Rotary Engineering secures S$500mn petrochemical plant construction deal

The group amassed S$110mn deals from July to September 2011.

It started with a small contract for early works such as temporary facilities, ground preparation and civil works for a chemical plant. Following that initial assignment, mainboard-listed Rotary Engineering Limited (Rotary) has reeled in a multi-million contract to undertake construction of the chemical plant, based in Jurong Island.

The project, contracted with CCD (Singapore) Pte Ltd, relates to Taiwan-based Chang Chun Group’s initial investment of S$500 million to build a petrochemical plant on Jurong Island.

In addition, Rotary announced a slew of contracts of varying values that it has amassed over the months of July through September 2011. For confidentiality and competitive reasons, the Group is unable to provide a breakdown of the transactions that involve work across different disciplines, including engineering, procurement and construction (EPC), maintenance and electrical and instrumentation services. Rotary is a leading provider of engineering, procurement, construction and maintenance services serving the oil and gas and petrochemical sectors, according to a Rotary Engineering report.

Rotary will be involved in the construction of the allyl alcohol and vinyl acetate monomer (VAM) plant. Allyl alcohol is a starting material for a variety of speciality monomers and polymers (plastics) while VAM is used in paints, adhesives and textiles. Rotary’s scope of work also includes equipment installation as well as electrical and instrumentation.

Chang Chun Group through its subsidiaries engages in the production of chemicals, circuit boards, and petrochemical-derived specialties. The company was founded in 1969 and is based in Taiwan. According to media reports, the company wants to capture the thriving demand for downstream products; and specifically, the new plant in Singapore will source ethylene and propylene from Shell Eastern Petroleum. Chang Chun Group through its subsidiaries engages in the production of chemicals, circuit boards, and petrochemical-derived specialties. The company was founded in 1969 and is based in Taiwan. Rotary’s Chairman and Managing Director Mr Chia Kim Piow was delighted to have landed this deal. He said: “We are thrilled to have been awarded this contract and honoured to be associated with this project and this client.”

Over the last three months, Rotary has managed to rack up about 10 contracts, excluding the Chang Chun deal, in Singapore. Of note would be a S$13 million EPC tankage project undertaken for Samsung C&T Corporation relating to a power plant project by GMR Group, which is a Bangalore-headquartered global infrastructure major with interests in the airports, energy, highways and urban infrastructure. The power facilities are being designed and constructed by a Siemens/Samsung Consortium.

Rotary’s has also secured a number of maintenance contracts including works for Chevron Singapore amounting to some S$3 million over three years; a two month turnaround maintenance project for United States-based energy conglomerate Invista (Singapore) Pte Ltd worth some $3 million; and some work for Germany-based speciality chemical manufacturer Evonik Rohmax Asia-Pacific Pte Ltd. Other Singapore wins include a number of electrical and instrumentation contracts.

For the half year ended 30 June 2011, the Group registered a profit after tax attributable to parent of S$20.2 million over revenue of S$283.8 million. As at 4 August, its order book stood at S$756.9 million with projects targeted to be completed and delivered progressively, up to end-2012. Of this, about 90% of the contracts originated from overseas.