MIRA INFORM REPORT

 

 

 

Report Date :

09.12.2008

 

IDENTIFICATION DETAILS

 

Name :

LYONDELL SOUTH ASIA PTE LTD

 

 

Registered Office :

250 North Bridge Road #14-03/04 Raffles City Tower

 

 

Country :

Singapore

 

 

Financials (as on) :

31.12.2007

 

 

Date of Incorporation :

26.02.2000

 

 

Com. Reg. No.:

200001565W

 

 

Legal Form :

Pte Ltd

 

 

Line of Business :

Trading and supply of chemicals for industrial use and providing administrative services to its related corporations.

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

Subject Company   

 

LYONDELL SOUTH ASIA PTE LTD

 

 

Line Of Business    

 
TRADING AND SUPPLY OF CHEMICALS FOR INDUSTRIAL USE AND PROVIDING  ADMINISTRATIVE SERVICES TO ITS RELATED CORPORATIONS.

 

 

Parent Company     

 

BASELL INTERNATIONAL HOLDINGS B.V.

(PERCENTAGE OF SHAREHOLDING: 100.00%)

 

 

Financial Elements 

 

                                              FY 2007

                                              COMPANY

                                               

Sales              :                       US$136,011,814

Networth           :      US$  9,781,264

Paid-Up Capital    :                                  US$    199,536

Net result         :       US$   1,23,731

Net Margin(%)      :   0.83

Return on Equity(%):                11.54

Leverage Ratio     :   53.79

 

 

COMPANY IDENTIFICATION

 

Subject Company :

LYONDELL SOUTH ASIA PTE LTD

Business Address:

250 NORTH BRIDGE ROAD #14-03/04 RAFFLES CITY TOWER

Town:

SINGAPORE

Postcode:

179101

Country:

Singapore

Telephone:

6880 2345

Fax:

6880 2377/68802378

ROC Number:

200001565W

Easy Number company:

00004523376166

 

 

SUMMARY

 

Legal Form:

Pte Ltd

Date Inc.:

26/02/2000

Summary year :

31/12/2007

All amounts in this report are in :

USD

Sales:

136,011,814

Networth :

9,781,264

Capital:

 

Paid-Up Capital:

199,536

Employees:

20

Net result :

1,128,731

Share value:

1

 
 
 
AUDITOR: PRICEWATERHOUSECOOPERS                                       
                                                                      
BASED ON ACRA'S 
                                              NO. OF SHARES     CURRENCY             AMOUNT              
ISSUED ORDINARY                100,000                   SGD                        100,000.00
PAID-UP ORDINARY               -                              SGD                        100,000.00           
 
                                                                      
BASED ON ACRA'S RECORDS
                                              NO. OF SHARES                    CURRENCY             AMOUNT              
ISSUED ORDINARY                300,000                                  SGD                        300,000.00
PAID-UP ORDINARY               -                                             SGD                        300,000.00

 

REFERENCES

 

 

Litigation:

No

Company status :

TRADING

Started :

26/02/2000

 

 

PRINCIPAL(S)

 

KHOO TONY

S1173512F

Director

 

 

DIRECTOR(S)

 

ADRIAN CHAN PENGEE

S1658599H

Company Secretary

Appointed on :

01/04/2000

 

Street :

700 LORONG 1 TOA PAYOH #08-02 TRELLIS TOWERS

 

Town:

SINGAPORE

 

Postcode:

319773

 

Country:

Singapore

 

LUN CHEE LEONG

S7003795E

Company Secretary

Appointed on :

30/09/2004

 

Street :

60 LORONG 4 TOA PAYOH #23-117

 

Town:

SINGAPORE

 

Postcode:

310060

 

Country:

Singapore

 

KHOO TONY

S1173512F

Director

Appointed on :

26/02/2000

 

Street :

12 STIRLING ROAD #38-12 QUEENS

 

Town:

SINGAPORE

 

Postcode:

148955

 

Country:

Singapore

 

CHARLES WAYNE GRAHAM

426993766

Director

Appointed on :

01/03/2007

 

Street :

SUITE 4937, FOUR SEASONS PLACE NO. 8 FINANCE STREET CENTRAL

 

Country:

Hong Kong

 

SIO TAT LONG

S0038448H

Director

Appointed on :

18/03/2008

 

Street :

110 HOLLAND ROAD #04-03

 

Town:

SINGAPORE

 

Postcode:

278553

 

Country:

Singapore

 

 

 

FORMER DIRECTOR(S)

 

YANG CHEN-CHEN CHARLES

710073487

 

ANG RU-LIN

S7442282I

 

 

ACTIVITY(IES)

 

Activity Code:

3970

CHEMICALS

Activity Code:

22190

TRADING COMPANIES

 
 
 
BASED ON ACRA'S RECORD 
1) WHOLEDSALE OF CHEMICALS AND CHEMICALS PRODUCTS;                    
   TRADING OF CHEMICAL PRODUCTS

 

 

SHAREHOLDERS(S)

 

BASELL INTERNATIONAL HOLDINGS B.V.

300,000

Company

 

Street :

WEENA 737, 3013AM

Town:

ROTTERDAM

Country:

Netherlands

 

 

FORMER SHAREHOLDER(S)

 

LYONDELL ASIA PACIFIC LTD

100,000

 

 

YANG CHEN-CHEN CHARLES

1

 

 

KHOO TONY

1

 

 

 

HOLDING COMPANY

 

BASELL INTERNATIONAL HOLDINGS B.V.

UF49686N

100%

 

 

 

PAYMENT HISTORY AND EXPERIENCES

 

Trade Morality:

AVERAGE

Liquidity :

SUFFICIENT

Payments :

REGULAR

Trend :

DOWNWARD

Financial Situation:

AVERAGE

 

 

 

FINANCIAL ELEMENTS

 

All amounts in this report are in :

USD

 

Audit Qualification:

UNQUALIFIED (CLEAN) OPINION

UNQUALIFIED (CLEAN) OPINION

UNQUALIFIED (CLEAN) OPINION

Date Account Lodged:

28/07/2008

 

 

Balance Sheet Date:

31/12/2007

31/12/2006

31/12/2005

Number of weeks:

52

52

52

Consolidation Code:

COMPANY

COMPANY

COMPANY

 

--- ASSETS

 

Preliminary Exp

 

19,926

77,380

Intangible Fixed Assets:

 

25,793

 

Tangible Fixed Assets:

82,162

173,540

252,732

Total Fixed Assets:

82,162

219,259

330,112

Inventories:

9,119,728

8,152,406

11,110,542

Receivables:

20,323,389

31,745,157

25,002,857

Cash,Banks, Securitis:

2,495,900

4,391,691

566,053

Other current assets:

607,984

277,412

182,480

Total Current Assets:

32,547,001

44,566,666

36,861,932

TOTAL ASSETS:

32,629,163

44,785,925

37,192,044

--- LIABILITIES

 

 

 

Equity capital:

199,536

60,734

60,734

Profit & lost Account:

9,581,728

8,591,799

6,204,638

Total Equity:

9,781,264

8,652,533

6,265,372

L/T deffered taxes:

14,259

 

4,530

Total L/T Liabilities:

14,259

 

4,530

Trade Creditors:

21,475,530

34,141,805

28,436,484

Provisions:

501,005

839,155

933,386

Other Short term Liab.:

471

3,251

 

Total short term Liab.:

22,833,640

36,133,392

30,922,142

Prepay. & Def. charges:

856,634

1,149,181

1,552,272

TOTAL LIABILITIES:

22,847,899

36,133,392

30,926,672

 

 

PROFIT & LOSS ACCOUNT

 

Net Sales

136,011,814

162,207,065

133,809,426

Gross Profit:

8,688,338

8,755,407

9,401,980

NET RESULT BEFORE TAX:

1,369,297

2,932,343

3,073,751

Tax :

240,566

545,182

698,553

Net income/loss year:

1,128,731

2,387,161

2,375,198

Depreciation:

121,461

105,852

73,113

Directors Emoluments:

841,424

256,867

238,671

Purchases,Sces & Other Goods:

127,323,476

153,451,658

124,407,446

Wages and Salaries:

3,397,218

1,778,255

1,455,218

Financial Income:

107,730

103,715

57,290

 

 

RATIOS

 

Date Account Lodged:

31/12/2007

31/12/2006

31/12/2005

Turnover per employee:

6800590.7

8110353.25

6690471.3

Net result / Turnover(%):

0.01

0.01

0.02

Stock / Turnover(%):

0.07

0.05

0.08

Net Margin(%):

0.83

1.47

1.78

Return on Equity(%):

11.54

27.59

37.91

Return on Assets(%):

3.46

5.33

6.39

Net Working capital:

9713361

8433274

5939790

Cash Ratio:

0.11

0.12

0.02

Quick Ratio:

1

1

0.83

Current ratio:

1.43

1.23

1.19

Receivables Turnover:

53.79

70.45

67.27

Leverage Ratio:

2.34

4.19

 

 

 

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)/1000

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 IN VIEW OF THE FOLLOWING:                                                        
                                                                      
NET WORTH:
THE BALANCE SHEET WAS PASSABLE WITH NET WORTH IMPROVED BY 13.05% FROM  US$8,652,533 IN 2006 TO US$9,781,264 IN 2007. THIS WAS DUE TO HIGHER   RETAINED EARNINGS OF US$9,581,728 (2006: US$8,591,799); A RISE OF  11.52% FROM THE PRIOR YEAR.
                                                                   
LEVERAGE:                                                             
IN THE SHORT TERM, SUBJECT WAS LARGELY FINANCED BY TRADE CREDITORS  WHICH MADE UP 94.05% (2006: 94.49%) OF THE TOTAL CURRENT LIABILITIES  AND AMOUNTED TO US$21,475,530 (2006: US$34,141,805). THE BREAKDOWN IS AS FOLLOWS:                                                           
                                                                      
*  TRADE PAYABLES  - 2007: US$2,727,681 (2006: US$9,609,702)          
*  AMOUNTS PAYABLE TO ULTIMATE HOLDING COMPANY (TRADE) - 2007: NIL    
   (2006: US$9,269,130)
*  AMOUNTS PAYABLE TO RELATED CORPORATIONS (TRADE)                    
   - 2007: US$18,747,849 (2006: US$15,262,973)                        
                                                                      
OVERALL, THE LEVERAGE RATIO HAD IMPROVED TO 2.34 TIMES (2006: 4.19 TIMES), INDICATING THAT THE COMPANY'S TOTAL LIABILITIES WERE LESS SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY. A LOWER RATIO WOULD BE MORE DESIRABLE AS THE LOWER THE RATIO, THE GREATER THE FINANCIAL SAFETY AND OPERATING FREEDOM FOR THE COMPANY.
                                                                  
LIQUIDITY:                                                            
IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 1.43 TIMES, UP FROM 1.23 TIMES WHILE QUICK RATIO REMAINED STABLE TO 1.00 TIMES (2006: 1.00 TIMES).                              
                                                                      
ON THE OTHERHAND, NET WORKING CAPITAL IMPROVED BY 15.18% FROM US$8,433,274 IN 2006 TO US$9,713,361 IN 2007.
 
CASH AND CASH EQUIVALENTS FELL BY 43.17% AND AMOUNTED TO US$2,495,900 
(2006: US$4,391,691). BREAKDOWN WAS AS FOLLOWS:                       
                                                                      
*  CASH AT BANK - 2007: US$2,495,204 (2006: US$4,391,039)             
*  CASH ON HAND - 2007: US$      696 (2006: US$      652)
                                                             
PROFITABILITY:                                                        
REVENUE POSTED A DECREASE OF 16.15% FROM US$162,207,065 IN 2006 TO US$136,011,814 IN 2007. SIMILARLY, NET PROFIT DROPPED BY 52.72% AND AMOUNTED TO US$1,128,731 (2006: US$2,387,161). HENCE, NET MARGIN FELL FROM 1.47 TIMES IN 2006 TO 0.83 TIMES IN 2007.                        
                                                                      
REVENUE CONSISTED OF:                                                 
*  SALE OF GOODS     - 2007: US$135,828,005 (2006: US$162,031,027)    
*  COMMISSION INCOME - 2007: US$    183,809 (2006: US$    176,038)
                                                                      
DEBT SERVICING:                                                       
DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE IMPROVED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING.        
                                                                      
IT WAS NOTED THAT AVERAGE COLLECTION PERIOD HAS SHORTHENED TO 54 DAYS (2006: 70 DAYS).
 
NON-CURRENT ASSETS:                                                   
*  DEFERRED INCOME TAX ASSETS OF NIL (2006: US$19,926) WERE CLASSIFIED UNDER PRELIMINARY
 
NOTES TO FINANCIAL STATEMENTS:                                        
*  SHARE CAPITAL:
 
ON 26 NOVEMBER 2007, THE COMPANY ISSUED 200,000 ORDINARY BONUS SHARES  AMOUNTING TO S$138,802 BY WAY OF TRANSFER FROM THE RETAINED EARNINGS. THE NEWLY ISSUED SHARES RANK PARI PASSU IN ALL RESPECTS WITH THE  PREVIOUSLY ISSUED SHARES.

 

 

BACKGROUND/OPERATION

 

THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON   26/02/2000 AS A LIMITED PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "LYONDELL SOUTH ASIA PTE LTD".
 
AS AT 01/12/2008, THE COMPANY HAS A ISSUED AND PAID-UP CAPITAL OF 300,000 SHARES, OF A VALUE OF S$300,000.                              
                                                                      
PRINCIPAL ACTIVITIES:
SUBJECT IS REGISTERED WITH THE ACCOUNTING AND CORPORATE REGULATORY  AUTHORITY (ACRA) BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:           
 
1) WHOLEDSALE OF CHEMICALS AND CHEMICALS PRODUCTS; TRADING OF CHEMICAL PRODUCTS
                             
THE COMPANY WAS LISTED IN THE SINGAPORE LOCAL DIRECTORIES UNDER THE  CLASSIFICATION OF: CHEMICALS
 
DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF   THE COMPANY CONSIST OF THE TRADING AND SUPPLY OF CHEMICALS FOR INDUSTRIAL USE AND PROVIDING ADMINISTRATIVE SERVICES TO ITS RELATED  CORPORATIONS.
                                                  
FROM THE RESEARCH DONE, THE FOLLOWING INFORMATION WAS GATHERED:       
                                                                      
                                                                      

BACKGROUND

 

LYONDELL CHEMICAL COMPANY, HEADQUARTERED IN HOUSTON, TEXAS, IS NORTH  AMERICA'S THIRD-LARGEST INDEPENDENT, PUBLICLY TRADED CHEMICAL COMPANY. LYONDELL IS A LEADING GLOBAL MANUFACTURER OF CHEMICALS AND PLASTICS, A REFINER OF HEAVY, HIGH-SULFUR CRUDE OIL AND A SIGNIFICANT PRODUCER OF FUEL PRODUCTS.

                                                                    

OUR PRODUCTS ARE THE BUILDING BLOCKS FOR COUNTLESS GOODS AND PRODUCTS  THAT PEOPLE USE EVERY DAY, SUCH AS FOOD PACKAGING, HOUSEHOLD FURNISHINGS, DETERGENTS, COSMETICS, AUTOMOTIVE PARTS, CONSTRUCTION AND HOME-BUILDING MATERIALS, PAINTS AND COATINGS AND MANY OTHER APPLICATIONS.                                                         

                                                                      

EQUISTAR CHEMICALS, LP; HOUSTON REFINING LP AND MILLENNIUM CHEMICALS  INC. ARE WHOLLY OWNED SUBSIDIARIES OF LYONDELL.
 
SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:                          
 
* MANUFACTURER AND SELLER OF PROPYLENE OXIDE, PROPYLENE GLYCOL, ETHYLENE, PROPYLENE AND POLYETHYLENE. SUBJECT IMPORTS AND EXPORTS CHEMICAL PRODUCTS AS WELL AS TRANSPORTING CHEMICAL PRODUCTS TO OVERSEAS.                                                           
                                                                    
PRODUCTS OR SERVICES:                                                 
*  ETHYLENE
*  POLYETHYLENE                                                       
*  STYRENE                                                            
*  PROPYLENE                                                          
*  PROPYLENE OXIDE                                                    
*  GASOLINE
*  ULTRA LOW-SULFUR DIESEL                                            
*  MTBE                                                               
*  ETBE
 
BUSINESS PARTNER:                                                     
* SAIPER CHEMICALS PRIVATE LIMITED                                    
                                                                      
FROM THE PRIOR  TELE-INTERVIEW CONDUCTED, SUBJECT CONFIRMED ITS ADDRESS AND CONTACTS. HOWEVER, QUESTIONS REGARDING ITS IMPORT AND EXPORT COUNTRIES WERE REJECTED.                                                                       
                                                                      
NUMBER OF EMPLOYEES (31 DECEMBER):
* COMPANY - 2008: 20; (2007: NOT AVAILABLE; 2006: NOT AVAILABLE       
2005: NOT AVAILABLE; 2004: 13; 2003: 14)                  
                                                                      
ATTEMPTS HAVE BEEN MADE TO CONTACT THE SUBJECT FOR A TELE-INTERVIEW. HOWEVER, TELE-INTERVIEW WAS REJECTED BY SUBJECT'S  PERSONNEL. HENCE, NO OTHER TRADE INFORMATION AT THE TIME OF THIS  REPORT.
 
LYONDELL ASIA PACIFIC LTD CEASED TO BE THE IMMEDIATE HOLDING COMPANY  AND LYONDELL CHEMICAL COMPANY CEASED TO BE THE ULTIMATE HOLDING COMPANY WITH EFFECT FROM 20 DECEMBER 2007 FOLLOWING THE TRANSFER OF   SHARES IN THE COMPANY TO BASELL INTERNATIONAL HOLDINGS B.V.,          
 
INCORPORATED IN THE NETHERLANDS WHICH BECAME THE NEW IMMEDIATE HOLDING COMPANY. LYONDELL BASELL INDUSTRIES, WHICH IS ALSO INCROPORATED IN THE NETHERLANDS, BECAME THE ULTIMATE HOLDING COMPANY FROM THAT DATE.
 
REGISTERED AND BUSINESS ADDRESS:                                      
250 NORTH BRIDGE ROAD                                                 
#14-03/04                                                             
RAFFLES CITY TOWER                                                    
SINGAPORE 179101
DATE OF CHANGE OF ADDRESS: 09/05/2005                                 
- PROPERTY RECORD WAS NOT AVAILABLE
 
WEBSITE: http://www.lyondell.com                                      
 
EMAIL  : -

 

 

MANAGEMENT

 

THE DIRECTORS AT THE TIME OF THE REPORT ARE:                          
                                                                      
1) CHARLES WAYNE GRAHAM, AN AMERICAN                                  
   - BASED IN HONG KONG.
 
2) SIO TAT LONG, A SINGAPOREAN                                        
   - HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.        
                                                                      
3) KHOO TONY, A SINGAPOREAN                                           
   - HOLDS NO OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE.

 

 

GENERAL COMMENTS

 

SINGAPORE'S COUNTRY RATING 2008                                                 
                                                                                
INVESTMENT GRADE
                                                                                
IN SINGAPORE, THE POLITICAL AND ECONOMIC SITUATION IS VERY GOOD. A QUALITY BUSINESS ENVIRONMENT HAS A POSITIVE INFLUENCE ON CORPORATE PAYMENT BEHAVIOUR.   
 
CORPORATE DEFAULT PROBABILITY IS VERY LOW ON AVERAGE.  ECONOMIC GROWTH REMAINED STRONG IN 2007 AND IN Q1 2008 (6.7%) THANKS TO A SHARP INCREASE IN CONSUMPTION SPURRED BY A BRIGHT EMPLOYMENT PICTURE, RISING REAL WAGES, AND A POSITIVE WEALTH EFFECT PRODUCED BY RISING PROPERTY PRICES. IN THIS  CONTEXT, BANKRUPTCIES CONTINUE TO DECLINE, AS REFLECTED BY THE FAVOURABLE COFACE PAYMENT INCIDENT INDEX TREND. SINGAPORE MOREOVER BOASTS THE BEST GOVERNANCE IN  ASIA THANKS TO AN EFFECTIVE LEGAL SYSTEM AND A GOOD LEVEL OF FINANCIAL TRANSPARENCY.                                                                   
 
HOWEVER, A GROWTH SLOWDOWN IS EXPECTED FOR 2008 (4.5%) AMID WEAKER DEMAND GROWTH
IN THE UNITED STATES, SINGAPORE'S NUMBER TWO TRADING PARTNER. THE FOREIGN TRADE  CONTRIBUTION TO GROWTH WILL THUS DECLINE ESPECIALLY WITH EXPORTS REPRESENTING   
210 PER CENT OF GDP.
 
INFLATION ACCELERATED IN 2007 AND REACHED 7.5% IN MAY 2008 BECAUSE OF RISING RAW MATERIAL PRICES. INDEED, SINGAPORE IMPORTS ALMOST ALL ITS ENERGY AND FOOD.      
 
HOWEVER, FOR THE ENTIRE YEAR, INFLATION SHOULD MODERATE AND REACH 2.8%. THE FINANCIAL SITUATION HAS REMAINED ROBUST AS THE EQUILIBRIUM OF PUBLIC SECTOR FINANCES AND THE SOLIDITY OF A BANKING SYSTEM POISED TO ADOPT BASEL II PRUDENTIAL STANDARDS ATTEST. EXTERNAL ACCOUNTS CONTINUE MOREOVER TO SHOW LARGE  SURPLUSES THANKS TO GOOD PERFORMANCE IN A RANGE OF SECTORS INCLUDING ELECTRONICS, TRANSPORT, CONSTRUCTION, TOURISM, AND FINANCIAL SERVICES. THE DECLINE EXPECTED IN THE CURRENT ACCOUNT SURPLUS IN 2008 SHOULD NOT JEOPARDISE  SINGAPORE'S EXCEPTIONAL FINANCIAL SOLIDITY.
 
UNDERPINNED BY SUBSTANTIAL FISCAL RESERVES AND A LARGE MAJORITY IN PARLIAMENT,  THE PEOPLE'S ACTION PARTY OF PRIME MINISTER LEE HSIEN LOONG HAS SOUGHT AT ONCE  TO MAKE THE CITY-STATE MORE ATTRACTIVE TO FOREIGN INVESTORS AND TO BOLSTER THE   SPECIALISATION IN HIGH-VALUE ADDED SECTORS TO MEET THE GROWING COMPETITION FROM  LOW-COST ASIAN ECONOMIES. BESIDES REDUCTIONS IN CORPORATE INCOME TAX AND TAX INCENTIVES FOR COMPANIES SETTING UP OPERATIONS IN SINGAPORE, THE GOVERNMENT      CONTINUES TO PURSUE ITS INFRASTRUCTURE AND R&D INVESTMENT POLICY.               
        
                                                                        

ASSETS                                                                          

 
"THE COUNTRY HAS BEEN PURSUING AMBITIOUS DIVERSIFICATION STRATEGY, ESPECIALLY TO HIGH VALUE-ADDED SECTORS LIKE CHEMICALS, PHARMACEUTICALS, AND  FINANCE.                                                                        
 
"IT IS AMONG THE MOST ADVANCED COUNTRIES OF ASIA IN QUALITY COMPETITIVENESS TERMS.                                                          
 
"SINGAPORE HAS BECOME A MAJOR EXPORTER OF CAPITAL IN ASIA IN MANY ECONOMIC SECTORS -SUCH AS FINANCE, TELECOMMUNICATIONS, TRANSPORT - NOTABLY VIA THE STATE- OWNED TEMASEK HOLDING COMPANY                                                   
 
"THE ECONOMY HAS BENEFITED FROM THE COUNTRY'S POLITICAL STABILITY AND  EXCELLENT BUSINESS CLIMATE.
 
 

WEAKNESSES

                                                                     

"SKILLED LABOUR IS IN SHORT SUPPLY IN THE SECTORS THE COUNTRY WISHES TO DEVELOP.                                                                        
 
"THE AGEING POPULATION COULD ULTIMATELY UNDERMINE ECONOMIC PERFORMANCE.        
 
"GROWING INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE LEAST SKILLED COULD GENERATE SOCIAL TENSIONS.                                   
 
"THE VERY OPEN ECONOMY IS VULNERABLE TO A WORLD ECONOMIC DOWNTURN.             
                                                                                
                                                                               
                                                                                

WHOLESALE AND RETAIL TRADE SECTOR                                               

 
PAST PERFORMANCE                                                                
THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.0% IN 2Q 2008, HIGHER THAN THE 5.5% GROWTH IN 1Q 2008. NON-OIL RE-EXPORTS GREW BY 14.0% IN 2Q 2008, STRONGER  THAN THE 11.0% GROWTH IN 1Q 2008. RETAIL SALES FELL BY 2.9% IN 2Q 2008. HOWEVER, THIS REPRESENTED A DECLINE OVER A RELATIVELY HIGHER BASE IN 2Q 2007(8.1%  GROWTH). EXCLUDING MOTOR VEHICLES, RETAIL SALES FELL BY 1.4% IN 2Q 2008, IN  CONTRAST TO THE 1.4% GROWTH IN 1Q 2008.
                                                                                
DOMESTIC WHOLESALE TRADE INDEX                                                  
THE OVERALL DOMESTIC WHOLESALE TRADE ROSE BY 11.1% IN 2Q 2008 OVER 1Q 2008.  EXCLUDING PETROLEUM, DOMESTIC SALES ROSE BY 2.9%.
 
AFTER SEASONAL ADJUSTMENT, DOMESTIC SALES ROSE BY 4.5% IN 2Q 2008 OVER 1Q 2008. EXCLUDING PETROLEUM, DOMESTIC SALES FELL BY 1.9%.                               
                                                                                
ON A YEAR-ON-YEAR BASIS, THE OVERALL DOMESTIC WHOLESALE TRADE GREW BY 25.4% OVER THE PREVIOUS YEAR. EXCLUDING PETROLEUM, DOMESTIC SALES ROSE BY 4.7%. AFTER REMOVING PRICE EFFECT, THE OVERALL DOMESTIC WHOLESALE TRADE FELL BY 2.0% IN 2Q  2008 OVER 2Q 2007.                                                              
                                                                                
ON A QUARTER-OVER-QUARTER BASIS, MOST WHOLESALE SECTORS REPORTED HIGHER DOMESTIC
SALES AFTER RECORDING SLOWER BUSINESS IN THE PREVIOUS QUARTER.
                                                                                
DOMESTIC SALES OF TIMBER, PAINTS AND CONSTRUCTION MATERIALS, AND INDUSTRIAL AND 
CONSTRUCTION MACHINERY REGISTERED INCREASES OF 22.7% AND 21.1% IN 2Q 2008.      
                                                                                
PETROLEUM AND PETROLEUM PRODUCTS, AND CHEMICALS AND CHEMICAL PRODUCTS ROSE BY
20.2% AND 12.6% RESPECTIVELY IN 2Q 2008 OVER 1Q 2008. AFTER ADJUSTING FOR PRICE 
CHANGES, SALES REMAINED AT SIMILAR LEVELS AS 1Q 2008.                           
                                                                                
CONVERSELY, DOMESTIC GENERAL WHOLESALE TRADE FELL BY 15.2%. IT WAS FOLLOWED BY   DOMESTIC SALES OF FOOD, BEVERAGES AND TOBACCO, SHIP CHANDLERS AND BUNKERING, AND
HOUSEHOLD EQUIPMENT AND FURNITURE WHICH CONTRACTED BY 4.1% TO 6.9% OVER 1Q 2008.
                                                                                
ON A YEAR-ON-YEAR BASIS, THE WHOLESALE SECTORS RECORDED MIXED PERFORMANCE IN    
DOMESTIC SALES IN 2008 OVER 2Q 2007.
 
THE DOMESTIC SALES OF PETROLEUM AND PETROLEUM PRODUCTS, SHIP CHANDLERS AND       BUNKERING, TIMBER, PAINTS AND CONSTRUCTION MATERIALS, AND CHEMICALS AND CHEMICAL PRODUCTS ROSE BY 17.8% TO 54.7% IN 2Q 2008. SALES OF TIMBER, PAINTS AND          CONSTRUCTION MATERIALS ROSE BY 8.7% OVER 2Q 2007.
 
CONVERSELY, DOMESTIC GENERAL WHOLESALE TRADE FELL BY 24.6%. WHOLESALE TRADE OF   FOOD, BEVERAGES AND TOBACCO, HOUSEHOLD EQUIPMENT AND FURNITURE, AND TRANSPORT    EQUIPMENT FELL BY 7.7% TO 9.3%. DOMESTIC SALES OF ELECTRONIC COMPONENTS DECLINED BY 4.3% IN 2Q 2008 WHILE TELECOMMUNICATIONS AND COMPUTERS REMAINED STABLE. FOREIGN WHOLESALE TRADE INDEX                                                   
                                                                                
FOREIGN WHOLESALE TRADE SALES ROSE BY 11.8% IN 2Q 2008 OVER 1Q 2008. EXCLUDING  
PETROLEUM, SALES ROSE BY 4.7%.
 

AFTER SEASONAL ADJUSTMENT, FOREIGN SALES ROSE BY 6.7% OVER 1Q 2008. EXCLUDING   
PETROLEUM, SALES ROSE SLIGHTLY BY 1.0%.                                         
                                                                                
ON A YEAR-ON-YEAR BASIS, FOREIGN WHOLESALE SALES ROSE BY 28.4% OVER 1Q 2008. EXCLUDING PETROLEUM, SALES ROSE BY 15.3%. AFTER REMOVING PRICE EFFECT, OVERSEAS
SALES ROSE SLIGHTLY BY 1.1% OVER 2Q 2007.                                       
                                                                                
COMPARED TO 1Q 2008, FOREIGN SALES ROSE IN THE MAJORITY OF WHOLESALE SECTORS IN 
2Q 2008.
 
FOOD, BEVERAGES AND TOBACCO WHOLESALERS REPORTED HIGHER OVERSEAS SALES OF 21.9% 
IN 2Q 2008 OVER 1Q 2008, THE LARGEST INCREASE AMONG ALL SECTORS. IT WAS FOLLOWED BY PETROLEUM AND PETROLEUM PRODUCTS, AND HOUSEHOLD EQUIPMENT AND FURNITURE WITH  INCREASES OF 19.4$ AND 16.1% RESPECTIVELY. FOREIGN SALES OF SHIP CHANDLERS AND  BUNKERING ROSE BY 8.1% IN 2Q 2008 OVER 1Q 2008.TIMBER, PAINTS AND CONSTRUCTION MATERIALS, CHEMICALS AND CHEMICAL PRODUCTS, AND INDSUTRIAL AND CONSTRUCTION     
MACHINERY ALSO ROSE BY BETWEEN 5.8% TO 7.2%.                                    
                                                                                
AFTER ADJUSTING FOR PRICE INCREASES, THE SALES VOLUME OF PETROLEUM AND PETROLEUM
PRODUCTS, CHEMICALS AND CHEMICAL PRODUCTS, SHIP CHANDLERS AND BUNKERING CONTRACTED COMPARED TO 1Q 2008.                                                 
                                                                                
CONVERSELY, FOREIGN SALES OF TELECOMMUNICATIONS AND COMPUTERS, AND GENERAL      
WHOLESALE TRADE FELL IN 2Q 2008 OVER 1Q 2008. SALES OF ELECTRONIC COMPONENTS    
REMAINED STABLE AS COMPARED TO 1Q 2008.
                                                                                
COMPARED TO A YEAR AGO, MOST WHOLESALE SECTORS REPORTED DOUBLE-DIGIT GROWTHS IN 
FOREIGN SALES IN 2Q 2008.                                                       
                                                                                
WHOLESALING OF FOOD, BEVERAGES AND TOBACCO CONTINUED TO RECORD HIGHER GROWTH
RATES IN FOREIGN SALES, WITH HIGHER TURNOVER OF 94.8% IN 2Q 2008 OVER A YEAR    
AGO. AFTER ADJUSTING FOR PRICES, SALES VOLUME ROSE BY 77.3% OVER A YEAR AGO.    
                                                                                
WITH HIGHER FUEL PRICES. WHOLESALE SECTORS OF PETROLEUM AND PETROLEUM PRODUCTS, 
SHIP CHANDLERS AND BUNKERING REPORTED HIGHER FOREIGN SALES OF 43.7% AND 38.1%
RESPECTIVELY OVER A YEAR AGO. AFTER REMOVING PRICE EFFECT, THE SALES VOLUME OF  
PETROLEUM AND PETROLEUM PRODUCTS FELL BY 10.7% WHILE SALES VOLUME OF SHIP       
CHANDLERS AND BUNKERING DECLINED BY 13.6.                                       
                                                                                
GENERAL WHOLESALE TRADE, CHEMICALS AND CHEMICAL PRODUCTS, TRANSPORT EQUIPMENT,
AND  HOUSEHOLD EQUIPMENT AND FURNITURE, AND INDUSTRIAL AND CONSTRUCTION MACHINERY    
ALSO REGISTERED STRONG SALES GROWTH OF BETWEEN 5.8% TO 24.7%.                   
                                                                                
CONVERSELY, FOREIGN SALES OF ELECTRONIC COMPONENTS, TIMBER, PAINTS AND CONSTRUCTION MATERIALS, AND TELECOMMUNICATIONS AND COMPUTERS FELL BY 4.9% TO  8.6%  IN 2Q 2008 COMPARED TO 2Q 2007.                                                 
 

                                                                              

NEWS

 

RETAIL SPENDING DOWN FOR THIRD STRAIGHT MONTH  RETAIL SPENDING FELL FOR THE THIRD STRAIGHT MONTH IN AUGUST AS DEMAND FOR CARS  AND RECREATIONAL GOODS DROPPED AMID THE COUNTRY'S FIRST RECESSION SINCE 2002.   
 
WHILE SPENDING ROSE 4.2% FROM AUGUST LAST YEAR, IT WAS 5.8% FROM JULY THIS YEAR, ACCORDING TO THE RETAIL SALES INDEX RELEASED BY THE DEPARTMENT OF STATISTICS
(DOS) YESTERDAY.                                                                
 
TOTAL RETAIL SALES IN AUGUST WERE ESTIMATED AT S$2.71 BILLION, DOWN FROM S$2.88 
BILLION IN JULY.                                                                
 
THE SLOWDOWN IN SPENDING MEANT PEOPLE SPLASHED OUT LESS ON CARS, FURNITURE AND  
HOUSEHOLD EQUIPMENT, PETROL, APPAREL, FOOTWEAR AND RECREATIONAL GOODS.
 
SALES FELL ACROSS THE BOARD FROM THEIR JULY TAKINGS, WITH DECLINES RANGING FROM 
3.6% TO 20.4%.                                                                  
 
BUT THERE WAS A DOUBLE-DIGIT RISE IN SALES OF BIG-TICKET LUXURY ITEMS.           TELECOMMUNICATIONS APPARATUS AND COMPUTER RETAILERS ENJOYED SALES GROWTH OF     
19.5%, WHILE THE WATCH AND JEWELLERY SECTOR'S RECEIPTS ROSE BY 13.6% IN JULY.
 
A RECENT STRAITS TIMES SURVEY OF 62 TENANTS IN SIX ORCHARD ROAD MALLS FOUND    RETAIL REVENUES HAVE FALLEN BY AS MUCH AS 30.0% IN THE PAST THREE WEEKS, COINCIDING WITH THE BANK FAILURES, STOCK MARKET ROUTS AND GROWING FEARS OVER THE GLOBAL FINANICAL TURMOIL.                                                       
 
SEVERAL STORES HAVE ALSO LAUNCHED MID-SEASON SALES, AN EXERCISE UNUSUALLY UNDERTAKEN ONLY IN PARTICULARY SLOW PERIODS.                                    
 
THE AUGUST FIGURES WERE MORE ENCOURAGING, HOWEVER, WHEN COMPARED WITH THE SAME   PERIOD LAST YEAR. VIRTUALLY ALL SEGMENTS, FROM DEPARTMENT STORES TO              SUPERMARKETS, REPORTED DOUBLE-DIGIT GROWTHS OF 11.2 TO 29.6%. HOWEVER, MOTOR    
VEHICLE SALES FELL 12.9% AND RECREATIONAL GOODS SALES CONTRACTED BY 6.8%.
 
INFLATION MAY HAVE PUSHED SALES FIGURES UP. AFTER REMOVING THE EFFECT OF HIGHER  PRICES, WHICH WOULD GIVE A HIGHER OVERALL SALES VALUE, RETAIL SALES ACTUALLY    REMAINED UNCHANGED FROM A YEAR AGO.                                             
 
VALUE OF PETROL SALES IN MARCH SOARED 39%, AS A RESULT OF RISING CRUDE OIL PRICES, EVEN THOUGH THE ACTUAL VOLUME WAS ONLY MARGINALLY HIGHER.
 
PETROL STATION SALES POSTED THE FASTEST GROWTH OF ALL RETAIL SEGMENTS IN MARCH,  ACCORDING TO FIGURES THE DEPARTMENT OF STATISTICS RELEASED YESTERDAY.           
PETROL SALES ROSE 28.2% IN FEBRUARY.                                            
                                                                                
MOST RETAIL SEGMENTS POSTED HIGHER GROWTH MARCH AFTER A WEAKER SHOWING IN FEBRUARY FOR THE COMPUTERS, FURNITURE, OPTICAL GOODS AND BOOKS SEGMENTS. BUT    MOTOR VEHICLES FELL 8.1% FROM MARCH 2007 AS A RESULT OF THE ESCALATING PETROL    PRICES. CRUDE OIL HIT ALMOST US$127 A BARREL RECENTLY.                          
                                                                                
THE SUPERMARKET AND FOOD AND BEVERAGE SEGMENTS ALSO REPORTED LOWER SALES ACTIVITY THAN IN FEBRUARY, WITH FALLS OF 4.7% AND 11.9%, RESPECTIVELY. OVERALL RETAIL SALES ROSE BY 5.6% COMPARED TO MARCH 2007. EXCLUDING MOTOR VEHICLES, SALES VOLUME ROSE BY 12.5%.                                           
                                                                                
OCBC ECONOMIST SELENA LING NOTED THE RETAIL NUMBERS INDICATED RELATIVELY HEALTHY
CONSUMER SPENDING. "THIS IS A TESTIMONY TO THE FACT THAT THE SINGAPOREAN ECONOMY
IS STILL ENJOYING BROAD-BASED GROWTH DESPITE THE GLOBAL SLOWDOWN," SHE SAID.    
THE TOTAL VALUE OF RETAIL SALES IN MARCH WAS ESTIMATED AT S$2.89 BILLION,       
 
COMPARED WITH S$2.59 BILLION IN FEBRUARY.
 
 

OUTLOOK                                                                         

                                                                                
GENERALLY, THE MAJORITY OF WHOLESALERS, WITH A NET WEIGHTED BALANCE OF 55% OF   FIRMS, FORECASTS BUSINESS ACTIVITIES IN THE COMING MONTHS, TO REMAIN AT SIMILAR LEVELS. FOR THE REMAINING WHOLESALE FIRMS, A WEIGHTED 22% OF THEM EXPECTS BETTER BUSINESS CONDITIONS TO IMPROVE. THESE FIRMS ARE MAINLY IN THE BUSINESS OF WHOLESALE TRADE OF INDUSTRIAL MACHINERY AND EQUIPMENT, ELECTRONIC COMPONENTS, AND COMPUTER AND ACCESSORIES. ON THE OTHER HAND, A WEIGHTED 23% OF WHOLESALERS, MAINLY FROM FOOD AND BEVERAGES, AND PETROLEUM AND PETROLEUM PRODUCTS, FORECAST  BUSINESS CONDITIONS TO DETERIORATE IN THE COMING MONTHS. ON THE WHOLE, A NET WEIGHTED BALANCE OF 1% OF FIRMS EXPECTS GENERAL BUSINESS OUTLOOK TO REMAIN LESS FAVOURABLE.                                                                     
                                                                                
A NET WEIGHTED BALANCE OF 20% OF RETAILERS PREDICTS LESS FAVOURABLE BUSINESS     CONDITIONS FOR THE PERIOD ENDING DECEMBER 2008. MOTOR VEHICLES RETAILERS, AND JEWWELLERY AND WATCHES CONTINUE TO PREDICT SLOWER SALES IN THE MONTHS AHEAD.    
                                                                                
EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE                       
                               SINGAPORE DEPARTMENT OF STATISTICS                              
                               THE STRAITS TIMES
                                                                                

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.49.22

UK Pound

1

Rs.73.03

Euro

1

Rs.63.14

 

 

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.

 

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

 

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)         Ownership background (20%)                  Payment record (10%)

Credit history (10%)                 Market trend (10%)                                 Operational size (10%)

 

 

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