Marine and offshore sector can pivot to new areas: Chan Chun Sing

As pandemic hits demand, it can tap growth areas such as LNG, offshore wind, digital products

The marine and offshore sector here employs close to 77,000 workers. ST PHOTO: LIM YAOHUI

The marine and offshore sector is facing challenging times, but it can still pivot to new areas for long-term growth, said Minister for Trade and Industry Chan Chun Sing yesterday.

During a visit to marine engineering firm Sembcorp Marine, he said: "It is perhaps a natural effect of the industry that there will be a cycle of peak and trough. Unfortunately, for us, at this point in time, we are going through a trough of the cycle, so the conditions are very challenging."

The marine and offshore sector here includes services that Singapore provides to meet the worldwide demand for ship repair, shipbuilding, rig-building and offshore engineering, as well as oilfield equipment manufacturing, and the building and chartering of offshore supply vessels.

It employs close to 77,000 workers and is anchored by Keppel Offshore & Marine, Sembcorp Marine and ST Engineering Marine, supported by a network of small and medium-sized enterprises (SMEs).

Mr Chan noted that due to the pandemic, the industry is being hit by a sharp fall in the global demand for oil because of the reduction in air travel and transportation.

This year, the International Energy Agency estimated that global demand for oil will drop by about 8.4 per cent, which is the largest fall in history. Production is also expected to fall to a 15-year low.

"Because of this, the demand for offshore rigs, with the cancellation or delay of existing projects, will threaten the rig-building industry... It is therefore very important for our industry to have the engineering capabilities to pivot to new areas," he said.

Efforts by the industry to transform even before the pandemic have already started paying off, noted Mr Chan.

Annual orders won by Singapore marine and offshore firms grew from $820 million in 2016 to $4.5 billion last year.

Growth areas include liquefied natural gas (LNG), offshore wind, and smart and digital products.

Singapore firms secured $1.5 billion worth of LNG-related projects and $1 billion worth of offshore wind-related ones last year.

  • Key figures for the segment

  • 0.7%

    Nominal GDP contribution last year


    Growth between January and September this year, on a year-on-year basis.


    Number of workers employed


  • Annual orders won by companies last year, up from $820 million in 2016.


Mr Chan noted that Sembcorp Marine has built a gas innovation and solutions centre to focus on design and engineering capabilities for LNG bunkering vessels, among others.

"With the reduction in our local manpower pool and also the constraints on the foreign manpower pool, our industry has heavily invested in productivity initiatives that leverage good upfront design, additive manufacturing processes, robotics and automation," he said.

Since 2017, the sector has committed more than $350 million in state-of-the-art production technologies, with the three key firms investing in measures to raise productivity.

Firms have also invested in upskilling workers, with Sembcorp Marine grooming staff through postgraduate programmes. Keppel Offshore & Marine sent 134 staff for professional conversion programmes so they can be redeployed to new roles.

Manpower Minister Josephine Teo said during the same visit that opportunities presented by technology can also change the perception of the industry as "dirty, dangerous and demanding".

"(Firms) are also moving into new business areas and understand the importance of sustainability. The new 3Ds are decarbonisation, dealing with disruption and digitalisation," she said.

Mr Chan added: "Today, the industry is competing on the basis that it has the design capabilities and quality assurance that can allow shipyards in Singapore to integrate parts of production from all around the world to be assembled and qualified in Singapore. And that is how we make a mark for ourselves.

"Notwithstanding the short-term challenges, we still see prospects for this industry going forward, into the new areas of engineering solutions required by the rest of the world."

Follow ST on LinkedIn and stay updated on the latest career news, insights and more.

A version of this article appeared in the print edition of The Straits Times on November 10, 2020, with the headline Marine and offshore sector can pivot to new areas: Chan Chun Sing. Subscribe