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Wika to work on $125 million tower project in Myanmar
State-run construction firm PT Wijaya Karya (Wika) says it has signed a US$125 million contract for the development of a commercial tower in Myanmar, a move highly needed to support its overseas expansion
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tate-run construction firm PT Wijaya Karya (Wika) says it has signed a US$125 million contract for the development of a commercial tower in Myanmar, a move highly needed to support its overseas expansion.
Wika and its partner, Singapore-based high-end developer Noble Twin Dragons Pte. Ltd., inked the agreement on Thursday to build the mixed-use Pyay Tower and Residences in Yangon.
The publicly listed company will be the sole contractor in the construction of the tower.
'Wika is proud to take part in [the construction of] Pyay Tower, which will be a landmark in Yangon,' Wika president director Bintang Prabowo said in a written statement.
Pyay Tower is located in a prime area of Yangon and is designed to have 23 floors and three basements. The first five floors will be dedicated to commercial use while the upper floors will house offices.
Wika will commence construction in October and is scheduled to conclude the project in two years.
Wika corporate secretary Suradi said the company's entry into Myanmar was in line with its mission to become a big player in the region.
It was earlier reported that the company was also targeting to construct of representative offices of state-run lender Bank Negara Indonesia (BNI) and oil company Pertamina in Myanmar.
It has also prepared around Rp 300 billion ($25.36 million) to build a concrete factory for its publicly listed subsidiary, Wika Beton, next year.
'The Myanmar project alone has allowed us to meet our projected overseas contracts,' he told The Jakarta Post over the phone.
Suradi said the state-run developer had now exceeded its overseas contract target for this year.
To date, he said, the company had pocketed more than Rp 1.4 trillion from its projects abroad, or almost twice its annual target of Rp 750 billion. The target was three times higher compared to its overseas contract last year, which Suradi said was less than Rp 200 billion.
- Wika sole contractor in the tower construction
- The project is expected to finish in two years
- Firm has pocketed more than Rp 1.4 trillion from overseas projects
The company has secured a toll road maintenance contract amounting to Rp 70 billion in Algeria. It is now awaiting approval to construct a bridge in Timor Leste, from which the firm expects to generate $16 million.
Wika aims to commence construction of the bridge before year-end. The project will take around a year to complete.
Wika set its total new contracts target to hit Rp 25.83 trillion this year, around a 28 percent increase compared to last year's.
As of June, it reported to have received Rp 6.7 trillion worth of new contracts, or only about 26 percent of its total contract target.
The firm previously said that its new order books were contracted due to project holdups during the legislative and presidential elections as well as the government's decision to cut spending for state-owned companies and infrastructure projects.
Wika booked Rp 5.85 trillion in net sales between January and June, up by 10.8 percent year-on-year
(y-o-y).
The company's first-half (H1) net sales are still below half its annual target of Rp 18.82 trillion. The full-year target is 22.5 percent higher than the Rp 15.42 trillion generated last year.
Wika's net profit rose by almost 10 percent y-o-y to Rp 348.14 billion during the period, while it targeted to see a 22.3 percent y-o-y increase in annual profit to Rp 678.65 billion by year-end.
