Sembcorp Industries Limited’s Chief Executive on The Company’s Future Growth

Sembcorp Industries Limited (SGX: U96) released its annual report a few months ago.

The company’s revenue comes from its three major business segments: Utilities; Marine; and Urban Development & Others.

Tang Kin Fei, Sembcorp Industries’ chief executive, had shared his thoughts on the company’s future in its latest annual report. Here’re three key things that he said.

On essential businesses

“Our products and services are essential to communities and industries. These solutions will remain relevant as the world’s demand for energy, water and other urban solutions continues to grow.”

Tang believes that Sembcorp Industries can remain relevant as well as grow in the future. The company’s Utilities segment provides power and water treatment services to industries and communities. Meanwhile, its Marine segment facilitates the exploration and production of oil.

On stability and diversity

“Through our Utilities business, Sembcorp has built up a strong income base. In addition, our diversified portfolio, balanced across different businesses and geographies, also gives us strength and resilience as a Group.”

Sembcorp Industries derives most of its revenue from its Utilities and Marine segments. The former provides a stable income base for the company and could act as a balance to the more cyclical Marine segment.

Tang also pointed out that Sembcorp Industries is diversified across businesses and geography. The Utilities segment has operations in over 70 locations in 15 countries, for instance.

On global ambitions

“Equally important though, is that we continue to build Sembcorp’s future as a global company. This means taking advantage of value-enhancing, strategically-attractive opportunities that may arise, and also building platforms for growth.

In 2015 alone, we secured over 3,000 megawatts of new thermal and renewable energy projects that will broaden our income base. We also expanded our urban development land bank by over 300 hectares and clinched S$3.2 billion worth of contracts to add to our marine and offshore engineering orderbook.”

Tang has his sights on growing Sembcorp Industries’ presence on a global scale. He shared three key figures to add weight to this statement.

Sembcorp Industries’ Utilities segment added 3,000 megawatts of energy projects in 2015 while the Marine segment had clinched $3.2 billion in new contracts despite the challenges in the oil & gas industry (the price of oil is sitting around US$50 per barrel today, a big drop from the level of over US$100 in mid-2014). Elsewhere, the Urban Development segment added 300 hectares to its land bank.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.