Source : Business Times - 19 Aug 2008
JTC went full steam ahead with reforms and restructuring during the ‘97 slump, says CLARISSA TAN
The 1990s was an exciting decade. Singaporeans, along with the rest of the world, invested in dotcoms, watched Seinfeld and started sipping Starbucks. But globalisation also meant that a financial crisis brewing in Thailand quickly spilt over to the rest of Asia.
During this period, the Jurong Town Corporation stuck to its guns and even ratcheted up its development of Singapore’s industrial space. By the time 2000 beckoned, not only did the industrial landscape look different, JTC itself had changed significantly.
The manufacturing and technological demands of the 1990s were complex. The growing reliance on personal computers and the internet required a momentous shift towards more nimble, knowledge-based corporate structures. At the same time, the world’s burgeoning population put increasing demands on large-scale industries such as oil refining and production, petrochemicals and biotechnology.
JTC, which this year celebrates its 40th anniversary, fired on all cylinders. On the heavy industry front, it undertook a reclamation project that would see the joining of seven islands - Merlimau, Serya, Ayer Chawan, Ayer Merbau, Sakra, Pesek and Pesek Kechil - into one territory, Jurong Island, to house a giant petroleum and petrochemical complex. The islands’ combined area of 930 hectares would balloon to 3,000 hectares by the end of this long-term project.
In terms of high-tech, knowledge-intensive activities, JTC started the International Business Park at Jurong East. Planned in the 1980s, the Park was launched in February 1992. Besides custom-made and ready-built buildings, it would also boast banks, restaurants, a post office and supermarkets, set against landscaped gardens and open water spaces. This became a model for a second and larger business park later in the 1990s, in Changi.
Another arm of JTC’s strategy was regionalisation - to develop Singapore as a node for investments throughout Asia. The Singapore-Johor-Riau Islands Growth Triangle, for example, was part of this strategy. Besides Malaysia and Indonesia, JTC also ventured into joint projects in Thailand and China.
By the mid-90s then, Singapore was sitting pretty. But the financial crisis of 1997 sent shockwaves through the global economy. Companies, including those who had manufacturing operations in Singapore, tightened their belts. That year, there was a noticeably slower take-up rate of standard factories, while the termination rates of flatted factories rose sharply.
Generous rebates
In July 1997, JTC either froze or cut its posted rents for land and factories. In April 1998, it handed out rental rebates to help cut its tenants’ operating costs. The rebates were between 3.6 per cent and 7.6 per cent for land lessees, and up to 5 per cent for factory tenants who renewed their leases. These rebates cost JTC $25 million in foregone revenue.
Another round of rental rebates was handed out in July 1998 as the economy worsened. This relief package was estimated to amount to $252 million in foregone revenue.
And in January 1999, JTC slashed its rents yet again, this time bringing them down to the levels of the early 1990s.
In the midst of the crisis, JTC pushed ahead with reforms and restructuring. In fact, 1997 was something of a landmark year for the Corporation, when seminal plans and ideas were launched.
That year saw the implementation of IP21 - Industrial Land Plan for the 21st century - a comprehensive plan to squeeze more out of Singapore’s tight industrial land supply. The new ‘9′ series of factories was launched. Designed to achieve higher plot ratio, these factories have two or three floors for production, and a mezzanine area that’s ideal for an office. The buildings also have a seven-metre high ceiling on the first storey for tall machines, and a goods lift for movement of heavy deliveries.
‘The downturn will be a test of our three Rs - resilience, resolve and responsiveness,’ said Maj-Gen (NS) Lim Neo Chian, who took over the reins as chairman of the Corporation in January 1998. ‘In three to four years you will see a very different JTC.’
The JTC baton had been passed to MG Lim (who is now chief executive officer of the Singapore Tourism Board) by Wong Hung Khim. Mr Wong’s own four-year term had seen JTC’s operating income rise to $1,857 million in 1997 from $1,023 million in 1993. Mr Wong had also played important roles in IP21 and in the development and marketing of the China-Singapore Suzhou Industrial Park.
‘We are earnest when we say we want to ensure better use of limited land,’ said MG Lim in 1998. He added that the Corporation aimed to ‘deliver greater value to customers, and react even more quickly to customers’ needs, especially with the current crisis’.
A programme called CS21 (CS stands for customer service) encapsulated this emphasis on the client. It aimed to cut red tape and customers’ waiting time, and also simplified the process of applying for industrial land and the sub-letting of factory space by lessees. A call centre was established to respond promptly to customer queries.
The Jurong Island reclamation work, it turned out, was actually expedited during 1997 and 1998. ‘We are pressing on without let at Jurong Island, upturn or downturn!’ said Lim Chin Chong, deputy director of the project, at the time. ‘Development will not slow down.’
JTC’s regionalisation strategy also continued apace. By the end of March 1998, it had invested more than $340 million in 13 industrial parks and related projects in China, Indonesia, the Philippines, Taiwan, Thailand, Vietnam and Singapore. Some of these included the International Tech Park in Bangalore, the Carmelray Industrial Park in the Philippines, the Thai-Singapore Industrial Estate and the Batam Industrial Park in Indonesia.
In 1998, JTC celebrated its 30th anniversary. ‘If JTC succeeds, Singapore succeeds. If JTC fails, Singapore fails,’ said Brig Gen (NS) George Yeo, then Second Minister of Trade & Industry and Minister of Information & the Arts, at the anniversary dinner.
That was also the year the Corporation made financial history, with a $4 billion Medium Term Note programme, by far the largest that Singapore had ever seen. It was also the first MTN ever by a statutory board. The MTN would help to minimise JTC’s long-term funding in the long run, while also broadening the spectrum of financial products in Singapore
By 2000, JTC - and Singapore - emerged from the Asian financial turbulence stronger than ever. Fittingly, the Corporation moved to sparkling new headquarters - a building that would epitomise its ideals
The JTC Summit is high-tech, with the latest in IT systems. It houses the Corporation’s one-stop customer service centre. And, towering at 32 floors, it is an example of efficient land use. It takes up only one-fifteenth of the former Jurong Town Hall premises in terms of land, but has 28 times more usable space
JTC could stand tall to greet the new millennium
This is the third of a four-part series brought to you by JTC Corp
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