154th: SME business confidence picking up woh!

makapaaa · May 5, 2009

<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published May 5, 2009

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>SME business confidence picking up
Companies more optimistic about prospects in April than last Oct: survey

By MICHELLE YEO
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>BUSINESS confidence among Singapore's small and medium enterprises (SMEs) has improved, according to a study by business-to-business research firm Kadence Asia-Pacific.

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</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>The rise in confidence was most evident in the service and wholesale sectors - both had an index score of 45.
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>The study found that although businesses expect economic conditions to remain poor, they are more positive now than they were six months ago.
A weighted score derived from 300 SME respondents edged up to 40 in the latest survey in April, from 35 last October.
The SME respondents come from a range of sectors such as service, manufacturing, retail, wholesale, construction and transport.
They were asked to give a view on the business community's confidence as a whole.
The survey shows the first glimmer of optimism since confidence began to collapse in mid-2008.
Piers Lee, managing director of Kadence and architect of the index, told BT: 'In the past six months, SMEs have done things to improve their own situation and help themselves, such as restructuring, reducing overheads and looking to new markets.
'And companies might have already adjusted to reality since the nose-dive in confidence six months ago.'
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</TD></TR></TBODY></TABLE>Last October, 56 per cent of businesses surveyed felt that trading conditions would worsen in the next 12 months compared with the preceding 12 months. This included 17 per cent who said things would get 'much worse'.
Last month, however, the proportion of those who felt things would worsen had fallen to 44 per cent, with only 8 per cent saying they would get 'much worse'.
The rise in confidence was most evident in the service and wholesale sectors, both of which had an index score of 45.
Mr Lee said the slight improvement could indicate that business confidence had bottomed out.
It could also be that companies are less 'in shock' now than they were six months ago, he added.
'We are not saying it's the end of the recession, but this could be evidence that we are over the worst,' Mr Lee said.
Despite rising figures, he is unsure yet whether confidence has really bottomed.
'We will only be confident about the economic outlook in 2010 if we see an increase in index score to above-50 in the next survey in October,' he said.
There has to be an improvement in the financial markets, and stock markets and global trade have to recover to make local businesses more confident, Mr Lee said. [/FONT]
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makapaaa · May 5, 2009

<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published May 5, 2009

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Petrochem plants close to full capacity
China demand hits 90% of what it was before downturn

By RONNIE LIM
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>THANKS largely to a recovery in demand in China, Singapore's petrochemical plants returned to near full operating capacity in the first quarter - and Q2 promises to be even better.

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</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>Key issue is new cracker capacity coming on stream in the Middle East and China in H2.
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>'From a 20-30 per cent plunge in Q4 last year, operating rates improved about 3-5 per cent each month in Q1, so most plants are now operating at 90-95 per cent,' said Stan Park, deputy managing director of Petrochemical Corporation of Singapore (PCS).
There has been a sustained recovery in China, with petrochemical demand there back up to about 90 per cent of what it was before the global downturn, he said.
'There has also been some revival in demand in Indonesia and Malaysia, but not been as strong as that in China.'
Following the Q1 upswing, demand stayed strong in April, with Mr Park saying he expects 'Q2 will be even better than Q1'.
'The key issue going forward for the industry here is not economic recovery, but new cracker capacity coming on stream in the second half in the Middle East and China, like from ExxonMobil's Fujian cracker,' he said.
This will affect Singapore's petrochemical plants and others in Southeast Asia, so 'We are in for volatile times, and we are all holding our breath'.
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</TD></TR></TBODY></TABLE>If Chinese demand continues to hold up, this will offset the new Gulf and Chinese capacity, Mr Park said.
If not, sales here may fall 10-20 per cent.
Singapore now has two operating petrochemical complexes on Jurong Island - PCS's 1.4 million tonnes per annum (tpa) facility and various downstream plants, plus ExxonMobil's (EM's) 900,000 tpa Singapore Chemical Plant (SCP) complex.
EM meanwhile yesterday said it has shut down several units at SCP for scheduled maintenance and upgrading, which is expected to take about two months.
'Unit shutdowns such as these are infrequent, but necessary, to ensure continued safe and reliable operations,' said SCP plant manager Derk Hartgerink. 'We have communicated the shutdown to our regular customers and have made plans to meet their product needs during this period.'
The EM shutdown should not have an impact on Singapore's petrochemical supplies, as operators build up inventory ahead of such a move.
Of greater concern is the coming avalanche of about 9 million tpa of new Gulf capacity - especially in Saudi Arabia and Iran - which is almost quadruple Singapore's current capacity.
Even with the upcoming two new crackers here - Shell's US$3 billion, 800,000 tpa project in early-2010 and EM's second US$5 billion-plus, 1 million tpa facility in early-2011 - the new Gulf capacity will be more than double that of Singapore.
And on top of that, China is investing in about 9 million tpa of new capacity.
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154th: SME business confidence picking up woh!

makapaaa

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makapaaa

Alfrescian (Inf)

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