Most of the business done by precision engineering company Coway Engineering & Marketing was in the aerospace and oil and gas industries – sectors hit hard by the coronavirus pandemic and global economic slowdown.
So it has had to diversify its business model and look to other industries for growth.
Managing director Lien Whai Cheng says that demand from the aerospace and oil and gas sectors has fallen by half, and the company expects a 25 per cent drop in revenue for the year.
“The pandemic has caused disruption and a rise in business costs, and affected productivity,” he says.
The aerospace and oil and gas sectors had accounted for 80 per cent of his business before the Covid-19 outbreak hit.
But now, the company is trying to win more projects in other areas to which it had less exposure previously, such as semiconductors and defence, Mr Lien says.
This is especially necessary as the outlook for the aerospace industry remains gloomy.
The Government’s wage support through the Jobs Support Scheme (JSS) has been critical, Mr Lien says. It gave the company enough time to adjust its manufacturing capabilities and operations.
But with funding set to end after covering this month’s salaries, with the payouts disbursed in October, Mr Lien acknowledges that Coway is likely to need to delay some digital transformation and upgrading plans in favour of conserving cash reserves.
“It would be good if (the JSS) could be extended further in some form, as recovery is a long road ahead and the rate of recovery is different for different firms,” he adds.
While the business outlook remains muted amid the uncertain economic landscape, Mr Lien says Coway does not foresee laying off any of its 40 workers for now. About 40 per cent to 45 per cent of its manpower is made up of foreigners.
On the contrary, it is hiring staff under the SGUnited Traineeships Programme, with four fresh graduates set to join next month.
However, the four positions they will fill are only a third of the vacancies that the company has for trainees. These vacancies are in engineering, inspection and machine operations.
“It’s hard to hire for roles like inspection which are more hands-on – which young people, including Singaporeans, tend to shy away from. They would rather take up jobs that are in front of the computer,” Mr Lien says, adding that these roles are likely to be filled by foreign workers, as has been the case in recent years.