By Michelle Tay

BELGIAN logistics giant Katoen Natie is busy with expansion plans which would create hundreds of jobs in Singapore.
This comes even as the fate of America's Big Three automakers - an important market for the company's business - hangs in the balance.

The group's vice-president, Mr Dirk Lannoo, said the health of Katoen Natie, as well as that of the chemical and petrochemical industry, relies a great deal on the health of the construction and automobile sectors.

'If one of these guys collapses, many suppliers will also collapse with it. That will be bad, but today, anything is possible,' he told The Straits Times yesterday at the celebration of Katoen Natie's 10th anniversary in Singapore.

But, he said, his strategy for surviving the economic downturn is 'don't panic'.

'If we see opportunities, we'll go for it. We are very careful but we are realistic,' said Mr Lannoo.

He is not deferring expansion plans for Katoen Natie here, though he accepts that that could change if conditions worsen.

Katoen Natie, one of the world's leading silo logistics service operators, is the biggest handler of poly-olefins, commonly used in the petrochemical industry worldwide. It handled 33 million tonnes of the material last year.

It is pumping $60 million into building its third logistics terminal here. Phase 3, as the project is called, will be 'up and running early next year', said Mr Lannoo.

He added that it will create more than 300 jobs and double Katoen Natie's current workforce here.

The third terminal brings Katoen Natie's total investment in Singapore to date to $150 million.

It does not stop there. The group also plans to build two more terminals - Phase 4 and Phase 5 - in the next few years, which will then double its total investment to '$300 million or more'.

Mr Lannoo describes the growth of the chemical and petrochemical industry in Singapore as 'amazingly fast'.

He recalls: 'As Singapore was growing in that area 10 years ago, it was more than logical, I would say, for us to be here. We started from nearly scratch, in Orchard Road, with a small office of two people.

'Then we moved to Penjuru Lane, and (now we are on) Jurong Island. This was water - today it's a terminal.'

Still, Mr Lannoo cannot completely ignore the effects of the financial crisis that has caused banks to collapse and economies to slip into recession.

With worldwide demand shrinking, and factory output and exports falling, the outlook cannot be described as rosy.

Said Mr Lannoo: 'The business is so far less affected in the Far East than in Europe and the US. Volumes are maybe slowing down a little bit, but to be honest with you, not that much.

'The chemical and petrochemical industry relies a lot on the construction sector and car manufacturers. So we will see the consequences of the slowdown maybe two or three months from now.'

He conceded that 'if the situation gets worse and worse', it would be 'possible that we delay our investment'.

'But it's too early to say. I would say it's so far so good.'

This article was first published in The Straits Times on November 29, 2008.