Sunway to venture further into India with JV company

KUALA LUMPUR: Sunway Holdings Bhd, via its unit Sunway Marketing Sdn Bhd, has proposed to set up a joint venture company with Opus Developers and Builders Pte Ltd called Sunway Opus International Trading Pte Ltd to undertake the importing, marketing and sale of architectural and finishing products.

The companies entered into a joint venture (JV) and shareholders agreement on May 3, Sunway announced on Bursa Malaysia. The products include sanitary ware and fittings, ceramic tiles, marble, pipes, iron-mongering and hardware products, paint and home furniture.

Sunway said the proposed JV would enable Sunway Marketing to expand its trading business to India and gain local knowledge of the Indian construction and property markets through a strategic partnership with Opus.

According to Sunway, Opus has several construction and property development projects in Hyderabad, India, including the iconic Sunway Opus Grand, a joint venture between Sunway City Bhd (SunCity) and Opus.

“The proposed JV would therefore benefit from gaining immediate access to the projects currently being carried out by Opus, specifically in relation to the potential supply of architectural products,” said Sunway.

On the other hand, Sunway Marketing possesses the agencies for an extensive line-up of high quality architectural and furnishing products, which are highly in demand for the upscale residences currently developed by Opus and other new high-end developers in Hyderabad, said the group.

Sunway added that India was an extremely attractive market for Sunway Marketing, with its population of 1.2 billion and a nominal gross domestic product (GDP) of over US$1.2 trillion (RM3.85 trillion) a year.

“The proposed JV would mark the entry of Sunway Marketing into this market and Sunway Marketing intends to leverage on this initial presence to continue expanding all over India and replicate its successful business model from Malaysia,” said Sunway.

Sunway is expected to have a 60% stake in the company while Opus is expected to take up the remaining 40% stake. “The paid-up share capital of Sunway Opus will gradually increase to Rs7.5 million (RM541,115) as and when Sunway Opus requires working capital for its operation,” Sunway said.

This article appeared in The Edge Financial Daily, May 4, 2010.