SPEECH BY MR S ISWARAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, FOR THE INAUGURATION CEREMONY OF SANDVIK ASIA PACIFIC DISTRIBUTION CENTRE, ON 1 NOVEMBER 2006, 10.30AM, AT THE AIRPORT LOGISTICS PARK OF SINGAPORE (ALPS)

Your Excellency Par Ahlberger

Ambassador of Sweden to Singapore

Mr. Peter Gossas

President, Sandvik Materials Technology &

Vice-President, Sandvik Group

Distinguished guests

Ladies and gentlemen

Introduction

Good morning. I am pleased to be here today at the inauguration ceremony of the Sandvik Asia-Pacific Distribution Centre.

Sandvik and Singapore share a long history which began when Sandvik first established its presence here in 1965. Over the past 40 years, Singaporehas grown to become a key partner and centre for the company’s activities in this region. Today’s ceremony represents a further deepening of the strong ties between Singapore and Sandvik.Singapore will become one of Sandvik’s three main distribution centres in the world, covering the entire Asia Pacific, as well as the southern part of Africa.

Singapore: Connecting Regionally and Globally

Sandvik’s decision to locate its Asia Pacific Distribution Centre at the Airport Logistics Park of Singapore, or ALPS, is a strong testimony to Singapore’s good connectivity and logistics infrastructure.

ALPS provides companies operating here a differentiating advantage. Due to its strategic location within the airport free trade zone, companies can optimize their operations with quick turnaround, value-added logistics, and regional distribution. Last year, Singapore handled over 1.83 million tonnes of air cargo.This is supported by more than 3,900 flights a week, linking us to 179 cities in 57 countries.

Singapore is also ranked as the world’s busiest port in terms of container volume and shipping tonnage. In 2005, the port handled over 23 million TEUs (Twenty-Foot Equivalent Units) and over 1.1 billion tonnes of goods.We have over 200 different shipping lines calling at our port as well as daily sailings to every major port in the world.

As a result of this connectivity, Singapore is, today, the preferred hub location for regional and even global distribution. Many leading manufacturers are using Singapore as their global supply chain management centres. These include BASF, Hewlett Packard, Texas Instruments, DaimlerChrysler, Toyota, Airbus and Boeing. Adding to the list, Motorola announced earlier this year that it will invest about US$60 million to set up its Global Supply Chain Control Tower in Singapore.

Singapore: Offering Integrated Manufacturing Solutions for Companies

Going forward, manufacturing will continue to be a key pillar of the Singapore economy.Manufacturing contributed 27% to our GDP in 2005 and we expect it will continue to contribute at least a quarter of our GDP in future.

One growing and pronounced trend is that manufacturing activities in Singapore are becoming more complex, automated and research-based. Instead of viewing each business function as an independent, specialised activity, companies are increasingly undertaking a value chain approach, integrating an array of functions - ranging from headquarters services, R&D, to logistics management - all from a single location.

With political stability, a pro-business environment, good infrastructure, a robust intellectual property protection regime, easy access to talent, and efficient logistics management, Singapore is well-positioned to be that single location, offering integrated, end-to-end manufacturing solutions for the companies.

Singapore: A Centre for Precision Engineering

Precision Engineering is the bedrock of Singapore’s manufacturing capabilities. Many products rely on precision engineered components and processes for production.This industry alone employs about 91,000 people in Singapore and is worth S$19.5 billion in output.

Sandvik is a key player in the Precision Engineering sector, both in Singapore and globally, with a presence in over 130 countries.Since it was founded in 1862, Sandvik has attained world-leading positions in 3 main business areas: metal-cutting tools, advanced materials such as high-grade stainless steel and cermented-carbide, and mining and construction equipment.In Singapore in particular, Sandvik has played a critical role in supporting a wide range of MNCs in various industries.For example, Sandvik’s cutting tools are used widely by aerospace companies such as Pratt & Whitney.Sandvik Advanced Materials Division has also been providing innovative solutions to many of our leading chemical companies including Singapore Refinery Company, Seraya Chemicals and Exxon Mobil.In addition, Sandvik actively works with our ITEs, Polytechnics and other technical institutions, providing important education material, know-how and services for the engineers of the future.Today’s inauguration of Sandvik’s Asia Pacific Distribution Centre will give a further boost to Singapore’s precision engineering sector, and reinforce the partnership between Sandvik and Singapore for the future.

Conclusion

In closing, let me say once again how pleased I am to be here to witness the inauguration ceremony of the Sandvik Asia Pacific Distribution Centre. I would like to thank Sandvik for its confidence and commitment to Singapore over the past four decades, and I wish the management and staff of Sandvik every success in the future. Thank you.