HSL sees worsening labour shortage in Sarawak construction sector

  • Corporate News
  • Friday, 07 Aug 2020

KUCHING: Hock Seng Lee Bhd (HSL) sees labour shortage in the construction industry in Sarawak to worsen while the disruption to the supply chain remains unresolved due to the impact of Covid-19 pandemic.

Managing director Datuk Paul Yu Chee Hoe (pic) said the supply chain disruption is still an issue but labour shortage is far more impactful.

“Labour shortage is a continuous problem. Now, we can say it’s become even more acute. Worksites have all reopened and companies are fighting to hire from the same pool of workers, resulting in higher salaries.

“The company’s challenge now is how to manage projects efficiently, ” he said as HSL reported more than 50% drop in group revenue to RM83mil in the second quarter 2020 from RM175.4mil in the same period a year ago, mainly because of the imposition of the movement control order (MCO) by the government to contain the spread of Covid-19 pandemic on March 18.

In the current quarter, Yu said the company had about only two weeks of full working days.

Despite the low revenue, HSL remains profitable with group net profit of RM3.95mil, down from RM16.4mil in the same period last year.

The construction segment contributed RM74.1mil and property development RM9mil to group’s revenue in the current quarter.

Yu said barring no further lockdown, HSL might have seen the worst in terms of productivity in the latest quarter.

“Our priority now is to maintain the fundamental and substratum of our business operations. This period is characterised by low productivity and high expenses.

“The current travel restriction to other divisions also impacted our workflow as projects are throughout Sarawak, ” he added.

The group’s ongoing jobs include Pan Borneo Highway work package, sewerage projects in Kuching and Miri as well as road and infrastructure projects under the Sarawak Coastal Highway.

Yu said HSL is concerned with recent Covid-19 clusters among Sarawak’s construction sites and engineering consultancies, adding that the company has built its own quarantine centre for workers.

“The company is working closely with federal and state authorities on safe operating procedures (SOP) and to gain approval. We strictly follow all the authorities rules. We have also drawn up additional SOP procedures.

“We have sent employees for Covid screenings even when they are outside of contact-tracing parameters. What we really don’t want is any more disruption due to shutdown.”

He said there would be no pre-pandemic levels of efficiency for the foreseeable future until a vaccine is found and widely available.

Yu said HSL’s operation is picking up its momentum as the group is presently working at about 60% of its capacity from 30%-40% during the start of the recovery MCO, which began on June 10.

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