MIRA INFORM REPORT

Report Date :

31.01.2007

IDENTIFICATION DETAILS

Name :	ISOLA ASIA PACIFIC (SINGAPORE) PTE LTD
Registered Office :	^101 Gul Circle, Singapore - 629587
Country :	Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	^15/09/2001
Com. Reg. No.:	^200106093G
Legal Form :	^Exempt Pte Ltd
Line of Business :	Manufacturing and Trading of Laminated Plastic Sheets and Glass Epoxy Laminates

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

ISOLA ASIA PACIFIC (SINGAPORE) PTE LTD

Line Of Business 

THE MANUFACTURING AND TRADING OF LAMINATED PLASTIC SHEETS AND GLASS EPOXY LAMINATES

Parent Company

HATTRICK LUX NO. 3 S.A.R.L.

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2005

COMPANY

Sales : US$28,600,000

Networth : US$9,153,000

Paid-Up Capital : US$7,600,000

Net result : US$-565,000

Net Margin(%) : -1.98

Return on Equity(%) : -6.17

Leverage Ratio : 1.19

Rating

Credit Rating : Sing $ 10000001 to Sing $ 50000000

COMPANY IDENTIFICATION

^{Subject Company : ISOLA ASIA PACIFIC (SINGAPORE) PTE LTD}

^{Former Name : -}

^{Business Address : 101 GUL CIRCLE}

^{Town : SINGAPORE}

^{Postcode : 629587}

^{County : -}

^{Country : Singapore}

^{Telephone : 6864 1200}

^{Fax : 6863 9315}

^{ROC Number : 200106093G}

^{Reg. Town : -}

SUMMARY

^{All amounts in this report are in : USD unless otherwise stated}

^{Legal Form : Exempt Pte Ltd}

^{Date Inc. : 15/09/2001}

^{Previous Legal Form : -}

^{Summary year : 31/12/2005}

^{Sales : 28,600,000}

^{Networth : 9,153,000}

^{Capital : 7,600,000}

^{Paid-Up Capital : 7,600,000}

^{Employees : 80}

^{Net result : -565,000}

^{Share value : 1}

^{AUDITOR : DELOITTE & TOUCHE}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 15/09/2001}

PRINCIPAL(S)

^{POON CHIEW KWAI S0161247F Director}

DIRECTOR(S)

^{CHANG SOW KUEN S1365694J Company Secretary}

^{Appointed on : 15/07/2005}

^{Street : 130 GEYLANG EAST AVENUE 1}

^#02-299

^{Town: SINGAPORE}

^{Postcode: 380130}

^{Country: Singapore}

^{ROBERT JOSEPH HASKINS 710543026 Director}

^{Appointed on : 31/05/2006}

^{Street : NO 89 CEDAR DRIVE, REHILL PENINSUL}

^{A, 18 PAK PAT SHAN ROAD}

^{Town: TAI TAM}

^Postcode:

^{Country: Hong Kong}

^{POON CHIEW KWAI S0161247F Director}

^{Appointed on : 31/05/2006}

^{Street : 11 ANG MO KIO AVENUE 9}

^#10-02

^{FAR HORIZON GARDEN}

^{Town: SINGAPORE}

^{Postcode: 569763}

^{Country: Singapore}

^{BOO YONG SENG S1482190B Director}

^{Appointed on : 31/05/2006}

^{Street : 940 TAMPINES AVENUE 5}

^#08-197

^{Town: SINGAPORE}

^{Postcode: 520940}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{LEE WEN SHIUNG DAVID 131058296}

^{LEE KIN FUN JOMA H90146913}

^{HAMISH ALEXANDER CHRISTIE S2200577D}

^{KHOO SUAT LEE S2635005J}

ACTIVITY(IES)

^{LAMINATIONS - PLASTIC, PAPER ETC Code:12807}

^{BASED ON ACRA'S RECORD AS AT 23/01/2007}

^{1. MANUFACTURE OF PLASTIC SHEET, FILM AND ARTICLES THEREOF (EG POLYTHENE AND POLYPROPYLENE BAGS)}

CHARGES

^{Date: 02/09/2004}

^{Comments : CHARGE NO: C200404330 (DISCHARGED)}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

^{CHARGEE: GE CAPITAL FINANCE S.P.A.}

PREMISES/PROPERTY INFORMATIONS

^{Date: 30/01/2007 Tax rate: 10}

^{Site Address : 101 GUL CIRCLE Postcode:}

^{Country: Singapore}

^{Annual Value: 713,000 (SGD)}

* TAX RATE OF 4% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS OWNER OCCUPIED.

* TAX RATE OF 10% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS PARTIALLY OR

FULLY RENTED OUT BY THE OWNER/OWNED BY COMPANY.

* FOR PROPERTIES OTHER THAN RESIDENTIAL PROPERTIES REGARDLESS RENTED OUT OR

NOT, THE TAX RATE IS 10% (I.E INDUSTRIAL AND COMMERCIAL PROPERTY).

* ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT THE PROPERTY CAN FETCH IF IT WERE

RENTED OUT. THE ANNUAL VALUE IS DETERMINED IN THE SAME MANNER REGARDLESS OF

WHETHER THE PROPERTY IS LET-OUT, OWNER-OCCUPIED OR VACANT.

BANKERS

^{HELLER BANK AG}

^{DEUTSCHE BANK AG}

SHAREHOLDERS(S)

^{HATTRICK LUX NO. 3 S.A.R.L. 7,600,000 Company}

^{Street : 8-10, RUE MATHIAS-HARDT}

^L-1717

^Town:

^Postcode:

^{Country: Luxembourg}

HOLDING COMPANY

^{HATTRICK LUX NO. 3 S.A.R.L. UF37210K % : 100}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality: AVERAGE}

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : DOWNWARD

Financial Situation: AVERAGE

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

^{All amounts in this report are in : USD}

^{Audit Qualification: UNQUALIFIED (CLEAN) UNQUALIFIED (CLEAN) UNQUALIFIED (CLEAN)}

^{Date Account Lodged: 10/07/2006}

^{Balance Sheet Date: 31/12/2005 31/12/2004 31/12/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^{--- ASSETS}

^{Tangible Fixed Assets: 8,427,000 7,449,000 8,086,000}

^{Total Fixed Assets: 8,427,000 7,449,000 8,086,000}

^{Inventories: 2,150,000 2,893,000 2,733,000}

^{Receivables: 4,607,000 5,933,000 5,846,000}

^{Cash,Banks, Securitis: 4,198,000 4,515,000 3,307,000}

^{Other current assets: 624,000 347,000 179,000}

^{Total Current Assets: 11,579,000 13,688,000 12,065,000}

^{TOTAL ASSETS: 20,006,000 21,137,000 20,151,000}

^{--- LIABILITIES}

^{Equity capital: 7,600,000 7,600,000 5,000,000}

^{Profit & lost Account: 1,553,000 2,118,000 96,000}

^{TOTAL EQUITY: 9,153,000 9,718,000 5,096,000}

^{L/T deffered taxes: 987,000 1,100,000 1,322,000}

^{Total L/T Liabilities: 987,000 1,100,000 1,322,000}

^{Trade Creditors: 2,562,000 2,793,000 4,672,000}

^{Prepay. & Def. charges: 480,000 745,000 -}

^{Due to Bank: - - 2,200,000}

^{Provisions: 299,000 1,078,000 774,000}

^{Other Short term Liab.: 6,525,000 5,703,000 6,087,000}

^{Total short term Liab.: 9,866,000 10,319,000 13,733,000}

^{TOTAL LIABILITIES: 10,853,000 11,419,000 15,055,000}

PROFIT & LOSS ACCOUNT

^{Net Sales 28,600,000 32,812,000 30,227,000}

^{Gross Profit: 2,206,000 4,811,000 2,898,000}

^{Result of ordinary operations - - 997,000}

^{NET RESULT BEFORE TAX: -679,000 2,300,000 790,000}

^{Tax : -114,000 278,000 694,000}

^{Net income/loss year: -565,000 2,022,000 96,000}

^{Interest Paid: 458,000 304,000 207,000}

^{Depreciation: 993,000 938,000 932,000}

^{Directors Emoluments: 460,000 324,000 330,000}

^{Purchases,Sces & Other}

^{Goods: 26,394,000 28,001,000 -}

^{Wages and Salaries: 2,097,000 2,478,000 2,248,000}

RATIOS

^{31/12/2005 31/12/2004 31/12/2003}

^{Turnover per employee: 357500.00 410150.00 377837.50}

^{Net result / Turnover(%): -0.02 0.06 0.00}

^{Fin. Charges / Turnover(%):0.02 0.01 0.01}

^{Stock / Turnover(%): 0.08 0.09 0.09}

^{Net Margin(%): -1.98 6.16 0.32}

^{Return on Equity(%): -6.17 20.81 1.88}

^{Return on Assets(%): -2.82 9.57 0.48}

^{Net Working capital: 1713000.00 3369000.00 -1668000.00}

^{Cash Ratio: 0.43 0.44 0.24}

^{Quick Ratio: 0.89 1.01 0.67}

^{Current ratio: 1.17 1.33 0.88}

^{Receivables Turnover: 57.99 65.09 69.63}

^{Leverage Ratio: 1.19 1.18 2.95}

^{Net Margin : (100*Net income loss year)/Net sales}

^{Return on Equity : (100*Net income loss year)/Total equity}

^{Return on Assets : (100*Net income loss year)/Total fixed assets}

^{Net Working capital : Total current assets - Total short term liabilities}

^{Cash Ratio : Cash Bank securities/Total short term liabilities}

^{Quick Ratio : (Cash Bank securities+Receivables)/Total Short term liabilities}

^{Current ratio : Total current assets/Total short term liabilities}

^{Inventory Turnover : (360*Inventories)/Net sales}

^{Receivables Turnover : (Receivable*360)/Net sales}

^{Leverage Ratio : Total liabilities/(Total equity-Intangible assets)}

FINANCIAL COMMENTS

^{THE FINANCIAL CONDITION OF THE COMPANY WAS SEEN TO BE FAIR TO LIMITED IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET WAS CONSIDERED PASSABLE WITH NET WORTH DECLINING BY 5.81% FROM US$9,718,000 IN FY 2004 TO US$9,153,000 IN FY 2005. THIS WAS DUE TO LOWER ACCUMULATED PROFIT OF US$1,553,000 (2004: US $2,118,000); A DECLINE OF 26.68% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT-TERM LIABILITIES WHICH MADE UP 60.12% (2004: 49.94%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$6,525,000 (2004: US$5,703,000). THE BREAKDOWN IS AS FOLLOWS:}

^{-RELATED COMPANIES - 2005: US$165,000 (2004: US$3,000)}

^{-LOAN FROM IMMEDIATE HOLDING COMPANY - 2005: US$6,360,000 (2004: US$5,700,000)}

^{IN ALL, LEVERAGE RATIO ROSE SLIGHTLY FROM 1.18 TIMES TO 1.19 TIMES AS A RESULT OF A SLIGHTLY GREATER DECLINE IN TOTAL EQUITY THAN TOTAL LIABILITIES}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION HAS DECLINED AS SEEN FROM THE DECLINE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO FELL TO 1.17 TIMES, DOWN FROM 1.33 TIMES AND QUICK RATIO FELL TO 0.89 TIMES FROM 1.01 TIMES IN FY 2004.}

^{SIMILARLY, NET WORKING CAPITAL FELL BY 49.15% FROM US$3,369,000 IN FY 2004 TO US$1,713,000.}

^{CASH AND CASH EQUIVALENTS COMPRISE OF:}

^{-CASH AND BANK BALANCES - 2005: US$2,051,000 (2004: US$2,515,000)}

^{-FIXED DEPOSITS - 2005: US$2,147,000 (2004: US$2,000,000)}

^{PROFITABILITY:}

^{REVENUE POSTED A DECLINE OF 12.84% FROM US$32,812,000 IN FY 2004 TO US$28,600,000 AND NET PROFIT DROPPED BY 1.28 TIMES TO US$-565,000 (2004: US$2,022,000). HENCE, NET MARGIN FELL TO -1.98% (2004: 6.16%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IT IS NOTED THAT THE SUBJECT HAS NET LOSS WHICH NEEDS CAUTION. AVERAGE COLLECTION PERIOD HAS SHORTENED FROM 65.09 DAYS TO 57.99 DAYS.}

^{A SHORTER AVERAGE COLLECTION PERIOD POSES LESSER RISK OF TURNING INTO BAD DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT SERVICING ABILITY MAY BE AFFECTED IF TRADE RECEIVABLES ARE NON FORTHCOMING.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{CONTINGENT LIABILITIES}

^{AS AT DECEMBER 31, 2005 AND 2004, THE COMPANY HAS GIVEN A CROSS GUARANTEE, TOGETHER WITH OTHER GROUP COMPANIES, TO A FINANCIAL INSTITUTION TO SECURE THE CREDIT FACILITIES GRANTED TO GROUP COMPANIES.}

^{LIMITED EXEMPT PRIVATE COMPANY:}

^{WHERE THE SHARES OF A PRIVATE COMPANY ARE NOT OWNED BY ANY CORPORATE BODY AND THERE ARE NO MORE THAN 20 MEMBERS, THE PRIVATE COMPANY IS KNOWN AS AN EXEMPT PRIVATE COMPANY.}

^{AN EXEMPT PRIVATE COMPANY ENJOYS A GREATER AMOUNT OF PRIVACY THAN A PRIVATE COMPANY. IT IS NOT REQUIRED TO FILE ACCOUNTS WITH THE REGISTRAR IF IT CAN PRODUCE A CERTIFICATE SIGNED BY ONE OF ITS DIRECTORS, SECRETARY AND AUDITOR CONFIRMING THE FOLLOWING POINTS:}

^{1. THE COMPANY IS AN EXEMPT PRIVATE COMPANY.}

^{2. THE AUDITED ACCOUNTS HAVE BEEN TABLED BEFORE THE SHAREHOLDERS AT THE}

^{ANNUAL GENERAL MEETING.}

^{3. THE COMPANY IS ABLE TO MEET ITS LIABILITIES.}

^{THERE IS THEREFORE NO DISCLOSURE TO THE PUBLIC OF THE ACCOUNTS OF THE COMPANY ALTHOUGH THE ACCOUNTS STILL HAVE TO BE AUDITED EVERY YEAR AND APPROVED AT AN ANNUAL GENERAL MEETING OF THE COMPANY.}

^{A PRIVATE COMPANY THAT IS WHOLLY OWNED BY THE GOVERNMENT MAY BECOME AN EXEMPT PRIVATE COMPANY IF THE MINISTER FOR FINANCE, IN THE NATIONAL INTEREST, DECLARES IT TO BE SUCH BY A GAZETTE NOTIFICATION.}

^{EXEMPT FROM AUDIT}

^{AN EXEMPT PRIVATE COMPANY IS EXEMPT FROM AUDIT REQUIREMENTS IF THE STARTING DATE OF ITS FINANCIAL YEAR IS BETWEEN 15 MAY 2003 AND 31 MAY 2004 AND ITS TURNOVER FOR THAT FINANCIAL YEAR DOES NOT EXCEED $2.5 MILLION. FOR FINANCIAL YEARS STARTING 1 JUNE 2004, THE AMOUNT OF THE TURNOVER HAS BEEN RAISED TO $5 MILLION. THESE COMPANIES ARE STILL REQUIRED TO MAINTAIN PROPER ACCOUNTING.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 15/09/2001 AS A LIMITED EXEMPT PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "ISOLA ASIA PACIFIC (SINGAPORE) PTE LTD".}

^{AS AT 23/01/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 7,600,000 SHARES OF A VALUE OF US$7,600,000.}

^{PRINCIPAL ACTIVITIES:}

^{SUBJECT IS REGISTERED WITH THE ACCOUNTING & CORPORATE REGULATORY AUTHORITY (ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

^{1. MANUFACTURE OF PLASTIC SHEET, FILM AND ARTICLES THEREOF (EG POLYTHENE AND}

^{POLYPROPYLENE BAGS)}

^{MANUFACTURE & TRADE IN LAMINATED PLASTIC SHEETS & GLASS EPOXY LAMINATES}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF THE MANUFACTURING AND TRADING OF LAMINATED PLASTIC SHEETS AND GLASS EPOXY LAMINATES.}

^{FROM THE RESEARCH DONE, THE FOLLOWING INFORMATION WAS GATHERED:}

^{BACKGROUND OF ISOLA GROUP:}

^{ISOLA GROUP LEADS THE MARKET IN THE DESIGN AND PRODUCTION OF INNOVATIVE BASE MATERIALS USED AS THE FOUNDATION FOR PRINTED CIRCUIT BOARDS. FOR OVER TWO DECADES, ISOLA HAS BEEN THE PREFERRED LAMINATE SUPPLIER TO THE TOP PERFORMING PCB MANUFACTURERS, DELIVERING HIGH QUALITY INNOVATIVE SOLUTIONS THAT MINIMIZE COSTS AND CUT MANUFACTURING TIME.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* MANUFACTURER AND SALES OF HIGH PERFORMANCE AND GLASS EPOXY LAMINATES AND}

^PREPREGS

^{* TECHNICAL CAPABILITIES:}

^{* MLB MANUFACTURING, PRODUCT DEVELOPMENT}

^{QUALITY ASSESSMENT:}

^{* ISO 9002}

^{NEWS: ISOLA ANNOUNCES UPGRADES TO SINGAPORE FACILITY "EXTRACTS"}

^{-SOURCE: ISOLA}

^{DATE: 12/09/2006}

^{CHANDLER, ARIZONA - ISOLA GROUP S.A.R.L., A DESIGNER, DEVELOPER AND MANUFACTURER OF HIGH PERFORMANCE BASE MATERIALS FOR THE PRINTED CIRCUIT BOARD INDUSTRY, ANNOUNCED TODAY EXTENSIVE UPGRADES TO THE SINGAPORE MANUFACTURING FACILITY.}

^{THE $6.6 MM UPGRADES INCLUDE A NEW MULTI-LAYER MATERIAL PRESS LINE WITH A STATE-OF-THE-ART AIKI AUTOMATED BUILD UP SYSTEM. THE AIKI SYSTEM COMES WITH ASSOCIATED AUTOMATION ENCLOSED IN A NEW 1K CAPABLE CLEAN ROOM FACILITY, WITH UPGRADED LAMINATE FABRICATION CAPABILITIES. IN ADDITION TO SUPPORTING CONTINUOUS QUALITY IMPROVEMENT, THESE UPGRADES WILL INCREASE CAPACITY BY 1.3 MM SQUARE FEET OF LAMINATE PER MONTH, SIGNIFICANTLY REDUCING LEAD-TIME AND ENHANCING QUICK TURNAROUND CAPABILITY.}

^{NO OTHER TRADE INFORMATION IS AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED BY SUBJECT'S PERSONNEL ON 30/01/2007.}

^{THE COMPANY IS A WHOLLY-OWNED SUBSIDIARY OF HATTRICK LUX NO. 3, S.A.R.L., INCORPORATED IN LUXEMBOURG.THE COMPANY'S ULTIMATE HOLDING COMPANY IS ISOLA GROUP SARL, A COMPANY INCORPORATED IN UNITED STATES OF AMERICA.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2005: NOT AVAILABLE (2004: 80; 2003: 82, 2002: NIL)}

^{* GROUP - 2005: - (2004: -)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{101 GUL CIRCLE}

^{SINGAPORE 629587}

^{- OWNED PREMISE}

^{- DATE OF CHANGE OF ADDRESS: -}

^WEBSITE:

^{http://www.isola-group.com}

^EMAIL:

^{info-sin@isola-group.com}

MANAGEMENT

^{THE DIRECTORS AT THE TIME OF THE REPORT ARE:}

^{1) ROBERT JOSEPH HASKINS, AN AMERICAN}

^{- BASED IN HONG KONG.}

^{2) POON CHIEW KWAI, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP IN OUR DATABASE.}

^{3) BOO YONG SENG, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP IN OUR DATABASE.}

Singapore’s Country Rating 2006

Investment Grade

IN SINGAPORE, THE POLITICAL SITUATION APPEARS TO BE VERY STABLE.

ECONOMIC GROWTH IS BECOMING MORE MODERATE AS INVESTMENT HAS BEEN FLAT DUE TO INCREASING OIL PRICES AND LESS BUOYANT DEMAND FOR ELECTRONIC PRODUCTS.

ECONOMIC PERFORMANCE HAS REMAINED STRONG, UNDERPINNED BY PHARMACEUTICALS AND SERVICES. EXPORTS HAS BENEFITED FROM THE STEADINESS OF DEMAND FROM ITS MAIN TRADING PARTNERS, MALAYSIA, THE UNITED STATES, CHINA AND HONG KONG. OTHER THAN ITS BALANCED PUBLIC SECTOR ACCOUNTS, LIMITED FOREIGN DEBT AND COMFORTABLE FOREIGN CURRENCY RESERVES HAVE CONTRIBUTED TO SINGAPORE’S STRONG FINANCIAL CONDITION.

AS THE ELECTRONICS SECTOR FACES COMPETITION FROM THE ASIAN ECONOMIES, SINGAPORE HAS BEEN PURSUING DIVERSIFICATION STRATEGY THAT HAS BEEN CONSOLIDATING ITS POSITION. PHARMACEUTICALS ALREADY REPRESENT 10% OF EXPORTS IN COMPARATIVE TO ITS INSIGNIFICANT CONTRIBUTION IN YEAR 1995. ELECTRONICS SECTOR SECTOR’S SHARE HAS DECLINED FROM 80% TO 60% DURING THE SAME PERIOD. THERE IS HIGH RELIANCE ON DEVELOPMENT OF PETROCHEMICAL PRODUCTS, HIGH VALUE-ADDED SERVICES AND BIOTECHNOLOGIES.

ASSETS

ONE OF THE MOST OPEN ECONOMIES IN THE WORLD WITH EXPORTS PLAYING A MAJOR ROLE IN ITS PERFORMANCE.

ONE OF ASIA’S MOST ADVANCED COUNTRIES IN QUALITY COMPETITIVENESS TERMS.

WORKFORCE’S EDUCATION AND SKILL LEVEL IS VERY HIGH.

A MAJOR EXPORT OF CAPITAL IN ASIA, PARTICULARLY THE STATE-OWNED HOLDING COMPANY, TEMASEK.

THE BUSINESS ENVIRONMENT HAS BEEN VERY FAVOURABLE.

GREAT POLITICAL STABILITY.

WEAKNESSES

ECONOMY REMAINED OVERSPECIALISED IN THE ELECTRONICS SECTOR.

MUST ACCELERATE DIVERSIFICATION IN SERVICES TO MAINTAIN ITS LEAD OVER OTHER ASIAN ECONOMIES

REFORMS ARE STILL NEEDED TO FOSTER INNOVATION AND EDUCATION-SYSTEM MODERNIZATION.

AGING POPULATION COULD ULTIMATELY AFFECT ECONOMIC PERFORMANCE.

MANUFACTURING SECTOR

SINGAPORE'S MANUFACTURING SECTOR, WHICH MAKES UP ABOUT A QUARTER OF SINGAPORE’S ECONOMY, EXPANDED 22.5 PERCENT FROM JUNE LAST YEAR, MORE THAN TWICE THE 10.6 PER CENT PACE IN MAY. THIS WAS LED BY A SURGE IN DRUGS AND SEMICONDUCTOR OUTPUT, AND CONTINUED STRENGTH IN RIG-BUILDING. THE SURPRISINGLY STRONG JUNE NUMBERS MEAN THAT IN THE APRIL-TO-JUNE QUARTER, MANUFACTURING OUTPUT JUMPED 12.5 PER CENT.

TOTAL MANUFACTURING OUTPUT EXPANDED BY 20 PER CENT IN THE FIRST QUARTER OF 2006, IMPROVING FROM THE 14 PER CENT GROWTH IN THE PREVIOUS QUARTER.

ALL CLUSTERS, EXCEPT CHEMICALS AND GENERAL MANUFACTURING, RECORDED DOUBLEDIGIT GAINS IN THE QUARTER. EXCLUDING THE BIOMEDICAL MANUFACTURING CLUSTER, MANUFACTURING OUTPUT GREW BY 15 PER CENT.

INDUSTRY CLUSTER	% GROWTH IN JUNE (YEAR-ON-YEAR)	% GROWTH IN APRIL-TO-JUNE QUARTER (YEAR-ON-YEAR)	% GROWTH IN FIRST HALF OF 2006 (YEAR-ON-YEAR)
BIOMEDICAL MANUFACTURING	59.4	15.6	29.6
TRANSPORT ENGINEERING	30.4	29.4	34.2
PRECISION ENGINEERING	15.4	10.6	12.4
ELECTRONICS	10.3	9.8	12.6
GENERAL MANUFACTURING	8.1	4.6	5.1
CHEMICALS	3.4	5.4	4.1
TOTAL	22.5	12.5	16.4

SOURCE: ECONOMIC DEVELOPMENT BOARD

PERFORMANCE BY CLUSTER

ELECTRONICS, WHICH MADE UP A THIRD OF MANUFACTURING’S CONTRIBUTION TO ECONOMIC GROWTH IN 2005, EXPANDED BY 8.6 PER CENT IN MAY, HELPED BY A 38.9 PER CENT EXPANSION IN THE SEMICONDUCTOR SEGMENT. UP CLOSE, ELECTRONICS WAS A TALE OF TWO PRODUCT SEGMENTS.

BUSINESS EXPECTATIONS FOR JULY TO DECEMBER 2006

SINGAPORE MANUFACTURERS REMAIN POSITIVE ABOUT BUSINESS PROSPECTS IN THE SECOND HALF OF THIS YEAR. OVERALL, A NET WEIGHTED 26% OF MANUFACTURERS, WHO WERE POLLED IN JUNE AND JULY SAID THEY EXPECT AN IMPROVED BUSINESS ENVIRONMENT IN THE JULY-DECEMBER PERIOD, UNCHANGED FROM THE PREVIOUS SURVEY COVERING APRIL TO SEPTEMBER.

MANUFACTURERS GENERALLY EXPECT POSITIVE CONDITIONS IN THE SECOND QUARTER OF 2006 TO BE MAINTAINED IN THE SECOND HALF OF THE YEAR. OVERALL, THE MANUFACTURING SECTOR’S OUTLOOK REMAINS ROSY, ACCORDING TO THE EDB SURVEY.

AMONG SINGAPORE’S MANUFACTURERS, ELECTRONICS MAKERS ARE THE MOST UPBEAT ABOUT THEIR PROSPECTS FOR THE SECOND HALF OF THE YEAR, DESPITE WARNINGS OF AN IMPENDING SLOWDOWN IN DEMAND FOR THEIR OUTPUT.

ACCORDING TO A SURVEY BY THE ECONOMIC DEVELOPMENT BOARD (EDB) ON BUSINESS EXPECTATIONS IN THE MANUFACTURING SECTOR, WHICH COVERED NEARLY 400 FIRMS, IT WAS REVEALED THAT 45 PERCENT OF PRODUCERS IN THE ELECTRONICS CLUSTER EXPECT THEIR CIRCUMSTANCES TO IMPROVE IN THE SECOND HALF OF THE YEAR, COMPARED WITH ONLY 26 PERCENT OF MANUFACTURERS OVERALL.

IN ADDITION, 30 PERCENT OF THE ELECTRONICS FIRMS SURVEYED SAID THEY PLANNED TO HIRE NEW STAFF OVER THE NEXT TWO MONTHS, UP FROM ONLY 7 PERCENT LAST QUARTER. THE MOOD OF OPTIMISM WAS MOST PRONOUNCED IN THE COMPUTER PERIPHERALS MARKET, WHERE AROUND 80 PERCENT OF COMPANIES POLLED EXPECT REVENUES, OUTPUT, AND STAFF NUMBERS TO GROW IN THE SHORT TERM.

EXTRACTED FROM:

CHANNELNEWSASIA

ECONOMIC DEVELOPMENT BOARD (EDB)

MINISTRY OF TRADE AND INDUSTRY (MTI)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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