ML Global partners Sany Construction for RM40 mil IBS plant
KUALA LUMPUR (July 17): ML Global Bhd is partnering with Sany Construction Industry Development (M) Sdn Bhd, a subsidiary of China's Sany Group Co Ltd, to set up a precast concrete panel manufacturing plant in Nilai, Negeri Sembilan, which will cost up to RM40 million in initial investment.
The two parties had signed a memorandum of understanding for the joint venture (JV) today, in which ML Global will hold a 51% stake while Sany Construction will hold the balance 49%.
The partnership comes ahead of the Construction Industry Development Board (CIDB)'s aim to enforce 50% industrial building system (IBS) usage in the private sector and 70% for the public sector by 2018, as outlined in the Construction Industry Transformation Programme (CITP).
"The initial investment for the first phase of the plant will be around RM35 million to RM40 million, which will be divided between the JV partners as per the equity holdings.
"Phase 1 of the facility will take six months to complete and we aim to commence production by the end of the first quarter of 2017," said ML Global executive director and CEO Datuk Richard Lim.
Upon completion of the first phase, the plant will have the capacity to produce precast concrete panels for up to 2,000 apartments per year.
Lim said ML Global has plans to expand the facility going forward, as the first phase of the plant is expected to be fully utilised upon completion.
"2,000 units per year is insufficient for our current construction. Right now we are building about 6,000 units per year. We will take it one step at a time as we have to make sure that the transition to this new technology is smooth," he said.
In terms of costs, Lim said the construction costs are expected to remain the same as the current construction methods for the first two years, after including transportation costs.
However, he said the utilisation of IBS lowers construction time by 30%, allowing for faster delivery of projects, adding that the expected continued increase in wages will make IBS relatively cheaper than current construction methods, as labour requirements for IBS is significantly lower.
ML Global gained 0.87% or 1 sen to RM1.16 with 170,600 shares traded in the morning session today. — theedgemarkets.com