KUCHING: Sarawak Consolidated Industries Bhd (SCIB) has bid for contracts to supply industrialised building system (IBS) products to several new multimillion ringgit school and government health clinic projects in Sarawak.
General manager Chai Tze Khang said the school projects that SCIB had tendered for include those in Miri and Bintulu towns, while the health clinic projects are in Stutong, Siburan in Samarahan Division and in Miri.
“The IBS component is estimated to make up between 10% and 15% of the total development cost of between RM30mil and RM40mil of each new school project.
“We stand a good chance in our bids,” he told StarBiz.
SCIB, which is the sole spun pile and IBS hollow core and panel wall manufacturer in Sarawak and Sabah, has in recent years supplied IBS products to new school projects as well as upgrading and reconstructing dilapidated schools statewide.
The Education Ministry and the Sarawak government recently reached an agreement to utilise the latter’s RM1bil loan repayment to the federal government to repair and upgrade the big number of dilapidated schools statewide.
To fast-track the projects, IBS products are being used for construction works.
Besides the school projects, Chai also expects the demand for IBS products to get a big boost following the recent announcement by Housing and Local Government Minister Zuraida Kamaruddin that all government affordable housing projects would be implemented using IBS technology by 2024.According to Zuraida, the IBS method is cheaper and faster, and would reduce the government’s dependence on foreign workers.Last year, SCIB more than doubled the production volume of IBS precast concrete components to 16,000 tonnes from 7,000 tonnes in 2017 to meet the demand from more construction projects.
The group’s sales of IBS products surged to about RM10mil from RM4.2mil year-on-year.
SCIB targets a 30% increase in sales of the IBS products to RM13mil this year.
Chai said SCIB had increased the sales of precast concrete products, especially foundation piles and box culverts, to the ongoing Pan Borneo Highway project. Last year, the group supplied RM27mil worth of products for the ambitious road project in Sarawak due for completion in 2021.
He said demand for these foundation piles and box culverts would further increase with the implementation of the billion-ringgit Sarawak state water grid project and Sarawak Coastal Road project.
“Demand for such products will also come from Sarawak Second Trunk Road project when it is implemented,” he added. The first package under the second trunk road project is expected to be awarded in the fourth quarter 2019.
SCIB is also looking to supply its products to other state road, bridge and jetty projects, of which the Sarawak government has allocated RM1.1bil in funding.
Chai said the current challenges faced by the industry include the shortage of aggregates,the raw material for making precast concrete products, and labour shortage.
“Because of the shortage, the prices of aggregates have gone up between 15% and 20% which has pushed up our production cost,” he added.
Besides, industry players in Sarawak are facing stiff competition from manufacturers in Peninsular Malaysia, which have the advantage of getting the supply of lower cost raw materials, like cement.
Meanwhile, SCIB has seen the emergence of a new and substantial shareholder in Datuk Mohd Abdul Karim Abdullah.
Mohd Abdul Karim, who is Serba Dinamik Holdings Bhd group managing director/CEO, has recently acquired 19.35 million shares of 22.53% stake in SCIB.
SCIB’s second largest shareholder is Tan Sri Hamid Bugo, also the company chairman, with a 19.32% stake, followed by Sarawak State Economic Development Corp (7.55%).
The entry of Mohd Abdul Karim into SCIB stirred much interest among investors who chased the stock to a multi-year high of RM1.05 on May 30.
Newly appointed SCIB executive director Rewi Hamid Bugo said he planned to meet up with Mohd Abdul Karim soon for potential discussions on the company’s future direction.
Rewi said SCIB would be obliged to offer Mohd Abdul Karim a board seat if there is such a request.