BMI's Executive Summary

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Taiwan is home to a vibrant domestic infrastructure sector amid efforts to move towards a more liberalised business regime since the economy's membership of the World Trade Organisation (WTO) in 2002. The five-year construction plan (2003-2008) is nearing completion and has been significantly responsible for much of the growth witnessed in Taiwan's construction industry over its coverage period. Moreover, with an approved budget of TWD205.5bn (US$6.32bn) for public construction in the current year, this spurt is likely to continue. This report forecasts the Taiwanese construction industry to grow at an average of 2.91% over the 2008-2012 period.

Transport-related infrastructure has seen maximum activity, with around US$18bn having been spent on the ongoing Municipal Rapid Transit (MRT) project in Taipei and surrounding regions over the past few years. The government's procurement agreement, aimed at opening up the domestic construction market to greater foreign participation, is expected to do away with the paucity of foreign contractors that had been attributed to entry barriers in the form of restricted bidding procedures and complex professional licensing arrangements. Furthermore, the industry is expected to get a boost from the six-year Challenge 2008 Development Programme, which involves an investment of about US$75bn for the construction of new research facilities and infrastructure.

However, Taiwan's construction industry faces its share of challenges in the form of labour shortages, lack of transport links with China and heavy concentration, with the top 25 contractors controlling nearly 80% of the industry. There is also a need to expedite the dispute settlement process to prevent foreign investors from losing interest in Taiwan. Furthermore, with several Taiwanese players involved in projects in mainland China, any instability in the diplomatic relations between the two could have serious ramifications on Taiwan's domestic infrastructure sector.

Notwithstanding the factors above, BMI forecasts the Taiwanese infrastructure sector to grow 3.32% year-on-year (y-o-y) in 2008, reaching a value of US$6.1bn, and onwards to US$6.8bn by the year 2012.

Contents

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Chapter 1 - Industry Trends And Developments

Market Overview

Taiwan's Economy In 2006

Taiwan's Construction Industry In 2006

Major Companies

Some Recent Investment Initiatives

Chapter 2 - Key Projects

Transport

Utilities

Steel Production

Hotel Construction

Commercial Construction

Table: Taiwan — Major Infrastructure Projects

Chapter 3 - Business Environment Rankings

Introduction

Table: Asia Business Environment Rankings

Business Environment Rankings — Methodology

Anticipated Potential

Regional Overview

Business Environment Ranking

Economics — Long-Term Risk

Politics — Long-Term Risk

Construction Growth

Competitive Environment

Anticipated Potential

Chapter 4 - SWOT Analysis

Taiwan Infrastructure Industry SWOT

Taiwan Economic SWOT

Taiwan Political SWOT

Taiwan Business Environment SWOT

Chapter 5 - Industry Forecast Scenario

Risks

Table: Construction Industry, Historical Data And Forecasts

Chapter 6 - Macroeconomic Outlook

Mounting Risks In 2007

Table: Population And Output

Chapter 7 - Competitive Landscape

Table: Key Players — Taiwanese Construction Industry

Chapter 8 - Company Monitor

BES Engineering Corporation

Kung Sing Engineering Corporation

Cathay Real Estate Development Company Ltd

RSEA Engineering Corporation

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Construction Industry

Sources

Competitive Landscape for Asia Infrastructure Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by sales, % market share, employees, registration date and ownership structure. Company profiles include fully researched senior executives and contact details, business activity and leading products and services. SWOT (strengths, weaknesses, opportunities, threats) of the state’s business environment, infrastructure sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Asian Infrastructure Sources

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BMI's Asian Infrastructure Reports are based on an extensive network of multilateral organisations, government departments, infrastructure industry associations, chambers of commerce and company reports. Information sources include: