ADDRESS BY MR LIM HNG KIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE NATIONAL DAY OBSERVANCE CEREMONY ORGANISED BY THE
SHIPBUILDING AND MARINE ENGINEERING EMPLOYEES’ UNION (SMEEU) AND JURONG SHIPYARD (PTE) LTD ON TUESDAY, 11 AUGUST 2009 AT 8.15 AM AT JURONG SHIPYARD CORPORATE OFFICE, 29, TANJONG KLING ROAD

Mr. Wong Weng Sun, President and Chief Executive Officer of SembCorp Marine and Managing Director of Jurong Shipyard

Mr. Lim Chin Siew, Executive Secretary of SMEEU

Mr. Tan Ah Chye, Chairman of SMEEU, Jurong Shipyard Branch

Ladies & Gentlemen

Good morning.

I am honored to be here today to celebrate Singapore’s 44thyear of independence.

As you heard earlier, while we are probably past the worst of the economic crisis, we have not fully recovered and we do not expect economic recovery from this severe downturn to be quick. Many countries will still continue to face challenges in the years ahead. The global economic situation remained volatile in the second quarter of 2009.The unemployment rate in the US hit 9.5% in June, the highest in 26 years.However, there are signs of recovery in China, with its government becoming increasingly confident of achieving almost 8% growth this year. This severe downturn to be quick. Many countries will still continue to face challenges in the years ahead.

For the Singapore economy, we earlier revised upwards the official forecast for 2009.Just this morning, the MTI announced that annualized growth in the second quarter was 20.7%, compared to the previous quarter. However, it is too early to cheer as Singapore is an open economy which is dependent on world trade as well as regional and international developments. The path to a full and sustained recovery ahead will be a challenging one.

The marine & offshore cluster is an important sector in Singapore’s economy. In 2008, the sector contributed 1.8% to Singapore's GDP, with a value added of S$4.5 billion. It provides diverse employment opportunities for almost 70,000 workers.

The sector has done us proud in placing our small nation as the top maritime center in the world for ship repairs. It captures 70% of the world market share in Floating, Production, Storage and Offloading conversion and 60% in rig building. More than 60% of the rigs ordered by international customers since the start of the rig cycle in 2004 have been delivered by Singapore shipyards.

Singapore is a world-class integrated maritime hub and is the preferred choice and home to many international shipping companies. Shipyards here have built up their core capabilities and expertise. They are moving up the technology ladder to deliver greater value, innovative solutions and faster turnaround. They are able to undertake complex and diverse turnkey projects involving engineering, procurement, construction, installation and commissioning works.

Like the Singapore economy, the marine & offshore sector in Singapore has not been spared the global recession and the credit crunch which hit the finance and banking sector in the last quarter of 2008.Its international customers are similarly affected; resulting in some owners deferring and defaulting on payment terms. Order flows have also slowed.

Amidst this economic uncertainty and unchartered times, I urge SembCorp Marine’s management and union leaders to continue to build on core capabilities, invest in R&D and engage in facilities upgrading. Do continue to invest in capability building and training for all staff so as to be ready for the next upturn. It is during such times that companies with strong fundamentals, management foresight and a versatile workforce will stand out and become stronger when the global economy recovers.

I am also pleased to be here to present the safety and innovation awards in recognition of the contribution to workplace productivity, safety and innovation by employees and subcontractors. My heartiest congratulations to all the award recipients.

I take this opportunity now to wish everyone here a Happy National Day.

Thank you.