SINGAPORE - Locally listed Tiong Seng Holdings has joined forces with two Japanese companies to take on demand for infrastructure in Singapore and Malaysia.
The construction firm will invest $6.4 million through wholly owned unit Robin Village International in a joint venture.
The joint venture is with Geostr Corporation - a unit of steel giant Nippon Steel & Sumitomo Metal Corporation - and Marubeni-Itochu Steel (MISP), the Singapore subsidiary of the Japanese firm.
Tiong Seng will own 44 per cent of the $14.5 million joint venture, while Geostr will have a 51 per cent stake. The remaining 5 per cent will be held by MISP.
In a statement released after the market closed yesterday, Tiong Seng said the joint venture will manufacture and supply precast tunnel segments for projects in Singapore and Malaysia, and will set up its manufacturing facility on Robin Village's existing precast site in Iskandar, Malaysia.
Precasting involves moulding concrete parts before transporting them to site for assembly, instead of pouring and casting concrete on site. This method lowers costs and improves quality control.
Tiong Seng chief executive Pek Lian Guan said: "We strive to harness Geostr's expertise and market leadership in precast tunnel segments to complement our existing suite of precast capa-bilities."
Geostr has more than 40 years of experience in making precast tunnels in Japan, where it accounts for more than 40 per cent of production volume for such works. It is also the largest producer of concrete sheet piles in Japan.
In an e-mailed statement, Tiong Seng said MISP will provide "strategic business services" to the joint venture, including business management and logistical support.
Mr Pek said the joint venture will improve his firm's outreach amid growing demand for precast solutions. "(The joint venture) will position us favourably as we target the growing pipeline of MRT projects and infrastructure construction in Singapore and Malaysia," he added.
Yesterday's news comes after Tiong Seng announced last month that one of its other joint ventures had been awarded a $316 million contract by the Land Transport Authority for the construction of the Great World station and tunnels for the Thomson Line.
According to its website, the Ministry of Transport expects to double the length of the rail network in the next decade to 278km from 138km in 2008, at a cost of $60 billion. Tiong Seng shares closed 0.6 cent higher at 19.6 cents yesterday.
This article was first published on June 12, 2014.
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