Singapore. Exxon Mobil overview
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Transcript of Singapore. Exxon Mobil overview
ExxonMobil investments in Singapore
The roaring, dynamic, global “Lion City” in Asia Experts:
Zsofia OlahNatalia Turkina
Kinga LadomeryDmitriy Pustovalov
24/04/2012
Agenda
• Singapore in general• Singapore – world class economic example• Doing Business in Singapore vs. the USA• History of ExxonMobil• ExxonMobil today• ExxonMobil invests in Singapore• Why did ExxonMobil choose Singapore?• Conclusion
24/04/2012 Slide 2
Singapore in general
24/04/2012 Slide 3
The Republic of Singapore is the most competitive Asian country and the fastest-growing economy in the world.
• population: 5,1 million (2011)• density: 7,315/km2 (3rd)• area: 710 km2 (189th) consists
of 63 islands• 1965 became independent• unitary parliamentary republic• PresidentTony Tan Keng
Yam• Prime Minister Lee Hsien
Loong
• GDP (2011):• Total $314.911 billion• Per capita $59,711
• 10th largest foreign reserves• Gini (2009) 47.8 (29th)• HDI (2011) 0.846 (very
high) (26th)• unemployment below 2%• 10,784.6 Foreign Investments
($m)
Singapore is…
• …the best city according investment potential.
• …in the top 2 most competitive countries in the world
• …the only Asian country to have AAA credit ratings from all three major credit rating agencies – Standard & Poor's, Moody's, and Fitch.
• …the 14th largest exporter and the 15th largest importer in the world.
• …the world's fourth-leading financial centre
Singapore is…
• …the world's second-biggest casino gambling market
• …the world's third-largest oil refining centre
• …the world's fourth largest foreign-exchange trading centre
• …the least bureaucratic place for doing business in Asia.
• .. the 7th in the world and 1st in Asia for having the least corruption in its economy
• …among the top 3 in foreign trade and investment
FOREIGN DIRECT INVESTMENT IN SINGAPORE BY COUNTRY/ REGION, 2006-2010p
(Stock as at Year-End)Country/Region 2006 2010
Total 370,494.7 621,884.5
Asia 82,485.0 150,241.2
Europe 174,058.3 233,114.4
United States 38,325.0 67,189.5
Canada 2,736.4 3,837.2
Australia 3,318.7 7,619.6
South and Central America, and Caribbean
60,876.4 137,735.5
Other countries 6,990.2 19,871.8
ASEAN 12,116.9 21,007.5
European Union 131,405.6 182,118.6
Million Dollars
Source: Singapore Department of Statistics, 30 December 2011
Singapore – world-class economy example
History
WHAT IS THE SECRET OF SUCH SUCCESS?
• 31 August 1963 – Independence from the United Kingdom (after being a British colony for 140 years)
• 16 September 1963 – Merger with Malaysia
• 5 August 1965 - Singapore declared its independence -> Republic of Singapore.
• “Singaporean” culture and social identity -> by late 1989 physically small Singapore became an economic giant.
Singapore – world-class economic example:
Key to success
Lee Kuan Yew1st Prime Minister of
SingaporeElections: 1959-1988Won Battle against
Corruption
English is one of the official languages
Various reforms
Singapore – one of the four “Asian Tigers”
Singapore – world-class economic example:
Key to success
EDUCATION
REFO
RM
•British-style system at schools; English + Chinese, Indian, Malaysian dialects; spending ~ 6% of GDP; free primary education + funds for high education.
INDUSTRIAL POLICIES
•Policies ensured that direct foreign investment was viable, allowing Singapore to become a serious contender on the international market.
TECHNOLO
GICAL DEVELOPMEN
T
• The National Computer Board (since 1981) - to help establish Singapore as an international center for computer services (Now it is Infocomm Development Authority)
• First copyright law (1986) – to avoid trade sanctions by the western markets and to attract foreign companies to the country.
Singapore – world-class economic example:
Key to success
MANUFACTURI
NG
•By 1988, the Singapore manufacturing sector was producing more economic returns than both the financial and business sectors due to emphasis on large international companies.
THE
PETROLIUM
FACTOR
•Late 1980’s - Singapore was the world’s third largest oil-trading centre and as the centre for refining petroleum.
LEGACY
• Free trade and free markets, in combination with a dominant government role in macroeconomic management and government control of major production enterprises.
Singapore – world-class economic example:
country’s industrial priorities
The major industries in Singapore: • Electronics• Oil and gas• Financial services• Shipping• Chemicals.
Maintaining country’s competitiveness by:• diversifying into value-added activities in the
manufacturing and services sectors;• identifying and investing in new growth sectors, such as
clean technology and biotechnology.
Doing business in Singapore vs. the USA in 2010
CATEGORY SINGAPORE USA SOURCE
Ease of Doing Business 1 4 World Bank, Ease of Doing Business Report
Country with Lowest Tax Misery (2009) 11 18 Forbes Tax Misery and Reform Index
World’s Most Competitive Economy 3 4 World Economic Forum, Global Competitiveness Report
World’s Best Country for Business 5 9 Forbes Best Countries for Business List
Country Most Open to Trade 1 19 World Economic Forum, Global Enabling Trade Report
World’s Most Competitive Economy 1 3 IMD, World Competitiveness Yearbook
World’s Most Innovative Economy 7 11 INSEAD and the Confederation of Indian Industry’s Global Innovation Index
World’s Freest Economy 2 8 Heritage Foundation’s Index of Economic Freedom
World’s Most Economically Globalized Country
1 57 KOF Index of Globalization
World’s Best Labour Force 1 2 BERI’s Labour Force Evaluation Measure
Country with Least Corruption Perception 1 22 Transparency International’s Corruption Perceptions Index
ExxonMobil in Singapore
History of ExxonMobil
• Rockefeller and his associates form the Standard Oil Company combined facilities constituting the largest refining capacity of any single firm in the world.
• Standard Oil Co. purchases a three-quarters interest in Vacuum Oil Company.
1870 1879
History of ExxonMobil
• Standard Oil Trust forms to include the Standard Oil Company of New Jersey and the Standard Oil Company of New York.
• Standard Oil breaks up into 34 unrelated companies, including Jersey Standard, Socony and Vacuum Oil. -the first time Jersey Standard's sales of kerosene
1882 1911
History of ExxonMobil
• Jersey Standard acquires a 50 percent interest in Humble Oil & Refining Company of Texas.
• “Esso” was introduced- Embodying the phonetic rendition of the initials ‘S’ and ‘O’ in Standard Oil
1919 1926
History of ExxonMobil
• first trans-Atlantic Boeing 707 flight from New York to London with Mobil oil
• changes its name to Mobil Oil Corporation
1958 1966
History of ExxonMobil
• Jersey Standard officially changes its name to Exxon Corporation.
• Exxon Research and Engineering invents a powerful new imaging technique called 3-D microtomography
1972 1986
History of ExxonMobil
• On November 30, Exxon and Mobil join to form Exxon Mobil Corporation.
• ExxonMobil finalizes its agreement with XTO Energy Inc.,
1999 2010
ExxonMobil today• Headquarter: Irving, Texas, USA• Operates around 50 countries around the world
Operating divisions:
- Upstream (oil exploration, extraction, shipping, and wholesale operations) based in Houston, Texas
- Downstream (marketing, refining, and retail operations) based in Fairfax, Virginia
- Chemical division based in Houston, Texas
ExxonMobil todayProducts: fuel, lubricants, petrochemicals
Financial Data
US$ billion in year of 2011Revenue 486.429 Operating income 73.257Net income 41.060Total assets 349.000Total Equity 154.396# of employees 82.100
ExxonMobil in Singapore
Milestones• 1893- the set-up of the Vacuum Oil Company,
which sold mainly kerosene and lubricants under the Mobil Oil brand name.
• 1916- Standard Oil, set up an office • 1931 - Vacuum Oil merges with the Standard Oil
Company of New York (Socony) to form Standard-Vacuum Oil Company, or Stanvac
ExxonMobil in Singapore• 1963 - Mobil decides to go into refining
business. Esso starts a chemical operations department which later became Exxon Chemical Singapore Pte. Ltd.
• 1966 - Mobil opens Singapore's first refinery • 1971 - Mobil in Singapore becomes Mobil Oil
Singapore Pte. Ltd.• 2007 - All service stations converted to Esso
brand
Brands
Activities
• Singapore refinery• Singapore Chemical Plants• Fuels Marketing• Lubricants and Specialties
Incentives of FDI in Singapore
1967: Liberalize tax
system
For non-pioneer firms: tax exemption
of up to 90 % - 5 years
For pioneer firms: 7 enjoy tax exemption
for up to 10 years
Tackle industrial relations
Reduce labor costs
Why did ExxonMobil choose Singapore?
Jurong Island – Energy&Chemical hub
Industry cluster with 95 global companies including ExxonMobil
$ 4 bn invested in a refinery and cracker plant
Why did ExxonMobil choose Singapore?the biggest Asia’s leading oil trading hub and pricing center
the leading bulk liquids logistic hub in Asia and ranks amongst the top three in the world
access to recourses has displaced low labor costs as the key driver of competitive advantage
political and macroeconomic stability
availability of skilled labor
is a major aviation and shipping hub – that provides good access and connectivity to destination markets.
Why did ExxonMobil choose Singapore?
• - free trade agreements with United States, EU, Japan, NZ, India, Korea, Peru, Jordan, Brunei, Chile
• - Singapore is ranked No.2 worldwide as the city with the best investment potential for 16 consecutive years
• - the world leader in foreign trade and investment with the most open economy for international trade and investment
• - government allows the movement of both capital and profit freely within and outside the country.
• - tax incentives and tax holidays• - strong Singapore dollar is not hurting export of
ExxonMobil
Conclusion
Conclusions:Lessons for the others
What should other countries learn from Singapore?
• Political stability• High level of education• Open-market policies• Modernized infrastructures• Attracting foreign investor policies• Sustainable long-term economic objectives
That’s why the most successful investment in Asia by ExxonMobil were in Singapore
THANK YOU!
References
• http://www.edb.gov.sg/edb/sg/en_uk/index/why_singapore/Guide_to_Investing_in_Singapore.html
• http://www.singstat.gov.sg/• Department of statistics, Singapore http://www.singstat.gov.sg/• Doing Business in Singapore vs USA
http://www.guidemesingapore.com/research-reports/usa/doing-business-singapore-usa• Singapore: A Future Economic Powerhouse? by Exequiel Octavio Bertaina, Staff Writer
http://www.arbitragemagazine.com/features/singapore-future-economic-powerhouse/• Exxonmobil.com• Exxonmobil.com.sg• Department of Statistics Signapore http
://www.singstat.gov.sg/educorner/faqsinvestment.html#qn6• Economywatch http://
www.economywatch.com/foreign-direct-investment/countries/singapore.html• Outward FDI by Singapore: a different animal? By Gaute Ellingsen, Winfried Likumahuwa and
Peter Nunnenkamp• Official Efforts To Attract FDI: Case Of Singapore’s EDB, By Augustine H H Tan, National
University of Singapore