HSL hopes infra devt will remain S’wak’s top priority
Hock Seng Lee Bhd (HSL) is hopeful that infrastructure development will continue to be a top priority in Sarawak in the Covid-19 aftermath.
According to chairman Datuk Idris Buang in his chairman statement in HSL's Annual Report 2019, the impact of the Covid-19 pandemic on the region will be severe and unprecedented.
Idris recapped that in its bid to curb the infection, the Malaysian government has implemented Movement Control Order (MCO) that lasted for weeks.
“This is expected to further impact the nation's fiscal profile, bringing greater uncertainty to the country's economy,” he said.
“Therefore, it is not an understatement to say that the pandemic has sent financial markets into a tailspin and global economy is now on the brink of a major recession.
“Following the rapid spread of virus infections in Malaysia as well as other countries, the economy is forecast to contract further as trade growth weakens.
“This is on top of the intensifying and prolonged US-China trade war, mounting geopolitical issues and uncertainties persisting from our regime change which have all impacted our industry.”
He noted that with volatile commodity prices, changes in fiscal policies, minimum wage-hikes and the inflow of competitors to the open tender exercises, there remain many challenges ahead.
“That said, we are hopeful that infrastructure development will continue to be a top priority in Sarawak.
“While the economy makes a recovery in the Covid-19 aftermath, we believe that this sector is key to rural transformation initiatives as well as urban development.
“We still have a substantial order book of RM3.3 billion as at December 31, 2019. Of this, RM2.2 billion is unbilled, so there is ample work to be done.”
HSL's mega projects were progressing well before the MCO was implemented in March 2020 by the government to control the Covid-19 pandemic.
“As a result of the MCO, the mega projects in hand will continue to present us with unprecedented challenges in managing escalating cost and human resources issues to achieve the desired financial outcome.”
HSL garnered some RM663 million in new works during 2019. The group will continue to bid selectively for projects which align with its specialist marine and civil engineering capabilities and in line with Government's policies.
However, Idris noted that the availability of new projects remain uncertain in view of other pressing priorities of the current government especially in continuing its efforts to curb the spread of Covid-19.
“Meanwhile, the property sector has perform satisfactorily but has been affected by the many unfavourable economic factors mentioned.
“There has been significant softening of the market due to a lackluster economy, stagnating wage growth, possible retrenchment and residential product overhang.
“Our team will have to ramp up greatly their marketing strategies and incorporate more aggressive pricing this year to clear remaining stock.”
Overall, Idris observed that the impact of the sluggish economy is very difficult to assess at this juncture given that the Covid-19 pandemic is forecast to cause the worst recession since the Great Depression.
He also opined that the crisis is far from over and it will continue to affect all Malaysians in the coming year or two.
“While the nation continues to battle against the Covid-19 pandemic, we remain hopeful that the situation will improve with time.
“We are attuned to the Government's policy and we are hopeful that more development projects implemented under the current Eleventh Malaysia Plan and going into Twelfth Malaysia Plan (2021-2025) will continue to stimulate the industry.
“Water supply, waste water systems, bridges and roads are among the projects that remain vital to Sarawak's development and offer ongoing work for HSL.”
As such, HSL's sentiment for 2020 and beyond is one of cautious optimism with our focus on efficient project execution and strategic procurement initiatives to sustain our commendable growth and continuous profitability.
“As we work cautiously, we look forward to moving into the new HSL office tower this year and seeing the adjacent mall tenanted.”