S’pore’s open trade system, trusted regulatory framework a draw for chemicals sector: Tan See Leng

SINGAPORE - Singapore’s open trade architecture is one draw for speciality chemical firms looking for a springboard into Asia, said Minister-in-charge of Energy, Science and Technology Tan See Leng on July 9.

The Republic has 28 free trade agreements that give it access to markets representing over 85 per cent of global gross domestic product, he said.

World-class infrastructure, a pro-business environment and trusted regulatory framework are also its advantages.

“A pro-business and trusted regulatory framework makes it easy (for firms) to navigate, operate, to adapt, and of course, to scale,” said Dr Tan at an event on Jurong Island marking a production milestone by French chemicals company Arkema.

Singapore’s commitment to tackling climate change is also attractive to firms which are serious about reducing their emissions, experts say.

On July 9, Arkema announced that its facility on Jurong Island has since 2024 been able to ramp up global production of its “green plastic” by 50 per cent following its opening in 2022.

The €400 million (S$600 million) plant, which produces plastics made from castor oil, is the world’s largest factory to produce bio-based, or plant-based, plastics.

It is also one of the largest of Arkema’s 157 factories worldwide.

Arkema’s castor bean plastic is called Rilsan PA-11, and it has been used in electric vehicles, medical devices and sports shoes. The company declined to reveal how much green plastic it can produce in a year, citing commercial sensitivities.

In 2026, the plant will also start a new US$20 million (S$25.6 million) unit to produce a different type of bio-plastic made from Rilsan PA-11, ultimately tripling its global production of the material. This other material, called Rilsan Clear, is used in electronics and spectacle frames.

Dr Tan, who is also Minister for Manpower, added that Arkema’s decision to anchor its PA-11 production facility in Singapore is a boost for the nation’s broader ambition for a “Sustainable Jurong Island”.

The carbon footprint of Arkema’s green plastic is over 80 per cent lower than fossil-based options, noted Dr Tan.

Jurong Island is the country’s petrochemical hub, responsible for a major portion of Singapore’s carbon emissions. By 2030, the island is aiming to produce 1½ times more sustainable products, like Arkema’s plastic, compared with 2019.

As Jurong Island marks its 25th anniversary in 2025, Dr Tan said: “We are now focused on shaping its next phase – one where it continues to remain globally competitive, but, at the same time, low-carbon and future-ready.”

Other chemicals companies have also set up large factories in Singapore over the past few years.

Neste’s Tuas South refinery is the world’s largest facility to produce sustainable jet fuel made from used cooking oil and animal fats.

In late 2024, a Saudi Arabian petrochemicals giant opened a new $220 million resin manufacturing facility in Pioneer, its second plant in Singapore.

While Singapore has stricter environmental regulations compared with the rest of the region, this has not stopped large factories from setting up base here.

Mr Kenny Gan, Arkema’s regional vice-president for South-east Asia, Australia and New Zealand, said Singapore’s connectivity, political stability and availability of talent convinced him to pick Singapore. He had previously considered Thailand, India or Malaysia.

“Jurong Island has a very smart set-up that helps us to distribute, ship the material and to serve our customers in the region much more efficiently and effectively,” he said.

Experts say that with many countries wavering on their climate goals, Singapore’s consistent approach to tackling climate change would be attractive to firms which are serious about reducing their emissions.

Such companies would want to remain credible to their customers who demand sustainably produced goods, they added.

“Singapore’s higher carbon price and stricter environmental regulations can actually be a feature, not a bug, for leading global firms that are serious about sustainability,” said Singapore Management University associate professor of finance Liang Hao.

“In an era of greenwashing concerns, setting up base in Singapore enhances trust with investors and customers, even if it comes with higher upfront costs,” he added.

Ms Marissa Lee, associate director at strategic advisory firm Global Counsel, said that economic pressure is preventing policymakers elsewhere from confronting the climate crisis.

“But Singapore has consistently demonstrated a strong commitment to the green transition through various policies and initiatives, and this gives companies the confidence to invest here for the long term,” she added.

Dr David Broadstock, energy transition research lead at the NUS Sustainable and Green Finance Institute, said: “A clean and sustainable net-zero future economy would not be one where no manufacturing occurs.

“We will still create and consume items, albeit with an increasing commitment to resource and waste circularity.

“It is therefore important to provide conditions where sustainable manufacturing is welcome, and sustainable investments nurtured.”