In fact, group managing director Lim Hock San said ML Global expected a 1-2% increase in construction cost due to higher prices in building or raw materials.
His comments echo those of Knight Frank, which in its Global Residential Cities Index Report for the fourth quarter 2016, said house prices in Kuala Lumpur continue to be on an uptrend, posting a modest 5.1% year-on-year increase, despite the weaker property market conditions.
The global property consultant further expected prices of residential properties in prominent and established areas in the city to remain resilient with moderate capital appreciation.
Another news report had said rich Chinese, unaffected by recent capital controls by China as they had their money parked overseas, were grabbing high-end properties in Malaysia after Australia and Canada started imposing extra taxes to discourage foreign ownership.
Speaking after the company’s annual general meeting today, Lim said the government had recently imposed duties on imports of rebar, steel wire rods and deformed bar in coils for three years until April 2020.
This sees duties of 13.42% for Year 1, 12.27% for Year 2 and 11.10 % for Year 3.
Hock San said due to these duties and to stay competitive in the market, ML Global had decided to ramp up its technology in using the industrialised building system (IBS).
ML Global chief executive officer Lim Lit Chek said using the precast IBS system would make the construction process cheaper and faster.
“It can control the quality of the concrete as it will be built in a factory environment.
“We can also cut down on our dependence on foreign labour,” he said.
A more upscale version from the IBS system, the precast IBS system allows the building of the “lego” type of concrete walls in a factory for easy shipment and subsequent assembling at construction sites.
“ML Global currently has more than 1,000 foreign workers.
“With this new system in place, we expect to reduce the number of these workers and stay competitive by using more high-end technology,” Lit Chek added.
ML Global has come a long way since the company (then VTI Vintage Bhd) was classified as PN17 (companies in financial distress) on March 1, 2010, after a 350% surge in its operating expenses.
In April 2010, it announced that it was negotiating with a strategic investor acquire equity to enhance its tile and construction businesses.
In February 2014, ML Global revised its regularisation plan, with property developer LBS Bina Group Bhd becoming the strategic investor.
LBS Bina currently owns a 56% stake in ML Global.