Tag: construction

  • Look to Singapore, Sarawak for construction jobs, says HLIB

    Look to Singapore, Sarawak for construction jobs, says HLIB

    Contractors should look to neighbouring Singapore and Sarawak for jobs, as a slowdown in award of contracts is expected in 2019, according to Hong Leong Investment Bank (HLIB). The research house said in a note that contract flows are expected to slowdown on the back of slight year-on-year (y-o-y) decline of 0.4% in development expenditure to RM54.7 billion.

    For the cumulative period of 12 months, domestic and foreign contract awards amounted to RM18.3 billion and RM406 million, representing a y-o-y decrease of 37% and 85% respectively. Contract flows continue to slow down after a brief rebound in Q3 18 as the government re-prioritised major infrastructure projects.

    HLIB said foreign contracts (piling works) from Singapore amounted to RM148 million in Q4 18, which is an indication that civil infrastructure projects remain robust in Singapore. HLIB expect more domestic contractors to bid for foreign jobs especially in Singapore given its geographical proximity and the continued slowdown in the domestic construction landscape.

    It expects contractors under its coverage such as Gamuda, Kimlun and Sunway Construction to compete for jobs there.

    “We expect smallish basic infrastructure projects such as road upgrading, hospital, water, sewerage and rural area development projects will be rolled out by government this year which we believe is insufficient to spark any enthusiasm back towards the sector. However, we do not discount potential events such as award of Phase 2 of Klang Valley Double Track project (RM5 billion) and news flow on ECRL (possible revival) and Pan Borneo Sabah could alleviate the pessimistic sentiment towards the sector,” it added.

    While the job flows in Peninsular Malaysia looks lacklustre following the change in government, Sarawak appears to have prospective jobs offers.

    “We understand that industry players are aiming for jobs in Sarawak as its chief minister mentioned emphasis will be put on state water and rural road projects following the decision to shelve Kuching LRT project,” it said.

    Funding for those projects is expected to come from the Sarawak state reserve of RM31 billion which is likely to insulate the projects from risk of cuts in federal government spending. The call for bids for the Sarawak Coastal Road and Second Trunk Road which has an estimated combined value of RM11 billion are expected in the near term.

    In that light, HLIB maintains a “neutral” call on the construction sector post changes in federal government and the scrapping of mega rail projects.

    “The domestic construction industry landscape is expected to remain challenging and we do not expect a significant improvement in the near term. The 37% decline in domestic contract awards in 2018 supports our view,” it added.

    Nonetheless, high orderbook levels (average cover ratio of 4.5 times) following the robust job flows in the past two years coupled with rock bottom valuation (0.5 times price-to-book ratio) should cushion further downside amid subdued near term industry prospects.

  • Retailers, mall operators embrace high technology

    Retailers, mall operators embrace high technology

    Malaysian retailers and mall operators are jumping on the technology bandwagon, adopting technologies such as shopper tracking systems and facial recognition cameras, using data analytics to capture important shopper information. Sunway Velocity Mall general manager centre management Danny Lee said the mall completed the installation of its shopper tracking system in early December that identifies a unique ID of each mobile phone carried by shoppers, and is testing the system now.

    “It enables us to know how many times a person comes to the mall and where they go. At the same time it tells us the number of shoppers at the mall and is able to give us an accurate count of how many people visit the mall every week or month. This is phase one.

    “This will then later link into us getting data of who they are so that we can use that as an intelligence system to know our customers and to push promotion to them. For example, we’d be able to detect automatically if it’s your birthday today when you visit the mall, and if there’s a special promotion in certain outlets during your birthday, you’d get certain discounts. We’ll be working on that in phase two,” Lee said recently.

    “How the system works is that it will detect shoppers who carry smartphones. The shoppers’ travel history, traffic pattern will be recorded. Insights of shopper traffic flow in the mall, visit frequency (new traffic or returning traffic) and dwell time can be viewed on the online portal. There is also provision for integration with mobile application (to identify shopper profile to offer more personalised engagement), as well as additional reports based on user requirement.”

    Adding that it has a formula to include children and discount double counting, Lee said Sunway Pyramid had rolled out the shopper tracking system first, followed by Sunway Velocity.

    “It lets us know whether our campaign for a period of time is effective or not compared to other campaigns. In this mall (Sunway Velocity), we have 55-56 sensors throughout the mall. So it covers different zones and it can track where a person goes to, from one zone to another, and capture how many people are there. At what time, how many people are there in this atrium… we’re able to generate reports on that,” explained Lee.

    He revealed that the set-up costs for this system range from RM120,000 to RM150,000, with recurring costs of RM10,000 every month per mall.

    “Some malls have (this system) but not many have this in the Klang Valley, compared with malls in Singapore that have a lot more.”

    Meanwhile, MRCA Academy, the training arm of the Malaysia Retail Chain Association (MRCA), is promoting awareness on technology adoption, especially in the areas of facial recognition and data analytics, to help MRCA members be more efficient in running their retail businesses.

    MRCA Academy deputy chancellor Stan Singh-Jit, who is also National ICT Association of Malaysia councillor, said technology will be a catalyst that will help retailers grow their business and that it is a tool that retailers should take advantage of.

    Stan is the founder and principal consultant of Ironhorse Asia Sdn Bhd, which provides solutions for in-store point-of-sale requirement, head office merchandising needs, warehousing, supply chain management, web-store, internet business, social media consultation, maximising return on investment via customer analytics, harnessing on merchandising analytics, among others.

    He said while the recording of images is illegal due to the Personal Data Protection Act, there is another facial recognition technology that captures the identity of shoppers in a different way.

    “It tails the person… it tells you whether the shopper is a male or a female and gives you the person’s age group. If I have data today that tells me the people that come to my store, their age and gender groups, I’m able to do more of what I’m selling. This is an important factor that is missing in the retail scene.

    “Facial recognition can tell whether the person is a staff or supplier. If a customer walks past your store but doesn’t walk in, it can also tell you how many people didn’t come into your store. It’s a way to find out why people don’t come in. And if my store is here but you spend more time looking at the merchandise there, that tells me a story,” explained Stan.

    He said this method differs from a footfall counter machine, which counts every walk-in, walk-out and hence the latter may not produce accurate numbers.

    He disclosed that since this facial recognition technology is new, there are five proofs of concept for such technology in the Klang Valley at the moment, of which one is for a department store. He said that a camera may cost some RM130. A department store may have three to four floors and many cameras on each floor.

    “All good things about buying begins at the store and there are many touchpoints in the store. As a customer walks into the store, how do you capture those points… how do you prioritise the value…. we’re helping MRCA members to understand the technology and how they can use it,” he said.

  • New Lego land in China

    New Lego land in China

    The site where a Legoland will be built in Chuncheon, Gangwon, on Friday. The development of the Legoland, about the same size as the Legoland in Johor Bahru, Malaysia, has been approved by the Gangwon government. British amusement park developer Merlin is in charge.

  • Semen Indonesia Snaps Up LafargeHolcim Unit to Bolster Market Lead

    Semen Indonesia Snaps Up LafargeHolcim Unit to Bolster Market Lead

    Cement maker Semen Indonesia is buying the local unit of Swiss rival LafargeHolcim for around $917 million, as it seeks to extend its dominant position in Southeast Asia’s largest market. Semen Indonesia said in a statement it had signed a deal to acquire LafargeHolcim’s 80.6 percent stake in Holcim Indonesia, which is the third-biggest cement producer in the country.

    A fully owned subsidiary of the state firm would launch a mandatory offer for the remaining shares owned by public shareholders, it said.

    “In the competitive environment of the national cement industry, the combination between Semen Indonesia and Holcim will be stronger and larger,” Semen Indonesia president director Hendi Prio Santoso said.

    The company said the acquisition will boost its total cement capacity to 53 metric tons per annum. Analysts say this will give the combined entity a total capacity share of about 50 percent, in a market that has 15 companies.

    Sources familiar with the matter said Malaysian infrastructure company YTL Corp and privately owned Chinese firm Hongshi Cement had also been among the final bidders but the strategic fit with Semen Indonesia helped LafargeHolcim’s Indonesian unit to win the auction.

    The initial round of the auction drew interest from about a dozen companies, including from Japan, the Philippines and other countries, the sources said.

    YTL and Hongshi declined to comment.

    A spokeswoman for LafargeHolcim said it had received strong interest from bidders for its Indonesian business but declined to give details on the parties involved.

    Though President Joko “Jokowi” Widodo’s infrastructure push has fueled a boom in the building of airports, roads and housing projects, an aggressive expansion in the industry and entry of newer players such as Anhui Conch has created excess capacity and a price war in the last few years, analysts say.

    Semen Indonesia has secured financing from local, regional and international banks such as BNP Paribas, said the sources, who declined to be named as complete details of the deal have not been announced.

    “This secures Semen Indonesia’s position as a market leader for many years. Cement prices are improving and there is significantly less new capacity coming,” one source said.

    In an August report on potential consolidation in the Indonesian cement industry, Deutsche Bank analysts said: “A bull-case scenario would be that domestic consolidation reduces the number of players competing in the overcapacity market, supporting higher ASP [average selling prices] and a profitability recovery.”

    “A bear-case scenario would be a prolonged condition in which the industry loses its pricing power due to the new players’ strategy to overtake market share,” the report said.

    Semen Indonesia said the acquisition would give it significantly larger capacity and broader product portfolio and geographical footprint, while LafargeHolcim, the world’s largest cement maker, said in a separate statement that it was selling the business as it reviews its portfolio to improve its financial strength.

    LafargeHolcim’s local unit has four cement plants with a capacity of 14.8 metric tons per annum and 30 ready-mix plants, Semen Indonesia said.

    It was advised by BNP Paribas, while LafargeHolcim was advised by Citigroup.