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SunCon wins bid to lease S'pore land at S$25.7m for proposed development

KUALA LUMPUR (July 27): Sunway Construction Group Bhd (SunCon) said today it has won the bid for the lease of a piece of land in Singapore from the island state's Building and Construction Authority.

In January, the group announced that it had partnered Singapore-listed Hong Leong Asia Ltd to jointly tender for the lease of the land for the development of the Integrated Construction Prefabrication Hub there.

A partnership was inked between SunCon's indirect wholly-owned subsidiary Sunway Concrete Products (S) Pte Ltd (SCPS) and Hong Leong Asia's precast concrete unit HL Building Materials Pte Ltd for the proposed joint venture.

In a Bursa Malaysia filing today, SunCon informed that the lease term for the land is 30 years from July 2018. The land is located at Pulau Punggol Barat and measures approximately 38,421.8 square meters.

"The total consideration for the land is approximately S$25.7 million comprising the land price and administrative fees. The said consideration will be borne by the joint venture parties proportionately," the group said.

It said the plans are to build a fully mechanised, state-of-the-art integrated precast plant on the land, with an expected annual production capacity of 100,000 cubic meters of concrete products.

The construction of the plant is expected to commence in August 2018, subject to the approval of the relevant authorities, it said.

"The investment in the land and the construction of the plant will fully mechanize SunCon's precast facility, improve productivity and reduce reliance on foreign workers. The investment ensures SunCon's precast division's continued presence in Singapore and is also in line with the Singapore Government's goal of enhanced mechanization to improve productivity," the group said.

SCPS expects to fund the investment by a combination of internal funds and bank borrowings.

SunCon's shares closed one sen or 0.51% lower at RM1.96, with 2.37 million shares traded, giving it a market capitalisation of RM2.52 billion. — theedgemarkets.com

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