Sanken-EMC Co, a new Thai-Japanese construction services firm, hopes to make a debut in Thailand with a 500-million-baht contract to renovate Suvarnabhumi airport's air-conditioning system.
The company, a joint venture between the SET-listed contractor EMC Plc and Japanese contractor Sanken Setsubi Kogyo Co, expects to earn 320 million baht in revenue by the end of next year.
Chanachai Leenabanchong, chairman and chief executive of EMC, said the joint venture is also vying for another two projects which involve large-scale buildings of government agencies.
EMC yesterday signed a contract with Sanken Setsubi Kogyo to set up the firm with registered capital of 40 million baht after having been in talks for nearly one year.
EMC holds 48% of the shares while the Japanese firm controls 49%. The rest are held by Thai investors.
EMC expects the joint venture to help it win Japanese customers in Thailand while raising its capabilities to provide mechanical and electrical (M&E) engineering services in Thailand and neighbouring countries, particularly Myanmar.
Mr Chanachai said the margin from M&E jobs is 8-14% while that of civil engineering jobs is 4-7%, although the construction value per job for the former is lower than the latter.
"With the Japanese partner, we can attract Japanese customers, both main contractors and project owners, in Thailand. We also aim for green buildings and clean rooms like those at hospitals, pharmaceutical factories and food manufacturing plants, which need expertise in M&E," he said.
Eiichi Matsui, Sanken's president, said the venture is a first in a decade for the company to have a serious investment concern internationally. Back in 1990, it entered the Middle East but needed to withdraw due to the Gulf War.
"The Thailand-based operation will help us expand to emerging countries like Myanmar," said Mr Matsui.
"Thailand is a strategic hub for Asean integration."
Mr Chanachai said the partnership with Sanken will also open up opportunities to construction jobs in Japan ahead of Olympics 2020.
Currently, EMC has a backlog of around 2 billion baht from eight projects, 20-30% of which will be realised in the fourth quarter and the rest in 2014. It will also enter bidding of five projects worth a combined 2.5 billion baht for the remaining of the year.
EMC shares closed yesterday on the Stock Exchange of Thailand at 1.10 baht, up three satang, in trade worth 16.52 million baht.