CONSTRUCTION firm Deluge Fire Protection's profits have been dipping annually in recent years due to foreign worker levy hikes. But it is not giving up.

The firm's general manager Freddie Quek said profit margins have been shaved by 5 per cent to 10 per cent each year, and may dive further with levies going up again.

Yet, the company, which employs about 400 Bangladeshi and Indian workers, and installs water sprinkler systems, is still hopeful. The way out is retain staff and boost productivity, said Mr Quek.

"We have to look at retaining workers who are experienced by offering them good pay and training workers so that they have to right skills for the job," he added.

Acting Manpower Minister Tan Chuan-Jin said in Parliament yesterday that the levy hikes and schemes to upgrade the skills of construction workers are meant to wean firms off inexperienced and low-cost staff.

The monthly levy - now $450 for a basic skilled worker and already due to hit $600 from July 1 next year - will be further raised to $700 on July 1, 2016.

But levies for skilled workers remained unchanged.

Mr Tan said: "We need to encourage firms to recruit and retain skilled foreign workers and move towards having a smaller pool of skilled foreign workers, rather than a large pool of inexperienced and low-skilled foreign labour."