SingaporeBusinessNews_March 2012

Travel DriverAsia is set to revolutionise the future of world travel

Industry FocusSingapore to become an Asian centre of Contemporary Art

Future Ready TodayCentre of Attraction

EDB Year in Review 2011Record investment commitments in 2011

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COLIN BAKER

FLIGHT NH7871 from Tokyo’s Narita airport in October of 2011 was no ordinary one. The All Nippon Airlines (ANA) launch from Tokyo was the first passenger flight of the Boeing 787 Dreamliner, which marked the beginning of a new era of aircraft largely manufactured from lighter carbon composites, thus resulting in fuel savings.

The fact that the first 787 flight was by an Asian carrier is an indication of the recognition and respect Asian airlines now receive in the commercial aviation market. Of the five airlines to obtain a five-star ranking from respected airline-quality benchmark organisation Skytrax, four are from the Asia-Pacific region: Singapore Airlines, Cathay Pacific, Hainan Airlines and Asiana. The other is Qatar Airways, based in the Middle East. The likes of ANA, Japan Airlines (JAL) and Thai Airways are not far behind in attaining global recognition. In fact around half of the world’s airlines given four or five stars by the Skytrax Airline and Product Service Quality Ranking are based in the Asia-Pacific region.

Asia is set to revolutionise the future of world travel as top-rated airlines, exponential travel growth rates, and aviation liberalisation all combine to form a potent mix.

Travel Driver_

Asian airlinesnow receive recognition and respect

Colin Baker is the editor of Asian Aviation, the leading independent magazine for the Asian commercial aviation industry. Previously, he covered the region’s aviation industry extensively as editor of Asian Airlines & Airports. Baker has also been European Editor of Airline Business magazine and has covered shipping,

construction and commercial property.

Unlike the aviation markets in North America and Europe, air travel in Asia has become increasingly commoditised, with Asian travellers now more willing to pay for higher-quality service. “Among the cognitive values attached to luxury travel, social status is the number-one factor, especially in Asia,” notes a report by trade show International Luxury Travel Market. One should also consider the longer air travel times needed to get across Asia. Whereas most major European business centres are within an hour or two of each other, flying from Singapore to Beijing, for instance, takes around six hours, while the duration of a flight from Tokyo to Hong Kong is about four hours.

According to the International Monetary Fund, Asian economic growth is outstripping that of the West — in 2010, China and India respectively registered GDP growth of 10.3 per cent and 9.7 per cent, while the GDP of the USA and the EU only grew by 2.8 per cent and 1.8 per cent respectively during the same period.

According to the World Trade Organisation, Asia’s exports of goods were worth US$4.69 trillion or S$6.1 trillion (32 per cent of the world total) in 2010, a 31 per cent increase over 2009. Trade between Asia and Europe and North America is also growing, increasing the

demand for long-distance travel and the greater comfort levels associated with that expansion. Coupled with the fact that Asia accounts for around 60 per cent of the world’s population, leading Travel IT solutions provider Amadeus and consultants Oxford Economics project that Asian travellers will account for one-third of global travel spending by 2020 — a significant increase from 21 per cent today.

Dr Haiyan Song, Chair Professor of Tourism at the Hong Kong Polytechnic University, adds, “China will become the largest tourist destination in the world after 2015,” with tourism experts predicting that the numbers will grow from 130 million international arrivals in 2009 to nearly 188 million in 2015. As a source market, the number of Chinese going abroad could grow to 79 million by 2015, possibly outstripping Germany as the top outbound travel market worldwide.

Asian airlines are well placed to take advantage of this high-growth market catering to passengers willing and able to pay a premium for quality. Investors have also taken note of this demographic’s rising spending power.

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Asian travellers are more willing to pay for higher-qualityservice

Asian travellers willaccount for one-thirdof global travel spending by 2020 — a significant increase from 21 per cent today

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According to Reuters, six of the world’s largest airlines by market capitalisation are based in Asia, namely Air China, Singapore Airlines, China Southern, ANA, China Eastern and Cathay Pacific. Asia also leads the pack in expansion plans within the emergent low-cost airline sector. AirAsia has been named the world’s best low-cost airline by Skytrax for the past three years, and has started to build what is in effect the first pan-Asian carrier with well-established operations in Thailand and Indonesia. Jetstar has also carved a strong position for itself, operating out of Australia and Singapore.

ASEAN has set itself a deadline of 2015 for formulating a liberalised regime that will allow foreign-owned aircraft to operate freely within the region. While there are a couple of possible laggards, ASEAN has already made great strides in reducing restrictive inter-governmental bilateral agreements that limit the number of airlines and flights that can operate between countries. For example, customers flying between Singapore and Kuala Lumpur can now choose from the likes of Malaysia Airlines (MAS), Silkair, AirAsia, Jetstar, Tiger Airways and Firefly. Only a decade ago, it was a straight choice between MAS and Silkair.

Asian carriers are also leading the way when it comes to low-cost, long-haul flights. Although their efficacy has not yet been measured, it has been noted that some of the advantages of a low-cost, short-haul flight such as quick turnarounds are not lost. Singapore Airlines subsidiary Scoot, Jetstar and AirAsia X are all pioneers in this field.

However, the most significant growth in this low-cost segment is likely to come from more protected markets, particularly in Northeast Asia. AirAsia and Jetstar are both launching low-cost operations in Japan in conjunction with JAL (Jetstar Japan) and ANA (AirAsia Japan). This development could open up the entire region by facilitating greater city-to-city links and market opportunities, as well as connectivity to the Asia-Pacific’s emerging markets and popular business travel spots.

Travel consultant Horwath notes that the deregulation of visa requirements for Chinese visitors, combined with the rise of Japanese low-cost carriers, could lead to a significant rise in inbound passenger numbers from China into Japan. What is certain is that with China set to become the world’s largest travel market, the opportunity for low-cost and mainline

carriers in the region is massive. At present, China has only few dedicated low-cost carriers, with the most significant being Spring Airlines. While Spring operated a fleet of only 27 Airbus A320 planes at the end of 2011, it would not be a total surprise if the airline becomes one of the world’s largest low-cost carriers by the end of 2020.

On the manufacturing front, China will launch its first home-grown and home-made aircraft in 2015, with the Comac C919. This new aircraft will be fitted with equipment from Western companies including Honeywell, GE-joint venture CFM International and Goodrich. This cooperation between Asian and Western companies is also reflected in the construction of the 787 Dreamliner, with Japanese companies supplying 35 per cent of the aircraft’s parts, including key sections of the wings and fuselage. While most of the other

suppliers for the Dreamliner are based either in the USA or Europe, some of the aircraft manufacturing for the Dreamliner is being carried out in Asia.

The increasing collaboration between Asian and Western aviation companies is no coincidence. As the Asian travel industry grows, aircraft manufacturers will want to be closer to their prospective customers, who are developing new and innovative growth strategies and sharpening their aerospace expertise. The dawn of Asia is looming large, as a vibrant and distinct player in the global travel industry of the future.

City-to-city links, more market opportunities and better connectivity to Asia’s emerging markets and popular business travel spots

COLIN BAKER

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Industry Focus

THERE is nothing quite like it yet in Asia. A new art hub built on a redeveloped compound with exhilarating elements, eclectic influences and refreshing ideas. Singapore Economic Development Board (EDB), JTC Corporation and National Arts Council have unveiled plans for former army camp Gillman Barracks to become an iconic destination for international contemporary art.

The Barracks will the base for an array of art galleries, artist residencies, groundbreaking exhibitions and artistic research programmes. The hub will feature 13 separate galleries, which will increase over time to between 18 and 20. Each gallery will house work by top-selling contemporary artists from around the globe, but with an emphasis on those native to Asia (including those from China, Indonesia, Japan, the Philippines, Singapore and South Korea).

Notable names include Japan’s artists’ collective, Kaikai Kiki, a gallery run by artist Takashi Murukami, and Sundaram Tagore Gallery, with branches in New York and Hong

We spotlight the business initiatives and regulatory policies that support inter-firm linkages and develop the nation’s leading and most promising industries.

Kong. The galleries will also be headed by leading gallery directors, such as Deddy Irianto and Janice Kim.

Speaking about the groundbreaking hub, Programme Director Eugene Tan, Lifestyle Programme Office at EDB said, “With a good mix of contemporary art galleries from different parts of Asia in Gillman Barracks, art collectors can access and enjoy Asian contemporary art in a single location.” Tan felt Gillman Barracks could advance the Singapore art scene by promoting and discovering Asian artists. Speaking to The Straits Times, Southeast Asian specialist at Christie’s auction house, Wang Zineng believes the Gillman Barracks could also promote “inter-Asian interactions and conversations.”

Visitors will experience cutting-edge work by acclaimed contemporary artists, including China’s Zeng Fanzhi, Indonesia’s Agus Suwage, and Japan’s Takashi Murakami — best known for his collaborations with luxury brand Louis Vuitton.

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An evaluation panel consisting of representatives from both the public and private sector selected the galleries that would form the Gillman Barracks’s arts hub. These were assessed on criteria such as the range of artists represented in them and the respective gallery directors’ depth and breadth of experience.

Panel member and international art collector Rudy Tseng said, “The galleries’ proposed programming plans for the next two years look promising with strong and exciting content.”Tseng added, “Singapore stands a chance of becoming an arts hub in Asia, given its status as one of the region’s most developed cities and the progress it has made in developing its visual arts space.”

Gillman Barracks will also host the Centre for Contemporary Art (CCA) Singapore. The CCA Singapore aims to produce, present and interpret contemporary art from all regions, and contribute to the exchange of artistic ideas.

Gillman Barracks will also become home to a number of creative businesses, such as art logistics firms and creative agencies. Private companies will have the opportunity to collaborate with artists and artistic programmes.

Speaking about the potential collaborative ventures in Gillman Barracks, JTC’s Director for New Business, Housing and Amenity Cluster, Leow Thiam Seng said, “Gillman Barracks marks another example of Singapore’s cluster development strategy at work. It will be an enclave of visual artists networking with curators, collectors and art lovers from Asia and other parts of the world. This will encourage an exchange and infusion of ideas which can further generate new ideas and collaborations.”

Singapore to become an Asian centre of contemporary art

(Top Left and Above) Artists’ impressions of the Gillman Barracks.

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GLOBAL IT firm SAP, the Singapore Economic Development Board (EDB), and the National Research Foundation (NRF) have established a new research centre in Singapore to address challenges such as transportation, logistics, urban management and sustainability in the region.

The newly launched SAP Research Singapore will be spearheading research work in the region, in efforts to develop solutions to help boost efficiency and competitiveness of both industries. A collaboration between SAP, EDB and the NRF, SAP Research Singapore is the first corporate laboratory to be established at NRF’s Campus for Research Excellence and Technological Enterprise, or CREATE.

Singapore will also become the headquarters for SAP’s research efforts across the Asia-Pacific and Japan, linking up with Singapore-based universities to develop research talent.

BIOTRONIK, manufacturer of cardiovascular medical devices, announced in January this year the opening of a new regional headquarters location based in Singapore, a move that emphasises the strategic commitment of the company to build a powerful leadership position in the Asia-Pacific region.

“BIOTRONIK will fully leverage the accelerated development of the Asia-Pacific countries to further propel the industry-leading growth trajectory that the company has maintained during previous years despite the global economic downturn,” commented Dr Werner Braun, BIOTRONIK’s global managing director. BIOTRONIK’s further plans for full-scale business development in the Asia-Pacific will be coordinated by a team based out of the new headquarters in Asia, Braun added.

“We can now deliver a uniquely sustainable value proposition to our customers — one that includes investment in activities such as our landmark clinical research programme

Research centre to boost transport, logistics and urban management

New BIOTRONIK headquarters to expand Singapore’s expertise in cardiovascular medical devices

According to the company, it will be staffed by 100 researchers and scientists, most of whom will be Singaporeans.

“This new research centre will be a hub where SAP and its partners from both the public and private sectors will develop and showcase the latest technologies and innovation to serve Asia’s dramatic growth and subsequently bring these to the world,” said Dr Vishal Sikka, SAP’s executive board member for innovation and technology. Minister of State for Trade and Industry Teo Ser Luck was the guest-of-honour at the ceremony. He said that “the centre marks the latest step in Singapore’s efforts to up the level of specialised technology talent” and that “Singapore continues to build its reputation as a location for large vendors to host data, as well as provide for them enterprise users to test and commercialise new products and services to the world.”

and best-in-class clinical education — in an environment where we have seen our competitors de-investing,” he said.

“BIOTRONIK is one of the leading cardiovascular companies in the world, and we are proud BIOTRONIK has chosen Singapore to be its Asia-Pacific headquarters. Singapore, with its strong regional connectivity and talent base, is well positioned as the strategic base to help companies access, manage and grow the diverse Asia-Pacific market,” said Kevin Lai, Deputy Director, Biomedical Sciences, Singapore Economic Development Board.

(Left to Right) - Kevin Lai (Deputy Director, Biomedical Sciences, Singapore Economic Development Board), Christoph Boehmer (Managing Director, BIOTRONIK), Dr Werner Braun (Managing Director, BIOTRONIK), Gunnar Wochnowski (Vice-President Asia-Pacific, BIOTRONIK), Angelika Viets (Ambassador of Federal Germany Republic to Singapore).

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Centre of Attraction Singapore has established itself as one of the world’s leading air travel hubs, and with its strategic position, business-friendly environment and industry know-how, the island city is looking to further cement itself as the region’s location of choice for aviation companies.

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IF ANY location can claim to be the centre of the Asian aviation industry, it must be Singapore. It is not for nothing that the city-state hosts the Singapore Air Show. Asia-Pacific’s leading aerospace and aviation event of its kind, the Singapore Air Show, is a biennial event that attracts more visitors than similar events in Dubai and Hong Kong combined.

The Singapore Air Show is a showcase for the country’s aerospace industry — it achieved an annual turnover of US$7.3 billion last year and is set to grow further. At the Singapore Air Show in 2010, engine manufacturer Rolls-Royce hosted a ceremony on an empty 154,000-square-metre site

in northern Singapore to mark the laying of the first brick of a new facility it was building there.

One air show later in 2011, an impressive 65,000-square-metre campus, which houses an assembly and test unit, a wide-chord fan blade manufacturing facility, an advanced technology centre and a regional training centre, was officially opened last month. The S$700 million state-of-the-art campus is Rolls-Royce’s largest facility in Asia, and is the first outside its home in the UK to test large commercial jet engines and manufacture Rolls-Royce’s unique wide-chord fan blades — a proprietary technology used in the manufacture of its engines.

OverviewThe city-state’s aviation achievements are a milestone for Singapore, which has established itself as an aviation hub in more ways than one. The city’s Changi International Airport, which served 42 million passengers in 2010, is one of Asia’s major hubs and is also an epitome of what the ultimate passenger experience should be. Skytrax, the world’s main airline passenger-quality review body, has ranked Singapore’s Changi Airport in its list of the top three airports worldwide every year since 2000. The airport is also renowned for its visitor-friendly facilities, such as swimming pools and a unique butterfly garden, as well as services such as free city tours. In terms of connectivity, Changi has around 100

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airlines operating some 5,500 weekly flights that serve more than 200 cities in approximately 60 countries. Changi Airport is also home to Singapore Airlines (SIA), one of only five airlines in the world to receive a five-star product-quality rating from Skytrax.

“Growing numbers of middle-income consumers are shaping new spending patterns, including the rapid development of new outbound travel markets from fast-developing economies,” notes Andrew Herdman, Director-General of the Association of Asia-Pacific Airlines. Singapore appeals to both seasoned business travellers and new outbound travel markets.

Added to its impressive network and connectivity, Changi Airport is strategically located at the apex of Asia-Pacific and the Middle East, regions that are expected to be the main growth drivers of the commercial aviation industry in the 21st century. These factors make Changi Airport well positioned to capture growth in commercial aviation. Within seven hours flight time to the north of Singapore are three of Asia’s most prominent business and aviation hubs: Beijing is now the world’s second-busiest airport in terms of passenger volumes; Tokyo is the gateway to Japan and a major transit point to North America; and Seoul (right) is the largest city of any developed country among the Organisation for Economic Cooperation and Development’s members and the capital city of one of Asia’s most globally competitive emerging economies. Around seven hours to the west of Singapore is Dubai, the gateway to Africa and the Middle East, while the huge Indian market lies mid-way between Singapore and Dubai. Sydney, the main entry point to the Australasian market, lies seven hours to the south of Singapore. In addition, there

is also a plethora of both mainline and budget connections to cities in Southeast Asia from Singapore. Changi Airport and SIA have together played an important role in the city-state’s efforts to develop not just into a regional aviation hub, but a world-class one.

Another important player in the global aerospace industry is ST Aerospace — the world’s largest independent aircraft maintenance, repair and overhaul (MRO) provider. According to aerospace publication Aviation Week, ST Aerospace is leading the industry with a margin of nearly three million airframe maintenance man-hours between ST Aerospace and its closest competitor.

ST Aerospace has subsidiaries or joint ventures in China, Australia, Denmark, Norway, Sweden, the UK, the USA, and Panama — making it one of only two providers (the other being Lufthansa Technic) with MRO facilities in the three main aviation markets of Asia, Europe and North America. This global footprint means that ST Aerospace can offer worldwide services to customers and allow them to benefit from economies of scale. SIA’s engineering arm, SIAEC, is also ranked among the top ten MRO companies in the world. Together, SIAEC and ST Aerospace give Singapore a critical mass in the MRO space that is unmatched in Asia. Both SIAEC and ST Aerospace have enhanced the country’s position as an aerospace and aviation hub — building on Singapore’s existing global capabilities and partnerships with other aviation markets, and leveraging on its expertise in manufacturing and maintenance, as well as its vibrant research framework.

Changi Airport and SIA have together played an important role to develop the city-state not just into a regional aviation hub, but a world-class one

Within seven hours of flight time from Singapore are Beijing, Tokyo and Seoul

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ST Aerospace and SIAEC have played a major role in developing Singapore into a centre, not just for airline travellers, but also for the aviation industry in general. Numerous aerospace companies have established their regional headquarters in Singapore, while a number have also developed significant partnerships, such as GASCA, a joint venture between SIAEC and Goodrich Aerostructures Group, which specialises in MRO for engine nacelles and airframe composites.

In addition, OEM Pratt & Whitney has established Eagle Services Asia as their Asian centre of excellence for engine overhaul, while SAESL, a joint venture between SIAEC and Rolls-Royce, serves as Rolls-Royce’s regional centre of excellence. Rolls-Royce’s positive experience with SAESL was one of the reasons the manufacturer decided to invest so heavily in Seletar Aerospace Park.

Singapore also hosts GE Aviation’s GEASO, which repairs and refurbishes high- and low-pressure turbine blades and vanes, combustors, rotating parts, and seals for aircraft engines for more than 100 customers around the world. The

facility underwent a major expansion in 2008, with GE citing GEASO as one of the best-performing locations in its global network. GEASO will handle the GEnx engine that powers the Boeing 787 Dreamliner, the world’s first major airliner to be built mainly from composite materials. Boasting world-class MRO services, ready availability of talent, global connectivity and a cost-competitive and business-friendly environment, Singapore is attractive to internationally recognised airlines and aviation firms.

Facts on the GroundWith over 100 aerospace companies with an established presence in Singapore, the city-state has captured 20 to 25 per cent of the Asia-Pacific MRO market, providing airlines with a one-stop shop for their maintenance needs.

This market is growing with increasing popularity of fuel-efficient, comfortable and reliable aircraft, in a sector where high oil prices, customer satisfaction and on-time performance are major considerations. Aircraft manufacturer Boeing estimates that approximately half of the world’s air traffic growth will be driven by the Asia-Pacific region over the next 20 years, and that total air traffic for the region will grow 6.7 per cent per year during the period. Accordingly, the Asia-Pacific region will require some 11,450 new aircraft between 2011 and 2030, which will account for around a third of new deliveries worldwide.

Singapore’s aviation industry has experienced strong growth over the past few decades. For example, the aerospace industry, which employs over 19,000 people, has achieved a compounded annual growth rate of over 10 per cent since 1990. This growth rate is also expected to continue — respondents to a survey by the Association

With world-class MRO, global connectivity and a cost-competitive and business-friendly environment, Singapore attracts globally recognised airlines and aviation firms

The 3.2 million-square-metre Seletar Aerospace Park is rapidly becoming a cluster for aviation companies, and is the strategic location for the aforementioned Rolls-Royce facility. This once-sleepy corner of Singapore, located not too far from Changi Airport, has been transformed into a buzzing regional aviation hub. Across the road from the Rolls-Royce facility, Textron Group sister companies, Bell Helicopter and business jet manufacturer Cessna, are building a 14,864-square-metre facility that will act as a

of Aerospace Industries (Singapore) just over a year ago indicated that the total turnover for the city-state’s aerospace industry is expected to grow by 33 per cent, from S$7.0 billion in 2009 to S$9.3 billion in 2015 (this turnover is for the entire Singaporean aerospace industry, including all Singapore-owned and Singapore-based subsidiaries of foreign companies).

Singapore is in an advantageous position to capture the projected growth in aviation.

“Singapore wants to be part of this global growth, to enable the local aerospace sector to contribute significantly to the economy, and to create jobs for Singaporeans,” says Lui Tuck Yew, the country’s Minister for Transport. Lui adds, “To achieve all these, we have to maintain our leadership position as a global aerospace hub by continuing to deliver world-class infrastructure, such as the Seletar Aerospace Park and Seletar Airport.”

service and support centre for the region when it opens in the second quarter of 2012.

This expansion of Textron follows fellow helicopter manufacturer Eurocopter’s move into an 8,200-square-metre facility in Seletar in 2010; the Franco-German-Spanish manufacturer also has its Southeast Asian headquarters in Singapore. ST Aerospace has a MRO facility also situated

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in Seletar, catering for narrow-body MRO and passenger-to-freighter conversions.

Seletar Aerospace Park also caters for a number of companies at the smaller end of the scale — namely the business jet market. Hawker Pacific, a business jet and helicopter service and sales company, has built a private-jet customer service centre at Seletar. Another corporate jet operator, Jet Aviation, also has a facility in the business park. There are also several facilities for smaller aerospace companies, providing a “cluster” to support the likes of Rolls-Royce.

The Singapore DifferenceRolls-Royce’s decision to manufacture wide-chord fan blades in Singapore, the first such venture outside of the UK for the engine manufacturer, was a major development for Singapore’s aerospace industry.

With a world-class MRO sector now in place, building up its aerospace manufacturing capability is the next logical step for Singapore — currently, around 10 per cent of the country’s aerospace industry is made up of manufacturing, and this is likely to grow.

Skilled labour is a highly prized asset for global players in the aerospace sector, and Singapore has a readily available talent pool with a high level of manufacturing expertise. Singapore’s tertiary talent pipeline produces around 1,500 aerospace graduates a year, creating a readily available pool of skilled and suitably trained workers. This depth of talent gives the country an edge that many regional competitors find hard to match.

Singapore is also leveraging its academic strength in the aerospace sector. Singapore research and development agency A*STAR’s aerospace

programme links local academic institutes with global heavyweights, including EADS, Boeing and Pratt & Whitney. There are now some 18 companies involved in research areas such as MRO processes, testing techniques, and the use of composite materials — a vital component for the aircraft industry as several new aircraft models are largely made of composites.

Earlier this year, A*STAR launched a range of new initiatives in partnership with the aerospace industry, including erosion-resistant thermal barrier coating for turbine engine components and intelligent inspection tools to assist the visual inspection of engines.

A cutting-edge initiative that was recently launched is AeroCloud — this collaboration between the industry and academia looks at the development of cloud solutions for the

Skilled labour is a highly prized asset for global players in the aerospace sector, and Singapore has a readily available talent pool with a high level of manufacturing expertise

Building up its aerospacemanufacturing capability is the next logical step for Singapore

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aerospace MRO and manufacturing industries within Singapore. Cloud computing, whereby servers are essentially outsourced, could make it easier and cheaper to match IT requirements to fluctuating work volumes that are a common feature of the aerospace industry. Singapore is also at the forefront of research into alternative fuels, which is another area of increasing importance for the aerospace industry.

The dual emphasis on skill training and knowledge development helps Singapore’s aviation industry to continually increase its productivity. In the Singapore Aerospace Manpower Study, commissioned by the Association of Aerospace Industries (Singapore) in 2010, it was found that the industry’s average revenue per employee in 2009 was about S$439,000, and it was projected that this would grow by about 13 per cent to S$496,000 by 2015. Patrick Moulay, Commercial Vice-President at Eurocopter Southeast Asia, says that Singapore’s overall competitive offering in terms of operation cost and workforce productivity is a key attraction, alongside its strategic location, government support, and the development of infrastructure such as Seletar Aerospace Park.

Singapore’s open, pro-business environment and global connectivity add to its attractiveness as an aviation hub. In an industry that literally spans the world, the maximised ease and minimised cost of getting spare parts is of great importance.

Singapore’s Investment Allowance Scheme for aircraft rotables — any item that requires replacing periodically — provides an investment allowance of 50 per cent of the expenditure incurred on these rotables. The Singaporean Government recently enhanced the scheme by removing the “non-swapping condition”, which helps to reduce the administrative difficulties of having to track specific aircraft rotables.

The city-state’s business-friendly environment also makes Singapore a major centre for the aircraft leasing industry: one of the world’s largest aircraft leasing groups, BOC Aviation, is based in Singapore. In addition, a global business environment, coupled with a bilingual workforce, places Singapore in a good position to serve the fast-growing Chinese aviation industry.

This environment has not gone unnoticed by aerospace companies. A survey by the Association of Aerospace Industries (Singapore) found that Singapore’s ability to attract, retain and expand aerospace-related businesses was

Emphasis for aviation lies on skill training and knowledge development

Singapore has taken a pioneering role in shaping the industry itself with its industry players, location and infrastructure — not least by taking a leading role in ASEAN’s economic liberalisation

ranked highly by aerospace companies, with the majority of respondents (78 per cent) rating Singapore as being better positioned as a location for aerospace companies than other regional markets.

The centennial anniversary of the first aircraft to land in Singapore was marked in 2011. With over a hundred years of aviation history, the city-state has always recognised the importance this

industry has played in the country’s development and advancement. Equally, Singapore has taken a pioneering role in shaping the industry itself — not least by taking a leading role in the economic liberalisation of the ASEAN region.

With industry-leading players, a strategic location and first-rate infrastructure, the aviation industry in Singapore looks set to grow from strength to strength.

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Record Investment Commitments For EDB In 2011 Despite Challenging Global Economic EnvironmentSingapore’s ‘Global-Asia’ positioning and EDB’s ‘Home’ strategy continue to gain traction with international companies and Asian enterprises.

(I) Overview1. EDB achieved record investment commitments in 2011 as investor interest in Asia remained strong.

Singapore’s positioning as a ‘Global-Asia’ hub and EDB’s ‘Home’ strategy resonated well with companies looking for a strategic base in Asia to drive their business, innovation and talent activities.

2. For 2012, EDB expects investment commitments to be sustained around levels achieved in 2011.

EDB will continue to build on and strengthen Singapore’s ‘Global-Asia’ positioning even as new capabilities put in place in recent years gain traction.

(II) Year 2011 In Review3. EDB achieved record investment commitments in 2011, meeting or exceeding the forecast

announced in January last year. This took place despite global economic uncertainties, especially in the second half of 2011.

4. Investment commitments for FAI, TBS, TBS less depreciation and value-added per annum were at the top end of the forecasts. FAI, at S$13.7 billion, represented a record year if spikes due to the petrochemical cracker-related investments in 2007 and 2008 were excluded. When projects that were committed in 2011 are fully implemented, they will contribute a record S$15.5 billion in value-added per annum and create 20,300 new skilled jobs, above our forecasted range of 16,000 to 19,000 jobs.

Indicator 2010 2011 2011 Actual Forecast ActualFixed Asset Investments (S$ billion) 12.9 12.0 – 14.0 13.7 Total Business Spending per annum (S$ billion) 8.6 7.5 – 9.0 8.6Total Business Spending less depreciation per annum 7.2 6.0 – 7.5 7.3(S$ billion)Expected VA per annum (S$ billion) 14.4 14.0 – 16.0 15.5No. of Skilled Jobs 21,300 16,000 – 19,000 20,300

(III) 2012 Investment Outlook5. EDB is cautiously optimistic about the outlook for 2012 and expects investment commitments in 2012

to be sustained at levels attained in 2011. Investment interest in Asia remains healthy in spite of the uncertainties in the global economy, especially in the Eurozone.

6. EDB’s forecast for 2012 is as follows:

7. The strong FAI forecast for 2012 reflects the continued strong interest in downstream chemicals projects that have been enabled by the two new petrochemical crackers. Decisions on such capital-intensive investments are typically based on long-term strategic considerations and are less sensitive to short-term economic volatility. Barring any major negative economic event, EDB expects that the investment momentum in 2011 will be carried over into 2012.

(IV) Conclusion8. “The 2011 record investment commitment levels achieved by EDB is testament to Singapore’s

continued attractiveness to global companies and Asian enterprises,” said Leo Yip, Chairman of EDB. “In 2012, EDB will enhance Singapore’s ‘Global-Asia’ positioning by championing key initiatives to build deeper horizontal business capabilities, such as consumer insights, data analytics and leadership development. These efforts will strengthen Singapore’s partnership with companies seeking to capture growth opportunities in Asia and globally, and firmly establish Singapore as a strategic location in Asia, for global companies to tap into pan-Asian growth opportunities and for Asian enterprises to access global markets.”

For more information about EDB Year in Review 2011, please visit SEDB.com

EDB Year In Review 2011

Indicator 2011 Actual 2012 ForecastFixed Asset Investments (S$ billion) 13.7 13.0 – 15.0Total Business Spending less depreciation 7.3 6.0 – 7.5per annum (S$ billion)Expected VA per annum (S$ billion) 15.5 15.0 – 17.0No. of Skilled Jobs 20,300 18,000 – 21,000

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Singapore Business News_Singapore Business News is a monthly publication that updates readers on the latest industry trends in Asia, with a uniquely Singaporean perspective. Highlights include Singaporean business stories and special opinion pieces on opportunities in Asia, how global companies are leveraging Singapore to tap into pan-Asian growth opportunities, and how Asian enterprises are globalising via Singapore. Singapore Business News also provides case studies on how Singapore partners businesses to deliver future-ready solutions.

The Singapore Economic Development Board (EDB) is the lead government agency for planning and executing strategies to enhance Singapore’s position as a global business centre. EDB dreams, designs and delivers solutions that create value for investors and companies in Singapore. Our missions is to create for Singapore, sustainable econmic growth with vibrant business and good job opportunities.

EDB’s ‘Host to Home’ strategy articulates how we are positioning Singapore for the future. It is about extending Singapore’s value proposition to businesses not just to help them improve their bottom line, but also to help them grow their top line through establishing and deepening strategic activities in Singapore to drive their business, innovation and talent objectives in Asia and globally.

Singapore Business News is a publication of the Singapore Economic Development Board.

Singapore: Future Ready articulates the nation’s aspirations to be a partner for global businesses as they develop their ideas for tomorrow’s solutions. Singapore does so by recognising the value of long term partnerships, adopting a forward-looking approach, demonstrating ingenuity, and taking on challenges with a can-do spirit.

About EDB

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