Surbana Jurong buys Aussie infrastructure firm SMEC for S$400m

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(Hot News Today Tuesday 2 August 2016)

Surbana Jurong buys Aussie infrastructure firm SMEC for S$400m

Lee Yen nee  leeyennee@mediacorp.com,sg

SINGAPORE — Local urban planning consultancy Surbana Jurong, formed after the high-profile merger between units under stateowned investment firm Temasek Holdings and industrial landlord JTC last year, completed its largest acquisition yet by taking all of Australian infrastructure player SMEC for S$400 million.

The deal — signed in May and announced yesterday — makes the combined entity the largest urban and infrastructure consulting firm in Asia by doubling its workforce to close to 10,000 employees and extending its global footprint to more than 95 offices across 40 countries in Asia, Australia, Middle East, Africa and the Americas, Surbana Jurong’s group chief executive Wong Heang Fine said.

He added that revenue of the group will grow to around S$1.1 billion from Surbana Jurong’s pre-acquisition turnover of about S$500 million, placing the firm on track to meet its target of S$1.5 billion at the end of this year. Currently, the group is going after S$160 million worth of contracts.

“We will have the complete skill sets to do everything. From feasibility to master planning to surveying to engineering design of more complex sanitation systems, sewage systems, roads, highways, improving all the urban transportation systems that you see, we have the complete skill sets within one company,” Mr Wong said.

The Singapore firm’s strengths are concentrated in areas such as master planning, urban design and township planning, with recent key projects including the master planning of the new capital of Indian state Andhra Pradesh.

Meanwhile, the Australian arm has been active in the infrastructure space, taking on civil engineering projects such as the redevelopment of Yangon Central Railway Station.

Besides skill sets, the two companies also complement each other in the geographical areas that they operate in, noted Mr Andy Goodwin, SMEC’s chief executive and managing director. For instance, SMEC brings to the table its track record in Australia and various cities in Africa, while Surbana Jurong has a strong presence in its home base Singapore as well as in China. That would allow the group to capture more opportunities, said Surbana Jurong’s chairman Liew Mun Leong.

He cited a PwC report that showed how infrastructure spending is expected to grow from US$4 trillion per year in 2012 to US$9 trillion per year in 2025, of which 60 per cent will be in Asia-Pacific.

Mr Liew, who has his eyes set on growing turnover further to achieve S$2.5 billion to S$3 billion in the next three to five years, is open to acquiring firms that can enhance Surbana Jurong’s current service offerings.

“We won’t stop here. If there are other opportunities for some special skills, we can add on to our menu of skill sets. With SMEC joining us, we are very strong in infrastructure, but we think there are other skill sets that can enhance our visibility,” he said, adding that possibilities include going into the facility management and infrastructure financing space.

Surbana Jurong was formed from merging Surbana International Consultants and Jurong International to tap opportunities arising from Asia’s increased spending on infrastructure development.

Following the merger, the firm acquired 100 per cent Singapore’s KTP Consultants and China’s Sino Sun Architects & Engineers. It also took a stake in CITICC (Africa) Holding Limited and Flux Factory. Media reports have placed its previous investment commitments to the tune of S$150 million to S$200 million.

S’pore-KL HSR among potentiaL projects: Surbana jurong

The Singapore-Kuala Lumpur high-speed rail (HSR) is the type of project that the new Surbana Jurong group would gun for following its S$400 million acquisition of australian infrastructure player SmeC, chairman Liew mun Leong said.

“of course, for anything major, we will have the appetite for it,” mr Liew told reporters yesterday when he was asked whether the firm is looking to participate in the HSR project.

Mr andy Goodwin, SMEC’s chief executive and managing director, added that the hSr project is one that can play to the two firms’ complementary strengths. “This is another prime example of our complementary services that we spoke about: We are in malaysia, they are in Singapore. We have the skill set for hSr and they don’t necessarily, but we have the total package together,” he said.

The governments of Malaysia and Singapore signed a memorandum of understanding last month to build the hSr, three years after the project was mooted, paving the way for a legally-binding bilateral agreement at the end of this year.

This month, a joint tender will be called for a Joint development Partner to provide technical
support to both countries.

Singapore’s Land transport authority will also be calling for a tender for an advanced engineering Study for the Singapore stretch of the hSr, looking at areas such as the architectural and engineering design of the Singapore  terminus.

Surbana Jurong is also involved in the indonesian rail project linking capital Jakarta with the city of bandung in western Java.

Along with global consultancy firms W S atkins and aedas, it is involved in drawing up plans for transit-oriented development along the route. LEE YEN NEE