Building global success


  • Construction
  • Monday, 09 Dec 2019

International acclaim: MEB’s completed catering facility for the Hamad International Airport in Doha, Qatar.

MORE than 15 years after Muhibbah Engineering (M) Bhd (MEB) received Construction Industry Development Board (CIDB) Malaysia’s International Achievement Award, it still retains its position among the top Malaysian construction companies for its global reach.

The group, which had a turnover of RM3 to RM5mil just prior to its listing in 1994, currently registers approximately RM1.8 to RM2.1bil in revenue across industries in different geographies.

Thus far, it has completed projects in Australia, Singapore, Syria, Sudan and Yemen. While ongoing work is being done in Myanmar, Qatar and Cambodia, Mac added that the group was not resting on its laurels but actively looking into more overseas projects in Indonesia and the Philippines.

One of the factors of its success, said MEB deputy chief executive officer Mac Chung Jin, was its participation in the internationalisation missions undertaken by CIDB.

Although the group had previously built three airports in Phnom Penh, Sihanoukville and Siem Reap in Cambodia during the 1990s, it was also through CIDB - one of the first agencies to have led overseas construction missions in the early 2000s - that MEB secured work in eight countries.

He shared, “CIDB was one of the first agencies to have lead overseas construction mission in the early 2000s, of which MEB was a part of. Datuk Ahmad ‘Asri Abdul Hamid and Mohd Zaid Zakaria led many of the trips, to countries such as Qatar, Syria and Libya to promote Malaysian construction companies there.

“These overseas programmes facilitated by the government helped to overcome barriers with government-to-government relations. It helped open doors between countries, ultimately creating access to governments, which is the first step to winning projects.

Mac: Internationalisation is linked to localisation. There is no international without first localising.Mac: Internationalisation is linked to localisation. There is no international without first localising.

“Undoubtedly, there is a lot of work involved between ‘step one’ and ‘step ten’, but breaking barriers is an important first step.”

Other alumni of CIDB’s overseas missions are today’s industry heavyweights, including familiar names such as IJM Corporation Bhd, Gamuda Bhd and UEM Sunrise Bhd.

In addition, teamwork is the foundation for MEB’s success, with its name a testament to that belief.

“The word ‘muhibbah’ means togetherness in Bahasa Malaysia. This togetherness comes in many different forms, including our relationship with clients and consultants.

“We need to work together as a team and that is how we succeed. We uphold the value of working together, whether internally or with the client,” Mac said.

MEB also has a strong management team, as its senior management have two to three decades’ worth of experience.

That said, the construction business is cyclical “in terms of getting projects and making profit”, which poses a big challenge especially with changes in orders for projects and slow payments that affect cash flow.

He opined, “As such, staying in pure construction is risky. Some construction players have become their own developers, which takes away certain risks of non-payment.”

MEB’s ongoing diversification efforts have seen it striking a better balance among its revenue channels, as construction now takes up 40% to 50% of its turnover, with other subsidiaries also feeding into the group’s earnings.

On the Construction Industry Transformation Programme 2016 to 2020, which outlines internationalisation and competition as its key outcomes, Mac stressed the importance of supporting local companies through enabling participation in projects within the country.

Noting that although China’s constructors may be cheaper, it would be more beneficial to bring in Malaysian companies to get the job done as he believes the economic spin-off could be eight to ten-fold.

He explained, “With local companies, we are employing more local talents, sourcing and using local materials and equipment, hence the higher economic spin-off. When jobs go to foreign players, our country loses at the end of the day.

“This is why it is important for us to start local. Without a solid track record locally, especially for newcomers with no experience, you cannot move to the next level of going international.”

Moreover, smaller companies lack the financial capability to bring their businesses abroad due to higher tendering costs overseas. This is especially pertinent considering the high import tariffs in countries such as Australia, Europe and the United States, which make imported services expensive.

“The key is: Let’s support local. Internationalisation is linked to localisation. There is no international without first localising,” he said.
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