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

KUALA LUMPUR: Otis Elevator Company Inc, the world’s largest manufacturer of elevators and escalators, sees new orders for elevator equipment slowing next year as the weakened ringgit puts pressure on the construction industry in Malaysia.

Otis Elevator Company (M) Sdn Bhd managing director Daniel H Daphne said while the company has yet to feel the pinch of ringgit weakness against the US dollar, it anticipates a difficult year ahead for the construction industry.

“We are taking a more cautious outlook as there are a lot of factors [indicating that] we may have a difficult year ahead in Malaysia. The falling ringgit will put pressure on the construction industry [which will in turn drag down elevator orders],” he told reporters on the sidelines of the Otis High Rise 2015 event recently.

Daphne said the value of Otis’ market in Malaysia is currently slightly below US$100 million (RM413 million) and growing.

“We are confident about our growth prospects [in Malaysia] in the long term to midterm, but are a bit cautious in the short term,” said Otis senior vice-president of global major projects Bora Gulan.

He noted that Otis has been experiencing double-digit sales growth in Malaysia over the past five to six years, but did not give a figure.

“It is good to see such growth as the construction sector in China is slowing down, while Europe is still flat,” he said, adding that sales growth for the group has been driven mainly by markets in North Europe, the United States, the Middle East and Southeast Asia including Malaysia.

Daphne also announced that Otis will be setting up a training centre for its technicians and engineers in Bangi, Selangor, where its sister company Carrier (M) Sdn Bhd has an air conditioner factory.

The training centre, which is expected to train about 200 people annually, will cater to the Malaysian and Southeast Asian markets.

“We chose Malaysia [to set up the training centre] because it has the biggest need in the region,” he noted, adding that it is a growing market with relevant labour pool and has a strategic geographical location.

Daphne, however, declined to reveal the timeline and investment amount of the proposed centre, saying it is still being finalised.

Meanwhile, Gulan said Otis is moving towards developing integrated solutions which combine the elevator system with the security, air conditioning, fire and control systems.

He added that Otis not only focuses on the speed of its elevators, but also looks to improve efficiency and develop energy savings and smarter elevator systems.

“Otis spends about US$150 million a year on research and development,” Gulan said, adding that Otis focuses on sustainable energy and developing intelligence dispatching system.

“We are also looking at developing elevators which use solar power,” he added.

Going forward, Gulan said there will be more mega cities in the future, which will boost the number of high-rise buildings and the need for elevators.

“There are now 34 mega cities in the world. The number is expected to grow to 47 by 2020,” he added.

Otis is part of UTC Building & Industrial Systems, a unit of New York-listed United Technologies Corp, a leading provider for the aerospace and building systems industries worldwide.

To date, Otis has provided elevator systems for the Petronas Twin Towers, KL Tower, Menara Maybank, Menara Public Bank and The Intermark, among others.

Otis started its operation in Malaysia in 1920, when it installed the elevator at Eastern & Oriental Hotel in Penang.

Internationally, it has installed elevators in some of the world’s famous structures including the Eiffel Tower, Empire State Building, Shanghai World Financial Centre and Burj Khalifa.