March 2022

NOTICEBOARD

THE STEELBILLETREBARSTEEL WIRE ROD

RM3,150

RM3400RM3,475SCRAPIRON ORE

RM2,530

RM618

Trade Performance
Malaysia’s Trade Performance, January-March 2022
Malaysia’s Iron and Steel total trade value in March 2022 grew by 20.3 percent to RM6.0 billion compared to
RM5.0 billion in March 2021. However the trade deficit increased to RM287.6 Million from RM181.3 for the same
comparison period.
Malaysia’s iron and steel export in March 2022 expanded by 18.8 percent to RM2.8 billion from RM2.4 billion in
March 2021. Three main export destinations in March 2022 were China, South Korea and the United States,
representing 24.0, 10.0 and 9.0 percent of the total export value respectively.
Malaysia’s iron & steel import in March 2022 grew by 21.6 percent to RM3.1 billion from RM2.6 billion in March
2021. Top three Malaysia’s iron & steel imports came from China, Japan and Taiwan representing 20.0, 14.0 and
13.0 percent of the total import value respectively.
During Q1 2022, the total trade value of the iron and steel products stood at RM17.1 billion compared to RM13.1
billion for the same period in 2021, showing an increase by 30.5 percent. Trade deficit for the same comparison
period, narrowed from RM856.9 million to to RM575.8 million.

Comparison of Malaysia’s Trade Performance - Iron & Steel Industry
March 2022: RM6.0billion

Trade Value
20.3 % M-o-M change

March 2021: RM5.0billion

March 2022: (RM287.6million)
Trade Deficit

Balance of Trade58.7 % M-o-M change

March 2021: (RM181.3million)
Trade Deficit
ExportMarch 2022: RM2.8billion
18.8 % M-o-M change

March 2021: RM2.4billion

ImportMarch 2022: RM3.1billion
March 2021: RM2.6billion
21.6 % M-o-M change

YTD Trade Value
Jan-March 2022: RM17.1billion
30.5 % Y-o-Y change

Jan-March 2021: RM13.1billion

Jan-March 2022: (RM575.8million)
Trade Deficit
Jan-March2021: (RM856.9million)
Trade Deficit

YTD Trade Deficit
32.8 %Q1 Y-o-Y change

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MSI WITH YOU
NEW INVESTMENT POLICY WALKABOUT
On 9th of March 2022, the Ministry of International Trade and Industry (MITI) organized the New Investment
Policy Walkabout session at Dewan Perdana MITI inaugurated by the Senior Minister, Dato’ Sri Azmin bin
Ali. Also present were Datuk Lim Ban Hong, the Deputy Minister as well as other stakeholders. The Deputy
Secretary General of Investment, MITI, Datuk Bahria bin Tamil then led both the Senior Minister and the
Deputy Minister around the hall which showcased the New Investment Policy.

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SCHAEFFER VISIT TO MSI
On 3rd of March 2022, Schaeffer represented by Mr. Mohammed Benjamin visited the office of MSI for thepresentation of the membership plaque for joining MSI as an associate member. Mr. Benjamin also had adiscussion with Mr. Lim Keng Yow on participating in the PENJANA and RMK-12 training program where
there is a possibility to train current or potential employees on the process of steelmaking.

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MSI BRIDGING GAPSMETAL PLATING FOR CORROSION AND WEAR E-TRAINING COURSE
On 22-25 March 2022, MSI attended the MISIF-USM e-Training Course on "Metal Plating for Corrosion andWear". The training was conducted by two experienced lectures. This training covered basic knowledge on
metallurgy (structure and properties, processing techniques), and fundamental of metal plating which
exposed to new knowledge and practices. MSI would like to thank MISIF for extending the complimentaryseat to MSI to join the e-training course.

5CIRCUMVENTION UNDER HS Code 7225.99.9000 (Alloy)

On 31 March 2022, MSI coordinated a discussion on “Circumvention under 7225.99.9000” with the objective
to minimize circumvention. The meeting was chaired by CEO, MSI and attended by MITI (BPI, Export &Import Control Section and TPS), SIRIM QAS, RMCD, MISIF (CSC, Mycron and POSCO) and NS BlueScope. The
challenges, new ruling and way forward were discussed Circumvention of alloy.al industry and loss ofgovernment revenue.

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WORKSHOP ON RESEARCH METHODOLOGY FOR OCCUPATIONAL FRAMEWORKDEVELOPMENT

MSI attended Workshop on Research Methodology for Occupational Framework Development from 1-4
March 2022. The workshop, organised by Jabatan Pembangunan Kemahiran, Kementerian Sumber Manusia
provided exposure to the participants on methodology to develop Occupational Framework for relatedindustry and to improve service delivery by the National Occupational Skills Standard (NOSS).

INDO-PASIFIK ECONOMIC FRAMEWORK-IPEF
On 21st March 2022, MSI attended meeting on Cadangan
Penyertaan Malaysia dalam Rangka Kerja Ekonomi Indo-Pasifik(Indo-Pasifik Economic Framework-IPEF) lead by the UnitedStates. This framework is part of the United States’ vision to
make the Indo -Pacific an open, resilient, prosperous and secure
region. It outlines 4 key thrusts for ensuring regional prosperity
and enhancing cooperation including Fair and Resilient Trade,
Supply Chain Resilient, Infrastructure, Clean Energy &Decarbonization and Tax & Anti- Corruption.

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STEEL FACTS

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EVENTS HIGHLIGHT

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STEEL NEWS1. Leon Fuat sees strong steel demand from palm oil, semiconductor industries
Date: 02 March 2022
Source: https://www.theedgemarkets.com/article/leon-fuat-sees-strong-steel-demand-palm-oilsemiconductor-industries
AS rubber glove manufacturers accelerate investment in new manufacturing facilities to meetgrowing demand amid the Covid-19 pandemic, steel maker Leon Fuat Bhd has been an indirect
beneficiary. The group, which specialises in rolled long and flat steel products, has seen increased
demand for steel products to support new production facilities. As glove manufacturers start scaling
down their expansion plans, however, Shah Alam-based Leon Fuat is banking on new orders frompalm oil millers and semiconductor companies to maintain its growth momentum. “While thedemand for steel from the glove manufacturing industry may have slowed down, activities in otherindustries that we serve, such as palm oil and semiconductor, are still very active. We continue toreceive strong demand [for steel products] from these sectors,” executive director Calvin Ooi Shang
How tells The Edge in an interview. Leon Fuat has been supplying its steel products to customers inpalm oil-related industries locally and overseas, including in Indonesia. The group also serves local
oil and gas (O&G) companies that are bidding for projects across the world.
“The one sector that we are particularly excited about is the semiconductor, or electrical andelectronics (E&E), sector. The increase in demand for semiconductor products has led to various
expansions in the local E&E sector, and these expansions will indirectly increase the consumption ofsteel products as well,” says Ooi, 43, who was appointed to Leon Fuat’s board in June 2012. “Wehave seen an increase in orders from the semiconductor sector over the past two years, and we
expect their orders to remain strong in the coming years.” Currently, the group has more than 3,000
active customers from various industries. Ooi is the son of the company’s co-founder and executive
deputy chairman Datuk Seri Ooi Bin Keong; nephew of group managing director Ooi Seng Khong andexecutive director Ooi Kong Tiong; and cousin of executive director Ng Kok Teong. The Ooi family
controls about 64% of the group through its private vehicle Leon Fuat Holdings Sdn Bhd. Leon Fuat
is expected to post a record net profit for the financial year ended Dec 31, 2021 (FY2021), after
chalking up a net profit of RM106.914 million in the first nine months — more than 10 times higher
than the RM10.465 million recorded in 9MFY2020. “Overall, 2021 was a surprisingly good year forus. In fact, in terms of earnings performance, FY2021 will be a record year for Leon Fuat since it wasestablished. It was even better than our performance in FY2008, when we experienced a surge insteel prices during the Beijing Summer Olympics,” Ooi says. The improved performance is attributed
mainly to a higher overall average selling price (ASP), which rose 44.1% year on year, and higher
overall tonnage sales, which were up 12.4% y-o-y. A check on AbsolutelyStocks shows that Leon
Fuat’s net debt position stood at RM367.4 million as at Sept 30 last year. “Last year, steel players,
including Leon Fuat, enjoyed a good year.
Given the pandemic, nobody was expecting business to be good. But, as it turned out, there was a
shortage of supply and increased demand for steel materials,” says Ooi. He adds that the increase insteel demand and supply chain disruptions, including shipment delays, had led to a shortage of steel
in the market. As a result, steel prices have shot up more than 100% since 2020. Apart from therubber glove sector, the palm oil industry has also been doing well amid rising crude palm oil (CPO)
prices. Likewise, the O&G industry has staged a strong recovery with higher crude oil prices.
Returning to a normalised year Still, Leon Fuat has been able to pass on higher steel prices. “As astockist, we do enjoy additional profit margin on the stock we kept at a cost relatively lower when
prices were on an upward trend. But, of course, there are still risks when prices come down. So, wemust manage our purchases carefully,” says Ooi. He observes that the hike in steel prices is a reason
for the delay in the execution of new projects or expansion plans in some of the industries that Leon

Fuat is serving. He says that once steel prices stabilise, it may encourage the affected industries toresume plans that were put on hold earlier.
“If these plans are to go ahead, it will benefit our business directly and indirectly. Meanwhile, we arehoping our steel pipe manufacturing division will make a higher profit contribution to our group thisyear,” says Ooi. Shares in Main Market-listed Leon Fuat have gained 76% over the past year to settle
at 98 sen last Wednesday, giving it a market capitalisation of RM335.89 million. The counter iscurrently trading at a historical price-earnings ratio (PER) of merely 2.5 times, offering a trailing 12month dividend yield of 2%. Meanwhile, Leon Fuat expects steel demand, steel prices and thegroup’s earnings performance to normalise this year. “Once the steel supply is back to a normal
level, we don’t expect a further price hike. Of course, Covid-19 is still affecting a lot of countries,
including those that are producing iron ore, which could be another issue for steel supply. But, for
now, our view is that most likely everything will normalise this year,” says Ooi. “Hopefully, we cansee a clearer picture after the first quarter of 2022. Having said that, we are still expanding our steel
pipe manufacturing operations. So, theoretically, after a normalised year in FY2022, our earnings
momentum should pick up again from FY2023.”
Steel pipe producer Hiap Teck Venture Bhd announced a RM3 billion expansion plan last November
for its associate EasternSteel Sdn Bhd, which includes a venture into the hot rolled coil (HRC)
business, by putting up a new plant at the latter’s existing 1,209-acre Kemaman site in Terengganu.
Ooi believes this is positive news for Leon Fuat, as it essentially means there would be an additional
HRC supplier in the market. The company ventured into the steel pipe manufacturing business about
three years ago. As for its trading division, HRC is the main product among the range of flat and longsteel products. Since Megasteel Sdn Bhd, which is part of tycoon Tan Sri William Cheng Heng Jem’s
Lion Group, stopped producing HRC, local steel traders have been sourcing it from countries such as
Vietnam, Thailand, Indonesia, China and India. “When we purchase steel from overseas, we need toplan ahead. Normally, the lead time is two to three months. If we can purchase steel from local
manufacturers, it will allow us to have better procurement plans, as the lead time will be shorter
than importing and, therefore, we can manage our working capital and cash flow more efficiently.
Thus, we certainly welcome this development,” says Ooi.
2. Steel mills warn on price hike
Date: 14 March 2022
Source: https://www.nst.com.my/business/2022/03/779828/steel-mills-warn-price-hike
KUALA LUMPUR: Domestic steel mills are adjusting prices due to the potential increase in commodity
prices, as market sources say European long steel prices are expected to rise sharply in the coming
weeks. Asteel Group managing director Datuk Sri Victor Hii Lu Thian said domestic steel millers arealso factoring in risks associated with the potential increase in domestic and imported inflation,
increase in oil and energy prices and potential disruption in the global supply chain. "Domestic steel
bar manufacturers have no control over the rising steel prices which has resulted in higher building
material costs. Victor said that domestic steel manufacturers are currently experiencing an excess
of inquiries, but it is important to note that steel allocation in our country is limited. "We find thatthe demand in Malaysia is merely spurred by earlier purchases by industry players, such as theconstruction and automotive industries, so it does not impact their budgeted costs that the global
price hike may impact," he said. Steelmakers across Europe are cutting back their operations as
power prices surge to record levels in response to Russia's invasion of Ukraine, Bloomberg recently
12reported. Producers of the metal from Spain to Germany are beginning to slow down or entirely stop
their output as the higher costs make production unsustainable, even with steel trading near record
levels. Russia's invasion of Ukraine has exacerbated already eyewatering power prices, affecting
companies including Acerinox SA, Salzgitter AG and Liberty Steel, it said. When asked on thecompany's contingency plan if steel prices continue to soar, Victor said Asteel is taking a morecautious approach to the potential price avalanche to manage safety stock inventory levels better.
"We take this precautionary measure due to a lesson learned from the steel price crash in the year
2008. "Similar to any steel player, the fluctuation of steel prices impacts us as it impacts our cash
flow and also our stock prices.
"We are continuously assessing the impact on our product supply chains, including surging shippingand insurance costs. To mitigate the situation, we are looking at the possibility of alternative supply
chain vendors to overcome these barriers," he said. Leon Fuat Bhd executive director Calvin Ooi
Shang How expect domestic steel prices to rise in tandem with markets overseas as there are knockon effects from the disruptions to the supply chain in terms of raw material and logistics cost. When
asked if the rising steel prices will be potentially pushed to consumers, he said this depends on theindustry and sector. "If steel prices continue to rise in tandem with other costs, businesses will
inevitably pass through the costs to consumers," he said. Calvin said the strategy is to sustain thebusiness and ensure that any price hikes are gradual and do not disrupt the company's operations
and customers. "We are working closely with steel producers to secure the supply needed atcompetitive prices to fulfil customer requirements," he said, adding that the company will continue
to monitor purchases closely, including the foreign currencies critical to global commodity prices,which in this case is the US dollar. Victor said currently, the direct impact is still minimal, but there
is always the potential for immediate risk in the long run if the conflict continues. "We believe thatmost domestic steelmakers have been cushioned with raw material stockpiling and diversified
procurement for now," he said. Victor noted that the international price trend influences the
trajectory of domestic steel prices, for example, trends in China will affect Malaysia as they accountfor more than half of global crude steel production. "So far, our domestic steel bar prices have been
below China's market price, but this may soon change as the conflict has rattled the global
commodity market with ripples spilling over to logistics and freight costs, resulting in delays andhigher operational costs," he said.
3. China-backed Johor megacity project struggles to gain momentum
Date: 14 March 2022
Source: https://www.freemalaysiatoday.com/category/highlight/2022/03/14/china-backed-johormegacity-project-struggles-to-gain-momentum/
JOHOR BAHRU: Malaysia is pushing to reopen its economy to the world after two years ofcoronavirus-related border closures, but a US$100 billion megacity spearheaded by a Chinese
developer off the country’s coast near Singapore remains largely stuck in neutral.
The integrated Forest City, comprising four reclaimed islands in Johor, is struggling to market
property to core investors in China and Singapore. The project is expected to be fully developed by2035.
Two-thirds of the project is owned by its master developer Guangdong-based property company
Country Garden Holdings, while the rest is held by a local firm.
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“As the pandemic prolong, there have been changes made with regard to the direction of corporate
investment, tourism and vacation as well as other project directions and development ideas, which
definitely affect our business,” Country Garden said in an emailed reply to queries from Nikkei Asia.
Built off the southern tip of Johor, Forest City totals 1,740 ha – about three times the size ofSingapore’s Sentosa resort island. A mixed development that includes residential, leisure,commercial and industrial spaces, plans are for Forest City to also include its own customs andimmigration checkpoint enabling its residents to easily travel to Singapore.
But the pandemic has slowed the sea reclamation process and overall development, which is divided
into eight phases, the Chinese developer said. Only the first island has been developed so far.
The closure of international borders has also hit businesses on the first island, which include
residences, an international school, retail and commercial spaces, luxury hotels and two 18-hole golfcourses.
“Our current businesses are also affected during the pandemic,” said Country Garden. “For example,
the hotel occupancy rate dropped significantly while the average daily number of people patronising
the golf course obviously (fell) off (a) cliff.”
Still, it said, sales for various projects in Forest City have been steady, without giving any figures.
“Nonetheless, it has not changed our company’s determination and belief in exploring the local
market,” it said. “We also provide digital services such as online sales, virtual tours and live viewing
for customers who cannot visit Forest City physically.”
Malaysia, like many countries in Southeast Asia, imposed a variety of quarantine and travel measures
to fight Covid-19 infection waves, but is keen to roll them back with an eye on boosting its economy
and businesses.
Prime Minister Ismail Sabri Yaakob announced last Tuesday that the country will reopen its
international borders on April 1, allowing quarantine-free travel and tourism as it moves towardcoexisting with and managing Covid-19.
Forest City has handed over keys to more than 20,000 residential units – far below the planned
700,000 residents expected to be living there upon completion of the fourth island in 2035.
The property owners mainly come from China, Malaysia and Singapore. The project has also
attracted buyers from Vietnam, Indonesia, Taiwan, Hong Kong, South Korea and Japan.
Country Garden, the largest residential developer in China by sales, is regarded as one of the mostresilient private developers in a country where the entire sector has been roiled by a severe liquidity
crunch since last summer.

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While many of its peers, including China Evergrande Group, missed payments on debt obligations
and some declared default, Country Garden has kept promises to creditors, as indicated in the full
redemption of US$425 million of offshore bonds in late January.
The company is able to get external funding from the market as well. After launching a HK$3.9 billion
convertible bond with a four-year tenure in January, its wholly-owned domestic subsidiary wasallowed to register a five-billion-yuan quota for an onshore medium-term note issuance over the
next two years by the local regulating body last month.
On top of that, China Merchants Bank, a mid-sized state-owned lender, granted the company 15
billion yuan in credit to finance a potential merger and acquisition last week.
Encouraging M&As in the sector is part of the Chinese government’s initiative to cope with thecurrent crisis, but Country Garden is possibly the first case where a state lender granted a credit
window for the purpose of a private developer’s acquisition.
Still, Fitch Ratings and Moody’s Investors Service give the company very few “investable” ratings in
the sector, while S&P Global Ratings maintains its junk rating.
S&P acknowledges that Country Garden has a “stronger-than-peer funding capability” given its
recent track record. But analyst Ricky Tsang wrote in his latest note that he expects the developer’s
sales “to be under pressure given the company’s high exposure to lower-tier cities, where housing
demand is generally weaker, especially when the sector is in a downturn”.
Indeed, its contracted sales in February came to 32.76 billion yuan, or 30% lower than the samemonth last year, rapidly deteriorating from a 10% fall in January and a 2% decline for all of last year.
Even though its liquidity position looks relatively solid compared to peers, Country Garden’s Hong
Kong-listed shares have lost almost 50% of their value in the past year by around mid-morning on
Monday.
The company issued a statement late on Sunday blaming recent “groundless” comments madeonline about its onshore and offshore financing for the recent accelerated stock price drop. It
stressed that its operation “is normal and can continue to carry on its business as usual”.
Real estate consultancy Rahim & Co International said in a recent report that Malaysia witnessed
201,065 property transactions worth a total of RM98 billion in the first nine months of 2021, marking
a 1.8% drop in volume from the same period the year before.
The report also highlighted overhang – or unsold properties – to the tune of 56,734 residential units,
including serviced apartments and small home office units, worth RM41.59 billion in Malaysia as of
September 2021. Most of those units were in high-rise developments.
Johor had the most overhang with 23,224 units worth RM19.29 billion, according to the consultancy.
Country Garden, however, said it remains confident in the Johor development, thanks to its uniquegeographical advantage near Singapore and a well-developed local economic base.
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“Country Garden has been in the Malaysian market for nine years, and we will continue our businesshere for long-term development,” it said.
“We hope that the government will remain proactive in managing the pandemic situation as well as
come up with policies and incentives to stimulate economic recovery. We will do our part and makeour contributions towards the economic development accordingly.”
4. MRT3 construction involves five main packages, tender to open in May, says Wee
Date: 15 March 2022
Source:https://www.theedgemarkets.com/article/mrt-3-project-be-implemented-turnkeycontract-method-%E2%80%94-transport-minister
KUALA LUMPUR (March 15): Transport Minister Datuk Seri Dr Wee Ka Siong said the tender forconstruction works on the Mass Rapid Transit 3 (MRT3) Circle Line project will be opened for tenderin May.
The minister told the media that the jobs will be awarded in the fourth quarter of this year.
According to Wee, the massive infrastructure project, which is estimated to cost RM30 billion,
consists of five main packages.
“The five main packages are for two turnkey contractors for elevated works, one turnkey contractor
for underground works, one for integrated rail systems and one project management consultant towork alongside MRT Corp as the project developer,” said Wee at the media briefing.
“Every work package, especially a system work package, will have its distinctive private funding
initiative requirements and details of these requirements will be announced by MRT Corp soon,” hesaid.
“Construction activities will be monitored directly by MRT Corp as the project developer and will be
assisted by a project management consultant (PMC). Procurement of four construction contract
packages and one PMC contract will go through an open tender,” he added.
5. Malaysia on track to achieve 2022 economic targets, says PM
Date: 20 March 2022
Source:https://www.thestar.com.my/news/nation/2022/03/20/malaysia-on-track-to-achieve2022-economic-targets-says-pm
HANOI: Prime Minister Datuk Seri Ismail Sabri Yaakob has denied that the government had failed torevive the economy following the Covid-19 pandemic. He said Malaysia’s positive economic
performance in 2021 shows that the country was projected to achieve the targets set for this year.
Ismail Sabri said based on reports by the Department of Statistics Malaysia and Bank Negara, thecountry's economy grew by 3.1% in 2021 compared with a contraction of 5.6% in 2020. "Manyassume that we have failed to revive the economy. In fact, we have already succeeded in reviving
the economy. In terms of foreign direct investment (FDI), we have also recorded an increase in 2021,
which is more than RM50bil compared to RM14.6bil in 2020. "This positive indicator gives the16impression that the country is heading towards economic recovery to achieve the projected Gross
Domestic Product (GDP) of 5.5% to 6.5% for 2022, in line with the projections made by the IMF(International Monetary Fund) and the World Bank," he said when meeting members of Keluarga
Malaysia (Malaysian Family) here in conjunction with his official visit to Vietnam. The Prime Minister
also said that the government was always concerned about the welfare of the people, especially inhelping tourism industry workers impacted by the pandemic. "When there was a lockdown
nationwide, there were companies that retrenched workers. They had no income but had to keep
paying salaries, so the government spent billions in wage subsidies, in which the government paid
employees’ wages so that they don’t get retrenched. "This was done to ensure the people still had
income and that we do not burden them or the employers who may resort to retrenching them andthat is why when there was a rise in unemployment, we tried to control (the situation),” he said. On
the first day of his visit, the Prime Minister also held meetings with higher management
representatives of several Vietnamese conglomerates who expressed their interest to expand theirbusiness to Malaysia. Malaysian Business Chamber (MBC) Vietnam president Datuk Theng Bee Han
was present at the event to introduce the company representatives. Among those present were
Sovico Group vice-president Dr Dinh Viet Phuong, chairman of Hoa Binh Construction Le Viet Hai andmanaging director of GAMI Group Pham Hai Minh. Sovico Group is Vietnam's leading private
conglomerate involved in various industries, including introducing low-cost carrier Vietjet Air, while
Hoa Binh Construction Group is a leading construction company with over 31,000 employees. Gami
Group, meanwhile, is well known in real estate, theme parks and trade, including the import ofvehicles for the Vietnamese market. – Bernama
6. Sustainability theme key to recovery
Date: 24 March 2022
Source: https://www.thestar.com.my/business/business-news/2022/03/24/sustainability-themekey-to-recovery
PETALING JAYA: A new recovery theme for the local construction sector could likely come fromsustainability practices. CGS-CIMB Research said the rising adoption of sustainable construction will
emerge as a longer-term sector recovery theme. In a report on the sector, it said this will happen on
the back of new macro policy measures and the reactivation of the RM31bil MRT 3 project. “These
would mitigate short-to-medium term sector risks, such as weak visibility in other new mega jobs,
limitations in the government’s fiscal space and uncertainties surrounding mega contracts due tothe political landscape,” it told clients in a report yesterday. Malaysia’s construction sector has been
one of the biggest casualties of the Covid-19 pandemic, with much work and projects experiencing
severe slowdowns or even coming to a complete halt as a result of the movement control orders
and stringent standard operating procedures. The industry is now struggling to get back on its feetas new jobs dry up largely due to cutbacks in government spending. A sustainability theme,
according to CGS-CIMB Research, may provide better visibility and an alternative view in terms ofresetting the government’s strategy in rolling out new contracts and better positioning forcontractors in tendering for upcoming new mega projects. It will also provide investors with a better
perspective on the potential longer-term winners and beneficiaries of the rollout of new contracts
that are more aligned to the sustainability agenda, it said. In its view, sustainability matters in acontract downcycles the phase. “While historically we observed that sector-wide sustainability
strategies and plans were somewhat fragmented, the government has placed greater emphasis on
the domestic construction sector’s pathway to higher sustainability standards, as seen in the 12th
Malaysia Plan (12MP).”17

Noting that these sustainability initiatives will cause Malaysia’s construction industry to enter into a“transformation phase” this year, CGS-CIMB Research said it was seeing a shift towards climate
action and sustainable mega projects. “Water, flood mitigation and transport projects are key
potential beneficiaries of this theme, which bodes well for Gamuda Bhd, IJM Corp Bhd and HSS
Engineers Bhd,” it added. According to CGS-CIMB Research, the construction sector accounts for 6%of global gross domestic product which implies that development activities will always be an integral
part of economic activity and growth. “This is particularly so for developing countries like Malaysia.”
It also said the construction sector is the largest global consumer of building materials and accounts
for 25% to 40% of global carbon emissions. “This directly relates to the building material supply chain
and the manner in which main building materials are produced. Cement and steel historically makeup 30% to 40% of total construction input. “Construction activities have been linked to up to 50% ofclimate change, 40% of global energy usage and 50% of landfill waste.
“This also extends to air, water and noise pollution and the destruction of natural habitats,” theresearch house said. It said its assessment of the sustainability theme on the overall local
construction sector’s environmental, social and governance spectrum points to opportunities tofurther transform and revamp the sector in its post-Covid-19 pandemic recovery phase in 2022 andpotentially back to its upcycle phase over the longer-run. “We believe that if policy andimplementation of the various sustainability initiatives under the 12MP and the National
Construction Policy 2030 gain greater traction in the later part of the 12MP period (2021 to 2025).
“This, with proper planning and execution, could translate into several positives, mainly a revival inprivate and public sector job flows coupled with the emergence of new infrastructure project
proposals beyond the legacy contracts.” Other positives include a revisit of other legacy megadevelopments such as the estimated RM50bil to RM100bil gross development value Bandar
Malaysia, the emergence of new growth areas such as those proposed under the RM5bil Penang
South Islands project and the rollout of backlog water infrastructure projects, it added. Meanwhile,
analysts still remain generally cautious on the construction sector. While there has been a showing
of some green shoots in line with the recent re-opening of the local economy, most are not confident
that earnings will come back in a big way this year. “Issues like labour shortage and a continuous risein raw material prices will continue to impact earnings for some time.”
7. Alliance Steel strengthens presence with RM5bil investment for factory expansion [NSTTV]
Date: 31 March 2022
Source:https://www.nst.com.my/news/nation/2022/03/784783/alliance-steel-strengthenspresence-rm5bil-investment-factory-expansion
KUANTAN: Alliance Steel (M) Sdn Bhd (ASSB), which is the Malaysia-China Kuantan Industrial Park's(MCKIP) first investor, will expand its manufacturing plant here with investments worth RM5 billion.
Menteri Besar Datuk Seri Wan Rosdy Wan Ismail said the second phase expansion project covering
an area of 101.2ha is the continuation of innovative exploration of bilateral economic relations
between both China and Malaysia under the "Belt and Road" initiative.
"It is widely recognised that iron and steel products are one of the main exports for Pahang. This
project will help increase the steel production capacity from 3.5 million tonnes to 10 million tonnes
annually with the introduction of steel plates as a new product.
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"The project will create 3,000 job opportunities for the people of Pahang and spur local economic
growth. Eighty per cent or 2,400 jobs will be opened for Malaysians," he said in a statement after
witnessing the memorandum of understanding (MoU) signing ceremony for the second plant
expansion project between the Pahang government and ASSB at Wisma Sri Pahang today.
Meanwhile, Wan Rosdy said the Pahang government is always committed to provide a conducive
environment to attract investors to expand their businesses across the state.
"Last year, Pahang managed to attract investments worth RM10.5 billion which consists of RM987
million domestic investments and RM9.8 billion foreign investments.
"Besides providing a conducive environment, the state government will also ensure political stability
to convince investors to come to Pahang. We are looking forward to more foreign direct investments
this year.
"The Pahang government is striving to ensure the state can be developed in a comprehensive andbalanced manner for the welfare and benefit of the people. We are committed to ensure Pahangachieves its key performance indicator (KPI) for this year to secure investments worth RM18 billion,"
he said.
Pahang state secretary Datuk Seri Dr Sallehuddin Ishak signed the MoU on behalf of the Pahang
government while ASSB was represented by its chief executive officer Steve Hujiulin.

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