KUALA LUMPUR: Recently-listed UCI Resources Bhd (UCIR) is upbeat on demand and growth for precast concrete products as the industry is expected to grow at a slower compounded annual growth rate (CAGR) of 3.7 per cent from RM4.0 billion in 2020 to RM4.3 billion in 2022.
Managing director Liew Thiam Leong said this growth is expected to be driven by the PRIHATIN stimulus packages and new economic easing measures, which will spur construction projects in the country and create demand for precast concrete products.
He said between 2017 and 2019, the precast concrete industry size in Malaysia grew from RM3.3 billion to RM3.9 billion, recording a CAGR of 8.7 per cent during the period.
However, due to the global outbreak of the Covid-19 pandemic and the enforcement of national lockdown policies resulted in most businesses restricted from operating in 2020, the industry was not spared.
"Now that we are seeing a better days ahead, we also believe that demand for precast concrete products will continue to rise.
"This is also because precast concrete products has its many advantages over cast-in-situ concrete products and these advantages will be favourable to the sustainability of our business," he told The New Straits Times.
Cast-in-situ are concrete structures poured, moulded and cured on site.
When asked on key factors promoting precast concrete market growth, Liew said on-going and upcoming infrastructure projects initiated by the government is a key factor in promoting the precast concrete market growth.
"Another key factor would be the long-term growth prospects in residential and commercial developments initiated by the private sector.
"And last but not least, the advantages of using precast concrete products over cast in-situ concrete products," he said.
As at 15 January 2021, UCIR unbilled orders for precast concrete products stood at approximately
RM12.4 million.
These orders are expected to be billed progressively over the next 6 months.
Liew said the group's primary focus is on increasing market share in Peninsular Malaysia and will explore East Malaysian market if there are any good market possibilities.
Touching on raw materials, Liew said the company constantly monitors the fluctuation of raw material prices.
"We obtain supplier commitments to pre-determine prices of materials and supplies prior to securing an order.
"Another advantage is that we have established a good business relationship with our raw material suppliers and this eases our purchasing negotiation.
"We are aware of the government's initiatives to reduce local manufacturers' dependency on foreign labour, therefore we have started sourcing for more local employees," he said.
UCIR officially listed on the LEAP Market of Bursa Malaysia on 23 March, of which the initial public offering (IPO) entails the issuance of 33.4 million new ordinary shares, which represents 10 per cent of the group's enlarged share capital of 333.4 million shares.
From the proceeds of RM5.01 million, RM3 million will be used to set up the group's new manufacturing site in Bestari Jaya, Kuala Selangor in line with its expansion plans.
The new manufacturing site will comprise a two-storey site as well as a storage area for raw materials, production equipment and production moulds.
"Following the completion of our new site, which is expected to be by the end of 2021, we expect that our manufacturing capacity for our precast concrete products will increase from 62,400m3 to 93,600m3 per annum," he said.
UCIR have supplied precast concrete products for several major construction projects in Malaysia such
as the Subang International Light Industrial Park, Kuala Lumpur International Airport 2(KLIA 2), MRT Jalan Semantan and MRT Kajang stations, East Klang Valley Expressway and the Sungai Besi-Ulu Kelang Elevated Expressway.
"In fact, last year, we secured orders of our precast concrete products for major projects such as the West Coast Expressway and the MRT 2 (Sungai Buloh-Serdang-Putrajaya Line)," Liew said.