HSS Engineers executive vice-chairman Tan Sri Kuna Sittampalam.
PETALING JAYA: HSS Engineers Bhd
has outlined a robust strategy for international growth, focusing on Asean, South Asia as well as the Middle East and North Africa (Mena) regions.
Executive vice-chairman Tan Sri Kuna Sittampalam said the group’s expansion is expected to generate 25% of its revenue from overseas ventures, up from the current figure of below 5%, by 2027.
Kuna highlighted three strategies the group planned to utilise for global growth, with the first being partnerships with major Japanese consultancies.
The strategy is to leverage Japan’s US$368bil overseas infrastructure development fund targeted at Asean, India and Mena.“Our idea is to tie up with them and go for jobs and that is how we won the Jakarta light rail transit (LRT) bid,” he told a press conference after the group’s AGM yesterday.
Kuna also highlighted ongoing projects such as the Patna LRT in India and the Dhaka Metro in Bangladesh were heavily funded by Japanese investments.
“Our initial role in the projects was minor, around 10% to 15%, but now we’re taking on about 40% in places like Patna,” said Kuna.
“This progression demonstrates the growing confidence our partners have in us,” he added.The second strategy will be to focus on projects funded by the Asian Development Bank (ADB).
Kuna noted that HSS Engineers’ success in Bangladesh, through an ADB-funded project in collaboration with Japanese partners, is a testament to the approach.
He said the group is eyeing the Davao bus rapid transit project in the Philippines, valued at US$38mil which also presents opportunities.The third and final plan is expanding through strategic acquisitions.
Kuna highlighted the group’s recent acquisition of a 12% stake in Indonesia’s PT Oriental Consultants, marking a significant step in this direction.
“We aim to integrate local expertise with our capabilities and bring a portion of the work back to Malaysia,” Kuna explained.
The group is also exploring similar acquisition opportunities in India.
It aims to capture a share of India’s construction industry, which is estimated to be US$778bil in 2023 and projected to grow at a compounded annual growth rate of 6% from 2024 to 2033, reaching US$1.39 trillion by 2033.
Additionally, Kuna said the group’s target is to extend its footprint in the Mena region.HSS Engineers had tendered for two major project management consultancy (PMC) in Saudi Arabia, including the integrated PMC for rail and construction supervision of landscape works for the Royal Commission in Riyadh under the Green Riyadh Programme.
As for Iraq, he said the group had been invited by the government to undertake the PMC for the Baghdad metro and Najaf-Karbala rail projects.
While pursuing international growth, the group remains committed to domestic projects.
It is managing five data centres across Peninsular Malaysia, with three more in the pipeline.
“Our objective is clear – to achieve 25% of our revenue from international ventures by 2027. If we secure the Iraq project, we could reach this target as early as next year given its US$24bil value,” he said.
As of Dec 31, 2023, the group has an order book of RM1.5bil, providing earnings visibility for the next five to eight years.
Notably, projects with fees under RM20mil constitute between 75% and 80% of the order book.
It has seen a positive start for 2024, bagging RM70mil new contracts.
The group also maintained a tender book value of RM528mil with a 50% success rate in engineering design, supervision, and project management as well as a 20% success rate in building information modelling.
