S’pore enjoys steady flow of billion-dollar investments

Global big names ranging from drugmaker Novartis to oil giant ExxonMobil put down huge sums on big investments in Singapore, including bricks-and-mortar assets as well as research and development activity. GABRIEL CHEN assesses some of these mega deals

THE stream of huge deals flowing into Singapore this year is striking proof that investors still have plenty of confidence in the country.

Commitments were made in bricks-and-mortar fixed assets as well as research and development, with some global giants – such as pharmaceutical company Novartis, chipmaker Qimonda, Neste Oil and Renewable Energy Corp – ready to spend at least $1 billion each.

These mega deals will also create jobs and boost the Republic's reputation as a hub for petrochemicals, pharmaceuticals and renewable energy.

Such huge investments are typically based on long-term considerations and are unlikely to be affected by cyclical events, although economists say a severe global recession could still delay some of them.

Standard Chartered Bank economist Alvin Liew believes that as long as Singapore's fundamentals remain sound and long-term growth projections remain buoyant, 'investment commitments will be there and not fall off the cliff'.

ExxonMobil's Jurong Island petrochemical plant

EXXONMOBIL announced in September that it would go ahead with its second multibillion-dollar petrochemical complex on Jurong Island.

The new Singapore Parallel Train complex is estimated to cost US$4 billion (S$5.8 billion) – almost double the cost of ExxonMobil's first complex, which is also on Jurong Island.

The Train, which will be up and running by early 2011, will be equipped to turn crude oil components into petrochemical products that are new to consumers in booming Asia, said the oil giant.

For example, it will be the first location in the world where ExxonMobil will produce large-scale commercial quantities of a new-age material called Vistamaxx. This is a kind of speciality elastomer or rubber said to have unprecedented elasticity, softness and strength, with uses ranging from medical equipment to space-age fabrics.

ExxonMobil said 400 business and plant jobs will be created when the second complex is up and running.

Its total investment in Singapore now comes to around US$11 billion.

Novartis' cutting-edge drug facility in Tuas

SWISS drug giant Novartis announced its biggest-ever manufacturing investment – a US$700 million (S$1.01 billion) plant to produce protein-based drugs, known also as biopharmaceuticals.

The facility will be sited in Tuas, next to its US$180 million tablet-making plant, Novartis announced in October. Construction of the plant will begin next year and will create more than 300 jobs when it is completed in 2012.

The plant will carry out clinical and commercial manufacturing of products that can be used to treat such afflictions as cancer, asthma, arthritis and spinal cord injury.

The development is especially significant as the drugs the plant will produce – known as biologics – are at the forefront of the global pharmaceutical industry.

Industry watchers say biologics are set to be the pharmaceutical sector's main growth driver in the next three years.

World's largest biodiesel complex by Neste Oil

FINLAND'S Neste Oil is investing 550 million euros (S$1.15 billion) to build a biodiesel plant in Tuas, which will be the world's largest.

Construction will start next year and the plant will be completed in 2010, said the Helsinki-listed company in November.

The plant, which will convert palm oil into car fuel, will be able to produce 800,000 tonnes of biodiesel annually.

Biodiesels are a renewable energy source as they are derived from crops that can be repeatedly grown and harvested.

Also, Neste says greenhouse gas emissions from its fuel are 40 to 60 per cent less than those from conventional diesel.

It will most likely use locally produced palm oil for the plant, which will eventually employ 100 people.

Shell Eastern's petrochemical plant

SHELL Eastern Petroleum announced in April it will build a butadiene extraction unit to complement the US$3 billion (S$4.4 billion) petrochemicals complex that will be completed in 2009.

Though it did not reveal the cost of the unit, industry watchers say it could run into 'several tens of millions of dollars'.

Butadiene is used to produce polymers and chemical intermediates for making end-products such as synthetic rubber.

Shell's wholly-owned complex will span Pulau Bukom and Jurong Island.

When completed, the complex will employ about 200 engineers, skilled workers and semi-skilled labour.

Singapore-led group's Jurong petrochem facility

A CONSORTIUM led by Singapore's Jurong Aromatics Corp (JAC) will build a US$2 billion (S$2.9 billion) petrochemical plant on Jurong Island, JAC announced in October. Its partners include Swiss- based oil and commodity trading house Glencore and South Korean refiner SK Energy.

The facility will produce petrochemicals such as benzene and xylene, which are used in end-products like detergents.

Construction will begin next year and is expected to be completed by 2011.

Renewable Energy Corp's solar plant in Tuas

NORWEGIAN firm Renewable Energy Corp is building a $6.3 billion plant for making solar energy products.

The plant will have the capacity to make solar modules with annual output of 1.5 gigawatts – enough to power several million households, the firm announced in October. The plant, to be built in Tuas View, is expected to start output in 2010 and create 3,000 jobs.

Qimonda's wafer fab in Tampines

GERMAN chipmaker Qimonda will build an estimated $4 billion wafer fabrication plant in Tampines.

The plant, announced in April, will make Dram chips that usually go into personal computers. Production is expected to start in 2009 with 1,500 jobs created.