The chief executive of Singapore-based rental company Tat Hong Holdings Ltd. last week said his company is looking for an acquisition target in Australia worth up to 30 million Singapore dollars, about U.S. $19 million, according to Australian Internet reports. Chief executive Ng San Tiong Roland also told Reuters the company is planning to launch a crane rental company in China.
Tat Hong, which has a fleet of more than 500 crawler cranes, last December listed its 70-percent owned subsidiary Tutt Bryant Group on the Australian Stock Exchange after acquiring privately owned Bay Hire. Ng said Tat Hong is looking for additional growth in Australia.
In its first entry into the Chinese market, Tat Hong last year acquired a 30-percent ownership in a joint venture with China’s Fushun Yongmao Equipment Manufacturing to make and sell tower cranes. Ng said Tat Hong, along with a China-based partner, plans to launch a tower-crane rental company called Shanghai Tat Hong before the end of its fiscal year ending March 2007.
Ng added that the Chinese crane rental business would start contributing to Tat Hong revenues in fiscal 2008, and he expects the Chinese operation to contribute up to 20 percent of the company’s volume during the next five years. Currently, about 60 percent of Tat Hong’s revenue comes from Australia, but Ng said he expects the revenue mix to change because of the construction boom in Southeast Asia and the Middle East.
In its home country, Singapore, Tat Hong is currently supplying cranes for the U.S. $4.2 billion Circle Line subway project. The company also expects to provide equipment for two large casino-resort projects, expected to cost a combined U.S. $2.5 billion.
Ng added that Tat Hong’s profits are likely to get a boost from large infrastructure projects in Indonesia, growing demand for cranes from shipping and oil and gas industries in Malaysia, and a construction boom in the Middle East.
Tat Hong’s shares have risen about 57 percent this year after a 61-percent jump last year.