Red Sea Housing Services Company has announced that its Dubai-based subsidiary has bought a Malaysian company that specialises in building modular housing for US$7 million.
The Jeddah-based company said that the deal, which will see it pay an initial $3m in cash and the rest in annual instalments, will not only boost its plans to expand into the South East Asian market, it also allows the company to get its hands on an “unconventional construction technology” that will allow it to build concrete structures of up to 12 floors quickly and using less manpower.
In a statement to the Saudi stock exchange, the company added that the deal will add about 100m Saudi riyals to its 2016 revenues. The deal will be financed through existing bank facilities and cashflow.
AM Modular is a designer and manufacturer of prefabricated modular buildings with three factory sites in Malaysia. The company was set up in 2007 and opened an Australian arm in Adelaide in 2009.
Red Sea Housing Services provides temporary and permanent modular housing used by companies to house staff working in remote locations. It has provided accommodation to firms in the oil and gas, and mining sectors, and more recently had a deal with Australia’s government to produce accommodation to house asylum seekers at a processing centre in Papua New Guinea. Last month, the company also announced that it had won a contract with Qatari real estate firm Daruna to build accommodation for up to 4,000 people.
The contract, worth 144m Qatari riyals (Dh145m), will see it build accommodation blocks, indoor and outdoor recreation space, utilities, retail space, a police station, bank and a clinic.
Red Sea declared a 56 per cent decline in 2015 net profit to 76.1m riyals. Revenue fell by 7 per cent to 1 billion riyal. Chairman Amr Al Dabbagh said the company had been impacted by lower oil prices, which resulted in some projects being called off and others suspended.
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