Singapore Government Press Release

Media Division, Ministry of Information & The Arts, #36-00, PSA Building, 460 Alexandra Road, Singapore 119963, Tel: 3757794/5

SPEECH BY MR MAH BOW TAN, MINISTER FOR COMMUNICATIONS, AT THE OPENING CEREMONY OF BMW PARTS DISTRIBUTION CENTRE ON 29 NOV 96 AT 11.00 AM AT SEMBAWANG WHARVES

The Asia Pacific is today the world's fastest growing region, with an average annual economic growth of 7% and a market size of 3.2 billion people. The World Bank estimates that the region will account for 40% of the world's economic activities by the year 2000.

This economic boom has spawned a relatively new industry, the logistics industry. In Singapore, the logistics sector has been growing at an annual rate of about 10% from 1991 - 1994. In 1995, the sector contributed S$9 billion in value added and another S$18.9 billion in business spending. Today, there are over 6,000 companies in Singapore providing a range of logistics services including warehousing, inventory management, documentation, freight forwarding and distribution. The availability of these logistics facilities and services has attracted over 500 MNCs to choose Singapore as their regional distribution centre.

Much of Singapore's development as a logistics hub can be attributed to our seaport and airport. The Port of Singapore is connected to more than 600 ports around the world. Our shippers have a choice of 14 sailings to the US, 22 to Europe and 30 to Japan every week. Changi Airport has 69 airlines connecting Singapore to 133 cities. Each week, there are over 3,000 flights from Changi to destinations world-wide.

Complementing these sea and air links are the Electronic Data Interchange (EDI) linkages. TRADENET links shippers, forwarders, shipping agents and government organisations in the processing of trade documents. PORTNET and SPECTRUM are specialised sea and air cargo systems which allow quick and paperless information exchange among the trading community.

To further enhance Singapore's position as a regional logistics hub, the Government has embarked on several projects to provide even better logistics facilities and services. These include the construction of the Pasir Panjang Terminal and the development of the Changi South Aviation Distrizone. When completed, Pasir Panjang Terminal will have a handling capacity of 36 million TEUs per year. The Changi South Distrizone, strategically located near Changi Airport, has already attracted 24 local and foreign logistics operators.

A similar thrust towards greater improvements can also be felt here in Sembawang Wharves. The conventional berths at Pasir Panjang, Sembawang and Jurong have been handling over 16 million tonnes of general cargo each year. Besides general cargo, these terminals can also handle project cargo such as construction equipment and industrial machinery to support infrastructure developments in the region. In addition, they can serve as ready depots for spares required for time sensitive services in the region.

The Port of Singapore Authority (PSA) has therefore decided to transform Pasir Panjang and Sembawang Wharves into logistics centres. Instead of merely transferring the cargo from ship to shore and vice versa, PSA encourages value-added services such as kitting, packaging, labelling and consolidation in these terminals before redistribution.

Here, in Sembawang Wharves, PSA has successfully developed the terminal into a specialised vehicle gateway. The number of vehicles handled has increased four-fold from 18,000 in 1989 to 73,000 in 1995. In view of its growing popularity as a car transhipment centre, PSA is planning a multi-level car storage facility. The facility will be equipped with a computerised inventory management system and will provide a comprehensive range of services such as pre-delivery inspection, degreasing, polishing and installation of accessories, which will boost productivity in the logistics of the motor industry in Singapore and the region.

Besides being a specialised gateway for cars, Sembawang Wharves is also being promoted as a regional distribution base for car parts to support the automobile industry in the region. It is therefore noteworthy that BMW has set up its Parts Distribution Centre here in Sembawang Wharves. This facility will handle a stock of 20,000 parts and accessories worth about $20 million. The Parts Distribution Centre will distribute these items using our seaport or airport to about 20 countries in the region.

The set-up of the BMW Asia Parts Distribution Centre follows shortly after the establishment of the BMW Regional Training Centre here in July 1995 and the attainment of the Business Headquarters award in October 1995. I congratulate BMW for its growth in Singapore. BMW has indicated that it is committed to Asia and sees Singapore as a base for its regional expansion. By leveraging on Singapore's strategic location, excellent shipping and airline connections, good infrastructure, pro-business environment, state-of-the-art technology and skilled manpower, I am confident that BMW, like many other companies, will be successful in its business expansion in the region.

Now, I take great pleasure in declaring the BMW Parts Distribution Centre open.