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This article first appeared in The Edge Financial Daily on May 30, 2017

KUALA LUMPUR: ML Global Bhd, 56%-owned construction arm of LBS Bina Group Bhd, is placing greater focus on industrialised building system (IBS) adoption to help ease the shortage of labour in the company.

Its chief executive officer Datuk Richard Lim Lit Chek said ML Global had allocated up to RM40 million at the initial phase for the adoption of a precast concrete manufacturing system from China.

“That [investment] will be enough to produce about 2,000 apartment units, which will be used in our upcoming projects by the first half of 2018,” he told reporters after the company's annual general meeting yesterday.

The adoption, Lim said, would further reduce the company's cost and reliance on skilled labour during the construction process.

“There are different groups of skilled labour. If you are short of one skill, you can’t deliver your building. That is what we are facing right now.

“Using precast concrete will greatly reduce our reliance on brick and plasters … That is an immediate way that we [can use to] cut a lot of trouble looking for specific skilled labour,” he added.

ML Global currently adopts aluminium shear wall system — one of many existing IBS — in its current projects. The new precast concrete construction method, however, would further reduce construction time while complementing existing techniques, Lim added.

Once ML Global becomes affluent in precast concrete manufacturing, it may eventually supply the manufactured parts to other companies in the long run. “As of now, our upcoming projects will provide sufficient demand for us to adopt the system and manufacture them on site,” said Lim.

The company expects 2017 results to be better than 2016 on the back of a strong order book of RM2.6 billion, of which RM600 million has been delivered. “The remaining order book will keep ML Global busy for the next three years,” said Lim.

ML Global's net profit fell to RM325,000 in the financial year ended Dec 31, 2016 (FY16) from RM10.17 million in FY15, dragged down by higher operating costs including corporate exercise expenses and impairments.

This was despite revenue more than doubled to RM92.53 million in FY16 from RM37.03 million in FY15, contributed by revenue from MITC Engineering Sdn Bhd, which it acquired last year.

In terms of tender book, the company is currently bidding for RM1 billion worth of projects in the country.

Instead of undertaking property development on its own, Lim said ML Global would complement its parent LBS Bina except for a mixed project in Seri Kembangan, Selangor with a gross development value of RM270 million that it was partnering landowner Alaf Cahaya Development Sdn Bhd to develop.

Going forward, Lim said ML Global would continue to focus on affordable housing construction projects as it is a “very sustainable market” as part of its growth strategy.

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