UP AND COMING construction player, Koon, is now one of Singapore’s largest precasters.
Yesterday, it inked a S$1.78-million deal to buy 100% in Contech, one of Singapore’s most experienced and versatile precasters.
Precasting is a method of producing concrete structures by using reusable molds, and is highly efficient for mass housing projects.
Contech has serviced many local and overseas developers, contractors and government bodies for 25 years. Its extensive customer base includes the HDB and LTA.
The latest acquisition, coupled with its purchase of Econ Precast in March, means that Koon now owns two out of nine BCA L6 licensed precasters in Singapore.
Koon offers a diverse range of specialist civil engineering services, ranging from soil improvement, dredging and reclamation, infrastructure, shore protection, building marine structures, construction of roads, drains and sewers and power/ sewage plants.
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It also has a project to build a port in Vietnam.
The foray into precasting is part of its strategy to ride on HDB’s plans to ease the shortage in public housing.
In the first six months of 2010, HDB launched close to 9,000 Build-To-Order (BTO) flats, exceeding the total number launched for the whole of last year.
This is expected to increase by another 7,200 by year-end, bringing the total BTO flat supply for 2010 to 16,000, or a 80% year-on-year surge.
With the additional precast capacity, Koon is able to target developers of mass-market private condominiums.
Sales of private residential units surged 82% year-on-year to 1,544 units in July 2010.
Leading this growth has been the sales of mass-market condominiums, which made up of 42.8% of private housing transactions in July 2010.
Contech’s 9 pre-existing production lines doubles Koon’s precast capacity to 50,000 cubic metres a year.
The management expects the acquisition to contribute positively to Koon’s financial this year and the acquisition will be wholly funded from internal resources.
“Contech has a fully operational precast facility and experienced management team, with little need for additional capital expenditure,” said its CEO Tan Thiam Hee in a press statement.
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