Distinguished Guests,
Ladies and Gentlemen,
A very good morning to all of you.
I am delighted to be here to officiate this groundbreaking of JTC’s CleanTech Two, and to witness the signing of the Memorandum of Understanding between the Advanced Remanufacturing & Technology Centre, or ARTC, and its industry partners.
The ARTC will be the anchor tenant for CleanTech Two, the second building to be developed at this 50-hectare CleanTech Park.
As Singapore’s first eco-business park, CleanTech Park will push the boundaries of green sustainability, by supporting research, innovation and commercialisation of cleantech companies, and cultivating an environment in which green companies can congregate, cooperate and collaborate.
I congratulate JTC for working with NTU on initiating this CleanTech Park.
I was told that by the time CleanTech Two is fully operational, ARTC will be strategically nestled in the midst of green businesses.
This collocation will greatly facilitate the structured and unstructured public-private partnerships between ARTC and technology R&D companies to develop ready-to-market remanufacturing solutions for Singapore and beyond.
Value of Remanufacturing to Businesses
As its name suggests, the Advanced Remanufacturing & Technology Centre is a centre that will advance technologies for remanufacturing.
It is part of a remanufacturing movement that has gained traction in recent years.
Remanufacturing, of course, is not new.
Since the Second World War, the automotive industry has been disassembling their products, inspecting and then reconditioning components for use in new products for the markets.
Drive shafts, diesel pumps, gearboxes and engines have all received a ‘second life’ through this process.
This has positive economic and environmental ramifications, the extent of which has only, more recently, come to light.
Caterpillar, one of the major adopters of remanufacturing, in fact embarked on it in 1973 only at the behest of its then new customer, Ford Motors.
And it did so reluctantly
[1].
Today, forty years later, the company is an exemplar of remanufacturing in practice, demonstrating the viability of the business model.
By returning end-of-life products into ‘good as new’ condition for the market, Caterpillar successfully retains much of the value added that goes into the manufacturing of its products.
This ability to recapture much more of this value added is the essential difference between remanufacturing and recycling.
Quite unlike recycling, which involves the destruction of the product into its component materials, remanufacturing attempts to retain most of the product’s value added.
Just to illustrate, for a product such as an automobile, the value of the raw materials that can be recovered by recycling is only in the order of 1.5 percent of the market value of the car (COE not included, of course).
Continuing with this same illustration, a 1981 MIT study on the remanufacturing of automobile at the component level indicated that approximately 85% of the energy expended in the manufacture of the original product was preserved in the remanufactured product.
This is why remanufacturing is considered the ultimate form of recycling and results in significant value creation or avoidance of value destruction.
Impact of Remanufacturing on the Environment
There is an additional good for businesses to pursue remanufacturing that is quite distinct from profits: remanufacturing is a green and sustainable process.
It alleviates strain on the world’s resources, reduces the emission of greenhouse gases and conserves energy.
I highlighted earlier that you may, in certain instance, save up to 85 percent of the energy that would otherwise have been expended in making a product from scratch.
Another study estimated that the total energy savings from current remanufacturing activities worldwide is equivalent to about 16 million barrels of crude oil.
This is the energy needed to fuel six million cars for up to a year.[2]
A New Growth Area for Singapore
With increasing recognition of its economic and environmental advantages, remanufacturing will intensify worldwide.
But, just how large would this new industry be?
The Global Industry Analysts, Inc. released a report that put the figure just for automotive remanufacturing at over US$100 billion in 2015.[3]
Outside the automotive industry, companies have also found reasons to embark on remanufacturing, making it a high growth area.
Singapore, with our aspiration as a living laboratory for sustainable solutions in an urban setting must therefore embrace remanufacturing.
Remanufacturing is particularly attractive to us because it is good business and precisely the kind of industry that will generate higher skill jobs and drive productivity to create sustainable and inclusive growth.
And we are well-positioned to gain from this area.
Singapore’s sound regulatory system, broad spectrum of engineering capabilities and our government’s sustained commitment to R&D over the years put us in a good stead to tackle the technological challenges faced by remanufacturers.
This brings us to the Advanced Remanufacturing & Technology Centre.
This Centre provides a one-stop shop where world-class expertise from public sector research institutes, the academia and industry work in win-win partnership to bring promising solutions from feasibility to near-deployment.
Here, members collaborate in members-decided technology areas and share facilities and resources in order to reduce the risk and costs involved in research and development.
A*STAR’s Singapore Institute of Manufacturing Technology, in particular, has made available its 20 years of experience in collaborating with industry as well as its strong capabilities in manufacturing technologies.
This is supplemented by a large pool of deep engineering capabilities in our autonomous universities such as NTU.
I am pleased to announce that, today, we will witness fourteen industry partners, and ARTC, coming together to sign a Memorandum of Understanding to jointly pursue research and technologies that would accelerate the adoption of remanufacturing.
Companies such as Boeing, Rolls-Royce plc and Siemens Industry Software, all thought leaders in their respective fields, will bring in real-world remanufacturing problems from the Aerospace, Oil & Gas, Marine, Energy, Automotive and Engineering industries.
Through such meaningful and impactful public-private sector initiatives, Singapore can anchor remanufacturers here, and grow value-added remanufacturing activities along the value chain, to positively impact the economy and society.
Conclusion
Research in remanufacturing may be in its infancy in Singapore, but it is one that is poised for fast growth.
We have much to gain from this new growth area, and it may represent a “renaissance” of high value manufacturing.
The ARTC represents Singapore’s commitment to remanufacturing, and seeks to catalyse the growth of this industry.
Through this landmark collaboration, I believe Singapore can develop into a hub in Asia to host new and complex remanufacturing operations.
Thank you.