Roadblocks in adopting IBS in Sarawak

KUCHING: Pre-fabricated construction – more commonly known as Industrialised Building System (IBS) in Malaysia – is a lesser-known method of construction in Sarawak whereby components are assembled off-site rather than on-site in more traditional construction methods.

This method is used worldwide as it has proven itself to be effective in increasing cost and resource efficiencies while reducing environmental and noise pollution.

Due to these advantages, many countries have designated IBS to be a necessary component for many, if not all, of their approved construction projects.

Malaysia herself is no stranger to IBS as the method of construction was introduced into the country since the early 1960s through the use of pre-cast concrete beams, columns and panels in a large panel building system.

The very first venture in utilising IBS elements with construction was the Tunku Abdul Rahman Public Housing Estate in Kuala Lumpur or more commonly known as the Pekeliling flats.

The flats featured seven 17-storey apartment blocks and were the third high rise apartments constructed in KL. They were built between 1964 and 1967 and utilised a large panel building system.

It stood tall for over half a century before its demolishing activities finalised in 2015 to make way for newer housing and commercial projects aimed to revitalise the area.

Since the maiden IBS project 53 years ago, IBS application has graced many of our construction projects from affordable housing projects to our iconic building structures like the Petronas Twin Towers and the KL Tower.

The private sector as well had participated in the IBS movement and experimented with various prefabricated construction methods while being led by various precast concrete solution providers.

Despite these efforts however, the form of construction has not yet made its full emergence within the country, especially in Sarawak and Sabah.

According to Ir. Shahrul Nizar Shaari, founder of Innovacia Sdn Bhd, the reason for this was due to a lack of proper guidance within the construction industry in the past.

“In most cases, it was for one-off and isolated projects (previous IBS attempts) – no proper plan was formulated by the Government for the industrialisation of construction,” said the Innovacia founder, an IBS consultancy firm and also the first private company accredited by the Construction Industry Development Board (CIDB).

“This was the case until the inception of the IBS Roadmap 2003-2010, which was a master plan to facilitate the transformation of the Malaysian construction sector.”

“The plan was formulated from input from the industry and endorsed by the cabinet in 2003,” Shahrul said in an article published in The Ingenieur (Sep-Nov 2006 issue).

After its endorsement, the next push for IBS adoption from the government came through in 2004 during the 2005 budget announcement.

“First, it was announced that all new Government building projects are required to have at least 50 per cent of IBS content; which is calculated through the IBS score manual developed by the CIDB.

“The decision to make it compulsory for Government buildings was to create sufficient momentum for the demand of IBS components and in order to attract the private sector, the second announcement was on the levy exemption for housing projects that have a minimum IBS score of 50 per cent,” shared Shahrul.

The government’s IBS agenda did not end there as during the subsequent 2006 budget announcement, further tax incentive to IBS manufacturers was offered through the Accelerated Capital Allowance (ACA) whereby they would be able claim tax relief for any expenses incurred in the purchase of moulds used for production of precast concrete components.

The final most prominent push for IBS during this period was witnessed in 2008 when it was reported in the local media that the government had increased their previous 50 per cent IBS content requirement for government buildings to 70 per cent.

With all these commitments from the government, one would think that our construction industry would be quick to adopt the new construction methods into their businesses, especially with all the provided incentives.

Sadly, this does not seem to be the case as even after seven years since the completion of the roadmap, IBS usage in our construction sector is still low.

According to a report from The New Straits Times, IBS implementation is only represented in 15 to 20 per cent of overall projects in Malaysia – majority of which are government projects.

Shahrul blames this low rate on the circumstances of which the IBS roadmap was initiated in.

“Unfortunately, the IBS roadmap was launched at the end of the Eighth Malaysia Plan; and by then, most of the Government allocations for development had been utilised.

“As the kick-start initiative depends almost solely on Government projects, not much could be seen in terms of IBS application as it was limited to one or two IBS pilot projects.

“Thus it could be argued that nothing much has changed in the industry since the introduction of the IBS roadmap,” he opined.

Shahrul went on to point out that the whole situation was further exacerbated by the lower demand of construction activities from the public sector which has been observed to contribute only 30.47, 27.97 and 32.86 per cent of total construction work value done in the years 2013, 2014, and 2015 respectively.

“As such, even though the Public Works Department (JKR) offers a new set of Government quarters’ drawings using IBS and modular coordination (MC), it is not being utilised fully due to the low overall demand of public construction activities.”

In response to this, it seems the government might be attempting to take a more forceful approach as CIDB’s technology division’s general manager, Noraini Bahri has said to The New Straits Times that the government agency is lobbying to extend the mandated IBS content beyond government buildings and into the private sector, starting with a 50 per cent score.

Joseph Wong Kee Liong, president of Sarawak’s Housing and Real Estate Developers Association (SHEDA) reckons this to be a real threat and anticipates that the guideline would mostly likely be imposed onto private developers within the next five to 10 years.

That being said, Wong urges local private developers to look into IBS adoption not just because of its cost and resource efficiencies but also to be prepared for future changes within the industry.

 

Wong’s advice seems to have not fallen on deaf ears as within our state alone, there appears to be a change in attitude for IBS adoption from both local government and developers.

This was observed in the recently-held affordable housing and urbanisation work visit to Hong Kong and the People’s Republic of China organised by the Ministry of Housing and Urbanisation (MoHU) and Sheda Kuching branch.

The visit’s intention was to explore and source for cost-effective construction systems and materials for the development of affordable housing projects in the state.

On this point, the trip is considered successful as five local private companies walked away from the trip, each having signed a memorandum of understanding (MOUs) between one of two Chinese IBS system manufacturers, Conceiving Board Manufacturing Co Ltd (CBM) and Weifang Henglida Steel Structure Co Ltd.

While majority of the MOUs were for the potential importation of IBS systems into Sarawak, the MOU that stood out the most was the one between CBM and Smart Housing R&D Sdn Bhd, the wholly-owned subsidiary of the Housing Development Corporation (HDC).

The MOU was for the set-up of a modular panel manufacturing plant in Muara Tebas under a third party vehicle between the two organisations with the HDC as the majority shareholder.

According to Chief Minister Datuk Amar Abang Johari Tun Openg who was present to witness that signing, the set-up of the plant would facilitate technology transfer from CBM to the state and help meet housing needs of the state by allowing increased access of IBS materials and systems for local developers to utilise.

He added that the technology would be extremely useful outside of the housing sector as well as it can be used for government projects such as resettlement projects and social infrastructure.

Lim Wee Han, a technical and sales manager with CMS Concrete Products Sdn Bhd, which is one of Sarawak’s our few IBS manufacturing plants, supported this notion, further adding that the potential plant – which is said to specialise in steel frames and sandwich panels –  would be greatly beneficial to the local industry on the whole.

“We are excited about its potential set-up as it will definitely help complement our products and increase adoption of IBS elements within the state.”

 

Roadblocks to IBS adoption

Financial  issues

Despite the optimism on the state’s IBS agenda, some concerns about its cost and acceptance from end-users were brought up as potential roadblocks to the adoption of IBS.

Speaking on the subject matter is the secretary general of the Kuching Chinese General Chamber of Commerce and Industry (KCGCCI), Jonathan Chai Vook Tok who reckons that from a financial point of view, IBS might not be a worthwhile venture.

“Even though the reduced cost of employing an IBS system such as modular housing can be very competitive, for our state’s situation, it may not churn out the same results you’d expect due to economies of scale.

“We need mass production of it for there to be any real cost savings and for that to happen, we must explore the export market as it would be very difficult to bring down the cost of production if we do not have a competitive edge,” Chai commented, noting that the nearest and most viable export market for us would be Indonesia.

Johari agreed with this notion, stating that he hoped, “Sarawak will be known as a place that export houses and not just build houses.”

He added that beyond the housing industry, the potential panel plant would be extremely beneficial to the construction industry on the whole within the state as it open doors for all building projects, from work houses to schools to hospitals.

 

Too much cheap labour

While exporting efforts can definitely help make the cost of IBS adoption more attractive to private developers, it does not answer the question of why is it that despite all the known advantages of integrating IBS elements, are traditional forms of construction still the most cost effective?

Lim said this could be due to an availability of affordable labour.

“The affordable labour makes conventional construction to be more cost effective than using IBS elements due to its lower upfront costs. However, over the last decade, this gap has been getting shorter and shorter.”

Wong predicts that this rise in labour cost will approximately double or even triple in the near to medium-term as the weak ringgit begins to deter foreign workers while the construction sector remains unattractive to most local workers.

Furthermore, government policy changes such as the proposed shift of responsibility of foreign worker levies to employers set to come into effect next year and the changes in worker accommodations requirements is predicted to further exacerbate the rate of increase in labour cost.

“Recently, the Federal Minister of Works has announced that construction workers would be prohibited to live within the construction sites.

“Thus, contractors and developers will not only have to source for alternative accommodation but also bear the additional transportation cost for their workers if they opt for conventional method of construction which requires a heavier labour force,” Wong explained.

Additionally, this lack of interest in undertaking IBS, especially among private sector project owners was seen to be dampening productivity growth within the construction sector as meagre 4.4 per cent of total economic output was recorded from the industry in 2015.

According to the Malaysian Productivity Corporation (MPC), this figure was the lowest productivity level of the five main Malaysian economic sectors – namely, services, manufacturing, construction, agriculture and mining.

“Its low productivity level indicated that industries in this sector needed to be more aggressive in adopting modern technologies and practices to reduce its over-dependence on low-skilled labour,” the MPC said in its 2015-2016 annual productivity report.

The government agency went on to point out the dangers of this trend continuing in the near future as our emerging neighbouring countries continued upgrading their construction capabilities.

“Malaysia may not be able to compete with low labour costs from now onwards as labour costs steadily increase. Productivity holds the key for improved profitability and income levels for all those employed within the sector.”

 

Changing old traditions

But even if we eliminated all the roadblocks, the implementation of IBS itself seems to be an issue as Lim explains that IBS adoption into a project isn’t just about changing a method of construction.

“It starts from the very initial stages where architects and structural engineers must adopt different designs factoring in the different properties of each IBS element to be used in order to ensure structural feasibility.

“On top of that, they will also need experience doing so, as to enable it to be on a modular design while ensuring economy of scale.

“The learning process also does not end at the private sector as local authorities must also update their knowledge on the new elements and materials in order for them to ensure proper guidelines for projects.”

Chai reckons that this step is crucial as it is the only way to facilitate for smooth IBS integration in future construction projects within the state.

“Before developers can even consider anything, many of the IBS or modular housing materials need to be first approved by relevant authorities with specific guidelines for them so as to avoid any hiccups in the planning and implementation processes.

“This is just one of the many obstacles we have to go through in order to get IBS and modular housing elements and materials onto the housing market with wider adoption across the sector.”

 

End-user preferences of IBS

Even if we do manage to lift the aforementioned roadblocks, there is still bigger concerns beyond our control – the preferences from our end-users.

After all, if consumers reject the notion of IBS-built building and residences, there is little a developer can do but to oblige their wishes in fear of their products being shunned.

Why is this more modern take on conventional construction shunned by our local buyers but not buyers aboard?

Apart from the obvious lack of information out there for the regular consumers on the attributes, advantages and disadvantages of IBS elements and structures, Chai reckoned that our previous attempt at integrating an IBS system – modular housing, into the local housing –  might be major contributor as to why users are shying away from new technology.

“The reason why I’m hesitant to say that IBS or modular housing will benefit our housing industry is because of our previous attempts at it,” Chai stated.

“There were a few projects previously using modular housing as system, but we ended up not achieving the results we were aiming for as it was new technology to us then.”

Adding on to this, Wong explained that the high upfront cost of IBS led to only a few pilot projects within the state – not nearly enough to raise public awareness on the new tech and its benefits.

As such, the general public still has a preference for insitu-casting stuctures because there is the misudnerstanding that there will be a compromise in quality if IBS elements are utilised.

“Using IBS elements is not a comprise on quality at all as it is widely used around the world and have been successfully implemented within the state as well for structures such as schools and malls,” argued Lim.

Lim went on to list several infrastructure and building projects within the state that utilised IBS elements in their construction to support his argument.

 

“Actually, IBS elements are used fairly regularly in larger construction projects. Shopping Mall like The Spring and Giant Petra Jaya are all using pre-fabricated hollow core slabs produced by our Sarawak Consolidated Industries Bhd (SCIB).

“For CMS concrete products, we supply to a range of projects from larger scale infrastructures to smaller private and or government projects,” Lim shared.

Under CMS Concrete product’s repertoire, the company manufacturer’s six main IBS elements  are its concrete wall panels, half slabs, precast columns, precast beams, precast staircases and hollow blocks.

Examples of their usage in state are: Tanjung Bako Wharf that utilises 4,500 precast deck slabs and 1,110 precast beams for the construction of its five jetties; Kuching International Airport’s new extension that incorporates precast half slabs for flooring, and Sekolah Kebangsaan Gersik that have used precast beams and half slabs during construction.

Such efforts however, seem to have little effect on consumer preferences as they are not widely advertised to the general public.

Chai opines that if we are to aim for successful industry wide IBS adoption, this can no longer be the case as we would need to continually educate and push it to the public for them to accept the new technology.

“If we can get consumers to accept IBS or modular housing, I’d say there’s a good chance of enabling the private sector in bringing down the costs of houses. However we will need both government and private sector support to achieve this,” he mused.

“Actually, IBS elements are used fairly regularly in larger construction projects. Shopping Malls like The Spring and Giant Petra Jaya are all using pre-fabricated hollow core slabs produced by Sarawak Consolidated Industries Bhd (SCIB).

“For CMS concrete products, we supply to a range of projects from larger scale infrastructures to smaller private and or government projects,” Lim shared.

Under CMS Concrete product’s repertoire, the company manufacturer’s six main IBS elements  are its concrete wall panels, half slabs, precast columns, precast beams, precast staircases and hollow blocks.

Examples of their usage in state are: Tanjung Bako Wharf that utilises 4,500 precast deck slabs and 1,110 precast beams for the construction of its five jetties; Kuching International Airport’s new extension that incorporates precast half slabs, and Sekolah Kebangsaan Gersik that have used precast beams and half slabs during construction.

Such efforts however seem to have little effect on consumer preferences as they are not widely advertised to the general public.

Chai opined that if we are to aim for successful industry wide IBS adoption, this can no longer be the case as we would need to continually educate and push it to the public for them to accept the new technology.

“If we can get consumers to accept IBS or modular housing, I’d say there’s a good chance of enabling the private sector in bringing down the costs of houses. However we will need both government and private sector support to achieve this,” he mused.

 

An alternative approach

Meanwhile, Wong is gunning for an alternative solution of industry and consumer wide IBS adoption and acceptance.

“Our market at the moment is oversaturated in higher end housing for our high income group but we have been neglecting a huge target market of consumers needing houses – our middle income group or the M40.

“We (Sheda) estimate that about 100,000 houses within the price ranges RM250,000 to RM300,000 will be needed to service the M40 group.

“It’s a huge figure to service at that price point currently, but with more modular and IBS systems coming out onto the market, I think it is completely feasible to achieve the feat in a cost and time effective manner if we are given the same treatment as Pr1ma housing projects.”

Wong went on to suggest that the huge number of houses needed would be ideal to kick start off widespread IBS adoption in the state while maintaining economy of scale for the venture to be profitable.

“We have actually made a proposal to the state government to provide us project densities that are equivalent to Pr1ma projects. In return we will be committed to build around 200,000 units of residencies acorss the state.

“Construction will be around 500 units at a time and will be constructed in several parcels of land across the state to ensure that the housing projects are well located and not congested,” Wong declared.

Of course, like many things in life, there will need to be more motivation for change to occur.

Wong acknowledges this and notes that there needs to be government encourage for both the production and implementation of IBS systems in the state.

“IBS is beyond just project implementation, it is about changing industry practices and enhancing productivity. And for that to happen, change needs to be promoted on both the supply and demand chain of the construction sector.

“We can achieve this by encouraging private investors to set up these IBS and modular system factories by way of tax incentives while ensuring steady demand for these materials from local developers by providing them special incentives for adopting IBS elements or systems into their projects.”

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