Strategies for Industries to cope with Economic Recession
         Done by Leslie Lee



Many industries are currently struggling under the economic recession, which has brought about a worldwide plunge in every country’s economy. Singapore is also a victim of this global economic crisis, with many businesses in all aspects of Singapore’s industries fighting for survival.

Banshing Industrial is one of the many companies in Singapore that has been directly and severely affected by the global financial tsunami. Having been in this industry for nearly 35 years, Banshing Industrials mainly focus on plastic and metal stamping operations, producing goods such as mobile phone casings and walkie-talkies. Some of its major customers include Mobile Phone company Motorola and Electronic company Philips.

This company has sustained two losses ever since the company started out, once in 2003 due to the SARS epidemic, and the other being this. According to company founder Albert Cheng, “the current economic crisis has been the greatest challenge the company has encountered, having to deal with the drop in revenue and the rising cost of raw materials”. Indeed, the impact this time has been greater than the ones they felt during the 1997 Asian Economic Crisis, and the 2003 SARS epidemic.

After a decline in the demand in production by Motorola, the company’s revenue has been greatly affected. This current economic downturn has added to its troubles, hampering most of the company’s operations and plans, as well as causing the company to suffer more losses.

Despite the current economic crisis, Mr Cheng still feels fortunate about the company’s situation, due to some measures that the company has taken before and during the economic recession. Before the economic crisis, the company focused on developing its core operations, instead of applying for bank loans to invest in property markets and other industries. This prevented them from relying on banks, which is now on the verge of collapse. Not choosing to make this company public is also a wise move, as its gives the company more time to focus on developing its resources.

In the face of the economic crisis, Banshing Industrial is searching for new customers, providing more services, diversifying its source of income and cutting costs to reduce losses to the minimum.

With an increase in orders from Siemens, as well as providing other value-added services such as spray-painting, Banshing Industrial’s performance is predicted to improve, showing that its strategies are working.

Despite not earning much profit, Mr Cheng still insists on the policy of not laying off workers. Mr Cheng tells us, “Retrenching workers is not a long-term plan. With the reduction in the amount of workers, we would not be able to continue some of our operations. Laying off workers will also demoralise the other workers’ morale.” Instead of laying off workers, the company is looking to saving on electricity overtime. “If needed, we will only reduce workers overtime.”

When asked about experiences learnt from this economic recession, Mr Cheng says, “Last time, I was planning to take more risks when the economy. However, now, I think that it is better to be more conservative.”

 Banshing Industrial is a good example of using good strategies to reduce losses to the minimum in times of economic downturn. They managed to have profit, while not having to lay off workers. This was achieved by useing less electricity during overtime. As can be seen, with effective strategies, it is not difficult to survive despite the economic recession.
posted by blackfire123 at 9:14 PM