November 2 - Singapore's minister of trade and industry, S. Iswaran, has stated that the government is studying the need for measures in the marine and offshore engineering sectors.
"We launch this centre at a time of uncertainty in the global economy," said Iswaran at the launch of the Technology Centre for Offshore and Marine Singapore (TCOMS).
"While there has been a general slowdown in economic growth, the impact has been uneven…the manufacturing output of the marine and offshore engineering industry has seen several consecutive quarters of contraction."
He added that the country's marine and offshore engineering industries are facing a prolonged downturn due to cyclical and structural forces, which has intensified the sector's financing challenges in recent months.
"Some level of market-driven consolidation is inevitable; some industry players say it is even necessary, to enable the industry to adapt and restructure," suggested Iswaran.
He noted that companies adversely affected by the slowdown can tap on government measures that are already in place, including the SME working capital loan, and explained that the Singaporean government is "ready to act if further measures are necessary".
Iswaran explained that the government will try to provide appropriate assistance, but cannot be a panacea: "It is critical that companies and financial institutions take appropriate measures in their own long term interests - to ensure that good businesses survive, respond to the industry's challenges and build capabilities for future growth."
In his statement, Iswaran suggested that the long-term outlook for the marine and offshore energy business remains positive. "The fundamentals of growing energy demand remain unchanged, and oil prices are expected to recover as the market rebalances," he said, adding that global demand for oil is expected to grow to 100.5 million bpd by 2020.
As part of the development of the TCOMS, the minister stated that the government will be investing close to SGD107 million (USD77.3 million) in infrastructure.
Singapore based integrated offshore construction and support services provider for shallow water oil and gas field development, Swiber Holdings, was placed under judicial management in October while it reorganises its debt.