Singapore an ideal hub to steer growth in Asia

ASK specialty chemical company Evonik why it chose Singapore as a key node in its global network and some of the factors listed will no doubt sound familiar.

These range from Singapore's robust intellectual property (IP) regime to, of course, the city-state being the perfect gateway to the region.

But it is also other "softer" factors, such as supportive government agencies, a robust talent pool and perhaps a little surprisingly, a spirit of trying and failing (and of course trying again) that keep them coming back.

The German company has a long history in Singapore, having set up its first office in 1969. Indeed, Evonik has been one of the largest investors in Singapore in recent years and in the last five years has invested more than one billion euros (S$1.6 billion) on Jurong Island alone.

Shirley Qi, who is both president for the Southeast Asia, Australia, and New Zealand region (SEAANZ) and head of nutrition and care division for Asia-Pacific, credits the "open mindset" and dynamism of Asia as key draws.

Evonik opened its Asia Research Hub in Singapore in 2018 with a mandate to focus on Evonik's growth topics including additive manufacturing (3D printing) for industrial application, particularly photoresin-based technology. In July this year, Singapore was elevated as the regional headquarters for Asia-Pacific.

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Helping hand

Like all other organisations, Covid-19 has impacted Evonik. Which makes the decision to move personnel in the midst of a pandemic an interesting one.

Ms Qi credits government organisations, such as the Economic Development Board (EDB), for helping both in the relocation of staff here, and keeping Evonik open throughout the circuit breaker.

Evonik is widely represented in the food industry - from the anti-caking agent in paprika to natural flavour extracts, amino acids and functional coatings for food supplements - and was identified as an essential business.

"We are thankful and we don't take that for granted," says Ms Qi, adding that Evonik is equally invested in the country. Beyond their investments over the years, they are also supporting the Singaporean labour force.

"We had some applications under the SGUnited scheme and are now hiring 15 trainees under this programme. This Singapore programme is an important support scheme in these challenging times. As one of the largest German employers in the city state, we feel a responsibility to support this," says Ms Qi.

That Sher Lin Ee, who today heads Evonik's Digital Labs Asia, returned to the company after a one- year stint at an American company, is perhaps the best testament to the company's commitment to its people.

Dr Ee joined Evonik in 2011 as a senior process engineer because, as she puts it plainly, Evonik offered her a stint in Germany.

She left Evonik in 2018 but rejoined a year later after Evonik, who had stayed in touch with her, offered her a role that married her expertise in mathematics (Dr Ee's PhD is in mathematical modelling in applied mathematics) and her passion for chemistry.

Digital Labs Asia is working on the development of artificial intelligence solutions for areas where the data, information, or the know-how is confidential. These AI solutions help the company identify the best formulations, ultimately increasing the speed of new product-to-market processes.

"In Asia, we start quick and we start small. If we fail, we try again," says Ms Qi. And this is why it makes sense to base their research hub here, she says.

"Basing strong innovation here makes a lot of sense because we are able to quickly do the development and testing and then start system pilot productions.

"Take for example our high-toughness photoresin products which have a multitude of 3D printing applications. Within three months, for instance, our team in Singapore were able to create a special prototype advancing the material toughness even further in our labs and after two months we had orders from customers. The challenging task now is to move this R&D-success into mass production," she says. "In Asia there is the speed element. And that's quite a big advantage especially for new technologies."

Today, Evonik has five manufacturing facilities in Singapore. This includes their two world-scale production complexes for essential amino acid DL-methionine, as well as an oil additives production site on Jurong Island. It also has a manufacturing facility producing epoxy curing agent, ink and hotmelt resin, and polyurethane catalyst blends.

Furthermore, the acquisition of Houston-based Porocel in August has further expanded Evonik's footprint in Singapore, adding one more manufacturing facility in Tuas which is focused on catalysts, enabling its customers to make their processes and products more efficient and resource-saving.

Good export network

"We see Singapore as a really good hub because we feel very safe with our intellectual property. In addition, Singapore has a very good export network and the lead time is quite short so the customer benefits."

Notably, in November, Evonik was honoured by the European Chamber of Commerce Singapore Sustainability Awards 2020 in the category of "Circular Economy".

Besides researching and developing solutions for mechanical and chemical recycling, the company's methionine plant for instance has an integrated digital platform to ensure efficiency and good use of all material flows.

Its latest acquisition also sees Evonik expanding its catalyst business and shifting its portfolio towards sustainability and especially the circular economy.

That Singapore and the European Union (EU) have a free trade agreement in place - the EUSFTA is the first FTA between the EU and an Asean country - benefits the company both directly and indirectly, in that Evonik and its customers and suppliers enjoy the elimination of custom duties. But more importantly, it's key because other countries are now starting to move in a similar direction, says Ms Qi.

The EU-Vietnam FTA for instance entered into effect on August 1 this year and the EU has expressed interest in pursuing a number of FTAs in the region.

Significantly, Germany announced in September this year its first ever policy guidelines for the Indo-Pacific region.

"It is a really good sign for further cooperation between Germany and Asia, especially South East Asia. The EU and Germany plan to strengthen the cooperation with the ASEAN-countries, in part through FTAs. That is really an important milestone."

Asked about future plans, Ms Qi says: "At this point, we cannot say when we are going to open our next facility here in Singapore. However, our large footprint in Singapore shows our commitment that Evonik is here to stay. We have strategic and long-term growth plans in Asia. Singapore is definitely a very important part of that strategy, as its position as a hub steers this growth."