companies in areas such as safety, security and navigation and training.

The new agreement builds upon an earlier pact on maritime transport signed in June 2000 between Singapore and Germany.

'Over the years, our bilateral maritime cooperation has developed in many areas, especially for issues of mutual interest that we have pursued together at the International Maritime Organisation,' said Brig-Gen Choi.

The Ministry of Transport said in a statement that the close ties between Singapore and Germany have resulted in recent joint projects.

These include the development of computer-based predictions of ship responses in storms, and shipboard trials of a ballast water treatment system to prevent the transfer of harmful organisms.

Both projects are co-sponsored by the Maritime and Port Authority of Singapore (MPA) under its Maritime Innovation and Technology Fund.

The latest agreement has already led to proposals that include developing simulation models for ports and waterways.

Another proposal is the setting up of performance standards and system requirements to transmit vessel traffic system targets and tracks to ships electronically.

Discussions are under way to work out details of these projects.

The deals will involve MPA's German counterpart, the Federal Maritime and Hydrographic Agency (Hamburg), the Technical University Hamburg-Harburg and the Nanyang Technological University, among others.

LORNA TAN

Copyright © 2005 Singapore Press Holdings. All rights reserved.

May 4, 2005
Cosco S'pore triples profit to $33m in first quarter

By Grace Ng

COSCO Corp Singapore has sailed into a glowing first quarter of net profits, which almost trebled to $32.8 million from $11.5 million a year earlier, buoyed by increased demand for vessel maintenance.

The bulk carrier and ship-repair unit of China's biggest shipping company announced yesterday that sales for the three months ended March 31 surged by 567 per cent to $164.6 million, up from $24.7 million a year earlier.

This was thanks to strong growth in its ship repair business, as well as in its marine engineering and shipping operations.

Turnover from the group's shipping operations rose by 41.5 per cent, driven by firm freight rates due to rising global trade and demand.

During the quarter, Cosco Singapore also renewed three charter contracts at higher charter hire rates, as it continued to fully utilise its shipping capacity.

Earnings per share rose to 2.38 cents, from 1.06 cents a year earlier, while net asset per share increased to 35.44 cents, from 29.67 cents as at Dec 31.

Cosco Singapore's results this quarter included the contributions of its newly acquired subsidiary Cosco Shipyard Group (CSG), which added $132.6 million to the group's turnover.

On Jan 1, it had bought a 51 per cent stake in ship repair and marine engineering firm.

The company expects turnover and net profit for the full year to 'substantially exceed' that of last year, saying that it is 'poised to strengthen its position for further growth ahead'.

It intends to expand its core businesses, such as the marine and offshore engineering operations, which it will grow globally in collaboration with SembCorp Marine.

The company will build on the success of CSG's maiden repair and conversion project worth 100 million yuan (S$20.1 million), which was completed during the first quarter.

This was one of the company's first forays into the specialised offshore marine engineering business.

Looking ahead, Cosco Singapore said that it intends to put in additional resources to secure higher value-added projects in areas such as oil rig repair and building.

It will also upgrade its shipyards to meet the burgeoning demand from the oil and gas industry and the ageing merchant fleet worldwide.

Two new berths in the mainland Chinese port city of Zhoushan will start operations in June, while a massive floating dock in Dalian will be operational by the end of the year.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

04 May 2005

PSA International wins US$46m deal to build India's container terminal
By Loh Kim Chin, Channel NewsAsia

SINGAPORE: Port operator PSA International has won a US$46m deal to build a container terminal at Kandla, India's second busiest port.

A unit of PSA will team up with India's ABG Heavy Industries to develop and run the terminal for 30 years.

The deal is subject to government approval.

The new container terminal will have a draught of 12.5 metres and quay length of 545 metres.

It will have a capacity to handle 500,000 twenty-foot equivalent units when fully operational.

Kandla currently handles more than 40 million tonnes of cargo annually. - CNA/ir

Copyright © 2005 MCN International Pte Ltd

2.3b euro AP Moeller-P&O deal could buffet S'pore

12 May 05

Port operator PSA, carrier NOL stand to lose from lower traffic, freight rates

By DONALD URQUHART


(SINGAPORE) An agreement by the world's largest container shipping line, AP Moeller-Maersk to buy the third largest line, Royal P&O Nedlloyd, for 2.3 billion euros (S$4.8 billion) will be the largest-ever industry consolidation, with ripples washing around the globe. Repercussions for Singapore could be far-reaching if the agreement goes ahead.


The combined entity would operate in excess of 500 ships with a capacity of 1.5 million 20-ft containers and control nearly 18 per cent of the global market, more than double the share controlled by the second largest operator, Mediterranean Shipping Co.

'In this fragmented industry, we believe these two highly complementary businesses wil achieve far more together than apart,' said Andrew Land, chairman of P&O. 'Their combined scale and know-how will create the world's leading container shipping line and logistics provider.'

In Singapore, people in the container industry say that they will be watching how the development plays out. 'We considered ourselves medium-sized but compared to the two of them together we are now very small,' said the head of a container line with a strong Asian regional focus.

The shipping executive, who declined to be named, said that the deal could affect PSA International - the world's largest container terminal operator - because of the significant volumes P&O brings through Singapore.

The question is whether the two lines - AP Moeller-Maersk and P&O Nedlloyd - will be operated separately or combined. 'Knowing the AP Moeller style, they will not let the two brands run separately; they will bring them together,' the executive said.

'P&O is a very large player here, they are very important to PSA, so if the two lines are collapsed into one, or P&O strings are run through the Malaysian Port of Tanjung Pelepas, that may have an impact on PSA, if Pelepas has the spare capacity.'

AP Moeller-Maersk took a 30 per cent stake in the Port of Tanjung Pelepas in 2000, shifting most of its business there. The port is said to be at capacity, but its phase two expansion is on target for completion later this year.

The enlarged liner grouping could also affect the key transpacific trade lane, according to Chris Sanda, DBS Vickers Securities associate director of equity research.

AP Moeller-Maersk withdrew last year from the Transpacific Stabilisation Agreement, an industry grouping that sets rates on the trade. An enlarged Maersk line could result in effectively two cartels competing on the trade which would have a downward pressure on rates, he said. This could hit other transpacific lines, like NOL.

P&O was long considered a potential merger or acquisition target for NOL, whose strength on the transpacific was seen to nicely jive with P&O's strong European focus.

Mr Sanda said that AP Moeller-Maersk's acquisition of P&O could also spur further consolidation within the industry, as key players see their market share under threat and move to join forces.

Analysts say that for AP Moeller-Maersk to squeeze out all possible efficiencies from the enlarged grouping, there would have to be a significant restructuring of its services. The group has already said that it is cutting 1,500 jobs or 5 per cent of its combined workforce over the next three years.

AP Moeller-Maersk has 98 new ships - or up to 48 per cent of its current capacity - on order with delivery due in stages until 2008, according to shipping analysts BRS Alphaliner.

With P&O's large proportion of charted vessels, 'it would make sense to off-hire some of the chartered ships', the senior shipping executive said. 'It could mean that there will be vessels cascading down, so the market will cool off.'

With unprecedented demand for container shipping, driven largely by China's need to deliver its exports, freight rates have soared and shipping lines are scrambling for additional capacity.

Business Times - 12 May 2005

NOL expected to post ninth quarterly profit gain

Analysts forecast 10% rise to US$180 million

(SINGAPORE) Neptune Orient Lines (NOL), which operates Asia's second-largest container line, may report its ninth quarterly profit gain, as Asia's exports kept its containers full and allowed it to charge more for cargo space.

Net income for the first quarter may increase 10 per cent to US$180 million in the three months ended April 8, compared with US$163.2 million in the same period last year, according to a median forecast of four analysts in a survey by Bloomberg. NOL will announce earnings tomorrow.

NOL and rivals such as AP Moeller-Maersk A/S, Hanjin Shipping Co and other lines reported higher earnings last year, buoyed by increasing demand from North America and Europe for clothes, electronics and other products from China and other Asian countries.

Demand for sea freight pushed rates to record levels last year and congestion at ports are likely to boost charges this year. About 80 per cent of global trade is carried by sea.

'This will be one of the best years for them as more goods are made in Asia and shipped to the US and other countries,' said Yang You Sik, who doesn't own NOL shares among the US$701 million he manages at LG Investment Trust Management in Seoul.

NOL chief executive David Lim, 49, on Feb 28 said the shipping industry may see in the coming years a prolonged 'up cycle' because congestion has reduced throughput capacity, making it ineffective to have bigger vessels. The company is the only one of the world's top 10 container shipping lines that hasn't ordered the biggest vessels available.

NOL shares rose 2 cents to close at S$3.72 yesterday. The stock has gained 24 per cent this year, outpacing its closest competitors Evergreen Marine Corp which fell 1.6 per cent and Hanjin Shipping which rose 16 per cent this year.

Only two of 12 analysts tracking NOL this year rate the stock, one of the top 10 best performing shares on the key Straits Times Index, a 'buy', Bloomberg data showed.

Exports from China, the world's third-largest trading nation, rose 35 per cent to US$156 billion in the first quarter and imports increased 12 per cent to US$139 billion, the customs bureau said in April.

'A substantial contribution to the unseasonable strength in volumes is due to the lifting of textile quotas,' analysts Christopher Gee and Adele Yeo at JPMorgan Chase & Co said in a May 4 research note. They have a 'neutral' rating on NOL with a target price of S$4.10.

APL Ltd, which ships containers for NOL, handled 499,100 40-foot boxes from Jan 1 to April 8 and contributed to 81 per cent of its parent's sales last year. APL's container growth in the period was 13 per cent higher from last year, NOL said.

Average revenue increased 7 per cent to US$2,732 a 40-foot container, bringing first-quarter revenue from the container shipping business up by 21 per cent to US$1.36 billion. APL has a total fleet capacity of 313,839 20-foot standard container.

NOL, which also operates warehouses and offers freight forwarding, said sales from contract logistics, which made up for 17.8 per cent of sales last year, rose 5 per cent to US$219.4 million from Jan 1 to April 8. Revenue from international services rose 23 per cent to US$97.5 million.

Temasek Holdings owns 69 per cent of NOL shares.

The global container shipping fleet's carrying capacity is set to grow by 60 per cent through 2008 and may create an oversupply of shipping space, TradeWinds reported on April 8, citing shipbrokers.

'While volumes should continue to rise in 2006 and beyond, a margin squeeze may cause earnings to decline,' Chris Sanda, analyst at DBS Vickers Securities, said in a May 4 research note. Mr Sanda has a 'fully valued' rating on NOL shares, with a one-year target price of S$3.36 a share. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 16 May 2005

Star Cruises to boost S'pore capacity by over 40%

IN a move that will boost its passenger capacity out of Singapore by over 40 per cent, Star Cruises, the Asia Pacific's leading cruise line, will station the SuperStar Gemini here for a four-month stint beginning November.

This will let Star Cruises meet strong demand for fly-and-cruise holidays to the Republic in a number of overseas markets including Australia, New Zealand, the UK and Europe, the company said. It will also enable longer cruises and new destinations, Star Cruises added.

Presently, SuperStar Virgo sails out of Singapore three times a week on cruises lasting two to three nights.

Chong Chee Tut, chief operating officer of Star Cruises, said: 'Fly-cruise packages have always been popular with tourists to Singapore.'

He added that almost half of the passengers on board SuperStar Virgo each week are non-Singapore residents seeking Singapore's sights and shopping. They total more than 130,000 a year.

SuperStar Gemini is now based in Taiwan and offers cruises to Japan. It will be in a dry-dock in Singapore for about two weeks prior to the start of her new itinerary.

On her return, the 19,093-tonne cruise vessel will offer regular seven-night South-east Asia itineraries along the Straits of Malacca and the Andaman Sea from Nov 20 until April 2, 2006. She will call at Port Klang, Langkawi Island and Penang in Malaysia, and Krabi and Phuket in Thailand.

In addition, the cruise liner will offer three special seven-night South China Sea cruises to Koh Samui and Ho Chi Minh City.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

^
Another cruise ship coming.....:yes:

May 17, 2005
Luxury liner gives regional cruises a fillip

By Kelvin Wong

A LUXURY liner from the world's largest cruise company will call Singapore home for nine months from next February, a sign of growing international interest in the region's cruise business.

The Pacific Sky, which operates under United States-based Carnival Corp's P&O Cruises Australia brand, will offer more than 30 weekly sailings from the Singapore Cruise Centre.

Its decision to dock here will give Singaporeans the chance to take longer, more luxurious cruises, and should help draw tourists.

Singapore Tourism Board's director (sightseeing and cruises) Chang Chee Pey, said: 'Star Cruises has done a great job in reaching out to the mass market... but hopefully, with more ships coming, they can cover different markets.'

The Pacific Sky currently sails out of Brisbane to destinations in the South Pacific and New Zealand.

It has 11 decks and boasts two outdoor swimming pools, a health centre with a spa and sauna, and a 600-seat lounge for shows. It can accommodate 1,550 passengers.

The ship will offer two seven-day itineraries out of Singapore. One route will call at places such as Koh Samui, Bangkok and Kuantan, the other such places as Malacca, Langkawi and Phuket.

Each trip costs about A$1,000 (S$1,260).

Carnival Corp is the latest cruise line to try to break Star Cruises' stranglehold on the market here.

Miami-based Royal Caribbean had the Royal Viking docked here for about a year in the mid-1990s.

Sun Cruises quit the business in 2000, following the sinking of its flagship vessel Sun Vista.

Mr Bruce Krumrine, director of shore operations (Europe and Exotics) at Carnival's Princess brand, said its move was prompted by 'growing interest in Asia cruising by the international market'.

The company hopes to get 80 per cent of its customers from Australia, with the rest probably from Singapore and the region. Mr Krumrine said it will consider having the ship back every year.

He was speaking to The Straits Times as part of a delegation of top executives from international cruise lines and port authorities. They were in Singapore at the weekend for the first Seatrade Asia Pacific House Party networking conference.

STB, which helped woo the Pacific Sky here, said it is also working closely with neighbouring ports to market the region as a vibrant one.

Last year, 57 cruise ships made calls at Singapore, a 12 per cent rise over 2003. Passenger throughput rose 23 per cent in the same period, to about 635,000.

Meanwhile, Star Cruises, which has an 80 per cent market share in the region, is not sitting idly by.

From November, it will bring the SuperStar Gemini back to Singapore from its Taiwan base.

Its SuperStar Virgo is based here, offering two to three-night cruises.

The SuperStar Gemini will resume week-long cruises from Singapore, which it stopped doing in 2002.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

May 20, 2005
EYE ON BRITISH PORTS FIRM
P&O shares up on talk of PSA interest

LONDON - SHARES in British ports firm P&O rose yesterday as talk swirled that Temasek Holdings, which owns PSA Corp, is building a stake in the company. P&O recently sold its stake in its container shipping venture.

The Daily Telegraph said Temasek was buying shares in P&O, and might already have a 2 per cent stake.

During yesterday's trading, P&O shares rose 4.7 per cent to reach 308 3/4 pence, on volume of more than seven million shares.

The talk comes on the heels of a takeover offer for P&O Nedlloyd, the container shipping group in which P&O holds 25 per cent. The bid, from container shipping line AP Moeller-Maersk, valued P&O Nedlloyd at 2.3 billion euros (S$4.85 billion).

A spokesman for Temasek declined to comment, while P&O spokesman Peter Smith told Bloomberg: 'We don't comment on market speculation.'

Temasek wholly owns PSA, a leading ports and terminals business. PSA has investments in 18 port projects in 11 countries - including Belgium, Italy and the Netherlands - and operates the world's largest transshipment hub in Singapore. \-- REUTERS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 20 May 2005

Chemical firm sets up $10m plant here

By LIZA LIN

JURONG Island saw a new addition to its industrial landscape yesterday with oleo-chemical manufacturer Faci Asia Pacific's opening a $10 million fatty esters plant.

The facility, the first esters plant in Asia by Italy-based chemical company Faci Group, will make chemicals used in the manufacture of plastics, personal care products, food and lubricants. It has a production capacity of 10,000 tonnes.

The plant will help Faci supply customers in the Far East, Australia and the US, said Franco Rossi, the Italian group's chief executive. He added: 'The availability of raw material nearby is also another reason for us choosing Singapore as our location.'

Resources such as palm oil and stearic acid are available in Malaysia, Indonesia and the Philippines.

Faci has had a presence in Singapore since 2000, when it opened a metal stearates plant with a production capacity of 12,000 tonnes, making about $22 million worth of products each year.

Aw Kah Peng, director for chemicals at the Economic Development Board, said the new plant is in line with Singapore's development strategy for the specialty chemicals sector. 'This sector is already a key growth segment for Singapore. Today, specialties contributes 11 per cent of the total chemicals cluster output and one-third of the value-added,' she said.

Mr Rossi said Faci will hire 15 to 20 workers for its new plant, which will start operations in July.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Here comes Dubai.......:yes:

May 21, 2005
Dubai Ports eyes terminals in Asia

DUBAI - DUBAI, the world's sixth-largest container-port handler, said it is interested in running more terminals in China and India to tap growing economies and challenge rivals including Singapore's PSA International.

State-run Dubai Ports Authority - which last year bought terminal operations in Hong Kong, China and other countries from CSX Corp for US$1.15 billion (S$1.9 billion) - is in talks with a 'dozen' ports around the world as part of a plan to more than double capacity to 20 million containers a year, Sultan Ahmed bin Sulayem, the authority's executive chairman, said in an interview yesterday.

'They've entered quite aggressively into the game, and raised the stakes for competitors,' Mr Neil Davidson, ports director at London-based Drewry Shipping Consultants, said.

Dubai Ports, which handled eight million containers in 2004, beat Hong Kong-based Hutchison Whampoa and PSA International - the world's largest and second-largest port operators respectively - to take over terminals operated by United States-based CSX last year.

The agreement gives Dubai - the second-largest member of the United Arab Emirates federation - a foothold in China through the cities of Hong Kong, Tianjin and Yantai, as well as ports in South Korea, Australia, Germany, Venezuela and the Dominican Republic.

With the assets, Dubai Ports expects to handle 12 million containers this year, potentially putting it ahead of its closest rival, Eurogate.

Hutchison handled 41.5 million containers last year, and PSA almost 29 million, according to Drewry.

Peninsular & Oriental Steam Navigation, Britain's largest ferry and port operator, handled 16 million containers. -- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 25 May 2005

Shell sees Jurong Island plants taking all output of new cracker

By RONNIE LIM

(SINGAPORE) Shell Chemicals is confident that ethylene output from a multi-billion dollar petrochemical cracker it is looking at building here would be fully taken up by downstream or secondary plants on Jurong Island - ensuring the project is competitive.

http://business-times.asia1.com.sg/mnt/media/image/launched/2005-05-25/5rtalks.gif

For a start, a significant share of the cracker's proposed one million tonnes per annum (tpa) of ethylene would be consumed by a mono-ethylene glycol plant that Shell plans to build on Jurong Island as part of the overall project.

'We are also developing other outlets for olefins and benzene and we expect all the output from the cracker would be consumed on Jurong Island,' said Harshad Topiwala, Shell's general manager for Base Chemicals in the Asia/Pacific and Middle East.

A Shell spokesman said the company is talking with downstream parties but declined to name them.

Local uptake of 100 per cent of output will be a key driver for the cracker's go-ahead. Pipelines from Shell's Pulau Bukom refinery - where the unit would be built - to the downstream plants on Jurong Island are already in place, Mr Topiwala said in Shell Chemicals Magazine.

Another plus would be the cracker's integration with the Bukom refinery, which means it could make use of heavier, lower-quality feedstock such as low-sulphur waxy residue available from the latter.

'In return, lighter molecules produced by the cracker and not suitable for use in chemical operations would be fed back into the refinery,' said project development manager Paul Hampson.

As part of its design and engineering study for the cracker, Shell is looking at land reclamation around Pulau Ular - one of three small islands that make up Bukom - because there isn't enough space on the main Bukom island to build the project.

On competition from rival Middle East crackers with access to cheap gas feedstock, Mr Topiwala said that although these can produce ethylene more cheaply, they can't produce much in the way of co-products. But liquid feedstock crackers - like the one Shell is looking at building here - can produce a range of co-products, such as propylene, butenes and benzene, apart from just ethylene.

'These are all part of our core portfolio and are an important factor in the overall economic viability,' Mr Topiwala said.

Also, the Singapore cracker would be closer to key growth markets - especially China - than rival Middle Eastern plants.

While all indicators point to a go-ahead, a final decision on the cracker is expected around end-2005 or possibly as late as mid-2006, which means it would not be operating until 2009. It would be Shell's third cracker here, following its half-stake in two Petrochemical Corporation of Singapore crackers with a total capacity of 1.4 million tpa.

Other cracker projects planned in the region include one by ExxonMobil, which is studying a second unit here after its 800,000 tpa unit on Jurong Island, and Shell's Nanhai cracker, which is scheduled to start up three to four years ahead of its Bukom project.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

25 May 2005

PSA partners Tianjin Port to develop the northern Chinese port
By Derek Cher, Channel NewsAsia

SINGAPORE: PSA International is expanding its operations in China further.

The port operator says it has signed a partnership with Tianjin Port Group to develop the northern Chinese port.

PSA won't disclose the size of its investment.

But according to a report in the South China Morning Post, PSA plans to buy a 30 percent stake in the expansion project for US$200 million.

The deal comes just three months after PSA bought US$385 million of port assets in Hong Kong.

PSA also has investments in port projects in Fuzhou, Dalian and Guangzhou on the mainland.

Meanwhile, banking sources say PSA may sell S$500 million worth of bonds before the end of June.

This is partly to redeem a US$500 million bond that matures in August.

PSA declined to comment on the bond offering, except to say that it has financing needs on an on-going basis, which it will address as and when required.

Sources say PSA is also raising funds for its working capital needs and may launch two bonds - a three-year floating paper and a 10-year fixed-rated bond. - CNA/ir

Copyright © 2005 MCN International Pte Ltd

May 26, 2005

Sumitomo Chemical to build $310m plant here
Third Jurong Island plant will be biggest Japanese investment in S'pore this year

By Kwan Weng Kin
JAPAN CORRESPONDENT

TOKYO - JAPANESE petrochemical company Sumitomo Chemical yesterday announced that it will build a new facility on Jurong Island at a cost of 20 billion yen (S$309 million).

The facility, which will produce methyl methacrylate (MMA) monomer and polymer, will be the largest Japanese investment in Singapore this year.

MMA monomer is the main material used in producing artificial marble and certain transparent resins. It is a raw material for making MMA polymer, which is used in products such as liquid crystal displays (LCDs).

The announcement coincides with Prime Minister Lee Hsien Loong's Tokyo visit. He received a call at his hotel yesterday from Sumitomo Chemical president Hiromasa Yonekura.

The MMA monomer production line will have an annual capacity of 90,000 tonnes, boosting total production in the Republic to 223,000 tonnes.

A Sumitomo spokesman said the decision to build this third plant was made even before the start of the second plant, underlining the company's strong commitment to Singapore.

The MMA polymer production line will have a capacity of 50,000 tonnes, for a total of 100,000 tonnes.

The new facility will be built on a 7ha plot of land next to the existing plants. It will require the hiring of only 17 extra workers thanks to automation and the existing facilities.

Commercial production is expected to start in the first quarter of 2008.

Output from the two new plants will help meet the growing demand in Asian markets, particularly in China.

Demand for MMA is being fuelled by explosive growth in special applications such as LCDs and projection TVs.

One reason why Sumitomo Chemical is understood to have picked Singapore is that it will be able to sell some of its output directly to derivative companies in the Republic.

'The Singapore Government is making a big effort to bring in derivative companies to Singapore to establish a product network. We can sell them our products through pipes without shipping by sea,' said Mr Toshio Kawabata, general manager for basic chemicals at the company's planning and coordination office.

He also cited Singapore's logistics as an added attraction, which will allow the company to save on shipping costs.

The Economic Development Board (EDB) yesterday hailed the Sumitomo investment.

'We are delighted that Sumitomo Chemical has chosen Singapore for this MMA project, making it the largest MMA site globally for Sumitomo Chemical,' said EDB chairman Teo Ming Kian in a statement.

'With this investment, Jurong Island will also become the leading MMA production site in Asia.'

Right chemistry

# The new Sumitomo facility will produce methyl methacrylate (MMA) monomer and polymer from the first quarter of 2008, making Singapore a leading producer of the chemicals.

# The MMA monomer production line will have a capacity of 90,000 tonnes, while the MMA polymer production line will have a capacity of 50,000 tonnes.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 27 May 2005

Investor shortlist for Shanghai port

Shanghai has whittled list of potential investors from over 20 firms

(SHANGHAI) A handful of the world's biggest shipping and port operators, including Singapore's PSA International, are vying for investments in the next phase of Shanghai's multi-billion dollar container port project.

Besides PSA, included on the shortlist to invest in the second phase of the city's Yangshan port are Hong Kong's Hutchison Whampoa, the world's biggest container port operator, as well as China's COSCO Pacific and UK-based Peninsular and Oriental Steam Navigation Co.

Shanghai has whittled its list of potential investors from more than 20 firms that had expressed interest in investing in the project, which is expected to cost about 5 billion yuan (S$990 million) to build, not counting the cost of land, said Gu Gang, the director of Shanghai Tongsheng Investment (Group), which is building the port for Shanghai.

The ports arm of Danish shipping giant AP Moeller-Maersk is also on the list of finalists, while Hong Kong-based Wharf Holdings' Modern Terminals tie-up with China Shipping Group is also in the running.

Global players are enticed by a Shanghai port market that is stretched as container traffic has surged by about 30 per cent a year on a compound basis since 1996.

However, massive expansion plans at several China ports are fuelling concerns by some observers that overcapacity looms.

Mr Gu said that Shanghai was looking to bring in a consortium of international investors, and added that winners would probably be chosen through negotiation, instead of bidding.

'We are looking for the biggest shipping companies and port operators because the port itself is very big,' he told reporters on the sideline of an international port conference.

'The best is for the companies to form a consortium since the number of berths under construction is still limited and we cannot satisfy everybody,' he said.

The Yangshan complex is the biggest new port project in China, with total planned investment of about 100 billion yuan. When finished, it will include 52 berths and a 32-kilometre bridge.

Shanghai International Port Group and its Shanghai-listed affiliate Shanghai Container Co Ltd are the only investors in the first phase with a total investment of 5 billion yuan for five berths, which will start trial operations by the end of this year.

The first phase will have a designed capacity of 2.2 million twenty-foot-equivalent units (TEU) per year, with potential to move more than 3 million TEU, Mr Gu said.

The second phase will be designed to handle around 2 million TEU but could also move up to 3 million TEU, he added.

International investors are keen to grab operation rights for container ports in Shanghai as it has become the world's third busiest container port and is poised to eventually overtake Hong Kong and Singapore. - Reuters

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved

30 May 2005

Keppel wins S$780m rig order from Danish shipping group Maersk

SINGAPORE : A unit of Singapore's Keppel Corp said Monday it has secured a contract worth S$780 million (US$473 million) to build two oil rigs for Danish shipping group A.P. Moeller-Maersk.

Keppel FELS Ltd, a subsidiary of Keppel Offshore and Marine, said it would build the semi-submersible platforms, while Moller-Maersk would supply the drilling and other construction equipment.

The rigs, each capable of accommodating 180 people, can operate in water depths of up to 3,000 metres.

Keppel said it would deliver the two rigs in 2008 and 2009, while an option for a third could be exercised within the next 12 months.

Monday's deal marks the second major contract Moller-Maersk has awarded to Keppel FELS Ltd this year, following a March deal worth S$990 million to build four jackup rigs. - AFP /ch

Copyright © 2005 MCN International Pte Ltd

Business Times - 31 May 2005

Jump of 14% in containers handled by NOL

Unit APL also saw rise in revenue per box

NEPTUNE Orient Lines (NOL), which operates Asia's second-largest container line, handled 14 per cent more containers in the four weeks ended May 6, helped by growing demand for Asian products.

The company's container shipping unit, APL, carried 152,600 40-foot containers in the April 9 to May 6 period, up from 134,000 boxes a year earlier, NOL said in a statement to the Singapore stock exchange.

Average revenue rose 7 per cent to US$2,769 a box.

Rising demand from North America and Europe for Asian products including toys and clothes is generating more business for NOL as well as rival shipping lines.

Sea freight rates rose to a record last year. About 80 per cent of global trade is carried by sea.

The increase 'reflects continued strong demand growth', NOL said.

The company moved 651,800 40-foot containers in the year to May 6, 13 per cent more than a year earlier. Average revenue rose 7 per cent to US$2,740 a box.

The shipping company, which also operates warehouses and offers freight forwarding, said sales from contract logistics rose 5 per cent to US$66.6 million during the four weeks to May 6. Revenue from international services climbed 12 per cent to US$27.5 million, NOL said.

NOL shares added 1.2 per cent to $3.40 at the close of trading in Singapore yesterday. The stock has risen 13 per cent this year, compared with a 5.1 per cent advance in the benchmark Straits Times Index in the same period. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

June 1, 2005
S'pore marine industry grows to record $5.3b

By Narendra Aggarwal
Economics Correspondent

BUSINESS is booming for Singapore's marine industry.

Revenue from companies involved in activities such as ship repair and oil-rig building shot up by a huge 40 per cent last year to hit an all-time high of $5.3 billion.

This rapid growth has been fuelled by a sharp rise in work related to oil and gas exploration, which in turn has been spurred by near record oil prices.

And the marine industry's outlook is equally bright, with the sector's order book at an all-time high, too.

In the first four months of this year alone, the local marine industry has secured a record level of more than $4 billion worth of contracts for projects with delivery dates till 2008.

'Orders are likely to increase further as the local shipyards continue to clinch more contracts amid a strong oil and gas industry,' says the president of the Association of Singapore Marine Industries, Mr Heng Chiang Gnee. The association has about 180 members.

In his president's report released at the association's annual general meeting yesterday, he said that the strong results last year 'were a clear manifestation of the industry's robustness in a highly competitive global market'.

All three main sectors of the marine industry - ship repair and conversion; shipbuilding; and offshore engineering - grew and contributed to the record-breaking performance, he added.

Revenue from the ship repair and conversion segment formed the lion's share at 59 per cent of the industry's total turnover. It grew 35.5 per cent to $3.1 billion.

The shipbuilding sector's output increased due to the record levels of new contracts secured in 2003 and last year. Revenue rose 22.9 per cent to $890 million, and accounted for 16.8 per cent of the industry's total last year. The offshore sector grew by a hefty 68.3 per cent from the previous year to hit $1.3 billion, and accounted for nearly 25 per cent of the industry total.

A marine sector analyst at a local brokerage said that the outlook for the marine industry was strong as the order books were at record levels.

She said top player Keppel Offshore & Marine had orders worth $5.5 billion in hand, while rival SembCorp Marine's orders stood at $3.5 billion. The two account for about 80 per cent of the marine industry here.

Mr Heng noted that Singapore had strengthened its global leadership position in building a type of oil rig known as a jack-up rig, with about 80 per cent of the world's market share.

At the same time, the market for conversions and the building of offshore support vessels - two niche areas for the industry - remained buoyant. The local industry had increased its market share for ship repair in the more sophisticated market segments such as that of liquefied natural gas (LNG) carriers.

Singapore is fast becoming the leading LNG ship repair centre with local shipyards winning long-term contracts, he added.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

02 June 2005

PSA International submits bid for Busan port project
By Thomas Cho, Channel NewsAsia

SINGAPORE : Port operator PSA International has submitted a bid to build four new berths at the South Korean port of Busan.

Four South Korean companies are also reportedly vying for the project.

These are Hyundai Development, Daewoo Engineering, Posco Engineering and Hanjin Heavy Industries.

The next step is for the South Korean government to review the proposals and choose a priority negotiator to continue talks for building the berths.

South Korea wants to add 30 new berths, as part of plans to expand its port facilities.

In five years, it hopes to be able to handle over eight million standard containers at Busan port, currently the world's fifth busiest.

PSA already operates a port at Incheon, near Seoul.

The port operator has been increasing its presence globally in recent years.

Earlier this year, PSA bought the Hong Kong port assets of NWS Holdings for S$630 million. - CNA /ct

Copyright © 2005 MCN International Pte Ltd

June 9, 2005
$160M EXPANSION DEAL
PSA to buy 80 cranes from S. Korean firm

PSA Singapore Terminals has awarded a $160 million contract to a South Korean company to supply 80 cranes, as part of a major expansion of its Pasir Panjang Terminal.

PSA International's chief executive for South-east Asia and Japan, Ms Grace Fu, signed the contract yesterday with conglomerate Doosan Heavy Industries & Construction.

The 80 cranes, used for loading and unloading containers from trucks, will be ready for operation late next year.

They will be installed at new berths that PSA is building at Pasir Panjang, as it moves to increase its handling capacity by more than 50 per cent.

A total of 15 berths will be added to the terminal by 2011, with three expected to be ready this year and another five next year.

Said Ms Fu in a statement: 'Our focus this year is to bring on new capacity as quickly as possible, and to provide excellent service to our customers while handling increased container volumes.'

She added that PSA has already invested more than $400 million on new port equipment for the new berths. The 15 new berths are expected to boost PSA's annual handling capacity in Singapore to 31 million standard sized containers, from 20 million.

KAREN TEE

Copyright © 2005 Singapore Press Holdings. All rights reserved.

June 13, 2005
PSA buys HK port stakes for $1.6b

HONG KONG - HUTCHISON Whampoa, the world's largest port operator, said yesterday it had agreed to sell stakes in two port divisions to Singapore's PSA International for US$925 million (S$1.6 billion).

The announcement confirmed reports last week that PSA was buying a stake in its long-time rival, although the price was higher than the reported US$800 million.

Hutchison will sell 20 per cent of Hong Kong International Terminals (HIT) and 10 per cent of Cosco-HIT to PortCapital, a company backed by PSA, said Hutchison. It will book a gain of HK$5.5 billion (S$1.2 billion).

'We are happy that this transaction will create a strong alliance in the group's port operations, and will put us in a position to have strategic cooperation resulting in further value creation for all parties,' Hutchison managing director Canning Fok said in a statement.

The deal is due to be completed by June 22.

Analysts in Singapore said last week that PSA was probably increasing its presence in Hong Kong to improve its service to major global clients which use both ports and want better access to China's booming economy.

In February, PSA secured a foothold in Hong Kong when it bought stakes in two Kwai Chung terminals from Hong Kong-listed NWS Holdings for $630 million.

PSA said then that the landmark deal - its first foray into the world's largest container port - would give it a crucial link to China. \-- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

13 June 2005

PSA's acquisition of Hutchison port assets mildly positive: analysts
By Hong Kong Correspondent Roland Lim

HONG KONG : Analysts have broadly given the thumbs up to news that PSA International has signed two significant deals in Hong Kong.

Hong Kong conglomerate Hutchison Whampoa confirmed on the weekend that PSA will buy a 20 percent stake in Hongkong International Terminals.

PSA will also take a 10 percent share in COSCO-HIT, which is a joint between Hutchison and the Chinese shipper, Cosco.

The deals are worth a total of US$$925 million.

The news did not come as a complete surprise, as some details had already been leaked out last week.

DBS Vickers says that the acquisition is positive because at the selling price of $925 million, the port assets are valued at 25 times earnings, compared to current valuation of 18 times earnings.

More importantly, other analysts say that there is also the strategic synergy that cannot be quantified; instead of competing Hutchison and PSA are now partners.

Hutchison Whampoa needs this deal just as much as PSA.

It will allow Hutchison to book in a one-time gain of $707 million, to help offset continuing losses in its third generation, or 3G, business.

Said Herbert Lau, research director at Celestial Securities, "With this sale, it also signals that Hutchison may want to diversify further or bridge the earnings gap due to its 3G business in Europe."

Others argue that its port business is already a maturing business for Hutchison, so cashing in is a typical asset-trading move by tycoon Li Ka-shing.

For PSA, it is getting a piece of the pie that is sought after by many global operators: Hong Kong's Kwai Chung terminal handles about half of the city's total container traffic.

Said Mr Lau, "PSA is paying the mid-teens in terms of earning multiples for the business, which is I think not very expensive, quite reasonable for a cash cow business. However, this is more likely a strategic move for them since they already acquired a port interest in Kwai Chung."

PSA previously paid $385 million to New World Holdings for a stake in Container Terminals 3 & 8 in Kwai Chung.

The forged alliance between PSA and Hutchison is also likely to reduce the risk of a price war, as Hong Kong faces increased competition from cheaper ports in Shenzhen.

Hong Kong used to handle up to 90 percent of all cargo in the Pearl River Delta, but today, that percentage has fallen to about 60 percent.

While Hutchison's Port Holdings still says it is confident about Hong Kong's container terminal business, latest numbers show only a 4 percent rise in earnings for its port business in Hong Kong as compared to a 20 percent rise in Shenzhen. – CNA /ct

Copyright © 2005 MCN International Pte Ltd

Business Times - 14 Jun 2005

Hutchison shares buoyed by PSA deal

Stakes in 2 port divisions to change hands for US$925m

SHARES of Hutchison Whampoa, the world's largest port operator, rose after the Hong Kong-based company announced it was selling stakes in two port divisions to Singapore's PSA International for US$925 million.

Hutchison, controlled by Hong Kong billionaire Li Ka-shing, said on Sunday it will sell 20 per cent of Hongkong International Terminals and 10 per cent of COSCO-HIT to PortCapital Ltd, a company backed by PSA International. Hutchison will book a gain of HK$5.5 billion (S$1.2 billion) from the sale. The purchase is the second acquisition by the operator of Singapore's port, which overtook Hong Kong as the world's busiest in the first quarter. The port is benefiting as exporters from Thailand, Indonesia and other South-east Asian countries ship their goods through the port to final destinations in the region, and to Europe and North America.

Hutchison's shares rose as much as 1.1 per cent to HK$70 in morning trade. The stock closed 50 HK cents up at HK$69.75 yesterday.

In February, PSA completed a HK$3 billion purchase of container terminal assets in Hong Kong from NWS Holdings Ltd. Previous attempts by the Singapore company to invest in Hong Kong had been thwarted by competitors.

Separately, Hutchison yesterday said it will buy US$150 million worth of shares in China Cosco Holdings Co, China's biggest container shipper, ahead of the company's initial public offering. Hutchison will acquire the shares through two indirect wholly-owned subsidiaries - Rhine Office and Vember Lord, it said in a statement.

'The acquisition is consistent with one of the core businesses of the Hutchison Whampoa group,' the statement added.

China Cosco is planning to raise as much as HK$12.88 billion selling shares in Hong Kong for the first time, bankers involved in the sale said last week. Beijing-based Cosco is offering investors 2.24 billion shares at between HK$4.25 and HK$5.75 each, said the bankers, who declined to be identified. The company plans to start trading its shares in Hong Kong on June 30.

HSBC Holdings Plc, JPMorgan Chase & Co and UBS AG are arranging the sale.

Last week, Bloomberg reported Mr Li and Temasek will each buy US$150 million worth of Cosco shares. Hong Kong real estate billionaire Lee Shau-kee will also invest US$100 million, people familiar with the plan said. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

15 June 2005

PSA to increase capacity at Antwerp terminals by 60%

SINGAPORE : Port operator PSA is expanding capacity at its Hesse Noord Natie, or HNN, terminals at Antwerp in the Netherlands.

The new cranes and terminal facilities will increase PSA's capacity at its Antwerp terminals by 60 percent to over 8 million standard containers next year.

HNN is putting in two more super post panamax container cranes at the Noordzee Terminal this month.

The two cranes are expected to increase container handling capacity by 300,000 standard containers a year.

At Churchill Terminal, upgrading works have been completed.

This will double capacity to 600,000 standard containers per annum.

It expects to complete the first phase of its Deurganck Terminal by the end the year.

The terminal will be equipped with six super post panamax container cranes. - CNA /ct

Copyright © 2005 MCN International Pte Ltd

June 16, 2005
S'pore Shipping gets $49m from sale

By Erica Tay

SINGAPORE Shipping Corp yesterday inked a deal to sell its stakes in another two of its vessels and raked in cash of US$29.2 million (S$49.2 million).

The sale comes on the heels of a recent disposal of two container carriers to a Norwegian firm, which brought another $95 million in net proceeds.

Both deals leave Singapore Shipping with plenty of cash to pursue its ultimate goal - to be a specialised owner of car carriers, rather than general cargo ships.

The listed ship-owning and vessel-management firm yesterday inked a deal to sell its share of two multi-purpose vessels to its Danish partner, Clipper Lines.

The Chekiang and the Clipper Stamford, both Singapore-made ships, were sold for a total of US$41 million.

Of the total, Singapore Shipping received US$29.2 million in net proceeds for its stakes, which left it with a profit of US$11 million.

The company's executive chairman, Mr Ow Chio Kiat, said the move was to take advantage of current sky-high vessel prices, and shore up cash for new purchases 'when sanity prevails again' in the market for new ships.

'The high tide that has lifted all boats cannot last forever,' he said, referring to a widely anticipated supply glut in shipping, once the current demand boom subsides.

'There are presently 4,000 new vessels on order globally, and this will definitely have an impact on the balance of supply and demand,' he added.

Mr Ow told The Straits Times that in addition to its fleet of car carriers, it has one supertanker and four smaller tankers.

'We will be looking at further disposals at the right price,' he also said.

He reassured analysts who were concerned that fewer vessels could mean lower chartering income, saying that he was satisfied with the improved cash flow from the long- term charter of remaining car carriers.

Car carriers are a more resilient line of business in a downturn, said Mr Ow.

They are chartered for several years and at fixed rates, while general cargo ships have fluctuating rates.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 16 Jun 2005

Work together to raise terminal capacity: NOL

It says ineffective planning by stakeholders has been costly

(SINGAPORE) There is an urgent need for the container industry to shoulder more of the responsibility in making the case for additional container handling capacity in the Western region, according to Neptune Orient Lines (NOL).

The Singapore-based global cargo transportation and logistics company released new research that showed the enormous costs in both time and money of developing more port capacity in Europe to ease congestion at marine terminals.

Speaking at the TOC Europe Conference in Antwerp, David Appleton, NOL's president for Europe, presented the findings of NOL-commissioned research by Drewry Shipping Consultants.

Mr Appleton said it was absolutely necessary that a planning process be thorough and involve all stakeholders, including the community.

He said the planning process alone for 12 north European terminal developments was costing an estimated 540 million euros (S$1.1 billion), while delays and cancellations meant that an extra capacity of 11 million TEUs expected for this year had not been built.

Poor planning was causing congestion and long waiting times for ships at European container ports, aggravating capacity shortages in the industry and increasing costs, he said, adding that much of the costs of congestion would have been diminished or eliminated, if there was a more efficient planning process.

'This has a direct impact on congestion,' Mr Appleton said. 'Today we are seeing utilisation rates in terminals of as much as 99 per cent and an overall average of 87 per cent.'

He added: 'If the projects had gone ahead as planned, we would now be experiencing about 68 per cent utilisation, and those ports that are operating at 95 per cent or above would be in a far more manageable situation.'

The shipping industry is booming on soaring global trade, driven to a large degree by China's rise as a manufacturing powerhouse, and container carriers such as NOL, Maersk Sealand and Evergreen Marine, are reaping the rewards.

Port operators have also profited, but some big ports in Europe and the United States are struggling to handle the sharp increase in traffic leading to congestion and delays.

'We cannot simply expect the port community to carry this burden alone,' Mr Appleton said. 'We must make it clear to all those involved that what we seek is reasonable. And we must demonstrate that these projects are well thought out and critical to economic growth in the local region, throughout Europe and internationally.'

The 540 million-euro financial impact includes the cost of public inquiries, official planning submissions and legal fees, and represents both commercial as well as public money.

Mr Appleton said: 'This is sufficient money to pay for the construction cost of an entire terminal handling facility of about 1.5 million TEUs, a project the size of Bathside Bay in the UK, for instance.'

In terms of the future, demand forecasts based on conservative growth rates call for an additional 50 per cent in handling capacity by the year 2010; 45 million TEUs rather than the 30 million available in 2004.

The research shows that with the expansion plans currently approved, and assuming no further delays, there will be 55 million TEUs of capacity available by the end of the decade.

This represents an average 83 per cent utilisation rate, which is marginally better than the 85 per cent that Drewry calculates is required to avoid widespread congestion during peak demand periods.

Mr Appleton concluded that there must be a concerted effort 'by the industry to represent itself in a professional and coherent way to public stakeholders'.

'One way or the other,' he said, 'these stakeholders will be impacted directly or indirectly by the congestion problem and the solutions to it.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 21 Jun 2005

PSA's Antwerp gears up to cope with peak traffic

MSC-PSA terminal at Belgian port has been upgrading, expanding capacity

By GEORGE JOSEPH

(SINGAPORE) PSA International which has gradually been building up capacity at its Antwerp terminals, may be one of a few in Europe able to cope with the peak season cargo traffic heading for European and North American ports.

Traffic almost came to a standstill last year when an unprecedented surge in Asian-made goods flooded Western ports beginning from June. The choked ports delayed unloading of goods and many retailers were unable to stock their shelves for Christmas on time.

Trade flows from Asia, especially China, to Europe and North America are forecast to expand at similar rates this year.

PSA, meanwhile, has a huge, growing presence in Europe following its acquisition of Hesse Noord Natie (HNN) of Belgium in July 2002, which was formed with the merger of two rival Belgian stevedoring companies, Hesse and Noord Natie.

This big overseas venture of PSA, second only to its recent massive investments in Hong Kong, has given the Singapore terminal operating company 23 container berths in Belgium alone.

PSA went for a high profile 'official opening' ceremony last week of another of its strategic terminals in Belgium, the MSC Home Terminal, believed to be the largest single-user facility in the world.

The MSC-PSA terminal in Antwerp is a joint venture between PSA and MSC, and was officially opened by the Flemish minister for public works, energy, environment and nature, Kris Peeters.

Since last year, MSC and PSA have invested more than 200 million euros (S$428 million) to upgrade and increase terminal capacity. By the time the terminal is fully completed next year, it will have a capacity of more than 3 million TEUs (20-foot equivalent units), an increase of more than 1.5 million TEUs.

The terminal will deploy 18 quay cranes and more than 100 straddle carriers that are able to handle mega container vessels of 9,000 TEUs and above.

To handle the rising box flows, PSA is investing over 500 million euros to double its container handling capacity to 10 million TEUs in Antwerp over the next five years, said HNN's chief executive officer Vincent Lim.

'Shipping line customers calling our terminals will be in a happy position as they can avoid the difficult congestion problems they encountered at European ports last year,' Mr Lim told BT.

HNN's new container capacity has been coming on stream since 2004, he said.

'Since the end of last year, new capacity was being added to HNN's existing four container terminals on the right bank of the River Schelde in Antwerp. This will be sufficient to handle container growth for 2005 and beyond.

'Concurrently, our new Deurganck Terminal on the Schelde's left bank will become operational by the 4th quarter of 2005 to cater to our customers' new shipping services. We are also implementing plans to expand our container capacity in Zeebrugge to handle new services and larger vessels,' he said.

Last year, companies like Nike decided to ship its goods to other ports instead of to congested California ports. A flood of containers choked the ports of Los Angeles and Long Beach beginning from June last year, with delays stretching to October.

Poor planning was blamed for the congestion and long waiting times for ships at European and US container ports, aggravating capacity shortages in the industry and increasing costs. Neptune Orient Lines president for Europe, Mr David Appleton, said at the TOC Conference that much of the costs of congestion could have been reduced or eliminated with more efficient planning.

He urged all stakeholders to get involved in making the case for more box handling capacity in the ports of the Western region.

In the US, port operators have said that they have been working at reducing delays this year.

'We are going to have delays, but not of the magnitude of last year,' said Doug Tilden, chief executive of Marine Terminals Corp of Oakland, California.

Labour disputes, manpower shortages, lack of automation and limited operating hours have resulted in lower efficiency causing massive supply chain bottlenecks in the West.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

28 June 2005

PSA issuing S$500m bonds by private placement

SINGAPORE : PSA will issue a total of S$500 million of bonds on July 6.

The bonds will come in two tranches - S$200 million will be on a 3-year floating rate and the rest on a 10-year fixed rate.

The net proceeds will be used to fund PSA's expansion drive in Singapore and refinance an expiring bond.

The three-year bonds will bear interest which is 0.6 percentage point below the six-month interbank swap offered rate, which is currently around 2.02 percent.

Interest for the 10-year bonds will be at the rate of 2.83 percent per annum.

The bonds will be in denominations of S$250,000 and offered through a private placement.

They are expected to be listed on the Singapore Exchange.

DBS has been appointed the sole lead manager for the bonds.

PSA last sold a 10-year bond five years ago worth S$600 million.- CNA /ls

Copyright © 2005 MCN International Pte Ltd

July 4, 2005
CWT speeds up container delivery with mega-movers

NARENDRA AGGARWAL - MOVING containers by road from one PSA shipping terminal to another is about to become a whole lot faster.

Mainboard-listed CWT Distribution last week took delivery of five heavy-duty Actros 'prime movers', as they are called, which cost a total of $700,000.

These state-of-the-art mega-movers are for heavy container haulage and can tow up to 77 tonnes each.

Their introduction in Singapore follows the Land Transport Authority's revision of rules earlier this year - increasing permissible axle-load on local roads, explained Mr Kenny Lim, who is manufacturer DaimlerChrysler South-east Asia's general manager for commercial vehicles.

The previous limit was 72 tonnes with a special permit needed for restricted roads.

The Actros prime movers have the muscle for heavy loads as they are built with heavy-duty axles and engines.

Their introduction is good news for Singapore because the Republic is the largest trans-shipment hub in the world.

And the more containers that can be moved in one go, the faster their cargoes can reach their destination.

Mr Lim also said: 'This will pave the way for heavier container movements on Singapore roads.'

He was speaking at the hand- over ceremony at distributor Cycle & Carriage Industries' showroom in Pandan Gardens.

CWT - which is one of Singapore's largest integrated logistics service providers - said the prime movers would be shifting containers from the Tanjong Pagar terminals to Pasir Panjang Terminal, and vice versa.

The Tanjong Pagar terminals comprise:

# Tanjong Pagar Terminal;

# Keppel Terminal; and

# Brani Terminal.

The European heavy-duty prime movers can be operated round-the-clock, on restricted roads in the country, said DaimlerChrysler's Mr Lim.

CWT's chief operating officer, Mr Arthur Thum, told The Straits Times that the addition of the new prime movers to the company's fleet of more than 100 prime movers and other vehicles, would enhance the company's trucking capability and efficiency as it handles 30,000 containers a month.

Up to 10,000 containers per month will be handled by CWT using the new Actros prime movers made by DaimlerChrysler.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 04 Jul 2005

Singapore still very much on BASF's radar

By RONNIE LIM

BASF says that Singapore still remains very much on the German multinational's investment radar although it concedes that the Chinese market is a big draw.

Last Tuesday, BASF started up a mega US$2.9 billion petrochemical complex in Nanjing, its largest single global investment.

Stating this in an interview, BASF South-east Asia president, Harald Lauke, said it already operates the US$500 million Ellba joint venture with Shell on Jurong Island, which is the largest such plant in Asia producing styrene monomer and propylene oxide (SMPO) used in making products like polystyrene containers and rubber soles. The plant exports to markets like India, Malaysia and Korea, and has contributed significantly to BASF's market growth in Asia.

And in April, BASF's acquisition of Merck's global electronic chemicals business, including Merck's Singapore plants producing chemicals for semiconductors and flat screens - now under BASF Electronic Materials - has swelled its total Singapore workforce, including its regional headquarters here, to 500.

Dr Lauke said BASF is pleased with the performance of the Ellba plant, which had a good run last year, with the SMPO market expected to stay strong for the next few years.

'We are constantly on the lookout for investment opportunities here,' he said. But he declined to comment at this point on whether it would expand the Ellba plant, or if it had been approached by Shell to participate in its planned new multi-billion dollar cracker on Pulau Bukom. 'Our investment strategy is we have to look at where the customers are, and where we get feedstock. We need to be competitive and to make money.'

That was the rationale behind its latest Nanjing investment in an integrated petrochemical complex comprising a cracker and nine downstream plants, as 40 per cent of BASF's regional business is in China. 'We cannot afford not to be there,' he said. Besides, naphtha raw materials for the cracker comes from Sinopec, its partner.

In Caojing, near Shanghai, BASF has also entered into other chemical ventures with Huntsman and Chinese partners, scheduled to start up next year.

The China investments mark the third wave of BASF's expansion to Asia, he said. It follows the first wave to South Korea, and the second to Asean, where it has also invested in an integrated 900 million euro (S$1.8 billion) petrochemical complex with Petronas, in Kuantan, Pahang state, where oil and gas feedstock is available. While the integrated Nanjing petrochemical complex serves China, Kuantan serves the rest of Asia, he said.

BASF, which had earlier set targets of achieving 20 per cent of its sales and earnings in Asia, and of siting 70 per cent of its production in this region by 2010, is fast approaching these goals. 'We're now hitting 16 per cent of sales and 10 per cent of earnings in Asia, and 57 per cent of our production is here.'

But he feels that unless an integrated regional market develops, there will be a wave of petrochemical investments going to markets like China rather than to this region.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.


Business Times - 04 Jul 2005

PTP seen gaining 1m boxes from Maersk-P&O merger

(KUALA LUMPUR) Malaysia's Port of Tanjung Pelepas (PTP) is set to see bigger container traffic following the AP Moller-Maersk acquisition of Anglo-Dutch carrier P&O Nedlloyd.

For a start, some one million TEUs (20-ft equivalent units) of containers handled in Singapore by P&O Nedlloyd are expected to be transferred to PTP, the regional hub for Maersk Sealand, which analysts said could translate into a gain of RM200 million (S$89 million) for PTP.

'Malaysia would gain in terms of increased foreign exchange earnings,' a maritime analyst said when asked to comment on the bid by AP Moller-Maersk for P&O Nedlloyd which became the talk-of-the-town among shipping circles, especially in Europe, recently.

He added, however, that it was not necessarily a win-lose game as international container shipping is a huge business.

This is more so as PSA International has always been much bigger than PTP and has been in the business much longer than PTP, he said.

AP Moller-Maersk, the world's largest carrier, owns Maersk Sealand as well as 30 per cent of PTP.

P&O Nedlloyd, on the other hand, is the world's third-largest carrier.

'Logically, if you own the port and your base is here (and) if you acquire somebody else, you would want to have one single consolidated operation (in one port) rather than having your feet in two different ports,' the analyst said.

A combined Maersk and P&O Nedlloyd would be more than twice as big as either Mediterranean Shipping Co or Evergreen, which are currently ranked second and fourth respectively in the liner league.

Evergreen of Taiwan is the other major shipping line besides Maersk Sealand that calls at PTP.

Analysts around the world have described the merger between Maersk Sealand and Royal P&O Nedlloyd NV as a very good match, creating the world's largest container shipping company.

The maritime analyst said that together, they would control 18 per cent of the world's container market.

He also said that feeder networks that used to service Singapore would be calling at PTP to service customers as well and 'this would create an increase in the connectivity available at PTP'.

There would also be more local common feeders operating within PTP.

PTP, he added, was well-positioned to accommodate this increased volume as it currently has excess capacity after having completed in mid-2004 berths 7 and 8; and construction of berths 9 and 10 are ongoing.

The analyst said berths 9 and 10 should be completed late next year.

Eight berths (7 to 14) have been targeted under the second phase of PTP's expansion programme at a cost of RM2 billion.

The analyst also said that the one million additional boxes would come onstream between a year and 18 months.

'PTP is a supply-driven port as when it started off in 2000, it built six berths outright although no customers were secured yet then,' he said.

The analyst added that PTP has excess capacity as it handled four million boxes last year, while its current capacity is six million boxes.

'So, PTP has room for an additional two million boxes and the additional one million boxes from Singapore shouldn't be a problem,' he said.

Links with global players could also mean more business for Malaysia once these players create their hub in PTP. - Bernama

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 09 Jul 2005

DuPont may beef up S'pore investments

By JEAN CHUA
IN NEW YORK

CHEMICALS giant DuPont is looking at beefing up its investments in Singapore - particularly in biotechnology, nanotechnology and other high-end research-based sciences - and moving some specialised manufacturing there, adding to the $1 billion it has already spent on the island.

Chief executive and chairman Charles Holliday told Singapore reporters in New York the company is working on several new products and is keen to work more closely with Singapore.

'We want to bring very specialised manufacturing to Asia and Singapore is a candidate,' Mr Holliday said.

'DuPont is doing much research in biotechnology. I believe biotechnology, working properly with chemistry, can solve a lot of problems the world is facing today. And perhaps with the thrust in biotechnology that Singapore is doing, we can do a lot more together.'

DuPont started operations in Singapore in 1973 and has factories on Jurong Island and a headquarters at Harbourfront. The potential new investment, however, would add new capability rather than production lines, Mr Holliday said.

'Our first wave in Singapore, we had a total investment of about $1 billion,' he said. 'I don't think we would be measuring our growth in terms of so much iron and steel.

'I think it would be much more knowledge-intensive, so I think that the jobs would require more skills, more training. There will be much more research-oriented jobs, more specialised jobs. Probably not as many jobs, but different kinds of jobs.'

Mr Holliday met Singapore Prime Minister Lee Hsien Loong, who is in New York to speak to business leaders and government officials as part of his week-long introductory visit to the US as head of government. Mr Lee will also visit Washington DC and Las Vegas.

In New York on Thursday, Mr Lee met the Wall Street Journal editorial board, visited Ground Zero and attended a lunch hosted by the president of the New York Federal Reserve Timothy Geithner.

At Ground Zero, Mr Lee spoke about the resilience of New York and how that resilience is needed now more than ever, especially after the London bomb blasts on Thursday.

'We also have to be psychologically prepared, because however carefully we take our precautions, there is always the possibility that one day somebody will slip through and we must assume that it's going to happen, and if it does happen, we must pick ourselves up and carry on,' Mr Lee said. 'It's not the end of the world, life goes on, and they shall not prevail.

'We have our way of life, our values and our determination. They will lose but we have to have the confidence and the courage to fight on. And that's the lesson we learn, whether it's the World Trade Centre or the London bombings.

'And in New York, the heartbeat is very strong. You may take a tremendous shock but you pick yourself up, and you build and you reconstruct - better than before.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 20 Jul 2005

Vopak investing $36m to beef up oil jetties

By RONNIE LIM

HIGH oil prices coupled with the robust inter-regional oil trade are sparking off more investments in Singapore's oil storage sector.

As Oiltanking breaks ground today for a tankfarm expansion on Jurong Island, rival Vopak, the biggest independent terminal operator here, yesterday said it was investing S$36 million to build more jetties to meet oil traders' requirements for quicker cargo turnaround and increased volumes handled.

'The current high oil prices require that oil be moved as fast as possible through the supply chain,' Vopak Singapore's managing director Paul Govaart explained.

The three new jetties to be built - adding to the present six - at the Dutch multinational's six million barrels Sebarok terminal, 'will satisfy our customers' need to handle their vessels efficiently and without delays.'

The new jetties, which will be operational by August next year, can handle tankers up to 150,000 dwt. 'This new investment will enhance Singapore's position as an efficient, safe and reliable oil hub in South-east Asia,' he added.

Oil traders make use of the Sebarok terminal to store and also blend various products like fuel oil, petrol, diesel and kerosene as they need to supply different specifications of these to various regional markets.

'The name of the game is to boost infrastructure, and not so much storage capacity, to cater to this,' he told BT.

Asked if Vopak was also planning to similarly beef up infrastructure at its three other terminals here, Mr Govaart said that construction of its latest Banyan terminal on Jurong Island includes two jetties, adding that 'this is sufficient to cater to the first phase expansion there.'

Altogether, Vopak - with its other Sakra and Penjuru terminals which serve the chemicals industry - has existing storage here of 9.3 million barrels, with another 2.1 million barrels coming on stream next year at the new Banyan facility.

Like the other independent oil terminals here, Vopak 'is a gathering point for products shipped from places like the Middle East, Venezuela and Russia, which is then redistributed to markets in Thailand, Indonesia, China, and all of South-east Asia,' Mr Govaart earlier said.

The booming regional oil trade is also leading others like Germany's Oiltanking to add about 1.5 million barrels to its current 6.25 million barrels storage capacity here. It will hold a groundbreaking today for the expansion project.

Horizon Terminals - wholly owned by Emirates National Oil Company - is also building a 5.25 million barrels tankfarm costing US$200 million here, while other traders like Chemoil and local big boy Hin Leong (which currently operates floating storage on board VLCCs) are also reportedly planning new on-shore tankage on Jurong Island.

Singapore currently has about 88 million barrels of storage capacity, three- quarters of which are in the hands of the oil refineries. Existing independent storage amounts to about 21.8 million barrels, with new independent storage being planned or under construction adding another 18 million barrels.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

20 July 2005
OilTanking builds $100m terminal on Jurong Island

By Vernon Lee

German oil storage operator, OilTanking, is building a new 100 million dollar oil storage terminal on Jurong Island.

This brings its total investments to date to over half a billion dollars since it started operating in Singapore in the early 1990s.

The new 240 thousand cubic metre terminal will complement Oiltanking's existing 3 terminals on the island.

The move will raise capacity by about 25 percent.

After completion in August next year, Oiltanking's total capacity in Singapore will amount to 1.3 million cubic metres or about 8.1 million barrels.

Speaking at the ground-breaking ceremony of the terminal, Education Minister Tharman Shamugaratnam says Oiltanking's new investment will help to strengthen Singapore's position as the top oil trading hub in Asia.

"Chemical logistics is a key element element behind the competitiveness of the chemical industry in Singapore. This is where Oiltanking comes in, as a third party storage provider. The chemical logistics cluster has also contributed to Singapore's position as consolidation and breakbulk hub for chemicals. Chemical transhipment traffic through Singapore has in fact doubled in the last four years."

The construction of the terminal and related infrastructure has been awarded to mainboard-listed Rotary Engineering, in a contract worth 68 million dollars.

Copyright © 2005 MediaCorp Radio Internet Development Unit

Swire Shipping makes S'pore its regional hub

21 Jul 05

By Narendra Aggarwal

SWIRE Shipping, a global shipping line, and an associated firm, Tasman Orient Line, are making PSA International's port operations in Singapore their South-east Asian transhipment hub.

The two shipping lines signed new terminal service agreements with the port operator for three years yesterday.

They believe their total business here could treble during this period.

Under the new pacts, Singapore will be a key transhipment hub for both container and bulk non-container cargo shipped by both lines.

Previously, Swire and Tasman had their own separate service agreements with PSA, which meant they were lower in the pecking order of lines calling at Singapore.

Now the two companies will enjoy a customised suite of extra services, including priority berthing at the Pasir Panjang Wharves, PSA's multi-purpose terminal.

Swire and Tasman will also enjoy rebates in recognition of their present and future business growth, a joint statement issued yesterday by PSA and the two lines said.

The new arrangements will enable the two shipping lines to better manage their cargo operations and further develop their bulk cargo business.

'This is a positive development for Swire Shipping and Tasman Orient Line, and particularly, for our customers and service providers who will benefit from the storage space and excellent facilities at PSA,' said Mr Gray Harvey, Swire's managing director.

PSA's South-east Asia and Japan chief executive, Ms Grace Fu, said the port operator understands Swire's diverse needs - in particular, the integration between container and bulk operations.

Swire manages on behalf of The China Navigation Company (CNCo), the shipping arm of the Swire Group.

CNCo has liner shipping services to over 100 international ports through its management of a number of shipping lines including Tasman.

The Swire Group's principal areas of operation are in the Asia-Pacific region and centre on the greater China area.

Tasman is a jointly-owned subsidiary of the British-based Swire Group.

********

Under the new pacts, Swire Shipping and associated company Tasman Orient Line will enjoy a customised suite of extra services

Business Times - 23 Jul 2005

NOL sets up RFID testing centre with Sun Microsystems

By AMIT ROY CHOUDHURY

NOL, the global transportation and logistics company, yesterday launched a radio frequency identification (RFID) test centre in Singapore in partnership with Sun Microsystems, in the presence of Lee Boon Yang, Minister for Information, Communications and the Arts.

The $2.7-million NOL-Sun Advanced Technology Centre, built with support from the Infocomm Development Authority of Singapore (IDA), features the latest testing facilities for evaluating RFID technologies and applications in a 'live' supply-chain environment, according to NOL Group CEO David Lim.

The centre, which was officially opened by Dr Lee, is the first RFID facility of its type in South-east Asia. According to Mr Lim, it will provide a full range of packaging and tag testing, compliance and integration services, along with training and entry-level 'tag and ship' solutions for customers wanting an immediate RFID solution.

Pointing out that last November, Singapore became the first Asian country to officially allocate frequency bands in the UHF (ultra high frequency) range for RFID use, the minister said the IDA is now seeking the industry's views on how to further improve Singapore's spectrum management for RFID development and deployment.

He added that since last year, firms in Singapore have committed to invest more than $30 million into technology development, infrastructure setup and adoption in RFID.

The NOL CEO added that the centre would add new capability to the group's core portfolio of logistics and container transportation services, 'providing immediate value for customers implementing RFID in their businesses'.

Sun Microsystems president for Asia South Lionel Lim said his company's partnership with NOL 'creates a perfect showcase for customers to learn from a global transportation company and a world leader in network computing. . . This will help drive their businesses to greater success'.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 26 Jul 2005

NOL handled 13% more boxes in June

(SINGAPORE) Neptune Orient Lines Ltd, which operates Asia's second-largest container line, handled 13 per cent more containers in the four weeks to July 1, helped by rising demand for goods made in Asia.

The company's container shipping unit, APL Ltd, carried 156,600 40-foot containers in the June 4 to July 1 period, more than the 139,200 boxes moved a year earlier, NOL said in a statement filed to the Singapore Exchange yesterday. Average revenue rose 7 per cent to US$2,867 a box.

Neptune Orient Lines, Evergreen Marine Corp and other Asian shipping lines are generating more business on rising imports from North America and Europe for low-cost toys, clothes, textile and other products made in Asia.

The demand for sea freight pushed rates to record levels last year and congestion at ports are likely to increase charges this year. About 80 per cent of global trade is carried by sea.

NOL said the 13 per cent year-on-year rise 'reflected continued strong demand growth'.

It moved 960,300 40-foot containers in the year to July 1, 13 per cent more than a year earlier. Average revenue rose 7 per cent to US$2,769 a container.

The shipping company, which also operates warehouses and offers freight forwarding, said sales from contract logistics rose 8 per cent to US$67.3 million during the four weeks to July 1.

Revenue from international services increased 34 per cent to US$34.7 million, NOL said.

Still, container freight rates, which soared during a four-year boom in Chinese exports to the US and Europe, may decline in 2006 as shipping lines expand their fleet, Oslo-based broker RS Platou AS said on July 1 in a market report.

The capacity of ships on order at shipbuilders worldwide is equivalent to 56 per cent of the current container ship fleet, Platou said. Few ships sailing today will be scrapped.

That means the global fleet will expand 11 per cent this year and 13 per cent in 2006, outpacing growth in global trade, Platou analyst Bjorn Bodding said.

Shares of NOL closed unchanged at S$3.64 ahead of the data's release. The stock has risen 21 per cent this year, compared with a 12 per cent increase of the benchmark Straits Times Index in the same period. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 30 Jul 2005

Listing PSA not feasible at the moment: CEO

Timing depends on what size it can attain: Eddie Teh

By GEORGE JOSEPH

(SINGAPORE) PSA chief executive officer Eddie Teh thinks it's not the right time now to list the Singapore-based terminal operator, which should be allowed to grow for 'a little bit longer'.

He also feels that even if the listing is postponed for another two or three years, it could end up at a time not conducive to a shipping related float, as many believe 'we are at the beginning of a down-cycle already'.

'So we have to wait and see,' Mr Teh said on CNBC's Managing Asia programme last night. 'Unlocking value through IPOs and listing is at the best of times a difficult decision,' he said, citing recent listings which, in hindsight, could have been postponed.

He said that for PSA, the timing for listing will depend on 'what value we see and what size we can grow PSA into'. Ultimately, he said, the decision will be taken jointly with shareholder Temasek Holdings.

Mr Teh also addressed another issue of possible concern to PSA. The world's biggest container shipping line, Maersk-Sealand, has acquired Anglo-Dutch line P&O Nedloyd, a major customer of PSA. This means it could move its services to the Malaysian Port of Tanjung Pelepas (PTP), where Maersk is the dominant user and part owner.

PSA is watching and evaluating the potential threats and opportunities, Mr Teh said. P&O is now part of the Grand Alliance - a group of shipping lines that share services and cargo slots - and there are contractual obligations within the group that would take time to unwind.

'Hopefully, there are opportunities as well because P&O Nedloyd operates globally in many port locations,' Mr Teh said.

PSA, which turned in record revenue of $2.1 billion last year, has postponed plans for a public listing several times after announcing its intention to go public in 2001.

The usually reticent Mr Teh - who was head-hunted in 2002 to run PSA as part of a management reshuffle that followed the loss of two of PSA's biggest customers to PTP - was giving his first media interview after almost three years in the job.

Despite his low profile and quiet style, he is respected in the port industry for his ability to strike a hard bargain and ability to recognise strategic investments.

PSA stole a victory in the port executive stakes when it poached the Malaysian-born chartered accountant from rival Hutchison Port Holdings, Hong Kong billionaire Li Ka-shing's port investment and operating company, the biggest in the world.

Mr Teh, who spent 13 years helping turn Hutchison into a global player, has steered PSA through a crucial change in mindset that has brought it to its best performance so far.

Recently, PSA International made one of its boldest moves when it gained strategic stakes in Hong Kong port assets. In quick succession it committed close to $2 billion in investments, including stakes in erstwhile rival Hutchison International Terminals (HIT).

Last night, Mr Teh dismissed a suggestion that PSA had ended up in bed with the enemy, saying Hong Kong and Singapore as port cities have a lot in common.

'Taking stakes in Hong Kong ports was purely an economic decision, taken on the commercial viability of the investment,' he said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 10 Aug 2005

A whole new cruising experience coming soon

Aussie cruise seller ties up with Zuji to offer 500 global cruise packages

By DONALD URQUHART

(SINGAPORE) A new partnership between online travel agency Zuji Singapore and Australian-based cruise wholesaler CruiseAgents aims to offer 500 global cruise packages to local consumers by year-end.

The brain-child of Brett Dudley, CruiseAgents pioneered an online cruise database and booking system for travel agents in Australia in late 2003 and later tied up with Zuji.

By contracting directly with cruise, air, hotel and land transport companies around the globe, CruiseAgents can offer packages that are up to 25 per cent cheaper than if an individual were to put it all together through a travel agent, according to Mr Dudley, the company's MD.

With the Asia-Pacific cruising market growing at nearly 28 per cent annually last year and Singapore's growing importance as a regional cruise hub, Mr Dudley said it was a logical step to set up operations here along with Zuji, which has a recognised and trusted online distribution brand.

Currently, the two are offering nearly 300 cruise packages on Zuji Singapore's 'Cruise Guru' website, aiming to boost this by 200 more before year-end. 'Singapore is abuzz with cruise news right now as the global trend for cruising reaches its shores,' said Mr Dudley.

'I'm confident that the demand for cruising will increase rapidly in line with global trends.'

He does, however, concede there is still much marketing and consumer education needed before the local potential cruise market can truly be tapped. 'Everyone we've spoken to and met, they've all been on a Star Cruises cruise and it has put a certain perception in their head,' he said.

Mr Dudley added that there is a vast range of cruising experiences available from the wealth of different global operators.

'Singapore is like Australia five years ago,' he said. 'A lot of the travel agents don't really know about cruising or how to sell a cruise.'

Australia introduced a cruise council aimed at training travel agents and raising the profile of cruising among consumers, which has significantly raised the popularity of cruising among consumers there.

The goal here and in neighbouring regional markets will be to turn land-based holidayers into cruise vacationers, according to Mr Dudley.

Getting people on cruise ships to experience the range of different offerings will be key to this, he said.

'People say Singaporeans won't go to Antarctica - but they will, and they do. It's just a matter of offering the choice,' he said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Aug 12, 2005
NOL profit up 6% to $325m, its smallest in six quarters
Rising costs to blame, but group positive about full-year outlook

By Narendra Aggarwal

RISING costs took their toll on shipping line Neptune Orient Lines (NOL), which yesterday posted its smallest gain in net profit in six quarters.

NOL reported a 6 per cent increase in earnings to US$196.2 million (S$324.7 million) for the second quarter, taking its first-half net profit to US$391.7 million, up 11 per cent year-on-year.

The second-quarter profit came below a median estimate of US$204 million by four analysts surveyed by Bloomberg News.

However, revenue rose a strong 16 per cent to US$1.69 billion in the second quarter. First-half revenue grew to US$3.5 billion, also up 16 per cent, as both the liner and logistics businesses recorded improvements.

NOL's earnings growth was checked by rising cost pressures within a competitive marketplace, as oil prices surged, said analysts.

An interim tax-exempt dividend of eight Singapore cents a share will be paid, NOL chairman Cheng Wai Keung announced at a joint media and analysts briefing. That is one cent more than the same period a year ago.

NOL's dividend policy is to maintain an annual dividend of eight Singapore cents a share, or a full-year dividend payout of 20 per cent of net profits, whichever is higher.

NOL's share price fell 0.6 per cent to close at $3.60 yesterday, ahead of the release of the earnings results. The counter has risen 20 per cent so far this year, outpacing a 12 per cent gain in the benchmark Straits Times Index.

Earnings per share (EPS) for the second quarter rose 4 per cent to 13.51 US cents, from 12.95 US cents in the same quarter a year earlier.

For the first half, EPS amounted to 26.96 US cents, a 9 per cent increase over the previous corresponding figure of 24.71 US cents.

Similarly, net asset value per share at the end of the first half was better at US$1.56, compared with US$1.50 at end-December.

On the first-half operating performance, NOL's group president and chief executive, Mr David Lim, said that 'continuing strong demand conditions helped APL to grow the business further, accompanied by higher profits'. APL is NOL's global container shipping unit.

'Margins were good, but were under some pressure due to rising costs, which we continue to manage tightly,' he added.

As for the outlook, NOL said: 'The business environment remains good.

'With our continued focus on asset utilisation, yield management, cost containment as well as growth and integration of the logistics business, the group expects to achieve a strong performance in 2005.'

narendra@sph.com.sg

An interim tax-exempt dividend of eight Singapore cents a share will be paid, says NOL chairman Cheng Wai Keung at a joint media and analysts briefing. That is one cent more than the same period a year ago

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 23 Aug 2005

S'pore goes all out to woo ExxonMobil plant

Highway on Jurong Island to be re-aligned to accommodate possible project

By RONNIE LIM

(SINGAPORE) Singapore is clearly pulling out all the stops to attract a new multi billion-dollar investment by the world's largest oil firm.

In order to accommodate the building of ExxonMobil's planned second world-scale petrochemicals complex, JTC Corporation is re-aligning and diverting a part of the already established main highway on Jurong Island.

It called tenders a week ago for the construction of roads, drains, sewers and soil improvement works for the realignment of the highway section between Sakra Road and Sakra Avenue, with the tender exercise closing on Sept 16.

The Sakra section of Jurong Island is where ExxonMobil's existing US$2 billion cracker and 605,000 barrels per day (bpd) refinery is. The company has a total refining capacity here of 580,000 bpd, including the Jurong refinery which it took over from Mobil.

Industry sources told BT that JTC has to move the highway to give ExxonMobil sufficient space to build the new cracker.

Confirming this yesterday, a JTC spokesman said that the 'tender is being called to divert part of the Jurong Island Highway; this is to support ExxonMobil's feasibility study for a new cracker plant'.

Another industry source, however, added: 'But the move is clearly just very preliminary. It is necessary for JTC to do it, but it doesn't signify a go-ahead yet for the project. In fact, it has been very quiet (regarding the project) in the marketplace.'

'ExxonMobil also hasn't yet appointed a project management consultant or contractor yet,' the source added, after earlier hosting in April a site visit by established process design contractors.

The diversion of the highway confirms an earlier BT report which said that because of the unusual positioning of available land there, some changes to the main Jurong Island highway may be needed to accommodate the new cracker. Construction will not be straightforward, as it is a landlocked site with no sea access.

Officials say ExxonMobil wants to build its planned second ethylene cracker close to its existing cracker and refinery at Sakra to enjoy economies from integrated operations.

Outgoing ExxonMobil chairman Lee Raymond said as much last September when he told BT that he was upbeat about expanding regional petrochemical production where it either has large integrated refining facilities or readily available feedstocks to meet strong demand from China and India. And Jurong Island - where it has invested US$6.5 billion to build its biggest integrated complex in Asia - is clearly a strong candidate.

In April, ExxonMobil confirmed it was studying a second world-scale cracker here, and said it was in the interim, beefing up its existing 800,000 tonnes per annum (tpa) cracker to 900,000 tpa to meet the fast-growing regional demand. Integrating petrochemical and refinery operations is a cornerstone of ExxonMobil's strategy.

Chemical Week in a March report quoted ExxonMobil president Rex Tillerson as saying: 'In one of our large-scale integrated complexes, the refinery units and chemical plants can exchange 60-70 different product streams, at rates of nearly 150,000 barrels per day.'

'Your ability to capture value from this integration is driven by the ability to optimise these streams,' he added. 'Anyone who claims there isn't significant value from integration doesn't know how to do it.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 02 Sep 2005

PSA, customers team up in Antwerp venture

Move part of PSA's plan to double its Antwerp capacity over the next 5 yrs

By GEORGE JOSEPH

(SINGAPORE) PSA has tied up with three East Asian shipping lines in a venture to operate berths at PSA's HNN Deurganck Terminal in Antwerp from January next year.

PSA's long-time global customers - Japan's K-Line, Taiwan's Yang Ming and South Korea's Hanjin, collectively known as 'KYH' in the agreement - announced the formation of a joint-venture company, Antwerp International Terminal, further strengthening the partnership between the global players.

Antwerp will become the European hub for KYH to handle its rapidly expanding Far East - Europe trade, the new partners said in a joint statement.

HNN chief executive officer Vincent Lim said in January this year that to handle rising container flows into the European port, PSA is investing over 500 million euros (S$1.03 billion) to double its handling capacity to 10 million TEUs in Antwerp over the next five years.

Berths will be built on both the Right and Left Bank of the city's River Schelde.

The KYH-PSA joint venture berths will be located at PSA HNN's Deurganck Terminal at the Left Bank.

PSA International made one of its biggest investments when it acquired Hesse Noord Natie (HNN) of Belgium in July 2002.

HNN was formed with the merger of two rival Belgian stevedoring companies, Hesse and Noord Natie.

Applauding the joint venture, K-Line's senior managing director, Mr T Shimizu, said: ''We have been customers of Antwerp Port for a long time. Its operational flexibility and efficiency is crucial in enabling KYH to deliver high quality services to our customers.'

Yang Ming's executive vice-president R Ho described the JV as a win-win for all the partners, demonstrating their continued confidence in the Port of Antwerp.

KYH has been able to secure assured capacity at the terminal, while PSA is assured of sustained growth volume for many years.

For Hanjin - which is launching bigger 8,000-TEU plus container ships - the JV helps it to centralise volumes in a few mega hubs, said senior vice-president GS Choi.

'Bigger vessels mean fewer port calls,' he added.

PSA's Belgian subsidiary contributed more than half of PSA International's foreign volumes last year.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Sept 14, 2005
$75B TRANSPORT HUB PLAN
S. Korea invites S'pore to invest in key ports

SOUTH Korea said Hyundai Merchant Marine and other shipping lines should set up terminals in Singapore as it invites the Republic to join in a 45 trillion won (S$75 billion) plan to become North Asia's transport hub.

South Korean Minister of Maritime Affairs and Fisheries Oh Keo Don asked Singapore, the world's largest container harbour, to invest in the ports of Busan and Gwangyang, the South Korean ministry said in an e-mailed statement yesterday.

Mr Oh met Minister of State for Finance and Transport, Mrs Lim Hwee Hua, on a visit to Singapore.

'We have found in our study of the port logistics models in South Korea, China and Japan that the cost of moving goods can be reduced the most at Busan and Gwangyang ports in the North Asia region,' the South Korean minister said in the statement.

Seoul plans to spend 9.2 trillion won to boost capacity in Busan, the world's fifth-busiest port. It needs the help of overseas investors like Singapore's PSA International, which has 18 port projects in 11 countries, to expand and compete with rival ports in Shanghai and Shenzhen.

PSA, which had $2.1 billion in cash and cash equivalents at the end of December last year, holds a stake in a terminal in Incheon, South Korea's third-largest port. \-- BLOOMBERG NEWS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Sept 16, 2005
Chemical firm Huntsman to build plant here

By Audrey Tan
Assistant Money Editor

UNITED States-based chemical maker Huntsman Corporation will build a polyetheramine manufacturing plant in Jurong Island to cater to booming demand in the Asia-Pacific region.

The new plant will be Huntsman's first manufacturing facility in Singapore, adding to its existing sales, marketing, trading and headquarters functions here.

Huntsman, the fourth-largest chemical maker in the US, said in a statement yesterday that it expects its new Singapore plant to be operational in the first quarter of 2007.

It did not reveal how much it will spend on the factory or the number of new staff it intends to employ.

But the company's president and chief executive, Mr Peter Huntsman, called the proposed Singapore plant a 'world scale' manufacturing facility with an annual capacity of around 13.6 million kg.

It will produce polyetheramines, which are used in concrete additives, organic pigments, fuel additives, herbicides and pesticides.

The Singapore plant will increase Huntsman's global manufacturing capacity of the chemical by around 25 per cent, Mr Huntsman added.

It will also help meet rapidly growing demand for polyetheramines, particularly in the Asia-Pacific region, he said.

Huntsman produces polyetheramines in Texas and Wales. 'Completion of the Singapore plant will give us a truly global platform for the manufacturing and marketing of this specialty product,' said Mr Huntsman.

The company is based in Salt Lake City and is listed on the New York Stock Exchange.

It manufactures a range of products for industries as diverse as plastics, detergent, agriculture, automotive, aviation, footwear, paints, construction, health care and furniture.

It has 11,300 employees in 57 operations scattered around 22 countries. Revenue last year was US$11.5 billion (S$19.4 billion).

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Sept 17, 2005
PSA's $1.3b bid for Turkish port hits snag

ANKARA - A TURKISH court suspended the privatisation of the country's biggest port yesterday, a day after the competition board approved the transfer of its operating rights to Singapore's PSA International and a local building company.

The state-run Anatolian news agency said the Mersin Administrative Court had suspended the transfer of Mersin port, which is on the Mediterranean coast, after an appeal by unions.

'We see the decision as a legal victory,' said the local leader of the Liman-Is union.

He said the union was now deciding whether workers should continue their occupation, now in its 66th day, of the port in protest against the privatisation.

Work is continuing at the port, but dock workers are refusing to leave once their shift is up.

The court ruled the privatisation went against the public interest. The state has seven days to appeal against the decision after the verdict is officially promulgated.

Turkey's Competition Board on Thursday approved the transfer of operating rights at Mersin to PSA and Akfen Insaat.

The pair made the highest bid of US$755 million (S$1.3 billion) last month in a tender to operate the port for 36 years. If the deal clears the legal hurdles, it then has to be approved by the High Board of Privatisation, which has the final say in privatisation deals.

Akfen chairman Hamdi Akin said last month the partners would invest US$70 million to US$100 million in the port in the first five months after the completion of feasibility studies.

The port is currently operated by the ailing state railway company TCDD, which will collect the revenues from the privatisation.

The port handled 16 million tonnes of goods last year. \-- REUTERS

Copyright © 2005 Singapore Press Holdings. All rights reserved.

25 September 2005

Singapore's oil rig industry reaps bonanza from soaring oil prices

SINGAPORE : Singapore's oil rig manufacturing industry is reaping a multi-billion-dollar bonanza as sky-high crude prices boost marine exploration for new oil and gas deposits worldwide.

Potential repair work on US rigs and platforms damaged by Hurricanes Katrina and Rita is also expected to further boost orders for Singapore's offshore engineering firms, whose share prices have risen in anticipation.

Two Singaporean oil rig makers with a number of overseas yards -- Keppel FELS Ltd. and SembCorp Marine -- have become the industry's main players, accounting for about 80 percent of the world market, analysts said.

Soaring crude OIL prices which hit all-time highs above 70 dollars a barrel in late August, rising energy demand and dwindling onshore reserves are driving exploration into ever deeper waters.

With offshore exploration offering potentially larger finds, the search has expanded from traditional sources such as the Middle East and the North Sea to frontier fields in the Caspian Sea, West Africa, South America, the Gulf of Mexico and Southeast Asia.

"With the need for exploration and production work increasing, we believe demand for rigs will invariably increase," US investment bank JP Morgan said in a report on the industry.

It noted that due to "massive underinvestment" over the past 20 years, the world's oil rig fleet has remained stagnant and by 2010, more than 90 percent of them will be over 20 years old.

Singapore, a Southeast Asian island-nation with not a single drop of natural oil reserves, has become a world leader in petroleum-related industries such as refining, trading and oil rig manufacturing.

Both top rig makers belong to government-linked industrial conglomerates.

Based on published figures, Keppel FELS' order book is now approaching 5.0 billion US dollars, with SembCorp Marine's at about 3.8 billion US dollars.

In the latest announcement, Keppel FELS said Friday it had won a contract to build a semi-submersible rig for Dallas-based ENSCO International worth 312 million dollars.

Keppel FELS -- which boasts 17 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and North Sea -- is the current global market leader, having built and designed the most of jack-up rigs on order over the past decade, according to its website.

SembCorp Marine, which has shipyards in Singapore, China and Brazil, said in a statement to AFP it has a 28 percent overall market share and has taken steps to further expand its global profile.

SembCorp Marine said Thursday its unit PPL Shipyard was in the process of acquiring the Sabine Shipyard in Texas which caters to contractors in the oil-rich Gulf of Mexico region.

Last year, SembCorp Marine bought a 30 percent stake in the shipyard unit of China Ocean Shipping Co., one of China's biggest ship repair firms, giving it a foothold in a market whose insatiable demand for energy has helped boost world oil prices.

"Besides our strong track record in constructing oil rigs, we position ourselves to be ahead of the competition through research and development to develop proprietary technologies that include proprietary design in jack-ups," SembCorp Marine said.

A jack-up rig -- similar to a floating barge with legs that can be lowered to the seabed -- can cost 130-135 million US dollars and takes about 26-28 months to build. They are suitable for shallower waters.

Semi-submersibles, designed for exploration at water depths of up to 10,000 feet (3,000 meters), can cost 250-400 million US dollars each and take 28-30 months to build.

Industry analysts have raised the two companies' earnings prospects on expectations they would benefit from repair contracts involving oil rigs and production platforms damaged by Hurricane Katrina, and possibly Rita.

The US government has said 46 oil platforms had been destroyed by Katrina and 20 severely damaged.

"Right now rig owners are still assessing the situation...Nevertheless, we are positioned to assist owners," SembCorp Marine said. - AFP /ch

Copyright © 2005 MCN International Pte Ltd

Business Times - 26 Sep 2005

Oiltanking starts ops at new Jurong berth

$20m facility ups turnaround time, cuts exposure

By DONALD URQUHART

(SINGAPORE) Oiltanking Singapore has announced the commencement of operations at its new $20 million deepwater petroleum products berth on Jurong Island.

The new berth will allow Oiltanking to turnaround vessels 25 per cent faster and can accommodate tankers up to 150,000 DWT, the company said. It added that the new berth will not only increase the efficiency of vessel operators, but reduces their demurrage exposure.

The berth, which took 10 months to complete, is Oiltanking's fifth deepwater berth on Jurong Island and is connected via pipelines to its existing three terminal located on the eastern side of the island.

The company also owns and operates four barge berths and four chemical berths on the island.

'We strive to improve the efficiency of our marine-shore interface alongside the growth of our transhipment business,' said the Oiltanking Singapore MD Rutger van Thiel. 'The berth also enables Oiltanking to grow in tandem with Jurong Island and help strengthen Singapore's position as a regional distribution and logistics hub for the global petrochemical industry.'

The company recently announced the construction of a $100 million, 240,000 cbm tank terminal for clean petroleum products on Jurong Island. When complete by August 2006, Oiltanking's total tank capacity in Singapore will amount to 1.3 million cmb.

Oiltanking is a division of German Marquard & Bahls AG, the second largest independent tank storage provider for petroleum products, chemicals and gases globally. Oiltanking owns and operates 71 terminals in 19 countries.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

^ Wow....more investment in Jurong Island.....does that mean they have to reclaim more?? :D

Business Times - 18 Oct 2005

NOL's Sept container volume rises 11%

(SINGAPORE) Neptune Orient Lines Ltd (NOL), which operates Asia's second-largest container shipping company, handled 11 per cent more volume in the four weeks to Sept 23 as demand for Asian products rose ahead of the year-end holidays.

The company's container shipping unit, APL Ltd, carried 157,900 40-foot boxes from Aug 27 to Sept 23, NOL said in a statement to the Singapore stock exchange yesterday.

Average revenue rose one per cent, the smallest increase in more than two years, to US$2,939 a container.

'Volumes shipped reflect continued demand growth,' NOL said in the statement.

NOL, Evergreen Marine Corp and other Asian shipping lines are generating more business on rising imports from North America and Europe for low-cost toys, clothes, and other products made in Asia. Demand for transport by sea and bottleneck at ports are pushing rates higher. About 80 per cent of global trade is carried by sea.

NOL moved 1.42 million 40-foot containers in the year to Sept 23, 12 per cent more than a year earlier. Average revenue rose 6 per cent to US$2,825 a container. Revenue from contract logistics, which refer to long-term agreements to provide companies with warehousing, transport and other logistics services, rose 8 per cent to US$68.1 million in the four weeks to Sept 23. Revenue from international services increased 29 per cent to US$39.6 million, NOL said.

NOL's stock has risen 0.7 per cent this year, compared with an 11 per cent advance of the benchmark Straits Times Index in the same period.

Asian container shipping lines are faced with increasing costs because of delays at ports and the surge in fuel prices that have prompted railways and truckers in the US to raise charges. Shipping lines have imposed surcharges on containers that are moved within the US to pass on some of the costs to their clients. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Oct 21, 2005
SIS '88 sugar supply system in Jurong a first in Asia

By Gabriel Chen

THERE'S a new sweet spot at Jurong Port that can serve up premium grade sugar without a grain of contamination.

It all centres on a new 24,000 tonne silo and adjacent blending facility built by SIS '88, which supplies about 65 per cent of Singapore's sugar.

The silo, which was launched on Wednesday, receives refined sugar via a 500m enclosed conveyor belt that connects to a specially designed ship from Mackay, Australia.

The conveyor belt system will also deliver a massive increase in efficiency.

SIS '88's managing director, Mr Raimundo Varela, said: 'Previously, we took 10 days to discharge sugar from the vessel. With the new system, we'll take only three days.'

Once stored in the 55m-high silo, the sugar is then packed mechanically into industrial and retail bags and delivered by tankers or taken by conveyor belt into a new blending facility alongside the silo.

The $7.6 million plant produces blends for milk powdered and flavoured drinks in high-tech instillations with epoxy-coated walls and curved edges which prevent bacteria and dirt from collecting.

And because everything is mechanically processed, 'the risk of contamination is greatly reduced', said Mr Varela.

He said the automated supply chain and shipping system - the first of its kind in Asia - would ensure purity of the sugar for customers here and around the region.

The chairman of the Singapore Economic Development Board, Mr Teo Ming Kian, said the new receiving and handling system will allow Singapore 'to set the standard for efficient sugar transportation in Asia and enhance our overall strength in food processing'.

SIS '88 supplies 85 per cent of its sugar to leading food and beverage manufacturers here as well as retailers.

The remaining 15 per cent is exported to the Middle East, Indonesia, Taiwan, the Philippines, Hong Kong, China and Japan.

Up to 150,000 tonnes of sugar is expected to be supplied annually through the new system.

The silo and shipping system - including the new blending facility - cost $25 million to build.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 26 Oct 2005

Peter Cremer to build S'pore's 1st biofuel plant

SINGAPORE - Private German company Peter Cremer GmbH, a food and oil-based products maker, said on Wednesday it plans to build Singapore's first biofuel plant.

'We selected Singapore for our first biodiesel plant in Asia because of its excellent connectivity. From Singapore, we have easy access to abundant palm oil feedstocks from the neighbouring countries of Malaysia and Indonesia,' said John Hall, global director of CremerOleo, the group's oleochemicals division, in a statement.

Biodiesel is a clean burning alternative fuel made from plant material or biomass such as sugar cane and palm oil. It can be used in diesel engines or blended with regular diesel fuel.

Biofuels become increasingly popular in recent years amid concerns over the world's diminishing oil and gas reserves and as countries try to reduce their dependence on imported fossil fuels. Hamburg-based Cremer will invest an initial US$20 million to produce up to 200,000 metric tons of biodiesel per annum by early 2007.

The facilities will be located on Jurong Island to the west of Singapore, the site of many of the Republic's chemical plants.

Cremer, a multibillion dollar family business, manufactures a range of products including breakfast cereals, animal feeds, and oleochemicals, which are chemicals derived from biological oils or fats.

Mr Hall said the Singapore operations could be the first of many plants in Asia as countries in the region rethink their fuel policies amid growing concerns over global carbon dioxide emissions.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

26 October 2005

Singapore to host two biodiesel plants, investments total over S$80m
By Loh Kim Chin, Channel NewsAsia

Singapore's petrochemicals industry got a boost on Wednesday, as two foreign companies announced they would set up biodiesel plants here.

These facilities will be a first for Singapore, and will attract more than S$80 million in investments.

The two biodiesel plants will be built on Jurong Island, Singapore's petrochemicals hub.

The first is from a German family business - Peter Cremer - which has had a trading office in Singapore since the 1980s.

It now wants to venture into producing biofuels and oleo chemicals.

Peter Cremer will initially invest up to S$34 million in the Jurong Island plant, which will have a capacity of 200,000 metric tons per annum.

Most of the products will be exported initially.

John Hall, CremerOleo's global director, said: "We expect our plant to be up and running by the end of quarter one in 2007. This will be the first phase of our development and then within five years, we will have a further two developments, which we hope to do on Jurong Island."

The second biodiesel plant is a joint venture between Wilmar Holdings and Archer Daniels Midland Company.

Wilmar plans to invest S$50 million over time, but did not specify the actual period.

The plant is expected to be operational by the end of next year.

It will have an initial capacity of 150,000 metric tons a year, which can be raised to 300,000.

Both companies say Singapore was selected for their first biodiesel plant in Asia because of its excellent connectivity.

Biodiesel is a growing energy source and is said to be a cleaner fuel than traditional petroleum-based products.

From Singapore, the plants will have easy access to abundant palm oil feedstock from the neighbouring countries of Malaysia and Indonesia.

Also, Singapore hosts major chemical logistics players which can provide terminalling services and shipping to markets around the world. - CNA/ir

Copyright © 2005 MCN International Pte Ltd

Oct 27, 2005
Foreign firms setting up 4 biodiesel plants in S'pore
The fuel production facilities will be built on Jurong Island in deals worth $169m

By Grace Ng

CLEAN green fuel production is making its debut in Singapore in a big way after two separate deals, worth a combined $169 million, were unveiled yesterday involving the construction of a total of four plants.

In the first, Peter Cremer, a German food and oil-based products maker, said it would invest US$70 million (S$119 million) over five years to build its first Asian biodiesel facility consisting of three plants.

Biodiesel - a clean burning fuel typically produced by the reaction of a vegetable oil like palm oil or animal fat with an alcohol such as methanol - can be used in diesel engines or blended with regular diesel fuel.

In the second deal, Wilmar Holdings, an edible oil refiner and oilseed crusher, together with Archer Daniels Midland (ADM) also announced a joint investment of up to $50 million in a biodiesel plant.

ADM, an Illinois-based agricultural processing group, owns a stake of almost 20 per cent in Wilmar Holdings, which is headquartered in Singapore.

All four plants will be located on Jurong Island, where many chemicals required for the processing of biodiesel fuels are available.

With petroleum products hitting record prices in recent months, there has been growing interest in fuel alternatives.

A United States Department of Energy study showed the production and use of biodiesel, compared to petroleum diesel, results in up to 78.5 per cent less carbon dioxide emissions. This makes biodiesel an increasingly popular alternative fuel.

The plant to be built by ADM and Wilmer is expected to produce 150,000 tonnes of biodiesel every year, which could be expanded to 300,000 tonnes annually. The plant is slated to be operational by end-2006 and will employ 30 staff.

As for Cremer's project, the initial phase - costing US$20 million - will produce up to 200,000 tonnes of biodiesel a year. It is expected to start production by early 2007, with the other two plants becoming operational later that year.

Cremer will hire an extra 20 production staff, on top of the 40 currently employed here to run its procurement business for vegetable feedstocks, chemicals and other raw materials.

The family business has been producing natural renewable fuels for several years. It already has biodiesel plants in Germany and South America which started production in recent months.

Mr John Hall, global director of CremerOleo, a subsidiary of the Cremer group, said the firm chose Singapore because of its 'excellent connectivity'.

'From Singapore, we have easy access to abundant palm oil feedstock from the neighbouring countries of Malaysia and Indonesia,' he said.

Singapore is also home to major chemical logistics players which provide terminalling services and shipping to Cremer's markets worldwide, he added.

Mr Kuok Khoon Hong, Wilmar's chairman and chief executive, echoed Mr Hall's comments: 'With her agricultural neutrality, excellent infrastructure and potential for downstream integration, Singapore is an ideal location for biodiesel production.'

graceng@sph.com.sg

Clean fuel

Biodiesel - a fuel typically produced by the reaction of a vegetable oil like palm oil or animal fat with an alcohol such as methanol - can be used in diesel engines.

The production and use of biodiesel, compared to petroleum diesel, results in up to 78.5 per cent less carbon dioxide emissions, a US study shows.

Copyright © 2005 Singapore Press Holdings. All rights reserved

31 October 2005

NOL reports 6% rise in Q3 profit, outlook challenging
By Loh Kim Chin, Channel NewsAsia

SINGAPORE : Neptune Orient Lines has reported a 6 percent on-year rise in third quarter profits.

Net income came to US$249 million for the three months to September, beating analysts' expectations of around US$220 million.

Earnings for the nine months amounted to US$640 million, up 9 percent on year.

Revenues for the year-to-date rose 15 percent to US$5.3 billion.

Going forward, NOL expects the business environment to remain challenging with continuing cost pressures and an easing of the tightness in global container capacity.

But the shipping line expects demand for its services to remain healthy for the rest of the year.

Barring any unforeseen circumstances, NOL expects to achieve a good full-year performance. - CNA /ct

Copyright © 2005 MCN International Pte Ltd

Nov 1, 2005
NOL posts $423m net profit in third quarter
Shipping line chalks up 6% rise in gains as it moves more goods to Europe and the US

By Narendra Aggarwal

SINGAPORE shipping line Neptune Orient Lines (NOL) yesterday reported third-quarter net profit of US$249 million (S$423.3 million), up 6 per cent from a year earlier, as booming global trade meant it shipped more goods to Europe and the United States.

Its latest report card was much better than the median estimate of US$217 million gains expected by four analysts in a Bloomberg survey ahead of yesterday's announcement.

Taking into account its third-quarter numbers, NOL's gains for the first nine months of the year have risen to US$640 million.

This amounts to a 9 per cent increase over the same period a year ago.

NOL, which operates Asia's second-largest container shipping company, has now posted its seventh straight quarterly profit gain as it moved more Asian-made goods to Europe and the US as a result of surging trade, and was able to charge higher rates.

In its statement to the Singapore Exchange yesterday, NOL said its revenues for the nine months ended Sept 30 rose 15 per cent over the same period last year, to US$5.3 billion.

The company said that its core earnings before interest expense, tax and non-recurring items were US$690 million at the end of the third quarter, up 6 per cent over the same period last year.

Group president and chief executive David Lim said that the third-quarter net profit of US$249 million was achieved despite rising bunker fuel costs, which were US$62 million higher than in the same quarter of last year.

'Our liner and logistics services continued to benefit from growth in demand.

'We are carefully managing our costs, and our margins are at good levels despite ongoing cost pressures, particularly from fuel prices,' he said.

Both the liner and logistics businesses reported higher revenues and profits for the nine months, with logistics continuing to improve its contribution steadily, he added.

On the outlook, NOL said it expects demand for its services to remain healthy for the rest of the year. It expects to achieve a good performance for the full year.

'Going forward, we expect the business environment to remain challenging with continuing cost pressures and an easing of the tightness in global container capacity,' NOL warned.

Shipping companies are generally heading for choppier waters as capacity in the industry has been growing faster than demand.

Rates for containerised freight between Asia and Europe have dropped by 10 to 15 per cent in recent months. At the same time, the cost of shipping goods from China to the US has dropped by 15 to 20 per cent compared with the rates a year ago.

narendra@sph.com.sg

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 02 Nov 2005

Maritime authority censures two bunker suppliers

Samples from ship fuel deliveries did not meet regulatory specifications

By DONALD URQUHART

(SINGAPORE) The Maritime & Port Authority of Singapore (MPA) has censured two bunker suppliers for delivering ship's fuel that did not meet regulatory specifications.

The authority will also meet all local bunker suppliers to reinforce Singapore's bunkering regulations.

MPA said it will issue a letter of warning and demerit points to Titan Bunkering and Equatorial Marine Fuel Management Services after three samples from bunker fuel deliveries last month by the companies revealed combined levels of aluminium and silicon that exceeded the regulatory limit.

The two elements, while naturally occurring, are typically reduced to acceptable levels during the refining process because they are abrasive and can damage engine components and fuel pumps.

In a letter to BT, MPA said both suppliers have said they will 'act responsibly and work with the buyers to de-bunker the vessels concerned'.

MPA's action followed a report by BT which highlighted several incidents of fuel deliveries that did not conform to specifications, along with inconsistencies in laboratory sample test results.

These testing inconsistencies led to industry speculation that bunker fuel samples were being tampered with.

Singapore is unique in the maritime world for having specific local bunker regulations.

The code, first implemented in 1997 and known as the Singapore Standard: Code of Practice for Bunkering SS CP60, has been strengthened over the years, most recently following a quality and corruption scandal in the industry four years ago.

CP60 procedures include sampling and security requirements specifically aimed at preventing sample tampering.

In mid-October, at least four fuel samples were found to contain excessive levels of aluminium and silicon by global testing laboratory DNV Petroleum Services (DNVPS), which conflicted with the test results of purportedly the same samples held by the suppliers.

But inexplicably, the fuel samples were not properly recorded when taken during the bunkering process. As such, they did not conform to CP60 regulations and were subsequently rejected by MPA, ultimately leading some industry players to suspect tampering.

'Moving forward, MPA will meet all bunker supplers in Singapore to once again highlight the importance of adhering to the SS CP60,' the regulator said in its letter to BT.

MPA added that it will work with the bunkering industry through the Bunker Quality Advisory Panel to further address the off-spec bunker issue and how bunkering standards can be reinforced.

'The CP60 will remain an important measure to ensure bunker quality in Singapore,' MPA said, adding that since it was introduced, the number of bunker disputes has dropped from 43 in 1996 to 16 last year. 'We will not hesitate to take firm action against any bunker supplier found to have contravened CP60', including suspending or cancelling a bunker supplier's licence in serious cases, MPA said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 04 Nov 2005

Offshore LNG terminal better for Singapore

Congested harbour, limited land among reasons cited by Aker Kvaerner VP

By RONNIE LIM

(SINGAPORE) Singapore should consider the option of building an LNG terminal offshore, given its congested harbour and limited, expensive land, says an official of Norwegian oil and engineering services giant Aker Kvaerner.

Oscar Graff, Kvaerner's vice-president for gas and onshore solutions, told BT in Oslo recently: 'We are still very interested in the Singapore project.'

An Aker Kvaerner-led Norwegian consortium, which includes classification society Det Norske Veritas, was one of four groups shortlisted to carry out a feasibility study for the project, but lost out to a Japanese group led by Tokyo Gas Engineering.

Still, Aker Kvaerner is keen to help build the terminal. Speaking to BT ahead of an Energy Market Authority (EMA) meeting scheduled for last Thursday in Singapore to seek feedback from industry players, Mr Graff said: 'We'll get a better idea from the presentation and hope to help identify solutions.'

Aker Kvaerner will give its input to EMA by the scheduled mid-November deadline.

BT has previously reported that all signs point to Singapore going ahead with LNG - which can be imported from anywhere - as this will give local power stations added security of supply on top of current piped gas supplies from Malaysia and Indonesia. This will also give Singapore a price buffer and choice, in case prices of LNG and piped gas diverge.

Aker Kvaerner now has on its order books five LNG projects at various stages of maturity. They include Europe's first LNG production plant in the Snohvit field in the Barents Sea, and the world's first offshore LNG receiving terminal near Venice, Italy.

The offshore terminal is being built in Spain, and the company plans to invite Singapore officials to see the work there, Mr Graff said.

The main drivers for building an LNG terminal offshore include heavy shipping traffic in harbours, expensive or limited land, better vessel access offshore and environmental 'not-in-my-backyard' factors. Safety considerations - given Singapore's concentrated population - also apply.

'Building offshore need not necessarily be more expensive than doing it onshore,' Mr Graff said. The US$900 million Venice terminal could have been built closer to shore at less expense, except that the local authorities, concerned about tourism, 'wanted the terminal to be invisible from the shore'.

The Venice terminal, with storage capacity of 250,000 cubic metres, will be ready by end-2007 and can import 8 billion cu m of LNG a year into Italy, where demand is growing.

Mr Graff said that while he has no specifics on the almost-completed Singapore feasibility study, a good starting point would be that as all harbours are designed to accommodate standard LNG tankers carrying about 160,000 cu m, the receiving terminals should have at least 200,000 cu m of storage capacity.

The site should also be flexible enough to allow future expansion, especially as Singapore is also considering trading LNG.

'It takes an average of three years to build a receiving terminal,' Mr Graff said, which suggests that if the government gives the go-ahead after February next year - the deadline for completion of the feasibility study - Singapore could be plugged into the LNG trade by early 2009.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 08 Nov 2005

Industry input sought on LNG terminal

EMA consultants suggest terminal that handles 1/3 of natural gas imports

By RONNIE LIM

SINGAPORE'S plan to import liquefied natural gas (LNG) as an additional fuel source for power stations is feasible, according to consultants to the Energy Market Authority (EMA). And they have recommended building a terminal that could handle about one third of natural gas imports.

The preliminary finding - after a nine-month study by the Tokyo Gas Engineering (TGE) consortium - was conveyed by TGE and EMA to industry players at meetings last week.

The aim is to gather industry input by mid-November on various aspects of the study - such as the business model, LNG demand forecast and investment appetite - before a final report is submitted to the government by the first quarter of next year.

Industry officials told BT that demand for natural gas, which in turn depends on GDP growth and entry of more big industries here, will dictate the timing of an LNG project. Because of these factors, it may not be operational until 2011 or 2012, despite a building time of only three years.

Rajeev Kannan, first vice-president of Sumitomo Mitsui Banking Corporation, which is part of the TGE consortium, told BT yesterday: 'Preliminary analysis shows the project is feasible.'

The consortium has proposed that Singapore build a 3 million tonnes per annum (tpa) receiving terminal that would cost about US$500 million (S$850 million), he said. It has also identified three possible locations, one of which is offshore.

Mr Kannan would not say where the sites are. But asked if the offshore site is an island or 'in the water', he said: 'Both are possible. We are still conducting technical analysis of the sites.'

BT reported last Friday that the world's first offshore LNG receiving terminal is being built off Venice, Italy, by Norway's Aker Kvaerner, which is interested in a Singapore terminal.

The Norwegian company said Singapore should consider a terminal offshore given the country's limited, expensive land, its congested harbour and for safety reasons.

Commenting on the TGE proposals, an industry official here said a 3 million tpa terminal would bring in about 400 million standard cu ft (mscf) of gas daily. This would account for about 30 per cent of total gas imports. At present, SembGas pipes in 325-500 mscf of gas a day from Indonesia's Natuna field, with another 350 mscf a day imported from Sumatra by Gas Supply Pte Ltd. Senoko Power pipes in 150 mscf a day from Malaysia, while Keppel Energy will bring in 115 mscf a day from across the Causeway from mid-2006.

An industry official has said previously that the capacity of an LNG terminal should not overwhelm gas piped in from Malaysia and Indonesia under existing long-term contracts.

While building time for a terminal is three years, sources say Singapore may not embark on the project until demand justifies it.

'Gas volumes must be large enough,' one source said. 'We need a big terminal to cater to demand in case piped gas supplies are disrupted. The trigger will have to be increased gas demand of about 2-3 million tonnes annually, and this depends on GDP growth and entry of industries.'

Singapore will also need time to sew up LNG supplies, the source said. The likely sources will be Australia, Brunei, the Middle East or even as far as Sakhalin.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 14 Nov 2005

Sea Containers is S'pore-bound

It'll move container activities from London to cut cost

By DAVID HUGHES
IN LONDON

BERMUDA-registered international transport group Sea Containers is set to move a significant part of its management operation to Singapore. This is part of a massive restructuring and disposals plan it announced last week just prior to publication of dire interim results.

For the first nine months of this year, Sea Containers' net loss came to US$58.5 million on revenue of US$1.3 billion, against a net profit of US$8.9 million on the same level of revenue a year ago.

Company president James Sherwood said in a statement: '2005 has regrettably been a 'perfect storm' for the company. All three of our main business segments - container leasing, railways and ferries - have encountered unanticipated difficulties.'

Much of Sea Containers' loss relates to the company's ferry services in the Baltic, English Channel and New York, but it is also looking to make big savings in all its areas of operation.

In an earlier announcement, it said: 'Due to the downsizing of the company's activities, it will be necessary to reduce central costs at the company's headquarters in London.

'Management of Sea Containers' container activities other than GE SeaCo will likely be moved to Singapore where they can be conducted at much lower cost than London. A first step in this cost reduction plan involves downsizing the publishing, plantations, property and administration division's London costs which will be completed by the end of 2005.'

Drastic restructuring of Sea Containers' ferries division has already meant the closure of the UK-France Hoverspeed service and major pruning of its Baltic ferry business, Silja, which is being put up for sale. Most of the Hoverspeed fleet will be redeployed to profitable joint ventures in the Mediterranean, but two older vessels will be sold. The company's ferries business is currently composed of three units.

The largest is Silja, the Finland-based leading Baltic operator of cruise ferries, ro-pax ships, fast ferries and cruise ships.

The second is the company's car-carrying fast ferries business with nine ships operating in European waters other than in the Baltic.

The smallest unit is SeaStreak, the New York-based commuter ferry service operating between New Jersey ports and Manhattan, which is also to be sold.

The company said: 'In 2005, the profits of Silja have declined significantly due to a combination of higher fuel costs which could not be recovered except on services to Estonia; the unsuccessful Finnjet operation between Germany, Estonia and Russia; reduced profits from duty-free sales and overcapacity in the Swedish market introduced by competitors. However, Silja still remains the leading operator in its region with an excellent brand name and reputation for quality, with its core business remaining profitable.

'The ferry routes between France and England across the English Channel have suffered from declining passenger and car volumes, excess capacity and reduced profits from low tax merchandise sales.'

Sea Containers said that SeaStreak, operators of services employing seven-foot passenger-only fast ferries on three routes between New Jersey and Manhattan has also incurred a loss in 2005 due largely to high fuel costs. It said: 'Passenger fares are being steadily increased to recover the extra cost but the market will only absorb such increases to a certain level before switching to cars, buses and trains.'

Mr Sherwood said: 'As a result of the losses incurred in ferry operations in 2005, when combined with these cash and non-cash charges, the company will report a very large loss in 2005.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 15 Nov 2005

Global group lauds S'pore's bunkering rules

Human factors, technology also play key roles: Bunker grouping

By DONALD URQUHART

(SINGAPORE) The International Bunker Industry Association (Ibia) has lauded Singapore's action to address recent problems in bunkering procedures and quality issues, saying that human factors and technology play a key role alongside rules and regulations.

Chairman of the Ibia, Don Gregory said that the Maritime & Port Authority (MPA) of Singapore's recent move to establish the Bunker Quality Advisory Panel was the 'next right step in the drive to raise industry standards and the image of the bunker industry'.

While Singapore has taken 'a rule-based approach to ensure market transparency and integrity', according to Mr Gregory, 'it seems that there is more that is required and there are other considerations beyond rules and regulations'.

He said human factors and technology have a role to play as well, which is why the Ibia supports the advisory panel initiative. 'I see Singapore as a leading light and I hope an example which we can take to other major ports in the world.'

Mr Gregory's comments follow recent cases of bunker deliveries to ships in Singapore which contained unacceptable levels of highly abrasive aluminium and silicon which can severely damage a ship's engine.

The MPA issued warning letters and demerit points to two companies over the issue. It said it will work with the bunkering industry through the advisory panel to examine how bunkering standards can be reinforced. The advisory panel, comprising industry representatives, was formed in early September after test results on bunker deliveries in Singapore from different labs failed to agree on whether the bunker fuel in question exceeded international limits on sulphur content.

In both cases, samples obtained by internationally accredited testing labs were ruled to be illegitimate because they had not been properly recorded during the bunkering process, as detailed by Singapore's bunker regulations.

This in turn sparked talk of tampering within Singapore's lucrative $7 billion annual bunker market, which led to 'divergent statements by various concerned parties and has created much negative interest and uncertainty in the market,' according to the Ibia. 'There has been a confusing picture of allegations of tampered samples, and contradictory clarifications,' it said.

'Ibia believes that this has perhaps been due to a polarity of opinion on responsibilities and how the industry should react to such incidents,' it said.

'Therefore Ibia supports the Port of Singapore's initiative to set up a Bunker Quality Advisory Panel to help clarify these issues.' It added that if the panel confirms an off-quality product, the framework should include a timely communication process that can be activated in order to assure the market that corrective measures are being taken to remove the sub-standard product from the supply chain.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Nov 21, 2005
SembLog venture builds second chemicals terminal

THE growing demand for chemicals storage space is behind a decision by joint venture entity Katoen Natie SembCorp (KNS) to build a second chemical logistics terminal on Jurong Island.

The proposed $20 million terminal, called JLT 2, will be located next to the first KNS terminal and is expected to be completed by the end of next year.

It will double the current warehouse storage capacity of 30,000 sq m for KNS, a 51:49 joint venture between Belgium's Katoen Natie and Singapore's SembCorp Logistics (SembLog).

Construction of JLT 2 kicked off with a groundbreaking ceremony last week that was attended by the Belgian Vice Minister-President of Flanders, Mrs Fientje Moerman.

'Our aim is to bring the Katoen Natie expertise in handling chemicals from Europe to Asia by training local people and working with customers on new solutions,' said KNS managing director Koen Cardon.

The president and chief executive of SembLog, Mr Koh Soo Keong, said the existing terminal had been operating at above 90 per cent of capacity through most of this year.

'We expect demand for space from customers to rise even further over the next three years,' he said.

KNS was formed in 1997 and handles more than one million tonnes of chemicals annually at its facilities in Thailand and Singapore. It counts Dow, ExxonMobil and Bayer among its customers.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 24 Nov 2005

Shell nears final decision on petrochem plant

By RONNIE LIM

(SINGAPORE) Shell has advanced its planned multi-billion dollar petrochemical cracker project here to the penultimate stage before a 'final investment decision' next year.

It said yesterday it has awarded contracts for the Bukom project's basic design and engineering to the ABB Lummus Global-Toyo Engineering Corporation joint venture (AB-TEC). This will help it determine the ethylene cracker's final design and cost, before it gives the green light.

The world-scale cracker - reported earlier to be of 1 million tonnes per annum capacity - is expected to start operating in 2009, given building time of three years.

Planned as a collaboration between Shell and the Economic Development Board, it will be Singapore's fourth petrochemical cracker and will boost the country's status as a refining and chemical hub.

Signalling the project's positive direction, Shell said: 'ABB-TEC is expected to provide engineering, procurement and construction management following final investment decision expected in 2006.' It did not say when in 2006 this will be.

Rival ExxonMobil, which is also planning a big new cracker here, indicated yesterday that its project, on Jurong Island, is on schedule.

'ExxonMobil's feasibility study for a second cracker and derivative units at our complex in Singapore to supply growing markets in Asia is on track,' a spokesman said. 'We will have more information to share shortly.'

Interestingly, Swiss-based ABB-Lummus Global, which has won the Shell contract, was one of several ethylene process providers that visited the proposed ExxonMobil site on Jurong Island in April.

ABB Lummus Global general manager Foeke Kolff said: 'We are delighted that Shell has entrusted us with the ethylene cracker contract, which incorporates our proprietary technology. We very much look forward to working together with the Shell team and our partner TEC and to meeting all of the project objectives.'

Shell said the cracker - to be built next to its 500,000 barrels per day refinery on Pulau Bukom - will take advantage of site and location benefits for maximum integration and optimal supply and market logistics.

Shell chief executive Jeroen van der Veer signalled in September that the group was likely to go ahead with the cracker, saying: 'Shell has invested many billions of dollars in Singapore and we are still not at the end of it. We feel good here.'

But more time was needed for study, he said. 'The cracker is a huge investment. It's not like building a house.'

The economics of the two new crackers have been affected by rising steel prices - though these have moderated recently - and by higher construction costs because of an upsurge in the building of refineries and petrochemical plants.

The timing for Shell's cracker here dovetails with the completion of its US$4.3 billion cracker at Nanhai, China. The company is also reportedly forming a chemical marketing arm in China to import and sell output from its plants in the Middle East and Singapore.

Petrochemical Corporation of Singapore - a joint venture between Shell and a Sumitomo-led Japanese consortium - now runs two crackers with a total capacity of 1.4 million tpa on Jurong Island, while ExxonMobil is upgrading its existing cracker here to increase output to 900,000 tpa.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 26 Nov 2005

PSA among likely Xiamen Port investors

(HONG KONG) Xiamen International Port, China's seventh-busiest container port operator, plans to sell a 9.9 per cent stake to strategic investors as part of its planned IPO, sources involved in the deal said.

Potential buyers included Singapore's PSA and European shipping giant AP Moeller-Maersk, they said. A decision on a strategic stake sale as part of the planned US$150 million initial public offering is expected next week.

Xiamen Port, in China's Fujian province across from Taiwan, was granted approval for its IPO from the Hong Kong stock exchange's listing committee on Thursday for what will be the first from a pure mainland port operator.

China expects 8 per cent GDP growth this year, with mainland port operators poised to benefit, making them enticing investment targets for foreign operators.

'Many overseas port operators and shipping companies plan to expand their global network by buying or investing in mainland container port operators,' one source said.

The company has a 55.13 per cent stake in Shenzhen-listed Xiamen Port Development Co Ltd and a 51 per cent stake in a joint venture with Xiamen International Container Terminals, in which Hong Kong's Hutchison Whampoa owns 49 per cent.

The company saw its throughput rise 15.8 per cent to 2.77 million twenty-foot equivalent units (TEUs) in the first 10 months of this year.

Among its listed peers, container port operator China Merchants Holdings and Cosco Pacific trade at 10.4 to 14.9 times forward earnings. BNP Paribas Peregrine is the sponsor of the deal. - Reuters

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

01 December 2005

US specialty chemicals maker breaks ground for US$35m plant on Jurong Island
By Jeana Wong, Channel NewsAsia

Ready-built factories will now be made available on Jurong Island.

This was announced by the Economic Development Board at the ground-breaking for a production facility to be set up by specialty chemicals maker Huntsman.

The Texas-based global manufacturer is setting up shop in Singapore for quicker access to its customers in Asia.

Huntsman is keen to get closer to the action of Asia's hot specialty chemicals scene.

It says the demand for such products in Asia has reached a point where it can achieve scale and operate a world-class facility efficiently.

That's why it is building a US$35m polyetheramine production plant on Jurong Island.

The specialised chemical has many uses, ranging from oil extraction to protective coatings on cars.

Huntsman says Singapore provides for a safe and efficient place to produce and distribute its products.

Huntsman's president for performance products, Don Stanutz, said: "The protection of intellectual property is an important issue for polyetheramines because the technology is very sensitive. There are very few companies that know how to make polyetheramines. And we'd like to keep it that way. Also, the logistics and infrastructure in Singapore lend itself well to serve a wider market geographically because we're building this plant to serve the entire Asia Pacific region."

At the ground-breaking ceremony, EDB Chairman Teo Ming Kian revealed that ready-made factories can now be built on Jurong Island.

This will give chemical producers quicker and easier access to a reliable supply chain of partners located near them.

Huntsman's chemical plant is expected to be operational by early 2007. - CNA/ir

Copyright © 2005 MCN International Pte Ltd

Business Times - 01 Dec 2005

S'pore Oct bunker fuel sales up 12.3%

SINGAPORE - Sales of marine fuels in Singapore, the world's largest bunkering port, rose 12.3 per cent in October from a year earlier to the second highest level on record, government data showed on Thursday.

Bunker sales rose to 2.252 million tonnes, up 5.4 per cent from September, with the year-to-date volume on track to close at a record high of around 25 million tonnes, figures from Singapore's Maritime Port Authority showed.

Sales of 500-centistoke (cst) grade marine fuels, a cheaper alternative the benchmark 380-cst grade, hit a record high of 237,500 tonnes, up 10.7 per cent from September and 34.9 per cent higher than the same month last year.

Volumes for 380-cst, which makes up about two-thirds of the total, rose 7.1 per cent over September to 1.568 million tonnes while 180-cst grew a marginal 1.72 per cent to 271,400 tonnes. -- REUTERS

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Dec 5, 2005
Temasek 'may build up P&O stake to above 10%'
This would prevent rival Dubai Ports from taking full control, says report

TEMASEK Holdings, which said on Friday it had bought 3.24 per cent of British ports and ferries group P&O, intends to build up its stake to more than 10 per cent, London-based newspaper The Sunday Times reported over the weekend.

The Singapore investment company is unlikely to make a full counterbid to rival that of Dubai Ports World (DPW), which last week agreed to a £3.3 billion (S$9.8 billion) takeover of P&O.

But a 10 per cent stake in the British company will be sufficient for Temasek to 'interfere with the hopes' of DPW in taking outright control, the newspaper said quoting 'sources close to Temasek'.

Temasek's announcement last Friday that it had accumulated a stake in P&O sparked speculation that a bidding war was imminent, leading to an 11 per cent rally in P&O's shares.

A 168-year-old company, Peninsular & Oriental Steam Navigation Co was originally founded to support Britain's colonial empire and grew to operate ports, ferries, container lines and cruises.

In recent years, it demerged its container and cruise businesses, leaving P&O with ferries and its crown jewel: a network of 29 terminals in 18 countries.

A successful takeover by DPW will more than double its container cargo handling capacity, catapulting it to third place behind Hong Kong tycoon Li Ka Shing's Hutchison Port Holdings and Singapore's PSA International.

A relative newcomer, DPW first shot to prominence last year when it beat bigger players such as PSA to buy CSX World Terminals' global assets.

DPW first approached P&O with a takeover offer earlier last month, setting off talk its rivals would make counterbids.

Temasek is also said to have long had an interest in P&O, making 'tentative approaches' to its former chairman, Lord Sterling, over the past six years although a bid never materialised, The Sunday Times said.

The newspaper added that after its announcement last Friday, Temasek had acquired more shares and could already hold as much as 4.5 per cent of P&O. With a 10 per cent stake, Temasek could 'manoeuvre itself into a position to block plans by DPW to refinance the business', the paper said.

Temasek paid £4.409 a share, a shade below DPW's offer of £4.43 a share.

But after P&O's stock rose 11 per cent on Friday, Temasek is unlikely to buy at this level and will wait for prices to fall, the paper added.

But it said most analysts think it is highly unlikely that Temasek will launch a rival offer. Even if it does, Temasek will not do so without the backing of P&O's board, it added.

In accepting DPW's offer last week, P&O's directors have agreed not to solicit any competing offers.
Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 06 Dec 2005

S'pore, Malacca Straits digital tidal atlas expected in early '06

It will offer detailed hydrodynamic info, promises safety, efficiency gains

By DONALD URQUHART

(SINGAPORE) The first-ever digital tidal atlas for the Singapore and Malacca Straits is set for commercial release early next year and will offer the shipping industry detailed hydrodynamic information, promising both safety and efficiency gains.

Aimed at ships' masters, pilots and terminal operators, the Straits forecast digital tidal system includes water current speed, direction and water level at a resolution as detailed as 25 metres based on near-real time sensor information.

The digital service is being developed by Info@Sea, a joint venture company established by BMT Asia Pacific Ltd, the Maritime & Port Authority of Singapore and DHI Water & Environment Pte Ltd.

Competition between land reclamation and ever-more congested sea space in Singapore's port waters was a key driver behind the project, according to Info@Sea CEO Mark Womersley.

This competition means two things he said: Singapore's currents can be quite complex in some areas due to reclamation and increasing pressures on sea space means port waters must be used as efficiently as possible.

Currently, hard copy tidal atlases offer limited data points for specific locations within port waters, whereas the new system will give complete coverage.

'Singapore has realised that if they are to utilise the sea space better, they need to give the end-users the information, let them have the knowledge about the areas they're going to anchor in, pilot through and berth alongside, and that will allow the port to be more flexible,' Mr Womersley said.

Where some berths and terminals are tidally restricted in terms of when vessels can be brought alongside, the new information may allow berthing windows to be extended or alleviate the need for tugs or pilots in some anchorages.

'When a large VLCC comes into port they will know what they are facing before they perform a complex manoeuvre, for instance,' he said.

The trend towards larger and larger ships, such as container vessels with very high free-board, makes this type of information even more crucial. The company plans on adding wind and weather data to the system in order to provide a more comprehensive picture. Later next year, it also aims to add under-keel clearance data, which will be valuable for VLCCs and other deep-draft vessels using the straits.

'A lot of this type of knowledge we've now captured in our information system, digitised and delivered via the web, was held in the heads of experienced pilots and masters.

'But imagine if you are a master who has never been to Singapore before - particularly in the narrowest part of the Strait where the currents can be quite strong. This now gives them the knowledge to have confidence and certainty in what they are planning to do,' Mr Womersley said.

The project was extended to include the Malacca Strait after Star Cruises approached Info@Sea looking for more detailed data than the three-to-five points of information currently available for the Strait.

This was not enough information to enable the cruise line to make full use of their sophisticated and very expensive onboard power management system, Mr Womersley said.

'We're hoping Star Cruises will be able to routinely deliver information onboard for their Malacca Strait passages when we go commercial in January next year,' he added.

Star Cruises, along with 30 other organisations, are currently test-bedding the system. The information is charged according to what is downloaded, in what Mr Womersley describes as a phone bill-type approach.

For 24-hours-worth of the most detailed 25-metre resolution data, the cost would be about $100, but smaller chunks - such as a few hours-worth for berthing of a vessel - could also be purchased.

Mr Womersley estimates the initial market for the system is in the order of at least $1 million a year, growing to a multi-million dollar annual business as coverage is expanded across regional waters and to Australia.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 07 Dec 2005

PSA Int'l, Temasek not ruling out counter-bid for P&O

By DONALD URQUHART

(SINGAPORE) PSA International and its parent Temasek Holdings have not ruled out a counter-bid for the substantial maritime empire of the Peninsular & Oriental Steam Navigation Co (P&O). Both said they are keeping their investment options open.

In a short statement to the London stock exchange on Monday, the two said that following press speculation, they 'wish to make clear that no statement has been made which imposes an obligation upon, nor restricts, either of them from any future course of action'.

Speculation over what the two Singapore entities are up to has been spreading like wildfire in the market since the duo began increasing their stake in P&O late last week.

By the close of business in London on Friday, PSA held some 24.3 million shares, or 3.24 per cent of total P&O shares. The shareholding is held through PSA International, Cazenove & Co on behalf of PSA, and Aranda Investments, a wholly-owned subsidiary of Seletar Investments which is in turn a subsidiary of Temasek Holdings' Temasek Capital.

The news fuelled speculation that Singapore Inc was either launching a counter-bid to Dubai Ports World's offer, or seeking to acquire a substantial enough minority shareholding to give it some leverage in buying part of the P&O assets from whoever emerges with the P&O jewels in hand.

Temasek spokesperson Eva Ho declined to comment when approached by BT yesterday.

About a week ago, DPW announced that it had agreed to a 3.3 billion (S$9.6 billion) takeover bid at 443 pence a share for P&O, the world's third largest container terminal operator with 22 terminals in 13 countries.

The entry of Temasek and PSA clearly energised the market, pushing up the British port and shipping group's shares to a record 494 pence at Friday's close.

By the close of the market on Monday it emerged that the Singapore duo had boosted their shareholding to nearly 30.8 million shares, or 4.1 per cent, which were acquired at a lower than expected 455.8 pence. At this price any counter-bid for P&O would cost Temasak 3.4 billion.

Aside from regulatory approval, DPW's bid needs the approval by 75 per cent of P&O's shareholders. This means Temasek would have to build up a stake of at least 25 per cent to block the Dubai bid.

To date DPW has received irrevocable undertakings from P&O's directors and letters of intent from three major shareholders - Schroders, Threadneedle Asset Management and Insight Investment Management.

Their shareholdings total 18.6 per cent of the group's equity. The deal also includes a break fee of 34 million that P&O has agreed to pay DPW in the event a third party succeeds with a rival bid.

Aside from Singapore Inc's moves on P&O, the deal is clearly far from done for DPW because of the potential for other large players like Hutchison Whampoa, or AP Moller-Maersk, to enter the fray.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Dec 8, 2005
Shipping lines welcome planned exemption

SHIPPING lines operating in Singapore which put their heads together to set common freight rates look set to be exempted from provisions of new anti-competition legislation that usually bars this type of collective price-setting.

In a move welcomed by the shipping community here, the Competition Commission of Singapore (CCS) said in a statement that it will recommend to the Trade and Industry Minister Lim Hng Kiang that 'liner agreements' in the maritime industry be exempted.

The move is in line with the practice in places like the United States, Europe and Australia, although the latter two are now reviewing these exemptions.

The main reason that shipping lines are usually granted this exemption is that the economic characteristics of the shipping industry - in particular, the high fixed costs and low marginal costs - leave the industry susceptible to instability in pricing and supply of services.

So it is recognised among competition authorities that there is a benefit in shipping lines cooperating to achieve economies of scale and scope in the provision of the service.

But Singapore's competition watchdog said on Tuesday that shipping lines would still be subject to prohibitions on the abuse of a dominant position in the industry. The block exemptions are known as consortium, conference and discussion agreements.

The Singapore Shipping Association (SSA) said it welcomed the CCS' decision. 'It has always been the position of the SSA that shipping conference, consortia and discussion agreements are beneficial for the end-users, as they help contribute to improving production, distribution and promoting technical and economic progress.

'In our opinion, the CCS' decision reflects this,' said SSA executive director Daniel Tan.

He said the SSA was pleased that the CCS recognised it is important for Singapore to keep in line with the global regulatory and legislative environment.

Leading container line Neptune Orient Lines' spokesman, Mr Dave Goodwin, said: 'The very sensible approach being recommended by the Competition Commission is that Singapore should take a position which is in line with international practices, and allows a continuation of comprehensive service levels for our customers.'

The CCS hopes to finalise the block exemptions by July next year. They will take retrospective effect from Jan 1, next year.

NARENDRA AGGARWAL
Copyright © 2005 Singapore Press Holdings. All rights reserved.

Dec 9, 2005
The Singapore connection

EXXONMOBIL MAKES PROGRESS ON POSSIBLE SECOND CRACKER

PLANS by ExxonMobil to build a possible second chemical cracker on Jurong Island moved closer on two fronts yesterday.

The company has appointed a project executive - Singapore-based Frenchman George Grosliere - and hired Foster Wheeler and Worley Parsons to undertake a further feasibility study.

A deadline for the study was not given.

Mr Grosliere is also site manager of ExxonMobil's US$2 billion (S$3.4 billion) chemical cracker next to its refinery complex on the island.

The second cracker would positioned to meet the surging Chinese and Indian demand for chemicals and plastics.

ITALIAN ELECTRONICS FIRM LAUNCHES REGIONAL BASE

ITALIAN-BASED Carlo Gavazzi Automation has opened its first Asia-Pacific headquarters here as part of regional expansion plans.

The Swiss-listed firm, which makes switches, sensors and electronic components used in factory equipment, will employ 25 people at the Paya Lebar office.

It will also allocate an 'important share' of a planned $5 million investment in the region to the Singapore office.

Carlo Gavazzi's base here will oversee a new factory in Kunshan and sales offices in Malaysia, Shenzhen, Shanghai and Hong Kong.

The firm wants a bigger share of the regional market, which it estimates to be worth US$2 billion (S$3.4 billion) in annual sales.

China is especially attractive as factories there are just beginning to automate their operations, said chief executive Dino Masili.

SIEMENS ARM OPENS PROCUREMENT OFFICE FOR ASIA-PACIFIC

THE German mobile phone giant Siemens Communications has set up a procurement office in Singapore to coordinate component sourcing in the Asia-Pacific.

The new office, located in the existing Siemens building in MacPherson, was opened on Tuesday with a staff of 25.

The Singapore office - the firm's fifth procurement centre around the world - will run the telco's purchasing activities in Asia, especially in the area of low-cost, high value-added components such as printed circuit boards, wires and plastic parts.

Siemens Communications, the largest arm of the Siemens organisation, racks up a procurement bill of $13 billion a year.

MOTOROLA SETS UP PRODUCT CUSTOMISATION CENTRE

PHONE company Motorola is establishing a new customer solutions centre here that will create 50 new jobs for engineers.

The centre will develop customised mobile phone solutions and applications for high-growth markets such as South-east Asia, India, Australia, Africa and the Middle East.

It will be staffed eventually by 100 engineers, half of whom will be transferred from other parts of the company. They will work on product design and localisation, technical support, product and programme management and software development.

'With a combined population of over two billion people, the high growth markets present tremendous growth opportunities for Motorola,' said centre director S.T. Liew.

'Singapore's strategic location, ideal talent pool and track record allows us to be able to support the huge footprint of high growth markets,'.

Copyright © 2005 Singapore Press Holdings. All rights reserved.

Business Times - 09 Dec 2005

Progress in ExxonMobil's 2nd Jurong Island plant

By MATTHEW PHAN

EXXONMOBIL Chemical took another step towards confirming that it will build a second petrochemical cracking plant on Jurong Island, announcing yesterday that it had appointed a project executive and external contractor to do further feasibility studies.

The proposal for the plant was first mooted about a year ago, and Singapore has bent over backwards to make it happen, with the JTC Corporation diverting an established highway on Jurong Island to make space for the plant.

ExxonMobil appointed its current Singapore plant site manager, Georges Grosliere, as project executive, and also awarded a project coordination and services contract to Foster Wheeler and WorleyParsons.

Mr Grosliere said the new steam-cracking plant would be 'marginally larger' and 'of comparable size' to the existing facility, which has an 800,000 tonnes per annum (tpa) capacity.

The new facility will include a world-scale steam cracker, which uses high temperature chemical processes to break down raw material feedstocks that come from crude oil or natural gas into simpler molecules like ethylene. It will have associated derivative units, such as world-scale polyethylene, polypropylene and specialty elastomers plants, which convert these simpler molecules into other chemicals with a wide variety of end-uses.

The new plant will use updated technology, but will otherwise be completely integrated with ExxonMobil's existing facility, said Mr Grosliere. It will produce the same range of products as the existing plant, except for the specialty elastomers, which are new products here, he said.

The next stage of in-depth feasibility studies will consider market demand from critical customers in the Asia Pacific, especially in China and India, as well as the project's cost structure, as represented by the price of steel and construction services.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 16 Dec 2005

New cruise tie-up targets Singaporeans

By CHEAH UI-HOON

WITH Singaporeans taking to the high seas, cruise holidays have also docked in Singapore - taking luxury travel to another dimension. Think a four-night cruise from Nice to Monaco, with tickets to the 2006 Monaco Grand Prix included, from $7,873 upwards. Or a cruise to the Great Barrier Reef with a marine biologist. Or Athens to Barcelona in 10 days, and Hong Kong to Bangkok in nine.

A travel portal, Zuji Singapore, and CruiseAgents, a leading cruise holidays agent, have teamed up to give cruising a new, upmarket appeal, particularly for Singaporeans and Asians who have long associated cruises with casinos-at-sea. 'The average Singaporean doesn't think of cruising as luxury travel,' admits Brett Dudley, managing director of CruiseAgents, which is based in Australia.

'One of our big challenges is to change this mindset,' he says, adding that he was optimistic of the growth opportunities in this area. The Asian cruise market is estimated to be US$600 million, only about 5 per cent of the global US$19 billion cruise market.

Philip Ho, general manager of Zuji Singapore, says the portal zoomed in on cruise packages because it noted that net-savvy Singaporeans are seeking luxury when they travel. 'We've seen this trend emerge in the last six months. Consumers are buying luxury, upscale holidays and pairing it with low-cost flights - something like flying Tiger and staying at the Banyan Tree,' says Mr Ho. That's 25-30 per cent of Zuji's customers, who are mainly aged 25 to 40, either single or married with young children, and with an annual income of about $100,000.

'The combination of affluence with relatively cheap travel opportunities has led to the hike in luxury travel stays.'

'Already, more than US$1 million worth of cruise packages were booked this year, out of Australia. That's why we're upbeat about the introduction of luxury cruises here,' adds Mr Ho. And in the cruise sector, 60 per cent are repeat customers.

The tie-up between Zuji and CruiseAgents will see 300 cruise packages across 17 cruise liners offered - in Singapore dollars - to Singaporeans. Out of this, 20 plus packages will feature Asian ports of call.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved

Business Times - 21 Dec 2005

Temasek, PSA silent on counterbid for P&O

British port and shipping group to go with DPW's 3.3b bid

By DONALD URQUHART

(SINGAPORE) Peninsular & Oriental Steam Navigation Co (P&O) yesterday said it would stick with the 3.3 billion (S$9.7 billion) takeover bid from Dubai Ports World (DPW) as neither PSA International nor Temasek Holdings have submitted a rival offer.

'To date, the P&O board of directors has had no contact from PSA or Temasek and no proposal had been received,' the company said in a statement to the London Stock Exchange yesterday.

It added that there can be no certainty that any counter proposal will be made and as a result the P&O board 'sees no reason to alter its recommendation of the offer' to P&O shareholders.

Speculation that there might be a rival Singapore bid first surfaced at the beginning of the month, when it emerged that subsidiaries of PSA and Temasek had been quietly increasing their stake in the British ports and shipping firm, whose history dates back to 1837.

By the close of the market on Dec 5, it emerged that the Singapore investors had boosted their shareholding from 2 per cent to 4.1 per cent, or nearly 30.8 million shares.

Temasek and PSA made a brief statement that day, effectively leaving all options open as to whether they would make a counter offer. 'PSA's and Temasek's announcement leaves open the possibility of them making an offer for P&O or for purchasing deferred stock to prevent the deferred scheme becoming effective,' P&O said in its statement. 'It is also possible that PSA and Temasek may not wish to make any further purchases of deferred stock nor make an offer for P&O.'

The highest price that Temasek/PSA has paid for a unit of deferred stock in recent weeks is 460 pence, which means that any counter bid from them would need to be at least equal to that. DPW agreed on Nov 29 to buy P&O for 443 pence a share through its wholly-owned subsidiary Thunder FZE.

The offer is currently structured as a scheme of arrangement, requiring 75 per cent approval from shareholders, allowing any unassented stock to be squeezed out rather than the 90 per cent which would be the case in a conventional offer structure.

But DPW CEO Mohammad Sharaf has been reported as saying the company, which is expected to issue its offer documents this week, may change the structure of the offer so that it only needs a simple majority of the stock to gain control.

Speculation that the Temasek/PSA team would make a bid helped push shares in P&O to a record high of 494 pence on Dec 2. On Monday P&O shares closed at 469.5 pence, 6 per cent more than the price DPW agreed to pay.

The various court and stockholder meetings to approve the transaction are scheduled to be held on Jan 20. The transaction is expected to become effective on Feb 9.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 29 Dec 2005

S'pore Nov bunker fuel sales up 3.8% on year

(SINGAPORE) Sales of marine fuels in Singapore, the world's largest bunkering port, rose 3.8 per cent in November versus a year ago, government data showed yesterday.

Bunker sales were at 2.085 million tonnes, down 7.4 per cent from October, but the year-to-date volume is still on track to close at a record high of around 25 million tonnes, figures from Singapore's Maritime Port Authority (MPA) showed.

Sales of 500-centistoke grade marine fuels, a cheaper alternative to the benchmark 380-cst grade, hit another record high of 242,000 tonnes, up 1.9 per cent from October and 4.4 per cent higher than the same month last year.

Volumes for the 380-cst grade, which makes up about two-thirds of the total, fell 8.3 per cent versus October levels to 1.438 million tonnes, while 180-cst dropped 10.8 per cent to 242,100 tonnes. The lower bunker volumes are largely due to thin supplies of fuel oil cargoes in November despite softer prices, said traders. Fuel oil 380-cst cargo values averaged at US$284.35 a tonne for November, down from the previous month's US$303.13.

'The falling volumes are a surprise because November is usually a heavy-demand month as shipping traffic increases towards the December festive period,' a Singapore-based marine fuels supplier said.

'The only reason I can think of was that the market was very tight at the time, with less Western arbitrage cargoes coming and some refiners having less availabilities because of maintenance.' - Reuters

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 30 Dec 2005

NOL, 11 others to raise US land surcharges

They are set to jump by up to 41% because of higher fuel costs

(SINGAPORE) Neptune Orient Lines (NOL), Evergreen Marine Corp and 10 other shipping lines plan to raise surcharges on land transportation of containers in the US by as much as 41 per cent because of higher fuel prices.

Starting Jan 1, each container will cost US$222 to move by trucks and railroad in the US, an increase from US$158, the 12-member Transpacific Stabilization Agreement (TSA) said on its website.

A box moved by trucks alone will be charged US$64 each, 39 per cent more than the current US$46, the group said. This is the second time the levies will be increased after they were first introduced on Aug 16.

Shipping lines are grappling with rising costs from higher port fees and fuel prices as US truckers and rail companies are charging more to move cargo within Asia's biggest export market. They are also struggling with concerns of a surplus of vessels next year as more new vessels will come into service.

'Shipping lines have levied a lot of surcharges this year to recover some of the costs caused by high oil prices,' said Lee Yu Seon, a shipping analyst at Shinyoung Securities Co in Seoul. 'In 2006, they will also have to deal with faster growth in capacity than demand as record shipbuilding orders in the last two years are completed.'

The 12 shipping lines, which account for about 70 per cent of trans-Pacific trade, estimated that costs this year will rise 10 per cent because of port congestion.

Higher fuel prices will inflate the cost of moving cargo to the US in 2006 by 7 per cent. The cost of transporting containers by trucks and railways will rise as much as 25 per cent next year, it has said.

Demand for cargo across the US and Europe will grow between 10 per cent and 12 per cent this year to about 5.8 million 40-foot containers, the group has said. About 80 per cent of the world's trade is carried by sea.

Shipping lines typically pass on part of the fuel, port fees and other costs to their clients through surcharges. Bunker fuel price have fallen 7.9 per cent since the start of the fourth quarter to US$295.50 per ton on Wednesday.

The inland transportation surcharge will be adjusted every quarter to reflect the movement of the US Department of Energy's National Diesel Price Index, the group has said.

Diesel prices in the US have risen 46 per cent this year to US$2.45 a gallon as at Dec 26, according to the US Department of Energy's website. The price rose to US$3.16 as on Oct 24, the highest in more than 10 years.

Higher costs from fuel prices and port fees in the US are undermining profits of shipping lines like NOL, Kawasaki Kisen Kaisha Ltd and Hanjin Shipping Co, offsetting increased demand for shipments to the US and Europe.

Other members of the TSA include CMA CGM SA, Cosco Container Lines Ltd, Evergreen Marine, Hanjin Shipping, Hapag-Lloyd AG, Hyundai Merchant Marine Co, Kawasaki Kisen, Mitsui OSK Lines Ltd, Nippon Yusen Kaisha, Orient Overseas Container Lines Ltd and Yang Ming Marine Transport Corp.

The 11-member Westbound Transpacific Stabilization Agreement also said on its website it will impose a similar amount of inland fuel surcharge on cargo moved in the US before they are shipped to Asia.

Of the 12 members of the TSA, CMA and Mitsui aren't part of the Westbound Transpacific Stabilization group, which counts China Shipping Group Co as a member.

Shares of Neptune Orient, the operator of Asia's second-largest container shipping line, rose 1.2 per cent to S$3.32 in Singapore. Shares of Evergreen Marine, Asia's largest container line, gained 0.9 per cent to NT$23.40 in Taipei.

Hanjin Shipping shares fell 0.9 per cent to 23,000 won in Seoul. Nippon Yusen shares rose 0.5 per cent to 810 yen in Tokyo. - Bloomberg

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

04 January 2006

Hin Leong building S$750m terminal on Jurong Island
By Jeana Wong, Channel NewsAsia

SINGAPORE : Homegrown oil trading company Hin Leong is spending S$750 million to build an oil storage terminal in Singapore.

The facility will be the largest independently-operated petroleum logistics terminal in the region and will house two very large crude carrier (VLCC) berths.

Industry watchers say that is expected to cut down turnaround time and related docking costs and help Singapore keep its edge as a key oil trading hub.

In two years' time, Jurong Island will house the region's first and largest independently-owned and run oil terminal.

The new terminal boasts 73 storage tanks with a combined capacity of 2.3 million cubic metres.

Owner Hin Leong Trading says large-scale facilities that provide a one-stop shop for third-party oil storage, distribution and supply needs are lacking in the region.

It says Singapore is well-placed to handle Asia's roaring demand for value-added services in chemical logistics.

Said Evan Lim Chee Meng, executive director of Hin Leong Trading, "It will be an increasing trend for people to move in big ships. The cargo that comes to the Far East requires a lot of upgrading, a lot of value-add before it can be used again, so it's not the normal kind of finished products that we call it. Then Singapore is ideal because there's a pool of good blend stocks around to make the fuel to usable grade."

The company says allowing huge crude carriers to dock directly can reduce transfer and processing time from about six days to under two days.

At the ground-breaking ceremony, Transport Minister Yeo Cheow Tong says petrochemical companies increasingly see logistics as a means to gain an upper hand in business.

He notes that having an independent facility to serve very large crude carriers will help Singapore's place as a leading trading hub.

Said Mr Yeo, "It will provide a very crucial and much-needed facility for VLCCs in the region. This added VLCC capacity, together with the new terminal's specialised piping infrastructure, will reduce turnaround time and associated costs for VLCCs. This will no doubt further enhance Singapore's position as a leading global oil transshipment and trading hub."

Singapore now ranks as the world's third largest oil trading hub.

It saw an annual turnover of over S$260 billion in physical oil trade and another S$300 billion in derivative trading. - CNA /ct

Copyright © 2005 MCN International Pte Ltd

Business Times - 10 Jan 2006

S'pore mulls floating LNG storage concept

SINGAPORE, which is considering building a liquefied natural gas (LNG) terminal, has also looked at the concept of a floating LNG storage and re-gasification unit (FSRU) - a prototype of which is being built by Keppel Shipyard for a foreign client, sources said.

But factors including security and heavy shipping traffic here weigh against it.

Such an FSRU anchored out at sea will receive LNG from offloading tankers.

It will then re-gasify the LNG by steam and pump it under high pressure into seabed pipelines to be transported to users on shore.

Keppel last Thursday said it had won a $90 million contract from Golar LNG, reportedly the largest independent LNG shipowner, to convert an LNG carrier into an FSRU.

It will be the world's first such unit when completed by the second quarter of next year.

Golar said it has been developing this 'floating energy solution' as part of its strategy to diversify into other parts of the LNG chain and to offer customers greater flexibility.

The Singapore LNG feasibility - commissioned by the Energy Market Authority and being conducted by a Tokyo Gas Engineering-led consortium - also considered floating LNG storage. 'But it's hard to compare an on-shore LNG receiving terminal with such an FSRU, as they are completely different,' one source said when asked about cost advantages.

BT earlier reported that the study is proposing that Singapore build a three million tonnes per annum receiving terminal that would cost about US$500 million.

The size of the terminal is based on stockpiling needs and security of supply, as LNG is meant to provide a back-up to present piped gas from Indonesia and Malaysia.

'But an FSRU may not necessarily be cheaper, as there are other costs involved, including building a submarine pipeline to bring the gas onshore,' the source said. 'While an FSRU is good for temporary use, it cannot provide for any storage of gas, making gas supply highly dependent on the timely arrival of the LNG tankers.

'Places like California - which puts a high premium on the environment, and also cosmetics, as they may not want to spoil the coastal view - may favour having such an FSRU,' the source added.

'Also, while it may be suitable for those countries with long coastlines, here, just a few miles out, it's already Indonesian waters. So it will be neither here nor there for us.'

Other disadvantages would include high security risks, including from terrorism, as the FSRU will be anchored offshore.

Another is the heavy shipping traffic calling at the port here.

'There is also no experience in FSRU use, although countries like the US and Spain are apparently looking at this,' the source added.

Singapore's year-long LNG study is scheduled to be completed by the end of next month.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 24 Jan 2006

NOL posts 5% jump in Dec box business

NEPTUNE Orient Lines, the world's sixth-biggest container liner, carried 5 per cent more containers on its ships in December than a year earlier, helped by strong trade between Asia and the rest of the world.

NOL said in a statement yesterday that its container shipping arm APL transported 219,400 40-foot equivalent units (FEUs) in the six weeks from Nov 19 to Dec 30, down 10 per cent from a seven-week period at the end of the year in 2004.

But it said that on an adjusted basis, shortening the 2004 reporting period by one week in order to compare identical timeframes, cargo volume rose 5 per cent.

Average revenue per container rose 2 per cent to US$2,829 in the same period compared with a year ago.

Prices for container shipments have soared due to China's export boom and a tight supply of ships, benefiting NOL - Singapore's biggest shipping firm - and others such as Taiwan's Evergreen Marine and Denmark's Maersk Sealand .

But while investors have grown increasingly cautious about shipping stocks as the industry cycle is set to hit a peak, NOL said that volumes in its container business rose 11 per cent in 2005 to nearly 1.95 million. It operates around 100 ships.

Average sales per container rose 5 per cent to US$2,841 in 2005.

December revenues in NOL's logistics business, which it has identified as a focus for growth to reduce its dependence on economic cycles in shipping, rose an adjusted 12 per cent to US$102.1 million in contract logistics and an adjusted 29 per cent to US$46.6 million in international services.

NOL is 67 per cent owned by Singapore's investment company, Temasek. - Reuters

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 31 Jan 2006

Use technology to stay strong, competitive, PM Lee urges PSA

Republic depends on port to keep S'pore thriving hub in South-east Asia

By GEORGE JOSEPH

(SINGAPORE) PSA International has to stay flexible and relevant, and leverage on technology to forge ahead as the world's leading port and to remain strong and competitive.

Prime Minister Lee Hsien Loong had this message for Singapore's port employees as he cautioned them on major challenges PSA would face and added that the port operator's transformation must continue.

But it was an upbeat mood the prime minister brought to staff manning the ports on the first day of Chinese New Year on Sunday. Mr Lee said he was there to thank them for their commitment and hard work in making Singapore the best port in the world.

It was a different picture about the same time just three years ago, when PSA went through an unprecedented retrenchment exercise and embarked on a restructuring to keep itself competitive and responsive to customers' needs. It implemented a more flexible wage structure and introduced across-the-board reductions in fees to customers.

Today, Mr Lee observed, PSA is leaner, stronger and more competitive. The Singapore container terminal operator that took a hit in its earnings as a result of the restructuring is now able to reward staff with higher bonuses after handling a record-breaking 22.3 million TEUs last year.

Congratulating the PSA team of managers, unionists and workers on their achievements, Mr Lee told them Singapore depended on its port, not just for jobs and profits in PSA itself, but to keep Singapore a thriving hub in South-east Asia.

'You have worked very hard to restructure PSA, to improve performance, upgrade and play in the world league. What you have done is remarkable,' he said. He added that PSA unions came under immense pressure during that time, but rallied the workers, explained why the changes were necessary and got the support for initiatives that brought long-term benefits that secured the jobs and livelihood of many Singaporeans in PSA and also in the Singapore economy. 'If PSA had not measured up, the whole economy would have suffered, our position in the world would have changed,' he said.

Mr Lee also told employees who came to greet him while at work at the PSA Pasir Panjang Terminal, that the image of the port worker has to be changed.

He said that they were no longer seen as waterfront dock workers, but tech-savvy port specialists, each person with skills and special contributions to make.

'You are a Singapore icon, you should also be a Singapore idol, as all Singaporeans take pride in your success,' he said.

Earlier, PSA chairman Fock Siew Wah, in saluting the port employees for their achievement, urged them to work as a team and work harder, in order to 'squeeze a bit more productivity'.

'Our competitors are literally snapping at our heels,' he said, adding that more ports are now remaining open 365 days a year and even on festive occasions, just like Singapore.

Mr Fock said PSA employees met all their key productivity indices last year, and with their fighting spirits will scale new heights this year.

PSA's Singapore terminals handled 22.3 million TEUs last year, bringing it to the top of the container port league, displacing Hong Kong as the world's busiest port.

Including its terminals overseas, PSA International chalked up a 24.4 per cent growth in containers handled to a record 41.8 million TEUs in 2005, in tandem with the continuing expansion of trade and growth in the world's economies.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 28 Feb 2006

NOL 2005 profit down 15%

SINGAPORE - Neptune Orient Lines, the world's sixth-biggest container liner, posted a 15 per cent fall in full-year 2005 profit on Tuesday, below market expectations, and said it expected a 'challenging' business environment this year.

Singapore's largest shipping firm, which is controlled by state-owned investment company Temasek, said in a statement it made full-year net profit of US$803.9 million, down from US$943 million a year earlier. Full-year revenue rose 11 per cent to $7.27 billion.

NOL and rivals such as Maersk Sealand and Evergreen Marine have benefited from surging freight rates on strong global demand for cheap textiles, toys and other goods from China, but investors have become more cautious amid talk the sector's economic cycle has peaked.

Analysts say the growth momentum for NOL is slowing and the outlook for container shipping continues to be challenging as capacity supply is set to outpace demand this year. NOL expects further cost pressures from high fuel prices in 2006, which could result in high bunker and land transportation costs. Trading at just 2.7 times forecast earnings, NOL is among the cheapest of its shipping peers. AP Moeller Maersk is valued at 9.8 times forecast earnings and Evergreen at 4.5 times. -- REUTERS

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Business Times - 02 Mar 2006

Panama wants PSA in US$900m container terminal project

Its participation in int'l bid welcomed, says VP, citing PSA's expertise in transhipping cargo

By DONALD URQUHART
AND DANIEL BUENAS

(SINGAPORE) Panamanian officials say they are hopeful of PSA International's participation in the country's US$900 million container terminal project, following the signing of a maritime education agreement yesterday between Singapore and Panama.

PSA officials had been to Panama 'a couple of times' and had expressed their interest in the US$900 million container port to be located on the west coast next to the Panama Canal entrance, according to the visiting vice-president of the Republic of Panama, Ruben Arosemena.

'They (PSA) have shown their interest in this mega project,' he said, noting that it would be an international bid and 'of course, Singapore port is one of the important groups that will participate in the bid'.

One of the advantages for PSA, he noted, was that, like Singapore, Panama is 90 per cent transhipment cargo. 'We came here, we saw their offices, which are state-of-the-art and we are very impressed and wish we could in the near future have the same capacity of moving cargo,' he said.

Mr Arosemena, who is also administrator of the Panama Maritime Authority, said there was no decision yet on when the first round of shortlisted candidates would be selected from those who have submitted expressions of interest, but it would likely be within a 'few weeks'.

Similarly, noting that PSA was one of the 'leading candidates' for the mega project, Panama Chamber of Shipping second vice-president Santiago Torrijos said: 'The leaders of the maritime industry in Latin America are looking forward to seeing the participation of PSA in this big project because they have the expertise, the experience, how they have done the things here.'

Mr Torrijos also marvelled at Singapore's handling of over 22 million TEUs (20-foot containers) annually in such a small country, which 'is a huge maritime operation for less than 10 million people, which is more or less what we have in Panama', he said.

'It is a very good opportunity for private businesses like PSA, as a government agency and private business, to have the good possibility of getting into participating in the mega project for the port, and win the bid in Panama.'

A PSA corporate spokesman declined to comment when contacted by BT yesterday.

In the meantime, cooperation between Singapore and Panama took a more concrete form with the signing of an agreement to cooperate in various academic and R&D areas between the Singapore Maritime Academy (SMA) of Singapore Polytechnic and the newly set-up, government-backed Panama International Maritime University (PIMU).

The agreement will cover the exchange of expertise in areas of maritime education and training, development of educational research programmes and projects, as well as other areas in maritime education and training.

This would include the exchange of students, professors as well as technology transfer.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

March 4, 2006
NOL gets nod to provide freight rail services in India

By Chua Kong Ho

NEPTUNE Orient Lines (NOL) said yesterday that it has received in-principle approval from the Indian government to provide freight rail services for 20 years, and possibly longer, as India opens up its state-controlled rail network.

This makes NOL the second Singapore firm after Gateway Distriparks to get permission for a slice of the action in the fast-growing business of shifting cargo around India's extensive rail network.

India Infrastructure and Logistics, NOL's joint venture with Indian telecommunications tycoon Rajeev Chandrasekhar, will focus initially on running freight trains between the key centres of Mumbai and New Delhi, which accounts for an estimated 60 per cent of all containers moved in India.

NOL had earlier said it expected an initial investment of US$60 million to US$70 million (S$97.4 million to S$113.6 million), mainly for equipment purchases.

The licence gives the joint venture the right to run unlimited trains on all India routes for 20 years, with an option to extend for a further decade.

The news provided some respite for the shipping group's stock, which ended the week as the worst performer in the 50-member Straits Times Index after it reported worst-than-expected results. NOL shares closed at $2.31 yesterday, down 9.4 per cent for the week.

Said NOL group deputy president Cedric Foo: 'By investing in landside facilities, we will complement and differentiate our liner services in India and at the same time develop a new stream of logistics income.' NOL said at its results briefing on Tuesday it would focus on integrating its shipping and land-based logistics businesses to provide better service to its customers.

NOL and other shipping lines in the 15-member Far Eastern Freight Conference said it would raise the rate for moving 20-foot standard containers from Asia, excluding Japan, to Europe by US$200 each, starting April 1 to June 30.

However, analysts say freight rates are poised for a fall this year as the number of new ships entering service would outstrip demand.

DBS Vickers analyst Chris Sanda downgraded NOL from 'hold' to 'fully valued' on Wednesday, and wrote in an investor note: 'With the cash payment out of the way and an estimated three years of declining profits (including a loss in financial year 2008), we think it is an appropriate time for investors to take profits.'
Copyright © 2005 Singapore Press Holdings. All rights reserved

Business Times - 14 Mar 2006

Titan Petrochem still keen on terminal in S'pore or Johor

By RONNIE LIM

OIL trader and tanker operator Titan Petrochemicals, whose first China storage comes on stream in June, is still keen on building a one million cubic metre (6.5 million barrel) terminal in Singapore or Johor.

The company, China's biggest owner of Very Large Crude Carriers (VLCCs), is also looking at investing in LNG tankers following China's move to import the fuel, chief executive Barry Cheung said yesterday.

'Our priority this year will be our new China terminals. We also want to optimise and strengthen our Singapore operations,' he told BT during an analyst/media visit to the group's largest VLCC - the 300,000-tonne Titan Virgo - before it left for the Middle East. Hong Kong-listed Titan's transport and trading operations are run out of Singapore, while corporate functions and China ventures are handled in Hong Kong. All of the group's VLCCs but one are Singapore-flagged.

Mr Cheung said the group's three China terminal projects are on schedule. It has a 70 per cent stake in the one million cu m Nansha terminal in Guangzhou, where the first phase of 370,000 cu m comes on stream in June. It also has about a one-third stake in two other terminals - a 1.5 million cu m facility at Quanzhou in Fujian and a 2.4 million cu m facility at Yangshan in Shanghai. The chemical component of the Fujian project will also be operational by the first half, while about 400,000 cu m will be operating at Yangshan by mid-2007.

But the group remains interested in building a terminal in Singapore or Johor, where it operates floating oil storage at Tanjong Pelepas and Pasir Gudang. 'The minimum size has to be one million cubic metres,' Mr Cheung said. While Singapore offers good logistics, costs are lower in Johor, he said. And there must be enough land available for future expansion.

With China gearing up to import LNG as a fuel, Titan has also begun to look at adding LNG tankers to its fleet. 'But LNG tankers are expensive - they cost about double the US$100 million or so for a VLCC. We will also have to consider the returns,' Mr Cheung said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.