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Singapore construction and engineering firm Yongnam


Singapore construction and engineering firm Yongnam Holdings said its order book should triple in size next year due to several big infrastructure projects in the city-state and the Middle East.

Yongnam recently won its first contract in the Middle East with a railway project in Dubai, worth S$4 million initially, but Seow said he expects the Middle East to contribute about 25 per cent in the group's revenue in 2007, and more than 45 per cent of revenue by 2011.
Yongnam wants to win bigger deals at home and abroad, including contracts for the construction of Singapore's two casinos -- expected to cost up to US$6.6 billion -- and for property development in the Middle East, chief executive Officer Seow Soon Yong said in an interview.

'I have to spread my wings to the Middle East, I see 10 years of growth in infrastructure and building construction there,' Seow said.

'There are so many high-rise buildings coming up in Qatar and Dubai now.'

Yongnam, whose order books currently stands at a record S$150 million ($97 million), expects to add new orders of up to S$250 million annually for the next three years.

The firm reported a sharp drop in net profit to S$1 million in 2005, from S$7.2 million in the previous year when the firm's profit was lifted by exceptional gains.

However, revenue from construction projects rose 28 per cent to S$81.5 million in 2005. Seow said the firm's turnover will rise by 50 per cent in 2006, and will grow by about 20 per cent annually in the next two years.

While Singapore accounts for some 70 per cent of revenues with the rest coming from Thailand and Malaysia, Seow said the Middle East would account for an increasing proportion.

Yongnam, founded in 1971 as a mechanical engineering firm with just five site workers, has grown into an engineering and construction company with 1,500 employees and a market value of US$55.8 million.

It built the steel columns and framework for the main terminal in Bangkok's new Suvarnabhumi Airport, and provided temporary steel supporting systems for the construction of many underground subway tunnels in Singapore.

However, the firm was hit by a downturn in the property market and slump in construction projects in 2001, and was mired in debts of up to S$80 million until 2004.

As property prices picked up and building activity resumed, the firm has recovered.

While the share price is still far below the August 2000 all-time high of S$0.415, the stock has nearly tripled in the past three months, making it the best performer in the All Singapore Index and in the Singapore construction index.

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