SPEECH BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE OPENING CEREMONY FOR CWT’S LOGISTICS HUBS 1 AND 2, ON 12 MARCH 2008 AT 11.45 AM
Mr. Loi Kai Meng, Chairman, CWT
Mr. Loi Pok Yen, Group Chief Executive Officer, CWT
Distinguished guests,
Ladies and Gentlemen,
Good morning,
It gives me great pleasure to be at the official opening of CWT’s Logistics Hubs 1 and 2.
Today, CWT is one of Singapore's largest and fastest-growing Third-Party Logistics service providers (or 3PLs).I would like to congratulate CWT for turning in a sterling financial performance for 2007.A 64% increase in revenue to $535 million and a 43% increase from the previous year to achieve record net profit earnings is no mean feat.
CWT’s achievements are possible because of the hard work of its 1,800 staff, and the more than 4 million square feet of warehouse space that it has in Singapore. However, in the dynamic operating environment of the logistics and supply chain industry, it is not just physical assets that distinguish one company from another.
In this industry, companies compete on knowledge. The knowledge of regional and global markets coupled with the right systems and processes enables 3PLs to deliver customized, efficient and reliable end-to-end supply chain solutions. Only then can goods, financial resources and information reach regional and global customers in a just-in-time and cost effective way.
The logistics and supply chain management industry contributes significantly to the domestic economy. In 2007, it accounted for 9.4% of Singapore’s GDP and employed 180,000 people. A strong logistics and supply chain industry is crucial for Singapore. The competitiveness of our trading and export-oriented manufacturing industries depends on it. It is because we have a robust and competitive 3PL industry able to offer high value, integrated supply chain services, that Singapore can remain well-connected with the global markets.
On the global stage, Singapore is often recognized as a leading logistics hub, because of its world-class port infrastructure and highly efficient customs. In The World Bank’s report on “Trade Logistics in the Global Economy” published last year, Singapore emerged the top-ranked logistics hub among 150 countries. However, we must not and cannot rest on our laurels. Supply chains and trade patterns are always changing and Singapore must respond.
The Singapore government is committed to the future of the logistics and supply chain industry. We want this industry to be best-in-class and stay ahead of the curve. This will allow us to capture the huge growth opportunities in Asia-Pacific, which at 10 to 15% is twice that of the global growth rate. There are various key initiatives we should focus on. Let me elaborate on three.
Firstly, we need to deepen our integrated logistics capabilities. Manufacturers are outsourcing non-core activities such as warehousing and transportation, to focus on their core competencies. This trend is set to continue.3PLs need to quickly acquire new expertise to fully capture these opportunities. This is especially so for industries such as the chemicals and pharmaceutical sectors which require specialized handling and storage of hazardous, toxic and infectious goods.
Singapore-based 3PLs are in an excellent position to add even more value to their customers. I am glad to see CWT do this, through the provision of specialized logistics services to chemical manufacturers such as BASF, DuPont, ISP, and Stahl. The Opening of its Logistics Hubs 1 and 2 will be the latest addition to CWT’s facilities. With a combined capacity of 850,000 square feet, these hubs will be Singapore’s largest integrated facilities catering to the handling of hazardous and chemical goods.
But Singapore should aim even higher to be the supply chain control tower for both manufacturers and logistics companies alike. This goes beyond entrenching operational supply chain functions like sourcing, procurement and network optimization here. I believe Singapore has the right mix of talent and industry experience to develop and test-bed next generation supply chain solutions that could take the industry to the next level. Trade financing and global trade management systems such as FTA optimization are some exciting opportunities being explored by 3PLs here today.
A second key initiative is specialized infrastructure. Infrastructure must go beyond the ports and specialized logistics parks such as the Airport Logistics Park of Singapore (ALPS) and Banyan Logis Park on Jurong Island.It is for this reason that the Singapore government laid out the bold vision for TradeXchange – to establish a neutral and secure trade platform that will accelerate and transform the way information is exchanged across the supply chain.
Launched in October 2007, TradeXchange immediately offers projected annual cost savings of more than 12% just from documentation costs alone. However, TradeXchange goes beyond being a one-stop system for all permit-related transactions. Over time, as more value added services such as freight management, trade finance and insurance are incorporated into TradeXchange, it will become a powerful asset for both commercial and regulatory users.
However, TradeXchange can only reach its full potential with strong industry support. I would like to encourage all companies within the trade and logistics community to lend TradeXchange their strongest support.
Thirdly, we need to groom world-class companies in Singapore. We often make mention of the fact that 21 of the top 25 3PLs globally have a significant presence in Singapore. I am however, very pleased to learn of how our local 3PLs such as CWT, YCH, Freight links have been able to establish a brand-name for themselves within the region too. Blue-chip companies such as BASF, Motorola and Dell form the base of their customers whom they service regionally, and I am very heartened that these local 3PL continue to leverage on Singapore as their home base to expand and develop new businesses overseas.
Conclusion
CWT is no exception. CWT is undergoing rapid expansion with the commissioning of its Cold Hub in Jurong, this opening of its Logistics Hubs 1 and 2 which also houses their Corporate Headquarters, and the upcoming completion of another Commodity Hub in Penjuru later this year.
May I once again extend my heartiest congratulations to the management and staff of CWT.I wish you every success in your business.