If you live in any type of public housing in Singapore, there’s a chance that the structure of your home was built by BRC Asia – a specialist in steel reinforcement solutions. Aside from its contributions to at least half of the public housing projects in Singapore, the company has also contributed to the construction of the iconic Marina Bay Sands and Pinnacle@Duxton and sections of China’s high-speed railway project. Today, BRC Asia is the largest steel fabricator provider in Singapore.
But this wasn’t always the case. After Singapore’s last building boom ended in 2015, the construction industry faced thinning margins and destructive competition. BRC Asia also found themselves on the verge of pulling out of their expansion plans in China.
In 2017, a new shareholder entered the scene. With it came the opportunity to acquire their local competitor, Lee Metal. The acquisition would make BRC Asia the largest producer of its kind in Singapore, giving them economies of scale that would help them expand in the region, but this came with the challenge of raising capital in a sector that was struggling at the time.
In this instalment of Building Asia with UOB, find out how UOB supported BRC Asia’s acquisition plans, giving them the confidence to venture beyond Singapore’s skyline.
Seah Kiin Peng (Executive Director & CEO, BRC Asia):
BRC Asia has been promoting the use of prefabrication in steel reinforcement works, in construction sites in Singapore.
We use state-of-the-art machinery with minimum manpower in our factories in Singapore. We would like to promote our solutions internationally and we believe that China is our next growth frontier.
The last building boom ended in 2015. We started to see destructive competition in Singapore. With limited capital, we were thinking of shrinking, pulling out of places like China. In 2017, we had a new shareholder and we worked out a plan to acquire our local competitor Lee Metal.
We needed support. UOB stepped in, they were from day one, very open, very committed. Without them providing a loan, it would probably have been very difficult to have done this acquisition.
Lim Chen Chen (Head, Group Structured Trade & Commodity Finance, UOB):
When BRC first approached UOB on the acquisition deal, it was not immediately compelling as the sector was highly price driven.
The merger would bring together two major companies that are margin challenged.
This is not what a bank would readily finance. When we got deeper into the transaction to understand about the economics and the value proposition, we felt that the acquisition deal would help them become the largest producer of its kind in Singapore. They could leverage on economies of scale and this would help them tremendously when they go into the region.
Seah Kiin Peng:
We have managed to integrate the two companies together well. This stability has given us more confidence to grow outside of Singapore. We have managed to bring our solutions to the high-speed railway industry in China. We think we can promote our products there further, deeper into the country.
Lim Chen Chen:
Understanding BRC’s vision and business model, was very important to us… to provide a holistic banking solution in their value-chain.
With UOB’s financing, BRC is able to bring an entrepreneurial approach to the construction sector. We hope that with their solutions, they can also build well-connected cities in Asia just like Singapore.
We see the opportunity for the company to leverage on UOB’s strong regional footprint, to connect the players in the entire value chain from steel producers to the final end-users in the construction sector.
Seah Kiin Peng:
BRC Asia is today the largest steel fabricator in Singapore.
We have been here since the 1930s. We started building the nation together with this government post-independence, starting with the public housing programme primarily.
We have contributed to at least half of all public housing projects in Singapore. From hotels to resorts… we have, I suppose, helped in our very small way, with the building of the Singapore skyline. Proud, proud to be part of this.