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Sat, Nov 24, 2001 - Page 21 News List

Singapore's marine industry going strong

SMOOTH SAILING While the rest of the nation is in recession, the building and the maintenance of sea-going vessels has shown a 45 percent growth rate so far this year

REUTERS , SINGAPORE

Singapore's economy may be hitting the rocks in many sectors, but it's full steam ahead for the marine industry, which is scrambling to fill 4,000 jobs in the city state.

"Despite the world's economic problems, the industry itself is facing a situation which is the reverse," said Heng Chiang Gnee, president of the Association of Singapore Marine Industries. "We've never had such a strong order book in the history of the industry. It's more than S$5 billion (US$2.72 billion)."

The marine industry is made up of ship repair, ship and rig building as well as offshore conversion of vessels.

Brisk trade

Singapore's marine industry, which accounts for about 16 percent of the global market for ship repair and 60 percent of the market for building jack-up rigs, posted 45 percent growth on the year in the first nine months, the Economic Development Board said.

This contrasts with the wider economy which is going through its worst economic recession since independence in 1965.

Heng said the ship repair industry was seeing brisk trade as shipowners took the opportunity to send in their vessels for repair during the current downturn.

"When economies slow down, the deployment of ships also shrinks. More owners tend to put their ships in for repair, so there's a time lag effect, which creates very strong ship repair demand for us."

Albert Goh, analyst at Kim Eng Securities, said high oil prices, which went up to around US$35 per barrel late last year, also helped spark a boom for the industry.

"Tanker rates also shot up due to the high oil prices ... that made offshore exploration even more profitable so we saw some of these rig-building orders and especially offshore conversion orders from some of the oil majors," he said.

Heng brushed aside concerns over volatile oil prices, which could affect demand for rig-building and offshore projects.

"Despite the fall in the oil prices below US$20 ... in terms of the offshore business, we foresee that the change in the oil price would not create any negative impact for the near-term," he said.

"If [oil] starts dipping down below US$15 and so on, then I will begin to look at it more carefully."

Brent crude futures on the International Petroleum Exchange, which hit a 29-month low of US$16.65 on Monday, were back above US$19 in early London trade on Thursday.

Container woes

In another area of the maritime industry the situation is more gloomy for the container sector.

The tide has turned down at the ports where the mountains of container in yards which surround large areas of the island state's foreshores are being whittled down as the economic slowdown hits seaborne trade.

Singapore's container throughput volumes saw an 11 percent drop on a year-on-year basis for the year to September, said the Maritime and Port Authority of Singapore.

The government-owned Port of Singapore Authority (PSA), which manages the world's second busiest container port, announced wage cuts of up to 11 percent in early November.

Nonetheless, to cope with the labor shortage created by the marine boom, ASMI and the Ministry of Manpower have organized a two-day job fair which started yesterday in the hope of luring more people to join the industry.

A similar job fair organized by four major shipyards in October saw a dismal turnout despite 3,000 jobs up for grabs.

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