SPEECH BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE & INDUSTRY AT THE INAUGURATION OF the JOINT R&D CENTRE FOR CONSUMER FILTRATION PRODUCTS BY Hyflux and Marmon Water, on Monday, 22 January 2007, 11.15am at the shangri-la hotel, katong ballroom

Distinguished Guests,

Ladies and Gentlemen,

Good morning. It gives me great pleasure to join you today for the inauguration of the joint R&D Centre for Consumer Filtration Products set up by Hyflux and Marmon Water.

Threats and Opportunities in the Global Water Sector

In many parts of the world, countries are grappling with their growing problems of water scarcity and pollution. By some estimates, more than 1.8 billion people will be living in regions with absolute water scarcity in 2025.A United Nations report calculates that more than 665 million people go without access to improved drinking water. The increased demand for water has led many countries to deplete their groundwater resources, so much so that these sources are now contaminated. As a result, more than 200 million people are affected daily by naturally-occurring arsenic poisoning of their drinking water.

Fortunately, many governments are alert to the problem and are starting to invest in basic infrastructure. In our region, the Asian Development Bank estimates that more than US$8 billion is required annually from now till 2015 merely to provide sustainable access to improved water and sanitation. The Chinese government intends to spend US$125 billion by 2010 to build waste-water treatment plants and upgrade water distribution systems. Larger investments are required to meet the thirst for water and significant investments are anticipated in the Middle East and North Africa. One report estimates that the total value of investment in the water and waste water sectors in that region is expected to surpass US$120 billion by 2015. These developments represent good business opportunities for Singapore companies.

Seizing Overseas Opportunities

It is therefore timely for our companies to ride on the wave and tap into the opportunities presented by the burgeoning global water market. Singapore has consistently invested in its environmental infrastructure, which allowed our companies to acquire capabilities in managing and delivering advanced water treatment & recycling systems. As a result, our companies are now well-placed to export their expertise. Indeed, in recent years, they have successfully clinched a slew of projects around the world, including in China and the Middle East.

Singapore is investing heavily in the environmental and water sector to further enhance our companies’ capabilities in water management. Last year, the Research, Innovation and Enterprise Council set aside $330 million over five years to boost R&D in new water technologies. The Environment and Water Industry Development Council (EWI) was also established to grow the water sector through R&D.

I am heartened to note that our companies have also taken the initiative to establish their own R&D centers. Hyflux started its membrane technology R&D center in 2004 and employs over 8 PhDs and over 100 other researchers today. Facilities such as these will help to differentiate our companies from their overseas competitors.

Nevertheless, while there are vast opportunities overseas, international competition is also intense. Our companies often have to compete with larger and more dominant players in overseas markets. The sheer intensity of competition makes collaboration a particularly compelling approach. Some of our companies have chosen to band together to offer end-to-end solutions. The Singapore Water Solutions Alliance, formed with the assistance of IE Singapore, is one such example. It brings together companies targeting different niches to offer a comprehensive water solution in Middle East markets.

Other companies take a different approach. They choose to leverage on the networks and market access of foreign partners via a joint venture or partnership to jumpstart their entry into overseas markets. Leveraging on the established brand name or R&D capabilities of a foreign partner can also shorten the time taken to develop new products. A partnership such as the one between Hyflux and Marmon Water has therefore great potentials.

Conclusion

In closing, I would like to congratulate Hyflux and Marmon Water on their partnership. Their Joint R&D Centre for Consumer Filtration Products will help to grow the Singapore water industry. I wish Hyflux and Marmon Water great success in this exciting venture.

Thank you.