Tiong Seng Holdings eyes JV deal with Shwe Taung Development

It plans to set up a precast plant in Myanmar.

According to DBS, Tiong Seng Holdings Limited announced it has signed a non-binding Memorandum of Understanding with Shwe Taung Development Co., Ltd (Shwe Taung) to explore entering into a joint venture to set up a precast plant in Myanmar.

Here's more:

Under the MOU, Tiong Seng and Shwe Taung are proposing a 30% - 70% joint venture company, to establish and operate a precast plant to supply precast components to construction projects in Myanmar.

Tiong Seng is expected to provide precast technical support, project-based design and other technical supervision services.

This comes on the back of the group’s plans to expand its pre-cast facilities regionally (the group recently acquired a piece of land in Iskandar to build a precast facility).

Potential JV partner Shwe Taung is one of Myanmar’s prominent corporations with a diverse business portfolio and one of the country’s largest employers. This may in the longer term be another avenue to extend its business contacts and potentially a new business arm into Myanmar.

The outlook for the construction sector in Myanmar is expected to be bright. It is noted that the Myanmar’s Ministry of Construction plans to build more than 1 million houses nationwide over the next 20 years.

Residential construction accounts for 51% or US$1.5bn, of Myanmar’s total construction output. In Yangon alone, the demand for affordable housing is 200,000 units every year, whereas only 20,000 units are supplied every year.

We do not anticipate any significant impact on earnings in the immediate term.