KUALA LUMPUR: Knusford Bhd has entered into a joint-venture agreement with Shanghai Greenland Construction Co Ltd to bid for major building jobs and infrastructure projects in Malaysia and the region.

In a statement yesterday, Knusford (fundamental:1.25; valuation: 1.8 ) said its wholly-owned unit Kota Express Sdn Bhd and Greenland Construction’s Malaysian entity — Greenland Malaysia Urban Development Sdn Bhd (GMUD) will form a new special purpose vehicle (SPV) to spearhead the strategic alliance.

According to Knusford, GMUD and Kota Express will have 55% and 45% equity interests respectively in the SPV.

The SPV is expected to be fully operational by this year and is likely to bid for and participate in several major real estate development projects by the Greenland group in Danga Bay and Tebrau Bay in Johor Baru, the statement read.

Aside from this, the SPV will also vie for other new and emerging construction and infrastructure jobs in the public and private sectors in Malaysia and the region.

Knusford’s major shareholder is Aman Setegap Sdn Bhd with a 30.11% stake. Johor ruler Sultan Ibrahim Sultan Iskandar and Tan Sri Lim Kang Hoo are deemed interested in the 30.11% stake through their holdings in Aman Setegap.

“The deal will give Knusford the much-needed leverage to bid for major building jobs and infrastructure projects, especially by China conglomerates in Malaysia, and pass on the benefits to local suppliers and contractors,” the statement read.

“For Greenland Construction, the tie-up with Knusford will enable it to tap into growing opportunities in Malaysia’s building and infrastructure sector, including the expanding mass rapid transit and high-speed rail network across the peninsula,” it added.

Knusford’s chief executive officer Lee Hun Kheng and Greenland Construction’s chairman and president Tan Deqin signed the heads of agreement to establish the JV entity at Greenland Construction’s headquarters in Shanghai.

The signing ceremony was witnessed by Tunku Idris Iskandar Sultan Ibrahim, who represented Knusford chairman Tunku Ismail Sultan Ibrahim, who is the crown prince of Johor.

Commenting on the JV, Lee said the JV will ensure that local businesses get procurement jobs for building materials and other services from China developers in Iskandar Malaysia.

Meanwhile, Tan also said Greenland Construction’s decision to join hands with Knusford was a demonstration of its commitment to expand its presence in Malaysia, especially in Johor.

“We have a clear understanding of the market requirements and have the necessary construction and infrastructure capability within this sector. We are eager to share our core competencies with a strong partner in Malaysia like Knusford,” he said.

Knusford’s share price closed unchanged at RM1.53, with a market capitalisation of RM152.5 million.

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This article first appeared in The Edge Financial Daily, on February 12, 2015.