joint venture

 
 

MGB completes first batch of IBS-built homes ahead of schedule

PETALING JAYA: MGB Bhd, a subsidiary of LBS Bina Group Bhd, has completed its first batch of Industrialised Building System (IBS)-built homes in LBS Alam Perdana in 12 months instead of 18 months.

Group managing director Tan Sri Lim Hock San said LBS Alam Perdana is MGB’s first IBS precast concrete development.

“The mobile IBS factory at LBS Alam Perdana has contributed significantly in terms of achieving greater efficiency, productivity and quality. It has enabled us to customise the precast units according to the project’s requirements, deliver the units within a shorter time frame and with superior quality. This has resulted in early completion of the homes,” he said in a statement.

The project, comprising 673 units of double-storey terraced homes, were constructed using IBS precast concrete components produced
by MGB’s first mobile factory which commenced operation in May 2018.

The 10-acre mobile factory is capable of producing up to 2,000 units of properties annually.

In its statement, LBS said with IBS, it was able to fast track the delivery of homes, enjoying up to 33% savings on construction time.

In addition, dependency on manual labour was reduced by 31%, achieving a 49% percent reduction in total on-site labour costs.

MGB has been producing IBS properties for the last 10 years. The group started producing IBS steel formworks and aluminium formworks, and recently added pre-cast concrete units to its offerings.

In March this year, MGB invested RM40 million to open its second IBS facility, a permanent precast concrete plant in Nilai.

The new permanent factory is a joint venture between MGB and Sany Construction Industry Development (M) Sdn Bhd, and is capable of producing up to 2,000 units of properties for Kita @ Cybersouth township.


OCR Group to launch ‘tallest development’ in Kuantan

PETALING JAYA: OCR Group Bhd aims to launch Vertex Kuantan, its second project in the city, by the first half of 2023, said group managing director Billy Ong Kah Hoe.

The mixed development, dubbed the “tallest development in Kuantan”, will have a gross development value (GDV) of RM268 million.

Meanwhile, Ong (pix) said the group had also seen a healthy take-up rate of 85% for the first phase of its affordable housing project, PRIYA Scheme Kuantan.

“Kuantan is evidently one of the most vibrant locations in the East Coast of Peninsular Malaysia, with major investments and industrial developments such as Malaysia-China Kuantan Industrial Park as well as the upcoming East Coast Rail Link.

“With the rapid urbanisation in Kuantan, we believe that this project not only provides us access into the up-and-coming property hotspot in Kuantan, but also supports the state’s home ownership drive among the masses,” he said in a statement.

The PRIYA Scheme Kuantan is a 50:50 joint venture between OCR’s subsidiary O&C Properties (Kuantan) Sdn Bhd and Yayasan Pahang.

The development is currently the largest affordable housing scheme in Kuantan.

The RM166 million GDV project comprises 978 units of single-storey terrace houses and 146 units of single-storey semi-detached homes starting from RM137,000. The project is slated to be completed in the second quarter of 2021.


OCR to launch RM268m GDV Vertex Kuantan project in 1H20

KUALA LUMPUR, Oct 21 — Boutique property developer OCR Group Bhd is targeting to launch its second Kuantan project, named Vertex Kuantan, in the first half of 2020. The RM268 million gross development value (GDV) mixed development will be the…


Metronic’s major shareholder Lee Kim Yew calls for special audit

PETALING JAYA: Metronic Global Bhd’s major shareholder Tan Sri Lee Kim Yew (pix) has called for a special audit to be carried out by independent auditors.

In a press statement today, Lee said he had instructed his solicitors on September 30 to write to the board of directors to request that the special audit be undertaken on its recent ESOS option, a joint venture, a proposed private placement and on the cash flow position of the group.

The statement also said Metronic had replied to Lee on October 7, and said a board meeting will be held tomorrow. The group said it would respond to Lee on the same day with the outcome of the meeting.

Lee holds a 29.01% stake in the group.

On August 7, Metronic Engineering Sdn Bhd, a wholly-owned unit of Metronic Global entered into a joint venture agreement with Zhuhai Singyes New Materials Technology Co Ltd to develop smart city solutions in Malaysia.

Metronic Engineering would provide RM20 million in capital for the project, while Zhuhai Singyes would provide the technical know-how for new technological solutions.

The joint venture would be on an 80:20 basis for Metronic Engineering and Zhuhai Singyes respectively.

Then on August 8, the group announced a private placement of up to 10% of the total number of issued shares of the company to raise up to RM9.4 million to fund smart city solutions.

As for the group’s cash position for its financial year ended June 30, 2019, Metronic Global had RM58.78 million in cash and cash equivalents. However, there is no comparison available as the group changed its financial year end in the preceding period.


Grand-Flo firm plans Kampar project with RM88m GDV

PETALING JAYA: Grand-Flo Bhd’s wholly owned subsidiary, Innoceria Sdn Bhd, has entered into a joint venture agreement with Pembinaan Maka Cemerlang Sdn Bhd (PMC) to develop 13.23 acres of leasehold land in Kampar, Perak.

The project will be a mixed development comprising 352 units of single-storey terrace houses and 24 units of double-storey shop houses, with an estimated gross development value of RM88.2 million.

The group currently has two ongoing development projects in Batu Kawan and Bukit Mertajam which are almost completed.

“The proposed joint venture represents a strategic opportunity for the group to replenish its existing property development projects.

“The Kampar project is expected to improve the revenue and profit contribution from the property development segment as well the overall financial performance of the group moving forward,” it said in a filing with Bursa Malaysia.

The proposed joint venture is expected to generate an estimated gross development profit of RM14.13 million.

The project will be financed via a mix of internally generated funds, borrowings and part of the proceeds raised from a proposed private placement.

In the same filing, Grand-Flo said it would undertake a private placement of up to 47.04 million new shares to independent third-party investors, which is expected to raise gross proceeds of RM11.76 million for its property development activities.

Grand-Flo said a private placement had been deemed to be the best option for fund raising as it would not have to incur interest expense or service principal repayments.

The proposals are expected to be completed by the fourth quarter this year.


Regal Path secures RM1.1b financing for Pavilion Bukit Jalil

PETALING JAYA: Regal Path Sdn Bhd has secured syndicated banking facilities of up to RM1.1 billion for the acquisition of Pavilion Bukit Jalil mall from Malton Bhd’s wholly owned subsidiary Pioneer Haven Sdn Bhd.

Regal Path said in a statement that it had on October 10 signed the facilities agreement with four banks, namely CIMB Bank Bhd, Malayan Banking Bhd, OCBC Bank (Malaysia) Bhd and United Overseas Bank (Malaysia) Bhd. The four banks are also the joint mandated lead arrangers.

With an estimated net lettable area of 1.8 million square feet, Pavilion Bukit Jalil mall is part of the 50-acre Bukit Jalil City integrated lifestyle project developed by Malton. The mall is expected to be completed by March 2021.

Regal Path is a joint venture company of Malton’s wholly-owned subsidiary Khuan Choo Realty Sdn Bhd, Qatar Investment Authority’s (QIA) wholly owned subsidiary Q PBJ Sdn Bhd, and Tan Sri Desmond Lim via his private vehicle Jelang Tegas Sdn Bhd.

The three strategic investors had on May 28 entered into a subscription agreement with Regal Path to participate in the ownership of Pavilion Bukit Jalil mall.


China sets timetable to end finance ownership caps

BEIJING, Oct 11 — China’s securities regulator has set a timetable to remove foreign ownership limits in finance companies next year, as Beijing seeks to attract overseas investment to boost a slowing economy. Foreign firms would be allowed to…


Ann Joo, Southern Steel to form JV for long steel manufacturing biz

PETALING JAYA: Ann Joo Resources Bhd and Southern Steel Bhd have entered into a memorandum of understanding (MoU) for the formation of 55:45 joint venture company (JV co) in relation to their long product steel manufacturing businesses.

This entails the proposed sale by Ann Joo of the entire equity interests in Ann Joo Integrated Steel Sdn Bhd, Ann Joo Steel Bhd and Saga Makmur Industri Sdn Bhd to the JV co for RM907.5 million.

It also entails the proposed sale by Southern Steel of the entire equity interests in Southern Steel Rod Sdn Bhd, Southern Steel Mesh Sdn Bhd, Southern PC Steel Sdn Bhd and Danstil Sdn Bhd, the business of manufacturing, sales and trading of steel billets and steel bars, and certain parcels of its land to the JV co for RM742.5 million.

“The proposals are intended to result in the JV co becoming a 55%-subsidiary of Ann Joo and a 45%-associated company of Southern Steel via the issuance of new shares in the JV co to Ann Joo and Southern Steel,“ Ann Joo and Southern Steel said in their stock exchange filings.

Ann Joo and Southern Steel are exploring various options to achieve the optimal structure for the proposal, including, but not limited to, the transfer of the sale assets to a new JV co to be incorporated; Southern Steel or a wholly-owned subsidiary of Ann Joo as the JV co; or Ann Joo or a wholly-owned subsidiary of Southern Steel as the JV co.

“The proposal aims to establish a joint venture comprising the long product steel manufacturing businesses of Ann Joo and Southern Steel, both of which are established players in the steel industry, to promote business efficacy and obtain synergistic benefits for such businesses. The proposal brings together the strengths of both Ann Joo and Southern Steel with a vision to create a highly competitive long product steel manufacturer in Southeast Asia.”

The proposal also seeks to realise various benefits, including synergy from operational efficiency gains and economies of scale with a strong balance sheet to support long-term expansion opportunities.

Ann Joo and Southern Steel will enter into definitive agreements to effect the proposal within 90 days from the date of the MoU.

Trading in Ann Joo and Southern Steel shares were suspended in the morning session pending the material announcement. At 3.10pm, Ann Joo and Southern Steel were trading 7 sen and 3 sen lower at RM1.16 and 95 sen, respectively.


IBS shortage may impede supply of affordable housing

KUALA LUMPUR: The government wants to use Industrialised Building System (IBS) technology to meet its 100,000 affordable housing units a year target over the next 10 years.

Digital IBS, that makes use of the Building Information Modelling (BIM) system, will speed up the completion of the prefabricated houses, as well as improve their quality.

However, Malaysia’s current capacity for the production of IBS components is far less than what builders will require in order to attain the target set by the government.

According to Construction Research Institute of Malaysia (CREAM) technical expert Prof Dr Zuhairi Abd Hamid, local IBS manufacturers can only produce enough components to build about 25,000 housing units per year.

CREAM is the research and development arm of the Construction Industry Development Board Malaysia, a statutory body under the Ministry of Works.

“This means they can only supply 25 percent of the components required under the government’s 100,000 affordable units a year plan,” he told Bernama, adding that priority should be given to increasing the supply of IBS components to enable the government to meet its target.

HAVE TO INCREASE IBS OUTPUT

In IBS, prefabricated components — that are manufactured off-site — are used for the construction process. Once the components are installed, there is little additional on-site work involved, resulting in faster completion times, greater productivity, less manpower requirement and lower overall construction costs. In fact, construction firms can save up to 45 percent in labour costs by using IBS; for example, if 40 workers are needed for a project using conventional building methods, only seven workers are required if IBS is used.

In Malaysia, IBS components are produced using the open system and closed system.

The open system entails the production of components such as precast concrete, steel frames, timber frames and blocks, as well as steel and wooden trusses for the roof and bathroom pods. Most of the players involved in this industry are small- and medium-sized enterprises.

The closed system involves the production of the complete range of IBS components and this industry is monopolised by several large manufacturers.

Currently, about 274 IBS component manufacturers and 26 IBS distributors are registered with the Construction Industry Development Board (CIDB) Malaysia, said Zuhairi.

“We’ve to step up efforts to increase the number of IBS component producers in this country. When we have more producers and distributors, the prices will become more competitive,” he said.

TRANSFER OF TECHNOLOGY

It is cheaper to build a house using conventional methods — about RM70 per square foot against RM90 per sq ft using IBS technology. Nonetheless, for large-scale projects, the innovative construction method is more viable in view of the huge number of units built repetitively.

“IBS productivity is thrice that of conventional building methods. The yearly target of 100,000 affordable units certainly cannot be achieved if the houses are built in the conventional manner but through IBS it is possible,” said Zuhairi.

Recently, CREAM-CIDB inked a memorandum of understanding with Gamuda Industrial Building System Sdn Bhd to enhance productivity in Malaysia’s construction sector.

According to Zuhairi, not many people venture into IBS component manufacturing on a large-scale basis because of the need for hefty capital outlays for the factory operations, purchase of equipment and machinery, and logistics.

Besides that, skilled and experienced workers would also have to be hired to operate the sophisticated machinery and equipment, he added.

He said importing IBS components from countries like China may resolve the shortfall faced by Malaysia and help to meet the demands of the affordable housing sector.

However, he pointed out, if the government were to choose the import option, it should ideally be tied in with transfer of technology which would benefit the nation over the long term.

“Any collaboration between the government and foreign IBS producers should take place in the form of joint ventures to facilitate the transfer of technology.

“If transfer of technology is not included, the deal will only help to meet our immediate needs (for IBS components) but it will be a great loss to our country (over the long term if we don’t learn the technology),” he said.

BE MORE CREATIVE

IBS technology also has its drawbacks, one of which is the homeowner’s inability to carry out renovations as any alteration in the structure can weaken its beams.

Due to this factor, said Zuhairi, many prospective house buyers, particularly those intending to buy terraced units, tend to think twice before purchasing houses built using the IBS technology. Since condominiums and apartments face minimal renovations, they are not weighed down by the disadvantage.

To render IBS-built terraced houses more attractive to buyers, he urged architects to be more creative and flexible when designing the units.

Zuhairi, who has been involved in IBS research for almost 20 years, also felt that while small-scale housing developers would currently prefer to use the cheaper, conventional construction methods, they may have to migrate to IBS in four or five years’ time.

“In four or five years’ time when Malaysia has more IBS factories and it gets harder to secure cheap manpower, small-scale developers may migrate to IBS,” he said.

PPVC MORE COSTLY

The government too has been actively promoting the use of IBS for more than a decade now. In 2008, the Treasury issued a circular requiring all government construction projects valued at RM10 million and above to have at least 70 percent IBS content.

Currently, the usage of IBS stands at 78 percent in the public sector and 31 percent in the private sector.

In a bid to push up the IBS adoption rate to 50 percent in the private sector by 2020, the government announced in January 2018 that private developments valued at RM50 million and above would have to use IBS technology.

The use of IBS in the local construction industry can be traced back to the 1960s when the Pekeliling Flats in Kuala Lumpur and Rifle Range Flats in Penang were built using the technology.

IBS was developed by several European countries such as Denmark after the second world war to enable them to swiftly rebuild their devastated housing settlements.

Singapore, which started using the IBS technology widely during the 1980s, has now shifted to a more efficient construction technology known as Prefabricated Prefinished Volumetric Construction (PPVC), where free-standing three-dimensional (3D) modules — complete with internal finishes, fixtures and fittings — are built in an off-site fabrication facility before they are delivered and installed on-site.

Zuhairi said while PPVC may eventually arrive on Malaysian shores, it would, however, not be suitable for affordable housing projects due to the high costs involved.

“Nevertheless, the construction technology for affordable housing will improve… we started with 2D IBS technology and this is set to develop further in line with Industrial Revolution 4.0, which will have an impact on our nation’s construction industry,” he added. – BERNAMA


Lotte Chemical Titan receives shareholders’ nod to sell 49% stake in Indonesian unit

KUALA LUMPUR: Lotte Chemical Titan Holding Bhd (LCT) received minority shareholders’ support to dispose of a 49% stake in Lotte Chemical Indonesia (LCI) to its major shareholder Lotte Chemical Corporation (LCC).

Minority shareholders voted 99.978% in favour of the disposal at the company’s EGM today. The disposal, valued at RM3.6 billion, will see LCC coming on board as a joint venture partner to develop the LCI New Ethylene Project (LINE Project) in Cilegon, Indonesia.

The LINE Project is an RM18 billion integrated petrochemical facility with a capacity of a million tonne per annum naphtha cracker and other related downstream petrochemical facilities.

With the funding received from the disposal, the company will utilise its IPO proceeds, internally generated funds and borrowings to raise the rest of the RM18 billion needed for the project.

Construction of the facility will start in the second half of next year, and is expected to be completed in three years.