Malaysia Services Exhibition 2011

Construction companies from Malaysia will display their internationally demonstrated capabilities in infrastructure development at the fourth Malaysia Services Exhibition (MSE 2011) held from April 17 to 20, will be held together with City Build 2011 at Abu Dhabi National Exhibition Centre (ADNEC), Hall 9 and 10, Thiry companies, specialising in construction and associated services, are participating in the exhibition, with the aim to identify potential partnerships and assume a greater role in developmental projects across the Middle East and adjoining regions.

MSE 2011 follows the success of the previous such exhibitions held in Sharjah 2008, Dubai, 2009 and 2010. The exhibition, organised by the Malaysia External Trade Development Corporation (Matrade), will bring a range of services from 6 industry clusters, bearing the Malaysian hallmark of excellence, under a single roof.

The construction cluster at MSE 2011 will include service providers that have lead Malaysia's successful forays into the global construction market. Together these companies have completed a big numbers of projects in the Middle East and worldwide as well. According to the Construction Industry Development Board Malaysia (CIDB), a government agency in charge of promoting, stimulating and facilitating the export of Malaysia constructions services, between 1986 to 2010, 652 Malaysian companies were awarded projects in 49 countries including India ($5.05bn); Saudi Arabia ($3.49bn); United Arab Emirates ($3.18bn); Qatar ($8.09bn); and Libya ($5.27bn).

Among projects secured included building infrastructure, roads and highways, railways and bridges, oil & gas, water treatment and power plants, residential, airports, mixed development projects including housing, hotels, and leisure and luxury residences.

The construction sector continues to be an essential element of the Malaysian economy, lending strength and capability to a host of economic sectors while supporting the social development of the country through the provision of basic infrastructure. With the rapid growth of construction on a global scale, more and more Malaysian construction companies are venturing abroad to fuel their business growth. Their involvement in Malaysia's mega projects in the country as well as abroad, has nurtured the capabilities and expertise of Malaysian contractors.

The strengths of Malaysian construction companies are in the areas of construction of buildings, roads and highways, railways, bridges and airports, toll concession, water treatment and power plants, steel structure fabrication and installation, mixed development projects including housing, hotels, leisure and luxury residences as well as building maintenance, including for high-rise towers.

Matrade Dubai's senior trade commissioner, Datuk Dzulkifli Mahmud said that MSE 2011 will be an excellent opportunity for countries in the Middle East, North Africa and CIS to source quality services from Malaysia and sustain growth of their infrastructure.

"Infrastructure development is getting increasingly diverse and ambitious in Mena and CIS with houses, hotels, ports, airports, utilities, telecommunication projects and mass transit systems being built at breakneck speed. Malaysia has successfully developed and exported its construction expertise in recent years and Malaysian companies can provide support to governments, planners and developers far and near to meet the demands of growing populations and heightened commercial activity," noted Datuk Dzulkifli.

Malaysian contractors have successfully completed infrastructure projects in the GCC, India, Vietnam, Cambodia, Boznia-Herzegovina and Sudan, the most notable of them being Bahrain's Formula 1 circuit, the Burj Al Arab in Dubai, the New Doha International Airport, the Mumbai-Pune Expressway in Maharashtra (India) and Cambodia's Siem Reap International Airport. Malaysian companies are also competent in different modes of project implementation including conventional, design and build, turnkey and build-operate-transfer.

"Malaysian construction companies are keen to forge partnerships and strengthen their presence in the Middle East as the region is launching exciting and challenging development initiatives. MSE 2011 will provide them a platform to network with existing and potential partners as well as expand throughout the region," Datuk Dzulkifli added.

Participating companies will be under the lead agency, Construction Industry Development Board Malaysia (CIDB) and Collaborator, Master Builders Association Malaysia (MBAM).

Other industry clusters represented at MSE 2011 are: Professional Services, Energy and Power Generation (Engineering, Architect, Interior Design, Urban Planner, Landscaper, Energy and Power Generation), Construction and Related Services, Information & Communication Technology (ICT), Oil and Gas, Specialised Training & Business Services and Environment Management Services.

Pakistan invites Malaysian construction companies

Kuala Lumpur: Pakistan government has invited Malaysian construction companies to join in its re-construction efforts in wake of devastating floods last year, which damaged roads, bridges, communication network, schools, hospitals.

"The country is also brimming with investment opportunities in sectors such as power, energy, construction, halal, education, agriculture. This can be gauged from the fact that over 600 foreign companies are earning good profits from their investments in Pakistan," said Pakistan’s high Commissioner to Malaysia Masood Khalid on Wednesday. Talking to News Straits Times Press editorial management team, he said over 30 top ranking companies of Pakistan were expected to attend Investment Opportunities in Pakistan seminar, interact with Malaysian counterparts to build business linkages, contacts to facilitate, explore business, investment opportunities in Pakistan. Seminar, jointly organized by Pakistan’s Board of Investment & Malaysian Investment Development Authority, will be held on March 31, 2011. Masood said after signingfree trade agreement in 2007, bilateral trade between Pakistan and Malaysia was on upward trajectory and within three years has touched US$2 billion mark. "Both sides enhanced cooperation in agriculture, veterinary and halal sectors. Two MoUs and one letter of intent were signed between two countries last year to enhance cooperation in agriculture. In veterinary, we are helping Malaysia establish a pilot project to breed Nili Ravi Bufflo of Pakistan.” He said Pakistan will start exporting beef to Malaysia and a Malaysian delegation expected to attend International Halal Conference from March 1-3, 2011 in Karachi.

CIMB Keeps Malaysia Construction Sector Overweight

CIMB Research keeps Malaysia’s construction sector as Overweight, anchored by the public transportation upgrade theme; “we remain positive on the construction sector in 2011 and are encouraged by the progress of the MYR36 billion-MYR40 billion KL MRT (Kuala Lumpur mass rapid transit project), MYR7 billion LRT (light rail transit) extension and upgrade, and other outstanding jobs under the 10th Malaysia Plan (a 5-year infrastructure blueprint from 2011-2015) which are at various stages of tSee Titleer and proposal evaluations,” says analyst Sharizan Rosely. He notes this suggests project awards are likely to dominate newsflow in the next 6-9 months. “The potential approval of the MYR10 billion-MYR12 billion high-speed rail project is another boon to the sector,” he adds. He notes Gamuda (5398.KU) and WCT (9679.KU) remain house’s top picks for the sector. Gamuda is last flat at MYR3.94 while WCT is +0.3% at MYR3.21.

Construction Projects Flow in 2011

During 4Q 2010, there were a series of positive news brought into construction sector. These news could possibly bring some cheers for local contractors during the "award ceremony" soon. To summarize it, let us examined and explored the news highlighted in 4Q 2010 for construction sector:

# KL Mass Rapid Transit, with the cabinet approving 1 of the 3 lines proposed, which will run from Sg Buloh to Kajang. It is said that the Government will set up an SPV to fund the RM36bn job via bonds and other capital market instruments. Tenders for the Sg Buloh-Kajang line will be open in April while construction will commence in July. Gamuda-MMC JV, which was recently appointed as Project Delivery Partner, to be the ultimate beneficiary of the MRT. The JV is only allowed to tender for the tunneling works estimated at RM14bn.

# Construction of the RM5bn Warisan Merdeka development is said to be slated to commence this year for implementation in 3 phases over 10 years. Amongst the local contractors, we think IJM is in the best position to participate in the tower portion given its track record with high-rise buildings in KL city center. Green building specialist Putrajaya Perdana could also benefit from the non-tower portions.

# A feasibility study is currently being conducted to evaluate the KL-Singapore High Speed Rail and will be concluded by mid-year, which cost RM10-12bn. Magnetic levitation technology was being proposed. OSK gather that YTL Corp has made proposals for several portions of the project.

# Brazail based Vale SA, the world's largest iron ore producer will invest RM467mil in Malaysia this year. The investment will involve the construction of a maritime terminal and distribution center to transport iron ore from Teluk Rubiah, Perak. We understand that Muhibbah Engineering is the only local contractor that has been pre-qualified for some of the packages.

# Bintulu Port has been invited by Sarawak government to submit a detailed proposal for the Samalaju Port. If implemented, we think Hock Seng Lee could win some packages given its marine engineering expertise.

# Malaysia and India have signed an MOU on technical assistance for road development which could enable Malaysian contractors to participate in the latter's projects. We see IJM as the clear winner from this MOU given its track record of building more than 1,400km of roads in India.

# During the Big 5 International Building and Construction Show in Abu Dhabi, it was reported that some more than USD23bn worth of construction contracts are ready to be awarded in the UAE. We view WCT as the ultimate beneficiary from contracts flow from the UAE given its past record in Abu Dhabi, Dubai and Qatar