Construction counters

(02-03-2012, 10:05 PM)Bibi Wrote: Pteris will be involved in the baggage handling logistics system?

Infrastructure counters (eg. OKP) could also rise.

(not vested)

The last time I remembered looking at a number of construction counters their gp margin still very low. Could it be most construction companies have gone into prop devt and hence the better margin. Even productivity champion Tiong seng has low margin

http://business.asiaone.com/news/indones...rt-granite

http://www.todayonline.com/singapore/gov...disruption

Serious issue here.. Good luck to those holding construction counters especially concrete players like Pan United. Hopefully they can pass the price increases to the project developers.

(05-02-2014, 12:46 AM)mrEngineer Wrote: http://business.asiaone.com/news/indones...rt-granite

http://www.todayonline.com/singapore/gov...disruption

Serious issue here.. Good luck to those holding construction counters especially concrete players like Pan United. Hopefully they can pass the price increases to the project developers.

My understanding is that generally prices are locked in when the contracts are signed and they might have a 1-3years lag. Export bans from Indonesia/Malaysia are NOT new and a good Mgt should have already made the appropriate hedges in terms of prices or supplies.

That said, there was a sand export ban from Indonesia and building materials price increase but PanUnited's BBM segment continued to make good profits in 2007/8 as it was able to source for new material sources elsewhere. That might have explained why PanUnited's stock price buckled the general downwards trend of the market in the last few days?

(05-02-2014, 06:54 AM)weijian Wrote:

(05-02-2014, 12:46 AM)mrEngineer Wrote: http://business.asiaone.com/news/indones...rt-granite

http://www.todayonline.com/singapore/gov...disruption

Serious issue here.. Good luck to those holding construction counters especially concrete players like Pan United. Hopefully they can pass the price increases to the project developers.

My understanding is that generally prices are locked in when the contracts are signed and they might have a 1-3years lag. Export bans from Indonesia/Malaysia are NOT new and a good Mgt should have already made the appropriate hedges in terms of prices or supplies.

That said, there was a sand export ban from Indonesia and building materials price increase but PanUnited's BBM segment continued to make good profits in 2007/8 as it was able to source for new material sources elsewhere. That might have explained why PanUnited's stock price buckled the general downwards trend of the market in the last few days?

The ban is not actually directed at granite export but on metal ores. This is really collateral damage.
I am not sure how the granite, if it is already crushed, can be processed further??

Not everything can be hedged. Companies need to find a willing counter party in order hedge successfully. I have not seen any common price indexes for aggregates before.

As for 2007, pan u biz soared mainly due the MBS project where they have a great support from Sands and government to push forward for the project. Demand was not that high then. Now we see various projects ongoing in Singapore and inevitably negotiations with various parties will be more complex.

Concrete is approx made up of 15% cement, 25% sand, 40% aggregate, 20% water. So you can imagine the impact for this export ban is much greater than e sand issue. Aggregate is certainly more costly to ship from further countries like vietnam as quarries located near the sea are pretty limited. Unlike sand where some can come from river dredging etc.

From the article, it mentioned that it has to be specifically shaped before it can shipped. So crushing does not qualify as there will not be uniformly shaped crushed aggregate. However, its really up to Singapore govt to negotiate with Indo authorities which will mean some time will be taken..