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Kajima hopes to double S'pore revenue contribution
JAPAN-LISTED Kajima Corporation is looking to double revenue contribution from Singapore within three years, mainly driven by construction and engineering contracts.
It is also keen to take part in more joint development projects with Singapore Press Holdings (SPH) here, particularly mixed-use developments.
Singapore contributed about 10 per cent of Kajima Corporation's overseas revenue, which in turn accounted for 24 per cent of total group revenue of 1.33 trillion yen (S$16.5 billion) for the three quarters ended Dec 31, 2017.
"We would double the revenue from Singapore within three years," said Keisuke Koshijima, senior managing officer of Kajima Corporation.
The targeted growth will be driven by construction contracts and engineering businesses garnered by the employees of the engineering division and Kajima Technical Research Institute based here, he told The Business Times.
"This is dependent on the competition and the volume of projects coming out from the government and private sector," he added. "We are better in building projects with complexity and high specification, like hospitals and pharmaceutical or other manufacturing facilities than in competing with local and Chinese contractors."
Kajima Development and SPH are jointly developing The Woodleigh Residences and The Woodleigh Mall in the fast-growing Bidadari estate.
Since 1840 when Kajima started its business as a contractor, it has expanded into architectural and engineering services, construction and real estate development globally.
It came to Singapore as early as in the 1960s as a contractor for oil refinery plants and shipyards. Later on, it set up its South-east Asian subsidiary, Kajima Overseas Asia, based in Singapore with a property development arm, Kajima Development.
Kajima currently has about 20 ongoing development projects in the Asian region, including Singapore, Indonesia, Myanmar and Vietnam.
In Singapore, it partnered Pontiac Land to develop The Regent Singapore, and has also developed luxury residences such as Sui Generis and Bishopsgate Residences.
Mr Koshijima said the group has established local subsidiaries in each region, tailoring them to specific conditions in regional markets to deliver quality projects.
"Having our own platform that encompasses every aspect of the development process is a major competitive advantage that increases the opportunities available to us through partners and networks," he added.
Kajima's global construction contract awards stood at 1.17 trillion yen as at end-2017, of which one-quarter came from overseas. Construction still accounted for about 87 per cent of its gross profit in the nine months to end-2017.
When asked if there is any potential risk of an oversupply of upcoming residential units for sale in Singapore, Kajima Development project director Kazunori Ichihashi replied: "We know the market here and the Singapore residential market has strong fundamentals, so we are quite confident."