The marine and offshore industry is in deep water as spending by energy companies tumbled following the oil price slump.
But local firms designing, building or repairing vessels to support offshore drilling and exploration see ways to stay afloat by diversifying even as they grapple with the downturn.
"Business has slowed down and we expect a 25 per cent fall in revenue this year," said Mr Govinder Singh Chopra, director at marine design firm SeaTech Solutions.
SeaTech is using its spare capacity to develop new designs as it branches out into the liquefied natural gas, renewable energy and seabed mining sectors.
"With the availability of land minerals fast diminishing, seabed mining is probably going to be the next gold rush," Mr Chopra noted.
The firm is designing the world's first seabed mining vessel for Dubai-based marine solutions company Marine Assets Corporation. The vessel is under construction in China, with delivery expected in 2018.
SeaTech is working with the Agency for Science, Technology and Research (A*Star) to develop technology that can recover energy from waste heat in diesel engines to improve fuel efficiency.
Another company, Dundee Marine and Industrial Services, has mostly focused on ship repairs since it started in 1977 but is now diversifying into aluminium boat building. With first-quarter revenue down by 50 per cent from the same period last year, general manager Spenser Tan estimates the firm would have retrenched 30 per cent of staff if not for its latest project, a more energy-efficient aluminium crew boat.
The crew boat, with a lighter and more streamlined hull form designed and built in-house, was launched in the market in April.
"Now, others are retrenching, but we are hiring," said Mr Tan. The company has added 30 new staff, including engineers and naval architects, to its force of around 100 since oil prices plunged in 2014.
Meanwhile, bigger firms such as Singapore-listed offshore marine and engineering firm Triyards Holdings won contracts for windfarm support and luxury cruise vessels in April, and a scientific research vessel for a Taiwanese government agency last December.
"Our order book used to be dominated by oil and gas vessels such as liftboats," Triyards said in an e-mail.
In July last year, liftboats made up 73 per cent of its order book. As of February, the number has dropped to 49 per cent.
"Diversification opens up additional revenue sources for companies to deploy their assets or get contracts," said Maybank Kim Eng analyst Yeak Chee Keong, but added that there may be additional costs involved in companies modifying their facilities to service a different industry.
"Diversification... prevents them from being at the full mercy of their clients in the oil and gas sector who are looking to slash prices in whatever way they can."
This article was first published on May 3, 2016.
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