SUM Cheong International has teamed up with an unnamed Singapore company and a mainland enterprise to develop a 200 million yuan (about HK$186 million) toll road in Suzhou, according to group managing director Lai Seck-khui. Sum Cheong, a regional infrastructure developer and contractor based in Singapore, and the Singapore company, each have a 30 per cent stake in the project while the rest goes to the China enterprise. Mr Lai said the joint-venture had a 25-year tenure. The road was expected to be finished by early 1997. Mr Lai said the group's profits, which plunged 60 per cent to $27.63 million for the year to June, had been improving. 'The profit outlook for this year will follow the second half year trend,' he said. He said the slump was due to keen competition on construction work in the region and the unexpected increase in material and labour costs in some projects. 'The unpredictable difficulties such as material prices have gone up which accounted for the loss,' he said. The group's attempt to list its Singapore subsidiary last year was turned down by the Singapore stock exchange. Mr Lai said the group had sufficient capital reserves, adding that the gearing ratio was less than 30 per cent.
