Singapore Corporate News - 13 Jul 2007

OKP bags $40m Jurong civil works contract

A S$40 million civil works contract announced yesterday for new petrochemicals storage on Jurong Island - which BT understands is for ExxonMobil - has sent yet another strong signal that the world's largest oil company will give the investment go-ahead very soon for a second multibillion-dollar petrochemical complex here.

Sesdaq-listed OKP Holdings said it had clinched the contract for civil works, including roads, drainage and underground electrical facilities, for 'new polymer storage' for a petrochemical project on the island, but did not name the client.

But the fact that it had secured the contract from the Foster Wheeler/WorleyParsons joint venture points clearly to the ExxonMobil project.

This is because the Foster Wheeler/WorleyParsons JV had earlier been awarded the front-end engineering design contracts by ExxonMobil in June 2006 for an aromatics extraction unit, an oxo-alcohol plant expansion and associated plant infra structure.

It was among a group of engineering contractors which were given the preliminary design contracts for five downstream, or secondary, plants at the oil giant's planned second complex - codenamed Singapore Parallel Train (SPT).

BT understands that the latest contract for new polymer storage facility - work on which has started, with completion targeted for February next year - is meant for SPT.

The world-scale SPT will be comparable to or slightly larger than ExxonMobil's existing US$2 billion, 900,000-tonnes ethylene cracker, but is likely to cost about twice as much because of higher material and building costs.

ExxonMobil is expected to make its final investment decision 'very soon', sometime this month or next, sources said.

'Costs notwithstanding, strategically the market push, including the ever-growing Chinese petrochemicals demand, is too strong a factor to ignore,' one source stressed.

BT reported last month that the company has begun recruiting engineers and technicians ahead of the decision.

And Reuters also recently said that Foster Wheeler had met potential sub-contractors and received initial cost estimates ahead of a staged bidding process to select sub-contractors to build the aromatics extraction unit and oxo-alcohol plant.

'They are proceeding to obtain sub-contractors as soon as possible,' Reuters quoted a source as saying.

On the latest $40 million deal, OKP Holdings' managing director Or Toh Wat said that it puts the company in a good position to vie for more deals on booming Jurong Island.

Its recent restructure of its workforce into specialised teams, including one for oil and gas and petrochemicals, will give it an edge in handling such projects, he added.

OKP first broke into the oil and gas sector in March last year, when it won the civil and related works worth $50 million for an independent oil storage terminal project.

ST Engg clinches ferry contract worth $168m

SINGAPORE Technologies Engineering Ltd (STE) has won a new ferry contract worth about $168 million.

The deal, awarded to its marine arm, Singapore Technologies Marine Ltd (ST Marine), is to design and build a roll-on/roll-off passenger ferry (Ropax) for Louis Dreyfus Armateurs SAS (LDA) of France.

The contract includes an option to purchase a second vessel, said STE.

Design of the vessel will start immediately and construction is expected to begin in the first half of 2008, with delivery expected in first half of 2010.

The project will not have an impact on STE's earnings this financial year.

The Ropax is the third newbuilding order from LDA for ST Marine, following the order of two roll-on/roll-off vessels for transporting Airbus A380 aircraft components in February last year.

With the latest contract, the total value of orders from LDA stands at $288 million, STE said.

'The Ropax is a first in Singapore's shipbuilding history. It involves complex and meticulous designs, state-of-the-art technologies and exacting engineering applications to build,' the group said.

The 4,000-dwt Ropax ferry measures about 161m long and 25.6m wide, and will operate in the English Channel for day and night crossing.

Equipped with passenger lounges and cabins, restaurants and bars, and a summer deck, the 930-passenger vessel is also designed for carrying trailers and cars.

Healthy expansion for OSIM in Middle East

OSIM International is targeting to have 100 new stores in the Middle East within five years.

The healthy-lifestyle products group said this yesterday as it announced the appointment of new franchisees in Kuwait and Iran and an exclusive distributor in Oman in a move to widen its Middle East network.

With entry into these key markets, OSIM is expected to expand on the retail presence it currently holds in regional markets such as Saudi Arabia, the United Arab Emirates and Bahrain.

'We are bullish on the Middle East region as there is tremendous demand for OSIM products due to the international awareness of the brand,' said Lee Hann Yang, OSIM's head of international franchise.

The master franchisee in Kuwait is Ali Alghanim & Sons, whose wide-ranging interests include electronic retailing. In Iran, the master franchisee is fitness equipment dealer Tunturi Center Shop.

The distributor in Oman is Oman International Electronics and Trading Co LLC, a member of the OHI Group. Two new stores in Kuwait city and three more in Iran will open this year.

Mr Lee said OSIM will have retail presence in almost all the key Middle East markets by the end of the year.

The acquisition of Brookstone and the success of Global Active Limited, a member of the OSIM group, can be seen to have significantly accelerated OSIM's push to go global in recent times.

Homegrown OSIM is a Singapore Exchange mainboard-listed company and operates a point of sales network with more than 1,100 outlets in more than 360 cities around the world.

Soilbuild buys Ruby Plaza for $69 million

SOILBUILD Group Holdings has bought Ruby Plaza on Balestier Road for $69 million through a collective sale, the developer said yesterday.

The price for the 39,500 sq ft freehold plot of land works out to $582 per square foot (psf) per plot ratio. The site has a 3.0 plot ratio, giving it a maximum gross floor area (GFA) of 118,500 sq ft. There is no development charge payable.

The site can be developed into a 36-storey commercial and residential development, said Soilbuild. The maximum allowable space for commercial use is 40 per cent of the total GFA, which works out to 47,400 sq ft.

Soilbuild also said that it intends to apply for an adjoining plot of state land of around 1,600 sq ft, which would take the total land size to about 41,100 sq ft.

The site is along the main thoroughfare of Balestier Road, in an area that has been growing in popularity among overseas investors and home owners, said Soilbuild.

'The acquisition of the commercial and residential development site is in line with our strategy of developing land sites in prime, central locations close to amenities,' said Low Soon Sim, Soilbuild's executive director. The group recently launched Montebleu, also in the same area, which is now fully sold.

The acquisition will be funded by internal resources and bank borrowings, Soilbuild said. The purchase is not expected to have any material financial impact on the consolidated net tangible assets per share and consolidated earnings per share of the company for the current financial year ending December 31, 2007.

The deal was brokered by RealtorHub Real Estate. The property firm originally marketed the Ruby Plaza together with the adjoining Balestier Towers, but decided to go ahead with Ruby Plaza's sale after owners holding at least 80 per cent of share value in the property decided to sell - while the same consensus couldn't be reached for Balestier Towers. The latter will be sold separately later.

The price of $69 million is 11.7 per cent higher than the reserve price of $61.8 million. Owners of the 36 apartments walked away with between $1.0-$1.2 million a unit, while owners of the 89 shop units took home between $273,000-$654,000 each.

Soilbuild's shares closed one cent down at $1.80 yesterday.