Surbana eyeing 2 architectural firms in expansion drive

Wong Heang Fine, Surbana Jurong’s group chief executive officer.
Wong Heang Fine, Surbana Jurong’s group chief executive officer.PHOTO: BT

If deals go through, it could be among world's top 20 engineering firms by international fees

Consultancy firm Surbana Jurong's search for acquisition targets to fuel growth has settled squarely on two architectural firms.

The deals, which could be announced within a couple of months, could catapult the company into the top 20 engineering firms in the world by international fees.

That would be a dramatic jump from its 35th place now, said Surbana Jurong chief executive Wong Heang Fine.

He tipped in a recent interview that the two architectural firms the group is eyeing are mid-sized ones with 400 to 600 employees. One is home-grown while the other is an international company. "It will be transformative for our urban skill sets," he noted.

The expansion plans come at a time when the firm expects urban projects to grow in tandem with a stronger economy.

It is also part of its goal of hitting $3.8 billion in revenue and 20,000 employees globally in the next three to five years.

Other plans are afoot to form a specialised unit called SJ Capital by the third quarter, Mr Wong said. This will provide seed money to bring infrastructure projects from inception to a "bankable" stage.

DRAWING LOCAL TALENT

We are hiring the most engineers now in Singapore. Part of our mission... is to establish the platform for Singaporeans to enter our sector. With improved prospects, people are more open to being part of the industry.

MR WONG HEANG FINE, chief executive of Surbana Jurong, noting that the industry is primed for vast transformation in the next five to 10 years as it embraces technology such as virtual design and construction and machine learning.

SJ Capital will initially invest in its own projects, ranging from power plants to airports to urban developments.

The group has been on a buying spree globally since it was formed in a merger of Surbana International and Jurong International in 2015.

Mr Wong hailed the group as a home-grown firm that has gone truly international.

Only 47 per cent of its 2017 revenue came from Singapore, down from 81 per cent as of June 2015. Its 13,500 staff, including those in its subsidiaries, are spread across more than 120 offices in around 40 countries.

Its key capabilities in urban development, infrastructure development and facilities management mean that the group can see through major projects from inception, urban planning and physical design of the buildings, to infrastructure and managing the completed facilities.

Surbana Jurong has already exceeded targets announced in 2015 to reach revenue of $1 billion to $1.5 billion and 6,000 employees within three to five years.

Annual revenue was $1.5 billion last year, while unrecognised fees from existing contracts stood at $2 billion, up from $644 million as of the end of 2015.

As for its profitability, Mr Wong said: "We returned to Temasek more than what they would have expected."

Surbana Jurong is now fully owned by Temasek.

The group strategy to beef up technical expertise by acquiring companies and retaining their respective brand names enables it to build up local expertise in overseas markets.

The firms acquired by Surbana Jurong have few overlaps, Mr Wong said, adding: "We can be very competitive because we have local value-add and we actually recruit local engineers and architects to execute the work."

There was a net recruitment of 150 staff here last year, including the hiring of 96 experienced workers from the industry.

"Last year, people said we were doing disguised retrenchment. This is not true, you can see the numbers," he said, referring to an incident last year when the group drew flak from the public and the unions for terminating the employment of 54 staff due to what it called "poor performance".

Mr Wong noted that the industry is primed for vast transformation in the next five to 10 years as it embraces technology such as virtual design and construction and machine learning.

"We are hiring the most engineers now in Singapore,"he said.

"Part of our mission... is to establish the platform for Singaporeans to enter our sector. With improved prospects, people are more open to being part of the industry."

A version of this article appeared in the print edition of The Straits Times on March 05, 2018, with the headline 'Surbana eyeing 2 architectural firms in expansion drive'. Print Edition | Subscribe