OPENING REMARKS BY MR LEE YI SHYAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, MINISTER IN CHARGE OF ENTREPRENEURSHIP, AT THE CELEBRATION OF COMPLETION OF EXXONMOBIL- NTUC FAIRPRICE ALLIANCE ROLLOUT ON 1 AUGUST 2007, 11AM AT ESSO TOA PAYOH

Mr Kwa Chong Seng, Chairman and Managing Director, ExxonMobil Asia Pacific Pte Ltd

Mr Ng Ser Miang, Chairman, NTUC Fair price Co-operative Ltd

Friends from the media,

Ladies & Gentlemen

Introduction

Good Morning. I would like to thank Chong Seng and Ser Miang in inviting me to join you at this happy occasion to celebrate the completion of the rollout of the ExxonMobil-NTUC Fair Price Alliance.

Value innovation

It used to be that petrol kiosks were dirty, greasy and slippery that drivers and passengers would not even want to get out of their cars when pumping petrol. In fact, most would prefer to minimize their stay at a kiosk. Typically, they fill up the tank, pay and go. I even knew of drivers who hesitate to stop their cars at petrol kiosks that were poorly lit at night, for fear of their personal safety. Thankfully, all that has changed now. We are here today at a spanking new and multi-functional kiosk that caters to what the drivers want and offers more than what cars need.

To me, this new generation of petrol kiosk offers us three lessons on how to stay competitive.

The first lesson is partnership. ExxonMobil has the largest petrol kiosk network in Singapore, with 74 petrol kiosks across the island. It is always seeking better ways to serve the drivers. NTUC Fair price supplies daily necessities through its network of supermarkets and convenient stores. Being Singapore’s largest supermarket chain, it acts as a great price stabilizer. The two came together in this alliance to add values to each other offerings. You have already heard from Ser Miang and Chong Seng that sales at the petrol-marts have increased by an average of 24%, with one outlet even achieving a huge increase of 200%. Apart from being profitable, petrol-marts have also enjoyed average labor productivity gain of 29% across-the board. Not only have they attracted a new segment of customers, this alliance also strengthens the loyalty of existing customers with the additional benefits.

The second lesson is creating a new business model. By crossing petrol retailing (located at kiosks along highways and strategic locations) with convenient stores’ offerings (usually located in residential and commercial areas) into petrol-marts, this alliance created a new breed of retailing concept that differentiated themselves from larger shopping outlets. The provision of round-the-clock grocery shopping, ATM machines and a carefully selected range of merchandise have increased the attractiveness of petrol-marts to both drivers and their passengers. Crossing or merging traditional industry boundaries is a good way to create new business model to beat competition. Many of our retailers need to consider this approach in order to differentiate themselves and compete in the blue ocean.

The third lesson is the willingness to challenge old paradigm and create new frontiers. Two years ago, this Alliance conceived a creative idea of increasing the size of the retail stores in the kiosk to provide a wider range of merchandise to their customers. The alliance wrote to the URA and after a careful review, the URA agreed to increase the allowable retail space in all petrol stations from 100 sq. m to 150 sq. m. As a result, petrol kiosks in Singapore are now able to introduce larger retail formats providing greater variety of merchandise and services with the improved store layouts. This example illustrates the importance of a close and understanding partnership between the public and private sector, in delivering win-win solutions to the consumers.

Indeed, through platforms such as Action for Community for Entrepreneurship (ACE) and the Pro-Enterprise Panel (PEP), the government is determined to continually improve our business and operating environment to make Singapore’s economy even more competitive. For instance, PEP has reviewed more than 1,600 suggestions from businesses community, of which an encouraging 54% have been accepted for implementation. The pro-business orientation of the public sector is validated by a 2007 World Bank Report, which ranked Singapore as the most business-friendly economy in the world. We intend to keep the honor in years to come.

Conclusion

In closing, I would like to encourage our retail players in Singapore to emulate this new alliance: to focus on reinventing their business models to create new value for their customers. With more exciting and major tourism developments like F1 and Integrated Resorts on our cards, we are expecting to attract close to 15 million tourists in a few years time. Therefore, our retail sector can do much to transform themselves by raising productivity and service level. They can be world class if they work on it.

Once again, it gives me great pleasure to congratulate all staff from ExxonMobil and Fair price for bringing about this partnership alliance and introducing the innovation in the retail format of the big-box petrol-mart. May your alliance grow from strength to strength, and leap ahead like a Tiger.

Thank you.