Kentz to enter Australian market with joint venture

Irish-based engineering and construction group Kentz is set to enter a joint venture with a subsidiary of Australian building giant Leighton Holdings, the company confirmed at the weekend. Barry O'Halloran reports.

Kentz has signed an agreement with Australia-based Thiess Pty Ltd to establish a joint business, Thiess Kentz Engineers and Constructors.

The company will target instrumentation, electrical engineering and building contracts in Australia and Indonesia. Kentz chief executive Dr Hugh O'Donnell and Thiess managing director Mr Roger Trundle signed the deal in Brisbane, Australia, last week.

Neither side gave an indication of the level of investment in the joint venture.

According to Dr O'Donnell, the deal will open the door to projects in Australia, which is a new region for Kentz. He said the new company plans to offer clients combined construction, engineering and instrumentation services, rather than using the traditional sub-contracting model, which involves several companies operating on the same project.

"With the future development of major projects in Australia and the Pacific region, the synergy between Kentz and Thiess will see the introduction of new contracting options for our clients, including a direct single point turnkey contract model as an alternative to traditional sub-contracting models," he said.

Tipperary-based Kentz is a privately owned group involved in specialist engineering and construction, which operates mainly in the energy and heavy industry sectors. It operates in 21 countries and has offices in the Middle East, South Africa, the US and Ireland. The company employs 3,500 people and operations are ultimately managed from its Tipperary offices.

Formerly known as MF Kent, it went into examinership in 1993 after borrowing against contract revenues that did not materialise. Malaysian Group Peremba rescued it in 1994, buying a 60 per cent stake that it subsequently increased to 90 per cent. It then sold this to two unnamed Malaysian investors. Mr Noel Kelly is the sole remaining Irish shareholder.

Thiess is part of publicly listed Australian company Leighton Holdings, which is one of the biggest players in that country's construction market. Thiess generates yearly revenues of $2 billion Australian dollars (€1.16 billion).

Its parent company has announced that it is expecting to make operating profits of $1120 million this year.

Thiess recently secured Aus$380 million in coal-mine operating contracts in New South Wales. The company has a Aus$700 million portfolio of healthcare and hospital construction projects and is working on the construction of the Aus$1.1 billion Lane Cove tunnel in Sydney.