TTI clears hurdles, bringing Big Box nearer the finishing line

AFTER several false starts and a quiet 2013, Singapore-listed TT International (TTI) was finally ready to unveil details of its flagship retail store Big Box at Jurong East.

The project, where construction is now 80 per cent done, will become Singapore's largest retail warehouse store when it opens its doors in the final quarter of the year.

If it turns into a "roaring success" as Big Box's chief executive Wong Ah Long confidently puts it, the business could prove to be the lynchpin of TTI's turnaround story.

The mega eight-storey project - next to Jurong East MRT station and bus interchange - which cost $320 million to build, spans 5.6 hectares of land and will have about 1.3 million square feet.

Big Box, 51 per cent controlled by TTI, will be the largest and last of four warehouse retail projects under the government's Warehouse Retail Scheme. The other three stores - Ikea, Giant and Courts - are in Tampines.

"Big box will mark a major chapter in the growth of TTI when it opens this year," said TTI chairman and chief executive officer Sng Sze Hiang at a media briefing yesterday.

The huge store which will have 400,000 sq ft of retail area and 600,000 sq ft for warehouses and logistic activities, will start business at a time when activity is bustling in the western part of Singapore.

Jurong Gateway, the area around the Jurong East MRT station, is gradually turning into a commercial hub with new malls, hospitals, hotel and office space.

"Collectively, these projects will transform this area into the second Orchard Road," says Mr Wong.

This project has been a long time coming for TTI which has been in the red for three consecutive financial years from 2011 to 2013.

TTI, a global supplier of consumer electronics and known for its Akira line of consumer electronics, was hit hard by the global financial crisis and underwent a financial restructuring that led to a scheme of arrangement with its creditors in 2010.

Owing to the financial woes, construction work on Big Box had to be halted in 2008.

TTI's attempts to revive the project three times between 2010 and 2012 had all suffered a similar fate - they failed.

But in December 2012, it found a silver lining when two Singapore shareholders - Prima BB, a firm behind the chain of PrimaDeli bakeries, and Utraco Investment, a geotechnical specialist and diversified logistics firm - agreed to take up equity stakes in Big Box.

Utraco owns 30.4 per cent of Big Box while Prima BB holds an 18.6 per cent stake, assuming full exercise of options and preference shares.

More help came last April when TTI managed to secure a $125 million loan facility which helped kickstart the stalled construction.

Now, there appears to be an air of optimism.

"We think this project will give us good returns . . . better than all our other investments," said Tan Ta Sen, founder of Utraco and Big Box deputy chairman, at the briefing yesterday.

Primus Cheng, the man at the helm of Prima is even more sanguine: "We think we can double our investment returns in Big Box very shortly as it's a worthwhile project."

That appears to be a shared confidence. Amid a general market which saw the Straits Times Index shed just over one per cent yesterday, TTI shares jumped 5.5 per cent to end the day at 15.3 cents.