More support for growing precision engineering sector

The growing precision engineering sector here will benefit from new enhancements to a scheme that helps companies of all sizes - and even those from other sectors - to build partnerships, said Minister for Trade and Industry Chan Chun Sing yesterday.

This aims to strengthen the overall sector ecosystem as it continues to grow despite the coronavirus pandemic, fuelled by booming demand for new technological solutions, he added.

He was speaking to the media during the weekly sector update, while visiting German technology group Rohde & Schwarz at Changi.

"We see bright prospects for this sector, as the advent of 5G technologies, Internet of Things and the new breakthroughs that we see in technological fields will require precision engineering behind the scenes," Mr Chan said.

"We are confident that if we continue to invest in this sector and build up core engineering capabilities, Singapore will be able to stand out as one of the precision engineering hubs in this region and in the world. There will be tremendous opportunity for this sector as Asia continues to grow from strength to strength," he added.

The sector grew by 10 per cent in the first nine months of this year compared with last year, driven by the machinery and systems sector, which grew 15.5 per cent in the same period.

But the sector's growth does not just hinge on individual firms but rather on the performance of small and medium-sized enterprises (SMEs) in the whole ecosystem. This involves SMEs collaborating with big companies and the continuous nurturing of the engineering talent required for the industry to continue long-term growth, he noted.

To this end, the enhanced Pact scheme will be available until March 2022. It provides firms with support to develop capabilities and their business through partnerships with others. The scheme has supported more than 280 projects from over 1,500 firms since it was introduced in 2010.

One of the beneficiaries was semiconductor test and assembly service provider Utac, in its project with AEM Holdings to jointly develop next generation, cost-effective test system solutions for image sensor products.

With the new enhancements, the support rate for firms for qualifying costs will be increased from the current 50 per cent to 70 per cent for manpower categories. It will also go up to 50 per cent for all other cost categories. Support levels now stand at 50 per cent for equipment and 30 per cent each for materials, software and professional services.

The scheme's coverage will also be extended to support the qualification of new suppliers and new or existing products.

Singapore firms with overseas manufacturing activity will also get more help, so they can internationalise and become potential suppliers to more original equipment manufacturers.

The number of workers in Singapore's manufacturing industry, of which the precision engineering sector employs more than a fifth.

The sector contributed around this amount in total output last year.

In the first nine months of this year, the sector grew by this much, compared with last year.

Mr Chan noted that these enhancements can benefit 16 prospective partnership projects that are still in discussions.

"It is not just about the small companies or the big companies. It is really about the whole ecosystem coming together to present an attractive proposition to potential investors to continue to invest in the precision engineering industry in Singapore," he said.

Grooming engineering talent is also part of investing in the sector for the long term, Mr Chan noted.

According to the September jobs situation report by the Ministry of Manpower, there are also nearly 1,500 job, traineeship and attachment opportunities in the precision engineering industry, offered by over 270 firms.

Mr Ng Choong Heng, 46, who joined Opto Precision as production manager in July, said: "The global precision parts market is expected to grow in the coming decade, especially in the automotive industry and the healthcare sector.

"I hope to contribute to 5G adoption, autonomous vehicles and other automation projects, and work together with other Singapore SMEs to grow the precision engineering industry."