SINGAPORE -- State-owned engineering consultancy Surbana Jurong announced on Monday the acquisition of two companies in Singapore and China to strengthen its urbanization expertise and expand market reach in China.
Surbana Jurong, which is jointly owned by sovereign wealth fund Temasek Holdings and industrial construction company JTC, bought Singaporean engineering firm KTP Consultants and Chinese architectural design firm Sinosun Architects & Engineers for undisclosed sums.
Signaling that there will be more deals to come, Surbana Jurong Chairman Liew Mun Leong said at a press conference: "We have a big appetite for M&A."
Surbana Jurong's expansion will be backed by the coffers of Temasek, which is one of the biggest state investors in the region. The company is aiming to more than double its annual fee income to around 1.5 billion Singapore dollars in the next three to five years and expects staff to increase to 6,000 from the current 4,000 through an aggressive agenda of expansion.
Surbana Jurong itself is the result of consolidation in the sector. It was formed in February in a merger between Surbana International Consultants Holdings, which had specialized in township and public housing developments, and Jurong International Holdings, which was focused on Singapore industrial estates and infrastructure developments.
In the latest acquisition, Surbana Jurong said that KTP will offer a large private-sector client base in residential, aviation and infrastructure in Singapore as well as a presence in Malaysia, the Philippines, China and the Middle East. Sinosun Architects will open up new opportunities to bid for government-led building projects in China, a key market for Surbana Jurong along with India and Indonesia.
The acquisition is a part of state-led initiatives to create an integrated platform to export urban planning and infrastructure capabilities across Asia. Surbana Jurong already owns an international portfolio including residential and airport developments in Myanmar, urban planning projects in India and petrochemical industrial bases in China.
Across Asia, money is being poured into infrastructure on the back of regional growth and also as a result of government initiatives to stimulate the economy. PwC had projected that global infrastructure spending will grow to $9 trillion per year by 2025 from $4 trillion in 2012. To meet that need, China is spearheading the formation of the Asian Infrastructure Investment Bank, while Japan has added another $110 billion to its own infrastructure funds.