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Wednesday, 3 June 2015

BUDGET 2015 Fears over extra costs allayed

Fears over extra costs allayed

Add-Plus Electronic has begun to replace labour-intensive work processes with machines, as hiring many foreign workers "is not a long-term solution", says its assistant general manager. -- ST PHOTO: DESMOND FOO 

Add-Plus Electronic
How it benefits
Foreign worker levies in the manufacturing sector frozen at current rates until 2017
How other companies will benefit
  • Basic-tier levy for R2 workers in the construction sector will be raised from $550 to $650 in 2016, and then $700 in 2017
  • Man-year entitlement waiver levy rate for R1 workers will be lowered from $750 to $600 from July this year

PUTTING foreign worker levies on hold for the next two years is a major Budget bonus for local manufacturing company Add-Plus Electronic.
Assistant general manager Johnny Mok said yesterday: "We won't have to worry about incurring extra costs because of rising levies, which will affect our margins."
The company has had to pay sharply higher foreign worker levies over the past few years, which has inflated overall business costs by about 25 per cent.
Add-Plus Electronic, which makes electronic components, employs about 70 people, of whom 20 to 25 per cent are from Malaysia and China. Most are involved in labour-intensive work, such as assembling parts.
The move to defer levy increases will push the company to send more of its foreign staff for training, said Mr Mok.
"This will help them upgrade their skills and raise their productivity."
The company, in turn, will also be able to focus its efforts on moving towards high-mix, low-volume manufacturing or more complex processes, he added.
But the company has already begun to replace labour-intensive work processes with machines over the past two years.
"It can be difficult to find good (foreign) workers who can produce quality work and, sometimes, they can be difficult to retain as well," said Mr Mok.
"Employing a lot of foreign workers is not a long-term solution, which is why we're turning to automation instead."

The Straits Times/ Top of The News                      Published on Wednesday, Feb 25, 2015

By Jacqueline Woo

Fears over extra costs allayed

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