Inteligent building
Gaining ground in progressive construction works

Commercial projects and private investment initiatives are pumping new life into Malaysia’s urban landscapes

Malaysia’s construction sector has been mirroring the country’s general positive growth throughout the last three years, boosted by private investment initiatives in property development and commercial projects such as malls and business centers. The construction of residential property is especially on the rise due to the liberalization of foreign investment laws, which now allow foreigners to acquire landed properties exceeding $40,000. These new regulations increased foreign participation in housing transactions by an astounding 95% during the first half of 2004, which was primarily based in the sales of condominiums and apartments in the major urban areas. Although growth in larger infrastructure projects has been slowed somewhat by Prime Minister Badawi’s administration’s attempt to curtail public spending in the short term, various large-scale projects have been completed this year, including Phase One of the East Coast Highway, the SILK Highway, the Penchala Link and New Pantai Expressway. Ongoing projects include a power station in Tanjung Bin and a hydroelectric power project in Sarawak. The construction sector currently employs nearly 8% of the Malaysian workforce and represents a large share of the companies listed on Bursa Malaysia.

Much of the success of Malaysia’s construction sector is due to strong partnerships between the government and the private sector, which are a reflection of the principles set out in the government’s Malaysia Incorporated policy, as well as increased liberalization in the sector. The country’s first experience of a successful partnership of this type was in 1988 when the government, after an initial investment of nearly $8 million, granted the concession of various road works to United Engineers, who completed the roads and were given the right to collect tolls for the next 33 years. The initial investment made by the government has enabled United Engineers to charge reasonable tolls for users – a winning solution for all. Minister of Works Samy Vellu comments, “I am pleased to say that in the area of public-private sector cooperation in Malaysia, the private sector has placed its full trust in the government and vice versa. The infrastructure sector is now well dominated by the private sector and this system has proved to be very successful.” According to Mr. Vellu, existing opportunities for investors in infrastructure include the construction of a coastal road from Penang to Banting. He also points out the fact that Malaysian companies have begun to venture abroad, and to date have worked on projects in India, the Middle East, and Eastern Europe.

SAMY VELLU Minister of Works

ARMAN ABDULLAH Chairman of CIDB

CIDB is the arm of the Ministry of Works in charge of promoting business opportunities for Malaysian construction companies abroad. The organization acts as project coordinator, locating appropriate projects around the globe, enlisting bids from Malaysian companies, and finding adequate foreign partners. The organization has had particular success in Muslim countries, and Chairman Arman Abdullah says that this could be an opportunity for American contractors. He explains, “American contractors in Malaysia have worked very well with the local contractors in joint ventures. We believe that we can use this good relationship to gain ground in other countries.

As Malaysia is a country that maintains good relations with third world countries, especially Muslim countries, it is better able to position itself, and U.S. partners could take advantage of this position.” Mr. Abdullah says that in return, Malaysian companies would benefit from American technological know-how, a priority focus for the industry in its drive to expand its global operations. CIDB was originally established in 1994 to develop and guide the Malaysian construction sector. The organization has since provided education and training to industry members, and has worked to promote the technological development of the private construction sector.

A private sector company that has greatly benefited from the recent boom in residential construction in the country is White Horse, Malaysia’s leading manufacturer of ceramic tiles. Not only has the company managed to secure a 30% share of the domestic market, but it has also enjoyed a very successful beginning to its regional expansion. Managing Director Mr. Liao Yuan Shun states, “For the last six months White Horse has been producing at full capacity, and yet we are still experiencing problems in meeting overseas demand in Singapore, Thailand, the Philippines, Australia, and Hong Kong.”

Galloping toward a winning position in Malaysia’s ceramic industry

White Horse strives to continuously increase the quality and variety of its products and is currently carving itself a niche in the high-end market

Manufacturing continues to dominate the Malaysian economy and accounts for the majority of its exports. Registering growth of 4% in 2002, and 6.5% in 2003, the industry is eager to move forward with increased regional expansion and to continue to promote the high quality associated with the ‘Made in Malaysia’ branding. White Horse Ceramic Industries is one of these successful Malaysian companies and the country’s leading ceramic tile manufacturer. Producing a wide variety of high quality tiles ranging from fully vitrified homogenous glazed, textured, and polished tiles to glazed ceramic wall and floor tiles, as well as special decorative border tiles of various shapes and sizes, White Horse has carved a niche for itself both at home and abroad for quality products.

LIAO YUAN SHUN Managing Director of White Horse

All White Horse tiles bear the hallmark of advanced technology, stringent quality assurances and the utmost dedication to design excellences. Managing Director Liao Yuan Shun says that the company’s heavy investment in technology throughout the 1990s has paid off and that regional demand for White Horse’s products almost exceeds turnout. The company plans to invest a further $26 million this year to increase capacity and further the company’s ability to cater to future high-end niche markets. Mr. Liao comments, “Over the last three to four years, we have been experiencing growth of over 30% in terms of absolute value, and this could have been higher if we had had greater capacity. We are doing very well as a Malaysian-based manufacturer, both in the local market and the export market, and our growth is based on the reputation for quality of the White Horse brand, its product, and its distribution units.” White Horse currently exports to Hong Kong, Thailand, Singapore, Australia, and the Philippines, and plans future penetration of the U.S. and European markets once their new production line is up and running.