SINGAPORE: Singapore yards are confident that they will be able to cope with the government's latest move to tighten foreign manpower growth.

Both Keppel Offshore & Marine and Sembcorp Marine said they have been improving productivity and processes through training and technology.

Analysts are also confident that both companies will be able to out-source lower value jobs to their overseas yards.

The government will be cutting the marine sector's foreign worker employment ratios by lowering the dependency ratio ceilings (DRC).

From January 2016, marine companies will have their DRC lowered - from the current ratio of one local to five foreigners to one local to 4.5 foreigners. The ratio will be further trimmed to one local to every 3.5 foreign workers in 2018.

Foreign worker levies will also be raised. However, both Keppel and Sembcorp said they employ mostly skilled workers. The higher levies will therefore have a comparatively smaller impact on them.

Low Pei Han, an investment analyst with OCBC Investment Research, said: " We don't really expect a significant negative impact on the key stocks in the sector, mainly due to the time given for them to make the changes. This is also a well flagged issue, so it was widely anticipated."

Singapore-listed Keppel Corporation and Sembcorp Marine are two of the world's largest rig builders by market share. Both firms said they have been setting aside significant resources to enhance operational efficiencies through facility upgrades and improvements.

Keppel said its overseas yards in China, the Philippines and Bintan will be able to take on more projects to support its Singapore yards.

Recruitment agencies are also seeing more Singaporeans taking up jobs in the marine sector.

Mark Robertshaw, managing director (Asia Pacific) with Faststream Recruitment, said: " We are not seeing much impact in terms of employment. There are more and more Singaporeans actually stepping up into these positions as the maritime and offshore sector. Education also supports that part."

Sembcorp Marine said the changes would be " challenging" . However, the firm is hoping to minimise the impact by raising productivity, and out-sourcing work to its overseas yards and partners.

The company is also building an integrated new yard in Singapore with improved logistics, better workflow and new automation. The new yard is expected to start operations in the second half of 2013.

Tang Kin Fei, group president and CEO of Sembcorp Industries, said: " With the Tuas yard, we are putting in facilities that will improve our productivity of doing our work. We believe we are able to meet the target set by the government."

Keppel and Sembcorp Marine currently employ close to 25,000 workers in their offshore and marine divisions.

-CNA/ac

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