When Surbana International Consultants and Jurong International Holdings merged in 2015 to create Surbana Jurong Private Limited, the newly-formed entity — now with double the expertise in sustainable urban solutions and industrial development — had a lofty goal: To become a global powerhouse in urbanisation and infrastructure.
Although competitive, market opportunities were certainly there. Global infrastructure spending was projected to balloon from S$4 trillion annually in 2012 to over S$9 trillion by 2025, with the Asia Pacific region accounting for a lion's share of the market. But the question was: how could the company effectively tap into this booming sector at a regional and global scale -- and do it fast?
Group CEO Mr Wong Heang Fine said the right path was clear from the get-go. With the support of IE Singapore, the company sought to significantly bolster its capabilities, grow new lines of business and deepen its market presence through strategic partnerships globally.
Since 2015, Surbana Jurong has closed several major M&A deals, including the acquisitions of Australian engineering firm SMEC and Chinese architecture company Sino-Sun. IE has assisted the company in shortlisting potential M&A partners and making those critical first introductions, said Mr Wong. IE has also supported the firm in conducting due diligence and determining project feasibility.
Thanks to their M&A strategy and the deepening of core capabilities, Mr Wong said the group is well on track to meet its global goal — just two short years after its formation.
"We've had phenomenal growth … in a very short time," he said. "When we merged in 2015, we had around 3,200 people and our turnover was about S$400 million. At the time, about 90 percent of our income came from Singapore. Today, we have built on that platform substantially, and 50% of our income comes from overseas projects. Our workforce is 13,000 strong and we have an annual fee income of S$1.3 billion."
Surbana Jurong currently operates out of 113 offices across 44 countries, with projects ranging from hydroelectric dams to iconic bridges and highways, to master planning of cities like Andhra Pradesh's new capital city in India and Sri Lanka's capital, Colombo.
With more partnerships and M&A plans brewing, including possible acquisitions in Japan and South America, Surbana Jurong aims to expand its global reach even farther in the coming years. The company could soon be on par with the biggest global players in the industry, with S$2 billion in revenue or more every year, said Mr Wong.
To illustrate how acquisitions have boosted the company's competitive edge, Mr Wong gave the examples of China's Sino-Sun and Singapore's KTP Consultants, which Surbana Jurong acquired in 2015 shortly after its merger.
The acquisitions immediately doubled the group's footprint in China from nine to 16 cities and thanks to KTP's strong regional reputation, opened doors in Malaysia, Indonesia and Myanmar. The deals also increased Surbana Jurong's staff strength by about 25 percent.
The Sino-Sun acquisition has manifold benefits, said Mr Wong. As one of China's top architectural firms, Sino-Sun has a Class-A architectural design licence which eliminates barriers for project biddings, allowing the group to capture more opportunities in China.
As Mr Wong explained, the Class-A licence is very difficult to secure but is mandatory for companies that operate design practices in China. "Without the licence, you can't submit bids," he said. "So, you have to pay [another firm] to use their licence to do so."
"We look at China as not just a market but as a potential base for us to recruit a substantial pool of talent, and build strong engineering and design capabilities."
Thanks to Sino-Sun, however, Surbana Jurong can now "do everything in-house," said Mr Wong. "We are the only Singaporean company in China with the licence to submit all our plans. We can now service our international clients better. This means foreign investors who are interested in projects in China -- whether it's a township or hotel or industrial park -- can partner us and use our licence for submission. We have that ability and control."
The Sino-Sun deal has also significantly boosted Surbana Jurong's technical expertise and potential, said Mr Wong. "We look at China as not just a market but as a potential base for us to recruit a substantial pool of talent, and build strong engineering and design capabilities," he said. "That's why we went about to identify, through IE, a local but private design institute that has this capability."
After discussing Surbana Jurong's needs and goals in China, IE had introduced the company to Sino-Sun after identifying the institute as a potentially good fit. "The introduction gave us the opportunity to convince Sino-Sun to join our vision," said Mr Wong, adding that the acquisition will go a long way in helping the company tap into the future opportunities in China.
"China will grow in a different way in the next 30 years. It'll be a more disciplined approach. Clients will be more focused on achieving high quality and high performance … and this is an area where we can do extremely well," said Mr Wong. "This acquisition gives us a route, a platform to go into China."
Over the years, IE has worked closely with Surbana Jurong to identify suitable acquisition partners in different markets. "When we go about the acquisitions, we engage a lot with IE. They are very useful to us," said Mr Wong. "Because of their [global] presence, IE can gather information about the countries that we want to look at and potential companies too."
"IE has that standing as a Singapore government agency, and they also know a lot about us and about what we want. So they're a very good key to opening doors."
IE's ability as "matchmaker" is enhanced by the government agency's strong understanding of the company's business and vision, said Mr Wong. IE has spent time with Surbana Jurong to fully understand their needs and ambitions. "IE has that standing as a Singapore government agency, and they also know a lot about us and about what we want. So they're a very good key to opening doors," Mr Wong said. "IE's reputation helps to be that golden key to talking to some of these entrepreneurs and companies."
IE's connections and network have also helped to facilitate these partnerships. An example Mr Wong gave was of IE's help in the company's S$400M acquisition of SMEC in 2016. Mr Roger Bayliss, who was a Business Representative with IE and a non-executive director for SMEC had helped forge a connection between the two companies, Mr Wong said -- a connection that "went a long way" in ensuring a smooth M&A process.