KUALA LUMPUR: Construction company ML Global Bhd is set to expand in the industrialised building system (IBS) segment, as it forms a joint-venture (JV) which will see an initial investment worth up to RM40mil in the first phase.
ML Global, which is 55.3% owned by LBS BINA GROUP BHD, has inked a memorandum of understanding (MoU) with Sany Construction Industry Development (M) Sdn Bhd to form a JV, as it seeks to establish a precast concrete panel manufacturing plant within the next six months. Sany Construction is a subsidiary of China-based Sany Group Co Ltd, which is the sixth largest heavy equipment manufacturer in the world.
The JV, which will be owned by ML Global (51%) and Sany Construction (49%), will see the construction of the partnership’s first IBS plant in Nilai, Negeri Sembilan.
Upon the completion of the first phase of the IBS solution, ML Global will be capable of building some 2,000 apartment units annually.
According to ML Global group managing director Tan Sri Lim Hock San, the JV will reduce ML Global’s dependence on manual labour and serve as a buffer in the event of possible rise in labour-related costs.
“We believe that the implementation of this IBS system will improve ML Global’s competitiveness in the construction industry.
“While the construction costs under the IBS system are expected to remain the same compared to conventional construction methods for the first two years, cost savings will occur if labour cost increases as seen historically over the past two years.
“The JV’s first project will be the SkyLake Residence in Puchong, a two-block serviced apartments by LBS Bina. The project will comprise 746 units in total,” said Lim.
IBS or pre-fabricated construction refers to the manufacturing of construction components in a controlled environment, placed and assembled into construction structures.
ML Global executive director and chief executive officer Datuk Richard Lim Lit Chek projects the JV’s first IBS plant to commence its production by the end of first quarter next year.
“Our precast IBS solutions will allow us to reduce approximately 15% of our construction workers.
“Not only that, a project’s construction period can be effectively reduced by 30% by using the IBS system.
“Our IBS solutions will benefit significantly from LBS Bina’s RM11.5bil-worth property development which is expected to be rolled out in the next three years. Currently, 80% of our construction jobs come from our parent company,” he added.
At present, ML Global’s order book stands at RM2bil while its tender book is valued at RM1bil.
The Main Market-listed ML Global closed 0.87% or 1 sen higher at RM1.16 yesterday, with 410,600 shares changing hands.
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