Shanghai Urban drives on with offshore growth

PUBLISHED : Wednesday, 13 July, 2011, 12:00am
UPDATED : Wednesday, 13 July, 2011, 12:00am


Shanghai Urban Construction Group, a major Shanghai-government-owned building firm, is aggressively expanding abroad, despite risks such as physical attacks on its staff in Angola.

On June 28, the company established SUCG International to operate its international businesses.

'The establishment of SUCG International is significant for the 'going out' of ... China's state firms in general. This will create the international brand of Shanghai Urban Construction,' SUCG International chairman Pu Zhaohui said.

A group spokeswoman said: 'Previously we had a department within Shanghai Urban Construction to handle international business, but it was too small.'

One incentive for SUCG International to expand overseas was that the profit margins where higher on offshore projects than those on the mainland, she said.

SUCG International's three main foreign markets are Angola, Singapore and India, according to Pu.

The company has US$1.76 billion in contracts in Singapore, including the Marina Bay Sands casino complex, metro rail and waste water treatment projects. In India, SUCG International has US$374 million in metro rail projects. In Angola, its projects total US$375 million, including a 50,000-seater stadium in Luanda.

Since it was founded in 1996, Shanghai Urban Construction has completed more than 150 projects in Shanghai, including Pudong International Airport and underwater tunnels between Pudong and Puxi. It was also involved in building airports in Xiamen, Guangzhou and Fuzhou.

But Shanghai Urban Construction has had problems abroad. In November 2009, Eddie Zhang, a company executive, told the BBC of mafia-style attacks against Chinese workers in the Luanda stadium project.

'During the unrest in Angola, we created emergency anti-terror groups to ensure the security of our staff and operations,' Pu said.

'Before entering any market, we must do market research and fully assess the market, operational and political risks.

'The ability of SUCG International to create an international brand is inextricably linked to ... [it's] close links with the governments of the countries it operates in.'