PIECE OF THE ACTION
China’s Zhongtian aims to secure B10bn in EEC construction jobs by 2021, leveraging its partnership with Rung Fah Serm.
A large Chinese contractor, Zhongtian Construction Group, has set its sights on the flagship Eastern Economic Corridor (EEC), aiming to secure construction jobs worth 10 billion baht by 2021.
Executive member Li Yuzhong said the group has been eager to take part in the EEC since the government announced the initiative.
“The Chinese government has the One Belt One Road policy, which promotes Chinese investment abroad, while Thailand’s EEC is drawing much interest from Chinese investors in the industrial sector,” Mr Li said yesterday.
Chinese investors prefer to use their compatriot contractors when investing overseas, for the sake of communication and cultural comfort. With so many Chinese investors eyeing the EEC, Zhongtian hopes to do construction jobs for them.
Last December, the group set up Zhongtian Overseas Engineering Thailand Co, a joint venture with Thai contractor Rung Fah Serm Corporation, with registered capital of 100 million baht.
Non-listed Zhongtian Construction Group holds 49% in the joint venture, and the rest is held by Rung Fah Serm Corporation and Dej Namsirikul, a renowned financier turned developer.
“We are looking not only at Thailand, but also at expansion in neighbouring countries like Cambodia, Malaysia and others in Southeast Asia, as Thailand’s geography is perfect,” Mr Li said. “The group has financial partnerships with Chinese banks, which enables us to take turnkey projects.”
But since the first stage of the EEC is focused on infrastructure, which is not the group’s expertise, Zhongtian and its Thai partner are looking long-term to develop buildings and factories in the corridor.
Suwan Paisarnfuengfong, chairman of Rung Fah Serm, said his company is partnering with Zhongtian for three years on a project-by-project basis.
“Two decades ago, we [Rung Fah Serm] partnered with Guangxi Construction Group, one of China’s largest contractors,” Mr Suwan said. “We learned much
construction know-how, but as it was a government enterprise firm with many changes in management, we looked for somebody else.”
To date, Zhongtian and Rung Fah Serm have joined in construction jobs worth a combined 1.2 billion baht in Thailand, including Sampeng 2 and Miami Bangpu, two property projects developed by MAIlisted J.S.P. Property Plc.
Elsewhere, the two companies have had construction jobs worth more than 1 billion baht in Cambodia and in Penang, Malaysia.
The joint venture aims to have construction jobs worth 2.5 billion baht this year, rising to 10 billion baht in 2021.
Zhongtian Overseas Engineering is currently awaiting the bidding results for construction of Artisan Ratchada, a mixed-use project in the Huay Khwang area worth 2 billion baht.
The winning bid is to be announced in the next two months.