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

SINGAPORE — Local urban planning consultancy Surbana Jurong, formed after the high-profile merger between units under state-owned 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 Bakun hydroelectric project, in central Sarawak on the Balui tributary of the Rejang River, for which SMEC provided consultancy services for the management and engineering audit. The acquisition of SMEC ‘will allow Surbana to capture more opportunities and enhance visibility’. Photo: Surbana Jurong

The Bakun hydroelectric project, in central Sarawak on the Balui tributary of the Rejang River, for which SMEC provided consultancy services for the management and engineering audit. The acquisition of SMEC ‘will allow Surbana to capture more opportunities and enhance visibility’. Photo: Surbana Jurong

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SINGAPORE — Local urban planning consultancy Surbana Jurong, formed after the high-profile merger between units under state-owned 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 on Monday (Aug 1) — 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 system, sewage system, roads, highways, improving all the urban transportation system 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 (S$5.36 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.

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