Sembcorp to Invest $527 Million in Integrated Urban Business

Singapore’s SWF Temasek backed Sembcorp Industries (Sembcorp) will invest approximately $526.85 million, representing 5% of its total investments for 2024-2028, in its Integrated Urban Solutions segment.

The investment will be funded through a mixture of operating cash flow, project financing, internal funding and capital recycling. The company is also exploring partnerships to develop and grow an asset management platform, offering optionality for further expansion.

Sharing its strategic plan for Urban business on Tuesday to establish itself as a leading low-carbon industrial park player in Asia, Sembcorp said that the urban business is a stable business segment with growth potential. The company has already developed 21 industrial parks, spanning over 14,000 hectares in key markets including Vietnam, Indonesia and China.

Vietnam and Indonesia offer compelling growth opportunities with their strong GDP growth prospects and growing manufacturing industry as these countries have increased domestic consumption driven by urbanisation and a rising middle class.

Industrial park growth in Vietnam and Indonesia remains strong, driven by strong foreign direct investment, supply chain diversification as well as favourable government policies.

To capitalise on these opportunities, Sembcorp’s Urban business targets to accelerate land development, expanding its land bank from the present 14,000 hectares to 18,000 hectares by 2028.

Grow recurring income by increasing its industrial properties to 1.5 million square metres (sq m) by 2028 from the current 0.1 million sq m, to support manufacturing demand, growing domestic consumption and e-commerce.

Sembcorp also plans to achieve net profit CAGR (2022-2028) of more than 15% and 2028 ROE of 10%.

Leveraging Competitive Strengths

Since 1994, the Urban business’ industrial parks have attracted more than 1,000 customers and drawn over $50 billion in investments, which have generated over 370,000 jobs.

The Urban business’ ability to attract foreign direct investment and create jobs positions it strongly for securing new projects in both existing and new markets. The Urban business will continue to grow its presence in Vietnam and Indonesia, explore new markets and optimise its operations in China to improve returns.

Low-carbon Solutions

As sustainability becomes a critical criterion for global companies, the Urban business is uniquely positioned to meet the rising demand for sustainable and low-carbon facilities, leveraging Sembcorp’s expertise in renewable energy and decarbonisation solutions.

The Urban business’ ability to provide green and smart infrastructure is a key differentiation, ensuring it remains the preferred choice for companies seeking sustainable solutions. In Indonesia, the company has recently signed MOUs to develop low-carbon industrial parks in Batam, catering to advanced manufacturing and data centres industries.

With clear targets set for 2028, the Urban business will leverage its extensive experience and group expertise to be the leading developer of low-carbon industrial parks in Asia, Sembcorp said.