Japanese strategic partner buys 19 per cent of Fecon shares

Japanese strategic partner buys 19 per cent of Fecon shares

Earlier in April 2019, Fecon and Raito Kogyo announced a comprehensive strategic co-operation.

Accordingly, besides buying 19 per cent of Fecon and 36 per cent of Fecon Underground Construction JSC (FCU), Raito also strengthened the development of underground works and soil improvement with advanced technology.

Otherwise, through this comprehensive co-operation, Fecon and Raito will jointly deploy new businesses using slope stabilisation technology which has already proved successful in Japan.

Previously, Fecon and Raito also jointly established Raito Fecon Innovative Geotechnical Engineering JSC (RFI) in 2016. Accordingly, Fecon and Raito Kogyo would jointly research, develop, and implement transport infrastructure projects (roads, ports, waterways), urban railway projects, and underground drainage system projects in Hanoi and Ho Chi Minh City as well as preventing landslides and mitigate natural disasters projects in Vietnam and other Southeast Asian countries.

Raito Kogyo would provide and transfer advanced technologies that Raito is one of the leading corporations on soft soil treatment, groundwater treatment, and slipping treatment.

According to Pham Viet Khoa, chairman of Fecon’s board of directors, Vietnam and neighboring countries have many potentials for infrastructure development. The advantages of technology, branding, reputation, and national relations of Raito’s as well as Fecon's willingness to integrate will bring good competitiveness for Fecon and the co-operation between Raito and Fecon in particular.

Raito is one of the major construction corporations in Japan with 70 years of operation in the field of foundation construction. The company now employs 1,016 employees. Raito has been listed on the Tokyo Stock Exchange since 1979. As of March 2018, its total consolidated net assets reached JPY58.7 billion ($536.9 million), with consolidated revenue of JPY100.1 billion ($915.5 million).

Fecon is one of the biggest underground construction contractors in Vietnam with 15 years of experience. It aims to become a leading investor and infrastructure developer in Vietnam. The enterprise currently has 17 member companies, including joint venture enterprises in Myanmar.

In 2018, Fecon recorded a total revenue of VND2.86 trillion ($124.35 million) and after-tax profit of VND252 billion ($10.96 million), up more than 42 per cent compared to 2017. The revenue growth target for 2019 is VND4.2 trillion ($182.6 million), up 47 per cent on-year.