9 May 2016
The environmentally friendly approach to building is gaining momentum in Malaysia, according to exhibitors at Kuala Lumpur's Greenbuild Southeast Asia exhibition, held last September. The trend is mainly driven by multi-nationals operating in the country and a series of government initiatives. The slowdown in privately funded property construction has forced Malaysia's building industry to become heavily dependent on government spending, ensuring that official policies on environmental standards would be adhered to.
"We have seen an increase in the number of companies coming to Malaysia that are insisting in having green buildings,” said Ryan Hitzman, Southeast Asia Export Manager at Kingspan, an Irish roofing insulation and building materials firm. “There are many companies coming to this region that have sustainable building practice requirements across the world. When they do business in Malaysia, they want to build to the same standards as they do elsewhere."
Other exhibitors also noted the marked difference in attitudes between companies headquartered overseas and those based in Malaysia. "Local businesses will not pay the extra money to have green buildings, while overseas companies will,” said Lim Vin Tze, General Manager of Operations at locally-based Sunway Construction. “This is because they have to comply with their company-wide CSR policies."
Local companies, to a certain extent, are also prioritising greener buildings, according to Mr Hitzman. "We are starting to see an increase in high-rent residential construction projects wanting things like roof insulation,” he said. “Being environmentally friendly has become a selling point for some developers. They are, however, doing this as much because it helps them to sell their buildings as because they want to be sustainable.
"Another area in which there has been some movement towards environmentally-sustainable construction is in buildings that are air-conditioned for long periods of time; for example malls and hospitals. They are looking to roof insulation as a means of reducing their running costs."
An important aspect of the global sustainable construction sector is the various certifications that buildings can be awarded to demonstrate their green credentials. Among these, LEED (Leadership in Energy & Environmental Design) is perhaps the most widely recognised. These certifications are well known in Malaysia but, again, it is primarily overseas-headquartered companies that are leading the way.
"Many local players in the Malaysian market are not that interested in green labels at the moment, though this may change,” said Tan Kian Sin, Senior Marketing Manager at Acotec, a Belgian wall panel company. “For projects in Singapore, for instance, you now have to have the green endorsement."
Government-sponsored infrastructure projects, however, require green construction. “The environmental standards required for the work are still under development at the moment,” said Devaraj Govindarajoo, Senior Manager for Business Development at IJM Construction, a local building firm. “They are being taken very seriously, however, and in the future you will have to be certified if you want to undertake government infrastructure work."
With the Malaysian property market slowing, government infrastructure projects now are the major business drivers for many construction companies. The boom in residential construction over the past two years, has now led to an over-supply in the market, said Mr Lim. “At Sunway, we are scaling down our residential projects and looking more at infrastructure projects and roads as areas for growth."
Several large infrastructure projects are in the pipeline in Malaysia, with work soon to start on a second mass railway transit line, as well as a third light railway transit line in the Greater Kuala Lumpur area. Work is also continuing on KL118 which, when completed in 2020, will be the world’s fourth-tallest building.
Significant government spending on infrastructure is expected to have a knock-on effect on the wider economy. "The construction industry has many positive multiplier effects in other sectors,” said Bryan Lew, Manager at RS Concord, the Southeast Asian offshoot of Finland's RS Steel. “Many of the government-funded projects in infrastructure, then, are an attempt to boost economic growth."
Private Initiative Projects
While the majority of such infrastructure projects are still government funded, a number of private finance initiative (PFI) projects are also on the agenda. "Most of the spending on roads and transport is still coming from the government, but we also have some projects partially financed by the Sunway Group under a PFI deal,” said Mr Lim. “PFI in Malaysia is generally used in the construction of power plants and is much less common for other infrastructure projects, such as roads."
Still, Malaysia’s broader economic troubles are taking their toll, particularly on the local currency. "One of our biggest problems is that the Malaysian ringgit has taken a nose dive,” said Mr Lim. “This has made materials from overseas far more expensive than they were before."
Echoing those sentiments, Mohd Shafiqzuddin Ahman Sidek, a Sales Engineer at M.S.Time, a Kuala Lumpur-based crane and hoist company, said: "Business has been slower this year. This is due to the slowdown in the economy and, in particular, to the currency problems."
The falling ringgit makes the cost of overseas materials more expensive, with many exhibitors saying that the cost of a project remains the most important factor for clients. "When clients have to choose between a project being done quickly to a very high quality or more slowly at a lower cost, they choose low cost almost every time," said Mr Lim.
To counter this, Sunway Construction has been making greater use of virtual design construction software. "By making a virtual model of a project before we build it, we can identify potential problems before they emerge,” said Mr Lim. “This enables us to better plan a project's time scale and its cash flow, often resulting in savings in both areas."
Education will play an important role in promoting the wider use of green construction practices, according to Mr Lew. "Many contractors here still prefer the traditional ways of construction. The most significant problem when trying to convert contractors to using precast steel is the higher cost. We argue that the higher cost is offset by the shorter construction site, as well as the increased safety. It remains a challenge to get people here, however, to pay for speed over cost. Cost is always the number one factor in this part of the world."
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