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Archive for May 3rd, 2008

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Prime buys are the best bet

Posted by luxuryasiahome on May 3, 2008

Cushman and Wakefiled’s Donald Han offers his views on the property market in the Channel NewsAsia programme, When The Bears Are Out – Invest Wise, hosted by Lin Xueling.

What are your favourite locations at the moment? And for which categories?

It all depends on your investment profile and investment criteria. I always say that you should go into a project or property sector that you are most familiar with.

For someone who is looking at residential properties, you might want to go into the first-tier residential market where you can get fairly good returns for your investment.

The more sophisticated ones are banding their investment dollars to create a larger quantum and investing in markets where we’ve seen substantial depreciation in asset values.

And one of the more common routes would be to go to the United States. This could present an opportunity, in terms of going in to buy US40 cents (54 cents) out of US$1 and getting what we call the deep-sea fishing expedition prices.

So it’s a question of waiting for the right time. But generally, you’re still pretty bullish about the market?

I’m still pretty bullish. I think everyone says it’s all about location, location, location. I think you need to put another important doctrine to that. It’s also about timing, timing, timing.

In fact, history has shown that one can make more money from timing than just from location over a short period of time.

We Asians tend to be really keen on property. Do you think that’s going to continue?

If you’re looking at the market right now, it’s a perfect opportunity for investors who have missed out over the last one or two years and have cash.

This is the investor whose money in the bank is earning interest rates of less than one per cent, considering that inflation is going to be four, or even six per cent.

At the end of the day, you’re better off hedging that and putting your money in asset location – with part of it being in property. This can help because as an asset class, it’s a hedge against inflation.

Also, owners and buyers are now more realistic in terms of pricing. If they were quoting a price 10 to 20 per cent higher than the market value last year, they’re now willing to sell at, or below market value.

You’ve been talking about time being everything. Do you think that the timing is right now?

I think the timing could be anything from the next six to 12 months. A lot depends on what unfolds from the sub-prime and, more importantly, the banking mess. It will affect the demand and sentiment.

At the end of the day, the Singapore property market is affected by sentiment – what you hear and what’s in the headlines tomorrow.

The headlines recently have been pretty much stellar economic growth for the first quarter – 7.2 per cent. That’s excellent. If the stock market doesn’t go down from current levels, that would help sentiment again. And we’ll have to wait for some of the Urban Renewal Authority data in terms of the analysis of the first quarter. We’ll make a decision at that point of time and over the next six months.

What would be your top tips for surviving the next six months?

Go for prime properties … it’s probably the first to go up in any recovery and the last to come down, so it’s very defensive. And measure your investment on the kind of yields that you can get and prime properties typically would be able to be leased out very quickly. Always look into prime properties wherever you go. It works in Singapore, Tokyo and US, too.

The programme is shown on Channel NewsAsia every Thursday at 9.30pm.

Source : Today – 3 May 2008

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The bets are on U: Economists

Posted by luxuryasiahome on May 3, 2008

Events such as the Grand Prix are new growth drivers to help cushion the slowdown: Analysts

THE Singapore economy is in for at least a year-long slowdown, but there will still be growth, according to most economists surveyed by Today.

This is the U-shaped scenario painted by Prime Minister Lee Hsien Loong during his May Day Rally speech on Thursday, which predicts that it could be next year before the United States economy sorts itself out and Singapore would be “loaded down significantly”.

In his speech, Mr Lee had also painted two other scenarios – the best-case V, where the US experiences just a mild recession with growth on track later in the year, or L, the gloomiest and most unlikely assessment of “an extended and severe downturn” that could stretch for 10 years.

While most economists are placing their bets on U, a more protracted downturn, they are still confident of Singapore achieving a 4 to 6 per cent economic growth rate for this year.

“If it’s U, growth will probably be at the lower end of the four to six per cent forecast. If it’s V, it’ll be at the higher end,” said Mr Leong Wai Ho, Barclays Capital associate director and regional economist.

A strong proponent of the U-shaped scenario, Standard Chartered Bank said the current downturn is led by the consumer, unlike the previous 2001 “V-shaped” corporate-led recession.

“The US housing market is weak, the jobs market may be turning down, credit conditions are tighter and there is increased uncertainty about the stock market … in such a climate, even US firms that are in good shape will be reluctant to invest at home,” said the bank in a recent report.

To UOB economist Jimmy Koh, one of the main reasons for the slower recovery is that banks need time to repair their battered balanced sheets that resulted from the sub-prime crisis. That leads to tighter credit conditions that inhibit the growth of the economy.

While exports and manufacturing, especially the electronics sector, will take a step back in such a slowdown, Mr Vishnu Varathan, economist at research house Forecast, believes the growth momentum from construction projects will prop up the economy for the year.

Referring to sectors such as services, Mr Koh said: “The new-found growth engines from Singapore restructuring its economy have also begun to yield results.

“Next year, the integrated resorts will kick in. There are also various events, such as the Grand Prix and the Youth Olympics, that will provide the cushion for Singapore’s economy at least for the next one to two years.”  
 
Source : Today – 3 May 2008

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The bets are on U: Economists

Posted by luxuryasiahome on May 3, 2008

Events such as the Grand Prix are new growth drivers to help cushion the slowdown: Analysts

THE Singapore economy is in for at least a year-long slowdown, but there will still be growth, according to most economists surveyed by Today.

This is the U-shaped scenario painted by Prime Minister Lee Hsien Loong during his May Day Rally speech on Thursday, which predicts that it could be next year before the United States economy sorts itself out and Singapore would be “loaded down significantly”.

In his speech, Mr Lee had also painted two other scenarios – the best-case V, where the US experiences just a mild recession with growth on track later in the year, or L, the gloomiest and most unlikely assessment of “an extended and severe downturn” that could stretch for 10 years.

While most economists are placing their bets on U, a more protracted downturn, they are still confident of Singapore achieving a 4 to 6 per cent economic growth rate for this year.

“If it’s U, growth will probably be at the lower end of the four to six per cent forecast. If it’s V, it’ll be at the higher end,” said Mr Leong Wai Ho, Barclays Capital associate director and regional economist.

A strong proponent of the U-shaped scenario, Standard Chartered Bank said the current downturn is led by the consumer, unlike the previous 2001 “V-shaped” corporate-led recession.

“The US housing market is weak, the jobs market may be turning down, credit conditions are tighter and there is increased uncertainty about the stock market … in such a climate, even US firms that are in good shape will be reluctant to invest at home,” said the bank in a recent report.

To UOB economist Jimmy Koh, one of the main reasons for the slower recovery is that banks need time to repair their battered balanced sheets that resulted from the sub-prime crisis. That leads to tighter credit conditions that inhibit the growth of the economy.

While exports and manufacturing, especially the electronics sector, will take a step back in such a slowdown, Mr Vishnu Varathan, economist at research house Forecast, believes the growth momentum from construction projects will prop up the economy for the year.

Referring to sectors such as services, Mr Koh said: “The new-found growth engines from Singapore restructuring its economy have also begun to yield results.

“Next year, the integrated resorts will kick in. There are also various events, such as the Grand Prix and the Youth Olympics, that will provide the cushion for Singapore’s economy at least for the next one to two years.”  
 
Source : Today – 3 May 2008

Posted in General, Singapore Economy | Tagged: , | Leave a Comment »

Experts divided over whether good times are back

Posted by luxuryasiahome on May 3, 2008

Is the global financial crisis really over? Many in the financial industry seem to think so.

On Thursday, Britain’s central bank suggested that the credit crisis was easing, saying the market has been overly pessimistic in valuing certain assets which now even look like bargains.

But a number of economists continue to caution that much of the optimism is misplaced. The full extent of the crisis, they say, has yet to wend through the wider economy, and may be the trigger for a long-overdue unwinding of economic imbalances that have built up in recent years.

Echoing earlier optimistic comments by heads of investment banks, the Bank of England (BOE) said that ‘while there remain downside risks, the most likely path ahead is that confidence and risk appetite will return gradually in the coming months’.

Mr John Gieve, a BOE deputy governor, said in the bank’s twice-yearly Financial Stability Report that ‘the pricing of risk in credit markets seems to have swung from being unsustainably low last summer to being temporarily too high relative to fundamentals’.

The report added, ‘As uncertainty falls and market liquidity improves, it should become clearer that some assets appear cheap relative to credit fundamentals.’

The comments are the latest in a discussion among policymakers, bankers, economists and investors about whether the current financial and economic turmoil is nearing the end.

On Wednesday, United States Treasury Secretary Henry Paulson Jr said that credit market conditions were improving. ‘We are closer to the end of this problem than we are to the beginning,’ he told Bloomberg Television.

The International Monetary Fund has estimated that the ultimate cost will reach nearly US$1 trillion (S$1.36 trillion) in write-downs and credit losses in the current crisis. But this estimate, based on imperfect information and models, may turn out to have been unduly pessimistic, the BOE said.

Still, some economists, like Mr Julian Jessop, the chief international economist at Capital Economics in London, said that even if conditions in the financial markets improved quickly, the wider economic fallout from the credit crisis would persist for many months or even years to come.

‘Indeed, the financial crisis might be seen as simply the trigger for the long-overdue unwinding of the economic imbalances that have built up in recent years,’ he said.

Uncertainties about the extent of the economic downturn and house price declines, Mr Jessop added, will add to the risk aversion in the financial sector.

The BOE shared some of that caution in its report on Thursday, saying tight credit conditions could lead to a pickup in defaults among vulnerable borrowers, parts of the commercial property sector and some non-financial companies with a lot of debt.

The BOE cut its benchmark interest rate last month for a third time since December, to 5 per cent, while the US Federal Reserve on Wednesday lowered its benchmark rate to 2 per cent, its seventh cut since September.

The BOE, following a similar initiative by the Fed, also announced a plan to swop £50 billion (S$133.59 billion) of British government bonds for up to three years in exchange for the illiquid mortgage securities that banks were holding on their balance sheets.

But some analysts pointed out that the banks’ need for such a facility illustrated that there were still not enough buyers for these assets in the market and that their value might have to drop further.

Banks worldwide have already written off more than US$300 billion in soured investments since the crisis began last summer with the collapse of the US sub-prime mortgage market.

The BOE is conscious that the market is partly ruled by sentiment, and the bank made clear in its report that too much pessimism about valuations and persisting concerns ‘could become self-fulfilling’.

Mr James Knightley, an economist at ING Financial Markets in London, said that ‘there may be signs that the credit crunch is easing up but there are still uncertainties about write-downs, and the macro numbers will get worse before they get better’.

‘There is still so much uncertainty that it is difficult to value the costs of the credit crisis, and there are so many shifts and turns in sentiment that it’s impossible to predict any timeframe,’ he said.

PROBLEMS WILL PERSIST

‘The financial crisis might be seen as simply the trigger for the long-overdue unwinding of the economic imbalances that have built up in recent years.’ - MR JULIAN JESSOP, chief international economist at Capital Economics in London, who believes the wider economic fallout from the credit crisis will persist for many months or even years

STILL TOO EARLY TO TELL

‘There is still so much uncertainty that it is difficult to value the costs of the credit crisis, and there are so many shifts and turns in sentiment that it’s impossible to predict any timeframe.’ – MR JAMES KNIGHTLEY, an economist at ING Financial Markets in London

Source : Straits Times – 3 May 2008

Posted in General, Global Economy | Tagged: , , | Leave a Comment »

Experts divided over whether good times are back

Posted by luxuryasiahome on May 3, 2008

Is the global financial crisis really over? Many in the financial industry seem to think so.

On Thursday, Britain’s central bank suggested that the credit crisis was easing, saying the market has been overly pessimistic in valuing certain assets which now even look like bargains.

But a number of economists continue to caution that much of the optimism is misplaced. The full extent of the crisis, they say, has yet to wend through the wider economy, and may be the trigger for a long-overdue unwinding of economic imbalances that have built up in recent years.

Echoing earlier optimistic comments by heads of investment banks, the Bank of England (BOE) said that ‘while there remain downside risks, the most likely path ahead is that confidence and risk appetite will return gradually in the coming months’.

Mr John Gieve, a BOE deputy governor, said in the bank’s twice-yearly Financial Stability Report that ‘the pricing of risk in credit markets seems to have swung from being unsustainably low last summer to being temporarily too high relative to fundamentals’.

The report added, ‘As uncertainty falls and market liquidity improves, it should become clearer that some assets appear cheap relative to credit fundamentals.’

The comments are the latest in a discussion among policymakers, bankers, economists and investors about whether the current financial and economic turmoil is nearing the end.

On Wednesday, United States Treasury Secretary Henry Paulson Jr said that credit market conditions were improving. ‘We are closer to the end of this problem than we are to the beginning,’ he told Bloomberg Television.

The International Monetary Fund has estimated that the ultimate cost will reach nearly US$1 trillion (S$1.36 trillion) in write-downs and credit losses in the current crisis. But this estimate, based on imperfect information and models, may turn out to have been unduly pessimistic, the BOE said.

Still, some economists, like Mr Julian Jessop, the chief international economist at Capital Economics in London, said that even if conditions in the financial markets improved quickly, the wider economic fallout from the credit crisis would persist for many months or even years to come.

‘Indeed, the financial crisis might be seen as simply the trigger for the long-overdue unwinding of the economic imbalances that have built up in recent years,’ he said.

Uncertainties about the extent of the economic downturn and house price declines, Mr Jessop added, will add to the risk aversion in the financial sector.

The BOE shared some of that caution in its report on Thursday, saying tight credit conditions could lead to a pickup in defaults among vulnerable borrowers, parts of the commercial property sector and some non-financial companies with a lot of debt.

The BOE cut its benchmark interest rate last month for a third time since December, to 5 per cent, while the US Federal Reserve on Wednesday lowered its benchmark rate to 2 per cent, its seventh cut since September.

The BOE, following a similar initiative by the Fed, also announced a plan to swop £50 billion (S$133.59 billion) of British government bonds for up to three years in exchange for the illiquid mortgage securities that banks were holding on their balance sheets.

But some analysts pointed out that the banks’ need for such a facility illustrated that there were still not enough buyers for these assets in the market and that their value might have to drop further.

Banks worldwide have already written off more than US$300 billion in soured investments since the crisis began last summer with the collapse of the US sub-prime mortgage market.

The BOE is conscious that the market is partly ruled by sentiment, and the bank made clear in its report that too much pessimism about valuations and persisting concerns ‘could become self-fulfilling’.

Mr James Knightley, an economist at ING Financial Markets in London, said that ‘there may be signs that the credit crunch is easing up but there are still uncertainties about write-downs, and the macro numbers will get worse before they get better’.

‘There is still so much uncertainty that it is difficult to value the costs of the credit crisis, and there are so many shifts and turns in sentiment that it’s impossible to predict any timeframe,’ he said.

PROBLEMS WILL PERSIST

‘The financial crisis might be seen as simply the trigger for the long-overdue unwinding of the economic imbalances that have built up in recent years.’ - MR JULIAN JESSOP, chief international economist at Capital Economics in London, who believes the wider economic fallout from the credit crisis will persist for many months or even years

STILL TOO EARLY TO TELL

‘There is still so much uncertainty that it is difficult to value the costs of the credit crisis, and there are so many shifts and turns in sentiment that it’s impossible to predict any timeframe.’ – MR JAMES KNIGHTLEY, an economist at ING Financial Markets in London

Source : Straits Times – 3 May 2008

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CapitaLand CEO sits on paper gain of $2.86m from options

Posted by luxuryasiahome on May 3, 2008

CAPITALAND Group president and CEO Liew Mun Leong is sitting on a handsome paper gain of $2.86 million (based on yesterday’s closing price for the counter) after exercising options for a total of 600,000 CapitaLand shares at an average $2.33 per share on April 30.

The counter closed 30 cents higher yesterday at $7.09.

A filing by CapitaLand to Singapore Exchange yesterday evening gave a breakdown of the exercise prices of the share options. Mr Liew exercised options for 200,000 shares each at $1.02, $2.25 and $3.73 each. Following the exercise, his direct stake in the property giant increased from about 1.832 million shares to 2.432 million shares, or a 0.086 per cent stake. His deemed interest in CapitaLand remains unchanged at 158,000 shares.

Mr Liew received $6.49 million in pay from the property developer last year, mostly in bonuses – more than the $5.14 million he earned in 2006.

On top of the $6.49 million pay packet last year, Mr Liew was granted contingent share awards of some 462,800 CapitaLand shares last year, based on information in CapitaLand’s latest annual report.

The actual number of shares that Mr Liew receives from the share awards last year will depend on his achieving ‘pre-determined targets’ over a period of one to three years, according to CapitaLand.

If ’superior targets’ are met, Mr Liew could receive a maximum of 845,000 CapitaLand shares – nearly twice the ‘baseline’ number of shares awarded. But if he fails to meet the targets, no shares will be issued under the awards.

CapitaLand this week posted a 59.3 per cent year-on-year drop in Q1 net profit to $247.5 million, from $608.1 million in Q1 2007 when the bottom line had been boosted by a $426.8 million fair-value gain from the sale of 8 Shenton Way.

Source : Business Times – 3 May 2008

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CapitaLand CEO sits on paper gain of $2.86m from options

Posted by luxuryasiahome on May 3, 2008

CAPITALAND Group president and CEO Liew Mun Leong is sitting on a handsome paper gain of $2.86 million (based on yesterday’s closing price for the counter) after exercising options for a total of 600,000 CapitaLand shares at an average $2.33 per share on April 30.

The counter closed 30 cents higher yesterday at $7.09.

A filing by CapitaLand to Singapore Exchange yesterday evening gave a breakdown of the exercise prices of the share options. Mr Liew exercised options for 200,000 shares each at $1.02, $2.25 and $3.73 each. Following the exercise, his direct stake in the property giant increased from about 1.832 million shares to 2.432 million shares, or a 0.086 per cent stake. His deemed interest in CapitaLand remains unchanged at 158,000 shares.

Mr Liew received $6.49 million in pay from the property developer last year, mostly in bonuses – more than the $5.14 million he earned in 2006.

On top of the $6.49 million pay packet last year, Mr Liew was granted contingent share awards of some 462,800 CapitaLand shares last year, based on information in CapitaLand’s latest annual report.

The actual number of shares that Mr Liew receives from the share awards last year will depend on his achieving ‘pre-determined targets’ over a period of one to three years, according to CapitaLand.

If ’superior targets’ are met, Mr Liew could receive a maximum of 845,000 CapitaLand shares – nearly twice the ‘baseline’ number of shares awarded. But if he fails to meet the targets, no shares will be issued under the awards.

CapitaLand this week posted a 59.3 per cent year-on-year drop in Q1 net profit to $247.5 million, from $608.1 million in Q1 2007 when the bottom line had been boosted by a $426.8 million fair-value gain from the sale of 8 Shenton Way.

Source : Business Times – 3 May 2008

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That condo is moving out of reach

Posted by luxuryasiahome on May 3, 2008

THERE have been several episodes of residential property price escalations in Singapore that may have overshot income levels. But just how do we determine if private property prices have become more or less affordable?

We have developed a housing affordability index that might add an additional indicator to help answer policy questions on housing affordability. Standard measures that link property prices to annual incomes are not enough. Here we present a more meaningful index that we developed primarily to assess the affordability of private residential housing in Singapore.

Buying a residential property is a long-term decision. We need, therefore, a measure of a household’s long-term income. For this we obtained unpublished data from the Department of Statistics on median household income since 1990 by age of household head at five-year intervals from age 20 to 64. The raw data shows income peaks occurring at age groups 30-34 and 55-59. If we remove the effect of different birth cohorts from the data, we can see that income peaks around age 50.

From the above income data, we used statistical techniques to estimate the income of different birth cohorts over their working age. From this, we computed a time series of lifetime incomes as the discounted present value of future income streams – that is, calculating future incomes in terms of today’s dollars.

Chart 1 plots the lifetime income of middle-income earners by birth year. Significantly, the lifetime incomes of those born before the 1960s were stagnant. As can be seen from the chart, whether one was born in 1926 or 1956, the lifetime median income hovered around $500,000 in 2000 prices. (Most of these cohorts were in their old age during our observation period.)

The lifetime median incomes of those born after 1960 were significantly higher, coinciding with the rapid economic growth of Singapore at that time. But the lifetime median incomes of those born after the mid-1970s taper off. This is because these people began their working lives after the mid-1990s, when the economy entered a turbulent period beginning with the 1997-98 Asian financial crisis.

Having developed a chart tracking the lifetime median incomes of different cohorts, we linked this to property prices to derive an index. We divided long-term income for any chosen age group by the price of a selected type of property. This gives us a housing affordability index, which in essence measures property price against the median lifetime income of a household.

Chart 2 plots the income-price ratio for the 30-year-old group each year considering buying private residential property. We focus on this age group because that is roughly the age at which people might begin to buy private residential property. One graph on the chart looks strictly at this income-price ratio.

The other graph ‘with HDB upgrader effect’ tries to capture the wealth effect generated by rising HDB resale prices. We assume that the 30-year-old had bought a subsidised HDB flat, resold it, and directed all cash proceeds from the sale into the purchase of a private property. In practice, not all HDB resale proceeds accrue to the seller, but for lack of available data, we assume that it does. This means the ‘HDB wealth effect’ as represented on the graph is an overestimate, but it provides a useful indicator nevertheless.

Chart 2 is instructive. In 1975, a 30-year-old’s lifetime income was nearly five times the amount he would have paid for a private property. But with prices rising, by 1983, his lifetime income would have sufficed to purchase only one private property. This trend continued: By 1997, a 30-year-old’s lifetime income would have been enough to pay for only about 60 per cent of the price of an average private property.

In other words, as a result of the rapid increase in property prices in the early 1980s, private housing affordability dropped rapidly. After recovering somewhat in the late 1980s, affordability further declined in the 1990s when property prices escalated to unexpected heights. Last year, affordability moved in the downward direction.

Generally, since 1992, the index has hovered around unity – that is, lifetime income has just about equalled the price of one property. The pattern is the same even for HDB upgraders, though their affordability is somewhat better.

An income-price ratio of unity means that a middle-income household that buys an average-priced private property would be locking up its entire lifetime income in that property. The price escalation in the mid-1990s pushed the income-price ratio below unity, indicating a scenario of perpetual debt if a middle-income earner had committed to an average- (or higher-) priced private property.

The same computations using the data available since 1990 for average-priced HDB resale flats show a much better picture. The HDB affordability index dropped from eight in 1990 to three in 1996 and then recovered to five between 2001 and 2006. The price hike last year led to a slight drop in the index to 4.5, which means lifetime earnings were equal to 4.5 times the price of an HDB flat.

An optimal rate for property price inflation should be one that does not erode housing affordability. The long- term growth rate of our lifetime income measure is about 4-5 per cent, which has also been the long-term growth rate of per-capita disposable income. But the long-term increase in property prices has been much higher.

There are serious implications when housing affordability is eroded to the point where higher prices do not translate into higher wealth for property owners. For example, if affordability sinks below unity, this generation’s lifetime income would not be enough to pay for the property, so the wealth from higher prices cannot accrue to the property owner today. Housing wealth may end up being transferred to the children of the current owners.

If this occurs, a question would arise: How to balance the cost of private property to the current generation against the benefits that might accrue to their children of having higher-valued properties?

On this point, our colleague Professor Basant Kapur thinks that a system of intergenerational transfers may work, whereby children can compensate their parents for such properties once they start earning. The complex of issues this raises would require another detailed research paper to examine.

By Tilak Abeysinghe & Gu Jiaying

Tilak Abeysinghe is the deputy director of the Centre for Applied and Policy Economics, Department of Economics, National University of Singapore.

Gu Jiaying is a research fellow at the centre.

Source : Straits Times – 3 May 2008

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3M opening US$200m film coating plant in S’pore

Posted by luxuryasiahome on May 3, 2008

65,000 sq m plant will be 3M’s most advanced outside the United States

TECHNOLOGY-BASED company 3M has pumped in some US$200 million to set up a manufacturing plant in Singapore that will produce coatings for film-based products used in commercial, electronic and automotive applications.

These products include films that are coated onto car windows and interior glass panelling, helping to reduce the amount of ultraviolet rays and heat that passes through them, said Jay V Ihlenfeld, 3M Asia-Pacific senior vice-president.

‘We will also develop new products at the site, prototypes which we’ll (let our customers) sample, and scale them into full production,’ he said.

‘Going forward, we would like to expand the capabilities and the different technologies that we practise on the site to create new products for our customers.’

He added that some 250 engineering jobs will be opened up once the manufacturing plant is completed, which is expected to be by mid-2009.

Frank Sommerfeldt, manufacturing and engineering manager for 3M Singapore, said that the 65,000 sq m plant will have a ’substantial’ capacity and will meet the demands of 3M customers in South-east Asia, a market that has been growing at double digits for the company.

‘The plant will be 3M’s most advanced film coating facility outside the United States,’ he added.

3M is one of the 30 Dow Jones Industrial Average companies and is headquartered in the United States. It produces a range of items for the consumer, electronics and communications, and healthcare industries, among others, and its trademark brands include Scotch, Post-it, Nexcare and Scotch-Brite.

The company set up a sales and marketing operation centre in Yishun in 1966, and a manufacturing facility in Woodlands which produces flexible circuits and adhesives.

Dr Ihlenfeld said that the company chose to set up the plant in Singapore as the Republic presents a good business environment for the firm.

‘For a high-tech company like 3M, Singapore has many important advantages: a high quality workforce, well-educated people, outstanding scientific institutions, intellectual property and probably the most important – political stability and a government that helps companies make investments,’ he said, adding that 3M has been working with the Economic Development Board and JTC Corporation in setting up the plant.

Source : Business Times – 3 May 2008

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3M to open $274m plant in Tuas

Posted by luxuryasiahome on May 3, 2008

It will expand ops in Singapore, which it envisions as its regional superhub
 
United States technology conglomerate 3M, best known for innovative products such as Post-it note pads, is expanding operations in Singapore with a new US$200 million (S$274.2 million) plant in Tuas.

The factory will employ 250 workers initially to make thin film coatings. These coatings are used mainly on windows to reduce glare and heat, but they also have electronic and automotive uses.

3M, which makes a vast range of products for both consumer and industrial use, has a long relationship with Singapore, which dates back to 1966 when it set up a sales office here.

The company said the new 65,000 sq m plant will be its most advanced thin film coating facility outside the US and will be a centre of excellence for 3M’s film coating business in the Asia-Pacific region.

The facility is expected to be up and running by the middle of next year, 3M said.

In expanding its operations here, the company envisions that Singapore will become a ‘3M regional superhub’, said Mr John Woodworth, the senior vice-president of corporate supply chain operations.

3M regional superhubs are large production and resource-sharing facilities that are tied to the company’s regional growth needs. They also manufacture products for other 3M businesses.

The Tuas plant will be 3M’s second facility in Singapore. It established a $400 million plant at Woodlands in 1998. That plant makes flexible circuits and electronics adhesives, and also carries out research and development. It currently has about 700 employees. 3M also has a sales and marketing office in Yishun.

Singapore was selected as the location for 3M’s new plant because of its proximity to the company’s supply chain operations in the region.

The new plant will serve 3M’s customers in the Asia-Pacific. Most of the products manufactured at this plant will be exported.

‘The Asia-Pacific market makes up about 30 per cent of total sales revenue,’ said 3M Singapore’s manufacturing and engineering manager, Mr Frank Sommerfeldt, who attended the ground-breaking ceremony at the Tuas site yesterday.

3M’s film manufacturing vice-president, Mr Kevin Kuck, said: ‘This investment brings us closer to our customers and creates a regional source of supply…and helps us respond more quickly to our customers’ needs in the fast-growing Asia market.’

‘Singapore has all the ingredients for the technology-intensive manufacturing that 3M is involved in,’ said Mr Donald Chang, the managing director of 3M Singapore and South-east Asia.

Minister of State for Trade and Industry Lee Yi Shyan, who was the guest of honour at the ground-

breaking ceremony, welcomed the company’s expansion moves.

‘For many, 3M stands for innovation, a value that Singapore embraces in developing her knowledge economy,’ Mr Lee said.

Source : Straits Times – 3 May 2008

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