Dickson Construction to diversify

Kenneth Ko

DICKSON Construction International is diversifying into transport, energy, property and telecommunications projects in China.

Executive director Leung Hung-kwun said that while Dickson would become diversified, construction would remain its core business.

The process would be a gradual one, he said, expecting non-construction businesses to account for about 30 per cent of its activities within the next two years.

Dickson' whose current non-construction interests include the trading of metallic building materials, has recently invested in mainland property projects.

Mr Leung said Dickson was now negotiating with NEC of Japan for a joint venture to manufacture telephone sets in Qingdao, Shandong province.

Chinese authorities had given approval in principle, and the investment for the project was estimated at US$4 million to $5 million, he said.

The company is also striving to expanding its transport-related business in China.

Mr Leung said Dickson had established a joint venture in Guangzhou to operate shipping transport facilities.

The venture was currently leasing two ferries to transport cargo from Guangzhou to Taiwan and Hong Kong, he said.

In the long run, he said, the Guangzhou joint venture intended to establish a shipping fleet.

Dickson was also negotiating with shipping authorities in Shanghai for a joint venture to develop and operate small shipping transport facilities.

The Shanghai deal was expected to be finalised next year.

Mr Leung, who had worked with China Merchants Group for more than 20 years, is responsible for the expansion of Dickson's business on the mainland.

His experience and knowledge about the business in China and his mainland connections are expected to support Dickson's expansion in China.

On the property side, Mr Leung said Dickson would concentrate on low-cost housing developments in China, similar to those involved in Hong Kong's home ownership scheme.

He said the capital involved in these projects would not be significant and they would generate a moderate profit margin of 18 to 20 per cent.

Dickson has recently taken a 60 per cent stake in a property project in Guangzhou, comprising three residential blocks totalling 23,000 square metres of floor area.

Mr Leung said Dickson also aimed to invest in small to medium-sized power plant projects.

The firm would invest an initial 20 million yuan (about HK$26.9 million at the official rate) in a joint venture with Shuang Shui Power Plant to build a plant in Shuang Shui town, Xinhui, he said.

Dickson had an option to acquire a 10 to 20 per cent equity interest in the plant within three years, he said.

The group recently entered into an agreement with China Railway Second Engineering Bureau to introduce the bureau's second engineering division to infrastructure projects in Hong Kong.

Dickson plans to capitalise on its relationship with the bureau to participate in infrastructure projects in China.