Asia industry banks on process

While some sectors of the Asian economy are slowing down, Asia's process industries remain in relatively fine shape—overtaking one country's electronics sector as the highest contributor to manufacturing output. The first ever ProcessCEM Asia conference and exhibition, which took place in Singapore, October 22-24, 2008, attracted more than 100 exhibitors from 14 countries and resulted in...

By Bob Gill, Control Engineering Asia January 1, 2009

While some sectors of the Asian economy are slowing down, Asia’s process industries remain in relatively fine shape—overtaking one country’s electronics sector as the highest contributor to manufacturing output.

The first ever ProcessCEM Asia conference and exhibition, which took place in Singapore, October 22-24, 2008, attracted more than 100 exhibitors from 14 countries and resulted in more than S$15 million of sales and orders, according to the event’s organizer, ASPRI (Association of Process Industry).

ASPRI was established in 1997 as an initiative to promote the interests and needs of service providers to Singapore’s process industry. ProcessCEM Asia was launched to provide a platform for industry players in process plant construction, engineering, and maintenance to showcase their capabilities.

At the event’s official opening, Tharman Shanmugaratnam, Singapore’s Finance Minister, revealed that the country’s chemicals industry (defined as petroleum, petrochemicals, and specialty chemicals) has overtaken Singapore’s famed electronics sector to become the largest contributor (S$82 billion) to manufacturing output. He also highlighted recently negotiated major projects, including two mega crackers from Shell and Exxon Mobil, a butyl rubber facility by Lanxess, and Nestle Oil’s S$1.2 billion biodiesel plant.

Chairman of Shell Singapore, Lee Tzu Yang, emphasizes the importance of workplace safety in his keynote address at the ProcessCEM opening ceremony.

Industry prognosis

Conversations with some of the major process automation vendors in Singapore (many of which have their Asia-Pacific headquarters located here), indicates that while order books are certainly currently healthy, the global financial crisis is starting to make an impact.

“In the wake of the current crisis, project funding is a major challenge. Projects which are approved will proceed, but capital expenditures not approved will most likely be delayed,” Au Yeong Pak Kuan, Southeast Asia head of Honeywell Process Solutions, told Control Engineering Asia . “Companies are focused on maximizing throughput and efficient production, rather than spending on new capital projects.”

Kwek Keng Huat, Singapore country manager, Emerson Process Management, expresses a similar view: “Currently, project activities in Singapore remain busy, however, project financing will certainly impact new investment, with some cancelled and others delayed a few months for observation.”

Meanwhile, Huat’s Emerson India counterpart, Sunil Khanna, says: “So far, we’ve seen no significant slowdown in the project and infrastructure business. However, some private companies have indicated that they will renegotiate recently awarded contracts and may even slow down or defer implementation. Once project financing picks up again, we are quite optimistic about the long term growth horizon.”

The global financial turmoil will, to a certain extent, impact Asia Pacific, Invensys Process Systems (IPS), tells Control Engineering Asia . “But the market is still looking strong despite some delays in key infrastructure projects. There is still a growing market demand in the Asia Pacific region, which represents 30% of global process automation spend.”

IPS also sees another, more positive, impact from current project financing constraints. “More operators will be challenged to find funding for large scale replacement or purchase of new systems and technology. Hence, we see increasing interest in solutions related to asset management, extension of plant asset life, performance and production optimization, soft migration and digital upgrade solutions.”

While adverse effects from the global financial tsunami may have been expected, a more surprising finding is the extent to which the availability of skilled workers is impacting process industry projects in Asia.

“Skill shortages continue to plague the oil and gas industries, as huge demand from the Middle East continues to attract labor from Southeast Asia,” says Honeywell’s Au Yeong. “And we see an increasing demand for training simulation solutions as a result of aging workforces and attritions.”

Even populous India is experiencing skilled labor issues. “More than 450,000 engineers graduate annually from India’s technical institutions, but the high growth in IT has virtually ‘sucked’ the best of these resources elsewhere,” laments Emerson’s Khanna.

However, Khanna sees the pronounced slowdown in the financial sector providing at least some respite. “More skilled manpower is now expected to choose the core engineering streams instead of pursuing careers in finance and investment banking.”

For its part, ASPRI points out that, “With the influx of investment to Singapore, most of our members are facing great difficulties in recruiting local manpower with the required skills to carry out their jobs.”

To ease the problem, ASPRI has been participating in several job fairs and career talks to increase the profile of the process industry. In 2007, it signed a landmark private-public sector memorandum of understanding (MOU) with several key Singapore government agencies to help enhance the capabilities of the local engineering service providers “to better support the process plant owners and to help prepare them to venture overseas”

As a result, ASPRI is currently running a number of government-approved training programs, including, signalman course, rigger course, metal scaffolding erection, oil/petrochemical safety orientation course, and confined space safety assessor course.

Also emphasizing human resources was Shell Singapore chief Lee Tzu Yang, during his keynote address on the topic of workplace safety at the ProcessCEM opening ceremony. Noting that 28 out of the 30 fatalities in Shell plants worldwide in 2007 were contractors, Lee stressed the need for companies to engage contractors as well as staff into plant safety initiatives.

He also made the point that 4% of global GDP is lost annually because of safety incidents, and that paying proper attention to process plant safety has a positive impact on business growth.

Author Information
Bob Gill is group editor of Control Engineering Asia, an English-language publication serving control, automation and instrumentation system engineers in Southeast Asia. Contact him at .