Track record, IBS make group a strong contender

“With the RM1bil total new wins for an industrial warehouse and semiconductor factory announced on June 21, this data centre project brings year-to-date FY25 wins to RM1.3bil.” CGS International Research

IJM Corp Bhd is the latest construction outfit to win a data centre job and it may play catch up to other contractors such as Sunway Construction Group Bhd (Suncon) and Gamuda Bhd, which have been winning more jobs in the data centre space.

IJM announced on Wednesday that it has been awarded its first data centre win, a Rm331.7mil contract to design and construct Block 2 of the Iskandar Puteri Data Centre in Johor, for TM Technology Services Sdn Bhd.

Construction begins from July this year and the project is slated for completion in the third quarter of 2025.

CGS International Research (CGSI Research) said IJM is likely to win more jobs in the data centre sector due to its strong track record in building projects and also its industrialised building system (IBS) plant in Bestari Jaya, Selangor.

The research house added that Suncon may be more selective in its tenders, given the urgency to complete the Sedenak data centre in Johor, while Gamuda’s strategy is to target hyperscalers that value speed of construction.

According to CGSI Research, IJM’S latest contract win is different from Telekom Malaysia Bhd and Singapore Telecommunications Ltd’s announcement on June 18, which was to develop a hyper-connected artificial intelligence-ready data centre campus in Johor with an initial capacity of 64 megawatt (MW) – potentially to be scaled up to 200MW.

The research house said IJM appears to be on track to achieve its RM5bil new order target for the financial year ending March 31, 2025 versus Rm3.7bil in the financial year 2024 (FY24), with a total order book of Rm7.3bil as at June.

“With the Rm1bil total new wins for an industrial warehouse and semiconductor factory announced on June 21, this data centre project brings year-to-date FY25 wins to RM1.3bil.

“Other potential wins include the North Pantai Expressway extension (Rm1bil), civil servant housing project in Nusantara Indonesia (Rm1bil), Penang light rail transit, ART Blue Line in Sarawak and other industrial buildings, data centres and semiconductor factories,” it added.

The research house reiterates its “add” call on the counter with a target price (TP) of RM3.66 as it continues to like IJM as a diversified infrastructure proxy in Malaysia.

Meanwhile, RHB Research estimates around 20% to 30% of IJM’S construction order book comes from industrial jobs.

“In fact, IJM stands to be the contractor with the highest number of industrial job wins (excluding data centres) in the past 12 months compared to other Malaysian large-cap contractors.

“IJM has two factories for industrial concrete piles in Ulu Choh and Senai, Johor, which we view may be utilised for providing concrete piles for the latest data centre job.”

Source: The Star

IJM likely to win more data centre jobs

The Digital Ministry said 5,331 companies have been granted Malaysia Digital (MD) status as of March 31, with over 73 per cent of them local firms.

The ministry said these local companies explore and conduct activities in the provision of high-value digital products and services using the latest technologies such as artificial intelligence, blockchain technology, internet of things, cybersecurity, financial technology, and drones.

“Various incentives and benefits are also offered to MD companies to accelerate growth and increase spillover effects to the economy as well as strengthening the country’s digital ecosystem,” the Digital Ministry said in the Dewan Rakyat today in a written reply to V. Ganabatirau (PH-Klang), who asked about the statistics with regard to local companies in the field of information technology from 2020 to 2023, and if there are plans to increase them.

The Digital Ministry, through the Malaysia Digital Economy Corporation, is working to increase the potential and competitiveness of local companies in providing hi-tech products and services that can penetrate global markets via the Gateway Amplify Invest Nurture programme.

“As of March 2024, 300 companies have participated in this programme, recording a cumulative export total of RM11.265 billion,” it said.

Source: Bernama

Over 5,000 firms granted Malaysia Digital status as of March 31

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz today expressed hope that German Vocational Education and Training (TVET), or German Dual Vocational Training, will be intensified to address the talent shortage in the semiconductor sector.

He said the government has agreed to provide RM25 billion in fiscal support to operationalise the National Semiconductor Strategy (NSS).

This includes a RM1.2 billion allocation to train and upskill 60,000 high-skilled Malaysian engineers to tackle the talent shortage in the sector.

“Apart from the Ministry of Investment, Trade and Industry’s joint efforts with the Ministries of Human Resources and Higher Education, we welcome the Malaysia-German Chamber of Commerce and Industry’s (MGCC) tireless efforts in coordinating German TVET or German Dual Vocational Training.

“Given the hundreds of German companies in Malaysia, I hope this highly regarded programme can be intensified to continue upskilling the next generation of Malaysian workers within your organisations, particularly in the semiconductor industry,” he said at the MGCC annual general meeting today.

Also present were the Ambassador of Germany to Malaysia Dr Peter Blomeyer, MGCC executive director Jan Noether, MGCC president Tim Groth, and MGCC vice president Geetha Kandiah.

Tengku Zafrul also proposed a Malaysian-German partnership in digitalisation.

“One exciting area is digitising the halal ecosystem and halal economy. Although Malaysia has made significant strides and built its leadership in the halal industry, there is still much more we can do beyond innovating the next award-winning sukuk model,” he said.

He said while German companies that are strong in digitalisation can support Malaysia in using technologies such as blockchain to secure the integrity of the halal supply chain, Malaysia can offer its expertise, infrastructure, and robust halal regulatory framework to serve the global halal market, which is estimated to reach US$5 trillion by 2030.

He mentioned that the European Union-Malaysia Free Trade Agreement (FTA) is still under consideration, saying, “We are looking at the terms.”

Furthermore, Malaysia has ratified and implemented two of the world’s largest regional free trade agreements: the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

“Both present expanded prospects not only for our key trading partners under the agreements but also for foreign investors, including German companies, in Malaysia,” he said, adding that being part of these trade pacts allows Malaysia to explore new levels of trade cooperation.

In addition to several FTAs in the pipeline to be concluded this year, he said, “Malaysia is always ready to collaborate with Germany on high-quality projects that will mutually benefit both our countries and industries.”

Source: Bernama

German TVET, RM1.2b NSS funding to address industrial, semiconductor talent crunch, says Tengku Zafrul

Malaysian businesses, especially small and medium enterprises (SMEs), should invest in cloud infrastructure and adopt a digital mindset to compete globally, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

He said the adoption of cloud technologies had led to improvements in productivity and creation of high-skilled jobs in the country.

“We have seen a surge in efficiency and innovation as industries leverage cloud-based solutions to streamline their operations, automate tasks and gain valuable insights from data,” he said at Google’s Cloud Day Malaysia yesterday.

For instance, the manufacturing sector is using cloud technologies to optimise supply chains, monitor equipment performance and enhance production efficiency.

Similarly, the healthcare industry is using them to manage electronic medical records and facilitate telemedicine services, among others.

Zafrul said these advancements not only boosted productivity through data-driven insights but also created job opportunities in fields such as data analytics, software development and cloud architecture.

On the cloud’s scalability and agility, he said it enabled homegrown startups to scale up and expand their business’ reach beyond Malaysia.

“Smaller enterprises can now leverage resources previously available only to larger corporations.”

Zafrul said Malaysia had started various projects to create 3,000 smart factories and establish Malaysia as a hub for generative artificial intelligence.

These projects will require a strong cloud-based enabler and this was where Google, as one of the global companies developing and promoting cutting-edge cloud-based technologies, could play a big role.

“Google is helping Malaysia realise key missions under its industrial transformation agenda, including helping businesses and industries tech up, automate, digitalise and robotise their operations.

“From the ministry’s perspective, the tech investments that we target and particularly favour are the ones that will promote inclusive socio-economic development.”

He said Google’s recent announcement of a US$2 billion data centre investment was a testament to Malaysia’s competitiveness, ease of doing business and growing importance as a regional hub for digital innovation.

“There are only 11 countries in the world where Google has data centre investments of this scale. Regardless of how Malaysia’s global competitiveness was ranked, which was based on a snapshot of time, the proof of the pudding is in the eating,” he added.

Cloud Day Malaysia saw 479 participants coming together to exchange ideas, forge new partnerships and experience first-hand the transformational potential of Cloud and AI technology.

At the event, companies such as AirAsia Move, Gamuda Bhd and Bank Muamalat showcased their involvement in AI innovation.

Source: NST

Zafrul: Invest in cloud infrastructure, adopt digital mindset

ENERtec Asia 2024, a threeday conference commencing today, aims to foster collaboration and knowledge exchange to address escalating air pollution and climate change caused by fossil fuel use, to meet the region’s rising energy demands.

Chairman of ENERtec Asia Tan Sri Abd Rahman Mamat said attendees will have unique opportunities to gain actionable insights, explore cutting-edge innovations and forge valuable partnerships to propel their organisations towards a low-carbon future.

“With over 300 exhibitors showcasing the most advanced solutions in renewable energy, cleantech, energy efficiency, and electric mobility, this is a true celebration of innovation and progress,” he said in his keynote address at the opening ceremony of ENERtec Asia 2024.

ENERtec Asia is organised by Informa Markets Malaysia Sdn Bhd, co-hosted by The Electrical and Electronics Association of Malaysia and in partnership with the Energy Industries Council.

Meanwhile, Sarawak’s Deputy Minister of Energy and Environmental Sustainability, Datuk Hazland Abang Hipni in his keynote address stated that ENERtec Asia provided a comprehensive platform to unite industry leaders, policymakers and stakeholders in pursuing a sustainable and secure energy landscape.

In support of the government’s commitment to the Paris Agreement, Hazland said the Sarawak state government is actively striving for a 45 per cent reduction in greenhouse gas emissions intensity relative to GDP by 2030.

“Our Ministry wholeheartedly embraces the government’s goal of achieving 31 per cent renewable energy in the national installed capacity mix by 2025, and 40 per cent by 2035.

“We are implementing a range of policies and initiatives to meet these targets, including expanding large-scale solar projects, promoting biomass and biogas energy generation, developing new hydroelectric capacity and exploring emerging technologies, such as wind and ocean energy,” he said.

He also emphasised that his ministry is implementing the National Energy Efficiency Action Plan in alignment with the government’s focus on energy efficiency.

“This plan aims to reduce electricity consumption by eight per cent across the commercial, industrial, and domestic sectors by 2025.

“We are working closely with other ministries to achieve the National Automotive Policy 2020 target of 15 per cent total industry volume for electric vehicles by 2030,” he added.

Source: Bernama

ENERtec Asia 2024 drives regional push for sustainable energy future

The investment commitment for the flagship National Energy Transition Roadmap (NETR) projects and initiatives have reached RM60.7 billion, exceeding the initial RM25 billion target, said Deputy Economy Minister Datuk Hanifah Hajar Taib.

The commitment is based on the implementation level of 10 projects and flagship initiatives on six energy transition drivers which have been introduced.

“With the level of implementation of the flagship projects and initiatives, the government also expects 84,544 employment opportunities compared to the initial target of 23,000.

“There is also a reduction of greenhouse gas emissions of 24,264 gigagrams (Gg) of carbon dioxide equivalent every year compared to the initial target of 10,000 Gg of carbon dioxide equivalent every year,” she said in the Dewan Rakyat today.

Hanifah was responding to Rompin MP Datuk Abdul Khalib Abdullah, who wanted to know about the status of the NETR Phase One in meeting the net zero carbon emissions target, including the amount of investment identified and the number of job opportunities generated to date.

She added that the 10 flagship projects and initiatives based on the six energy transition drivers involve energy efficiency (one flagship project); renewable energy (three flagship projects); hydrogen (two flagship projects); bioenergy (a flagship project); green mobility (two flagship projects) and carbon capture, utilisation and storage (one flagship project).

“Each of these projects and initiatives has a different level of maturity, and most are still in the pre-implementation stage and on schedule,” Hanifah said.

Source: Bernama

NETR projects investment, initiatives at over RM60 bln — Deputy minister

Economy Minister Rafizi Ramli said governments must adopt a holistic approach to policy and infrastructure to bolster renewable energy (RE) supply and ensure sustainable development.

He said that Malaysia plans to significantly ramp up its RE capacity over the next two to three years, paving the way for a more integrated regional approach within the Asean community.

“We need to establish comprehensive policies and robust infrastructure to support RE expansion.

“Our goal is to significantly increase our RE supply in the next few years, moving towards a cohesive regional strategy,” Rafizi said.

The minister said this during a panel session at the Annual Meeting of the New Champions, themed “The Opportunity of Managing Energy Demand”, organised by the World Economic Forum in China Tuesday.

He also said as Malaysia prepares to take over the chairmanship of Asean, it is set to champion a flagship project aimed at advancing integrated green growth across the region.

The initiative seeks to bridge the gap between RE capacities in different economies, with excess capacity in the north and higher energy demand in the south.

“Malaysia is committed to leading Asean towards integrated green growth. Our goal is to create a cohesive regional approach that facilitates the transition to sustainable energy, connecting through the peninsula to Singapore and Indonesia,” Rafizi said.

Addressing the complexities of energy demand, the minister said the critical importance of ensuring that the entire energy system is sustainable, including grid, supply, policies and incentives.

He noted that governments must be willing to invest in infrastructure and enact policy and regulatory changes, particularly concerning pricing.

“A successful public-private sector engagement (PPE) model involves the government doing everything necessary to build infrastructure and adjust policies and regulations.

“When it comes to policy and incentives, they must create a cost structure where alternatives are viable and sustainable,” Rafizi said.

Source: Bernama

Malaysia to lead push for integrated green growth across Asean — Rafizi

The Digital Ministry sees the latest US$2.2 billion investment by Microsoft as an aspiration and a benchmark for other industries in driving national innovation.

This commitment encourages the development of digital talent and drives Malaysia towards becoming a global digital hub, the ministry said in response to Dr Richard Rapu @ Aman Anak Begri (GPS-Betong).

Rapu had asked the Digital Ministry to explain how it views Microsoft’s latest investment vis-à-vis Malaysia’s digital potential.

The ministry explained that the investment will enable Microsoft to develop cloud infrastructure and artificial intelligence (AI) in the country.

Microsoft also plans to strengthen collaboration with the government to establish a national AI centre, improve the country’s cyber security capabilities, train more than 300,000 workers in the digital sector by 2025 and support Malaysia’s target to produce a million digital talents by 2030.

The multinational computer technology company also aims to create more high-skilled job opportunities in areas such as AI, cloud computing and cyber security and support the growth of Malaysia’s software ecosystem.

The investment will also help more than 200 local companies integrate AI into their operations by 2025 to improve efficiency and innovation.

Source: Bernama

Microsoft investment sets benchmark for industry players to drive national innovation

Malaysia has the potential to greatly improve productivity through the adoption of artificial intelligence (AI), surpassing the benefits of digitalisation, said Investment, Trade and Industry (MITI) Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He said AI’s potential to simplify complex and mundane tasks boosts productivity and opens doors to creativity and strategic thinking.

Alongside AI is the move to enhance research and development (R&D) to increase economic complexity by producing and delivering competitive products and services, enabling companies and economies to participate in higher-value global chains, he said.

“In R&D, process innovation is as important as product innovation and critical to boosting productivity. Our competitors are fast catching up to us, we cannot afford to be unproductive,” he said in his speech at the launch of the Productivity Report 2024 by the Malaysia Productivity Corporation (MPC) here today.

The text of his speech was read out by MITI secretary-general Datuk Hairil Yahri Yaacob.

Tengku Zafrul highlighted that technology, regulation, and talent are critical drivers of productivity which is the essence of the Productivity Report 2024.

He noted that the report recommends governments at all levels embrace good regulatory practice (GRP) and have the ease of doing business mindset, minimising shocks and unpredictability in regulatory compliance.

“Businesses must embrace modern management and technology to reduce fixed and marginal costs.

“At the same time, they must value and reward employees who continuously upskill or reskill, ensuring their competencies stay relevant in our rapidly evolving landscape,” said the minister.

Meanwhile, Tengku Zafrul stressed that a comprehensive, whole-of-government approach is essential to address the multifaceted factors influencing competitiveness.

These include talent management, public service delivery, digitalisation improvements, and the management of both the domestic economy and international trade, he said.

Themed “Driving Malaysia’s Productivity”, the report noted that the country’s 2023 labour productivity per employee was positive, moderated to 0.9 per cent compared with 2022’s jump of 5.4 per cent.

It said the country’s productivity level increased to RM96,692 per employee in 2023, rising slightly from RM95,858 in 2022.

Source: Bernama

Embrace AI to achieve significant productivity improvements – Tengku Zafrul

Malaysia’s Solarvest, a company specialising in clean energy solutions, has partnered with GreenRock Energy, a Taiwanese firm focused on renewable energy, to expedite the advancement of green energy solutions in Taiwan and Malaysia.

The collaboration makes GreenRock Energy the first Taiwanese company to participate in Malaysian government green energy projects.

GreenRock Energy is entering the Malaysian renewable energy market with a goal of achieving 1GW (gigawatt) of renewable energy projects within the next five years.

This regional partnership enables both companies to access each other’s established markets and expertise to navigate the complexities in the region.

The Malaysian energy market is actively transforming to achieve green energy development goals. Earlier this year, the government launched the LSS5 large-scale solar programme with a total of 2GW renewable energy capacity, marking the largest solar project in history.

This initiative complements the National Energy Transformation Policy , which encompasses a variety of green energy developments such as energy efficiency, renewable energy zones, and green hydrogen, all aimed at reducing carbon emissions and achieving a low-carbon nation by 2040.

To further support the nation’s ambition of becoming a regional renewable energy hub, the government also plans to adopt a Third Party Access mechanism and establish a renewable energy trading centre.

These initiatives will enable the export of cross-border renewable energy and accelerate the energy transition in Southeast Asia.

Despite the complexity and intense competition of local green energy policies, GreenRock is confident that its collaboration with Solarvest will overcome these challenges through its combined expertise and technological advantages.

As of March 2024, Solarvest has achieved a 1.2GW project track record regionally, with 440MW of projects under construction and 348MW of solar assets, representing its leadership position and extensive experience in the region.

Solarvest provides comprehensive services, including solar development, design, applications, construction, operation, maintenance, and asset management. Besides Malaysia, Solarvest

has developed renewable energy businesses in six other Asian markets including Taiwan, Singapore, the Philippines, Vietnam, Thailand and Indonesia.

In Taiwan specifically, Solarvest is collaborating with GreenRock Energy on large-scale agrivoltaic and aquavoltaic projects, targeting a total of 500MW projects.

Source: The Sun

Solarvest team up with Taiwan’s GreenRock Energy to advance green energy solutions

Axrail, an Amazon Web Services (AWS) advanced tier services partner in Malaysia, has opened Southeast Asia’s first of its kind Generative AI (Gen AI) lab to support the growing demand for AI solutions and the nation’s digital economy aspirations.

The Gen AI lab pools the expertise of AWS, Phison and Axrail in one collaborative hub.

Axrail said it showcases cutting-edge cloud solutions powered by AWS, including those built on Amazon Bedrock, alongside on-premise innovation with Phison’s innovative aiDAPTIV+ technology.

Located within Axrail’s 3,000 square foot centre of excellence (CoE) for AI solutions, the lab is designed to accelerate businesses’ AI readiness by helping them to build capabilities to extract value from data and increase operational efficiency across various functions.

“It aims to cater the evolving needs of businesses seeking a fast-tracked and scalable path to AI adoption, and positions Axrail at the forefront of delivering comprehensive, end-to-end generative AI solutions for both cloud and on-premise environments,” it said.

Axrail founder and chief executive officer Kelvin Kok said the innovative sandbox will empower businesses to reimagine operations through AI, delivering measurable outcomes and future-proofing their approach. 

“Our goal is to accelerate AI adoption, especially among Malaysian small and medium enterprises, leveraging the upcoming AWS Region in Malaysia for data residency, low latency and robust cloud services across Southeast Asia,” he said in a statement.

AWS Malaysia country manager Pete Murray highlighted that the lab offers business solutions that boost productivity and efficiency for industries like retail, manufacturing, healthcare and entertainment for SME customers of all sizes. 

“Partners like Axrail can help customers make the most of the opportunity advanced technologies like generative AI can offer business owners,” he added.

Axrail, a subsidiary of QL Resources Bhd, has a track record of helping over 50 businesses across Malaysia and Singapore.

Source: NST

QL Resources’s unit Axrail unveils Southeast Asia’s first generative AI lab in Malaysia

Johor’s potential as a data centre hub is largely driven by its strategic location near Singapore and the resources it offers in terms of energy, water, transportation and suitable land, according to Malaysia Digital Economy Corp (MDEC).

MDEC digital industry acceleration head Wan Murdani Wan Mohamad said when demand for more data centre capacity exceeded the neighbouring region’s resources, global companies started looking beyond – to Batam and Jakarta in Indonesia, the Philippines, Bangkok in Thailand, and Malaysia.

He said Johor offers the perfect solution due to its geographical closeness, allowing companies to leverage Singapore’s established digital ecosystem while benefiting from the ability to expand and grow in the region.

“This proximity ensures minimal latency and high-speed connectivity, which are essential for data centre operations.

“These factors collectively create a favourable environment for the establishment and growth of data centre operations, positioning Johor as a key player in the regional data centre landscape,” he told Bernama.

Wan Murdani opined that the increasing demand for artificial intelligence (AI), cloud computing and data storage presents significant opportunities for Malaysia to advance in the digital economy.

“As more businesses transition to cloudbased services and leverage AI, the need for scalable compute and data storage solutions will drive further investments in data centres, particularly in strategic locations like Johor.

“These investments will enhance Malaysia’s digital infrastructure and attract global companies seeking cost-effective and well-connected hubs,” he said.

In attracting more investments, MDEC has established close collaborations with various federal and state agencies such as Iskandar Regional Development Authority, Invest Johor, Jcorp, Plan Malaysia Johor, and Koridor Utiliti Johor to streamline and enhance the experience for both current and potential investors.

“By working closely together, MDEC and these agencies ensure that investors’ requests and requirements are promptly addressed and effectively met,” said Wan Murdani.

Establishing data centres in Johor will significantly increase demand for commercial real estate, including new facilities and the retrofitting of existing buildings.

Another key attraction for Johor potentially becoming a data centre hub is the state’s power and water infrastructure readiness to handle large-scale data centres.

According to Wan Murdani, MDEC has been providing technical advice and assistance to state governments, Tenaga Nasional Bhd (TNB) and investment promotion agencies since 2010 in preparation for these data centre investments.

“The availability of locations with ready infrastructure in Johor, such as Sedenak Technology Park (STEP), Nusajaya Tech Park (NTP) and SILC (Southern Industrial and Logistics Clusters) allowed for the rapid development of expansive data centre facilities without the prohibitive costs seen in more densely populated areas.

“Additionally, while Malaysia’s energy costs are competitive, it was TNB’S infrastructure readiness for hyperscale data centres that enabled companies to expedite their construction plans, which played a major role,” he noted.

As data centres and digital infrastructure consume significant energy, there will be an increasing emphasis on developing eco-friendly renewable energy solutions.

Investments in renewable energy sources, energy-efficient technologies and sustainable practices will ensure that the growth of the digital economy aligns with environmental goals, positioning Malaysia as a leader in both technological and sustainable development.

Wan Murdani said Malaysia has passed the Energy Efficiency and Conservation Act, which aims to ensure energy-intensive industries, including data centres, are operated to maximise energy efficiency as much as possible.

He said MDEC has facilitated engagements between the Energy Commission and the industry.

Source: The Star

Demand boom, resources make Johor fit as data centre hub

The state government in collaboration with the Town and Country Planning Department (Plan Malaysia Johor) is drawing up the Johor State Data Centre Development Planning Guidelines to coordinate and monitor data centre development planning.

Johor Investment, Trade, Consumer Affairs and Human Resources Committee chairman Lee Ting Han said the initiative is aimed at having a uniform guide and reference for local councils and agencies involved.

Lee, who is also the Paloh assemblyman, chaired the first meeting of the Johor State Data Centre Development Coordination Committee yesterday.

“Committee members are made up of state and Federal agencies including the Johor Economic Planning Division, Invest Johor, Malaysian Investment Development Authority (Mida), Malaysian Digital Economy Corporation (MDEC), Iskandar Regional Development Authority (IRDA), Tenaga Nasional Berhad (TNB) , Ranhill SAJ, Land and Mines Office, Environment Department and Plan Malaysia which acts as the secretariat.

“Among the functions of the committee include assisting the state government and councils to coordinate the development of data centres, providing advice on matters related to data centre development before applications are considered by the councils, considering and making recommendations for the development of data centres in existing or abandoned buildings and submitting reports related to data centre development to the State Planning Committee (if necessary),” he said in a post on his Facebook page.

Lee said the committee has decided that data centers in Johor should focus on the use of renewable technology in addition to saving electricity and water.

“In this regard, the state government will continue its investment-friendly policy since the development of data centres is one of the main requirements in increasing the use of technology and digital as a result of the development of Industrial Revolution 4.0 and Artificial Intelligence, which can increase productivity and competitiveness.

“Furthermore, the state government will work with Federal agencies such as Mida and MDEC to realise the potential of developing a wider digital ecosystem as well as attracting related and AI-based technology companies to Johor, while also creating job opportunities in the fields of technology, engineering, data management, infrastructure support for the people of Johor,” he said.

A total of nine data centre projects have been successfully implemented with a total capacity of nearly 1,280 megawatts so far.

Six projects are currently under construction with a projected capacity of nearly 1,490 megawatts in addition to more than 30 projects that are at various stages of discussion and approval.

Source: Bernama

Johor to streamline coordination of data centres for local councils and agencies

The opening of Penang’s Asia Design Centre is a significant step forward for Malaysia’s tech ecosystem to develop next-generation precision digital instruments, leveraging custom integrated circuit (IC) designs.

Digital Minister Gobind Singh Deo said this enables the delivery of high-performance and high-quality semiconductors, propelling Malaysia’s technological capabilities.

The Asia Design Centre is a RM71 million investment by LTX-Credence Sdn Bhd, part of US-based global tech company Cohu.

“The investment is a testament to LTX-Credence’s commitment to Malaysia’s growth. This is projected to generate an impressive RM1.6 billion in indirect economic value over the next five years, significantly boosting the local economy,” Gobind said at Asia Design Centre’s inauguration today.

“As part of Cohu, LTX Credence has established itself as a leader specialising in semiconductor test solutions. Ranked third globally in the semiconductor test industry, its expertise and innovation continue to set new benchmarks,” he said.

Gobind said Cohu has a presence with operations and customer support centres across key markets in Asia, Europe, and North America with more than 500 highly skilled field engineers.

He said the Asia Design Centre’s recruitment drive will attract up to 60 skilled research engineers, paving the way for a rise in highly trained workforce. The investment also aligns with Prime Minister Datuk Seri Anwar Ibrahim’s vision to upscale Malaysia’a semiconductor industry.

He also said LTX-Credence’s Malaysia Digital status in May 2024 underscores government support and commitment to the sector.

“Malaysia commands an impressive seven per cent share of the global semiconductor market with companies increasingly diversifying operations beyond a single location to mitigate risk and ensure continuity.

“More will be done to enhance the nation’s capabilities and infrastructure because the ultimate goal is to see Malaysia play a role in the global semiconductor industry,“ he said.

Collaborations between the centre and local universities and research institutions are a possibility, he said.

Source: Bernama

LTX-Credence’s RM71m investment in Asia Design Centre to generate economic value, jobs

A total of nine data centre projects have been completed in Johor, while six others are in the process of completion, says Lee Ting Han.

The Johor investment, trade, consumer affairs and human resources committee chairman said that the state has become a key player in the development of data centres in the region due to several key advantages.

“Among the factors that have made Johor ideal for the development of data centres include its strategic location, the availability of utilities, infrastructure and human resources, as well as the investor-friendly approach of the state and federal governments.

“As of June this year, nine data centre projects with a combined capacity of 1,280 megawatts have been completed in the state, while six other projects with an estimated capacity of almost 1,490 megawatts are in the process of being completed.

“On top of that, there are 30 other projects that are in discussion and approval level,” he said in a statement here on Thursday (June 20).

Lee added that in view of the rapid growth, the state government has taken some steps to ensure that the development of data centres is being properly planned and that it will benefit the locals.

“As such, the state government and the Johor Town and Country Planning Department (PLANMalaysia) have come out with guidelines.

“This will act as a guide for local councils and agencies involved in the coordination and monitoring of data centres,” he said.

He added that he had chaired the first meeting of the Johor data centres coordination and development committee on Wednesday (June 19), where several key matters were discussed.

“The committee has decided that data centres in Johor should focus on the use of renewable technology capable of saving electricity and water,” he said, adding that the state government will continue sticking to its investor-friendly policy.

Source: The Star

Nine data centres in Johor completed, six others in progress, says exco rep

Johor is rapidly becoming a key player in the data centre industry in Southeast Asia, driven by its strategic location, robust infrastructure and investment-friendly policies from both state and federal governments.

As of June this year, nine data centre projects with a combined capacity of nearly 1,280 megawatts have been completed in Johor, while six more projects are currently under construction, expected to add about 1,490 megawatts.

Trade Investment and Consumer Affairs Committee Chairman Lee Ting Han said approximately 30 other projects are in various stages of planning and approval, reflecting Johor’s growing appeal as a data centre hub.

He said Johor’s proximity to major regional economic centres enhances its appeal for data storage and processing, while its robust utilities and infrastructure offer reliable power and water supply, essential for data centre operations.

“The favourable investment climate provided by the state and federal government policies offers the needed support and incentives for data centre development.

“With the rapid growth of data centres, we are also ensuring that the benefits extend to local communities.

“Guidelines and coordinating committees have been developed to ensure that the data centres prioritise the use of renewable energy and technologies that enhance energy and water efficiency,” he said in a statement today.

Lee said provisions in the formulated guidelines aim to serve as a standardised reference point for local authorities and agencies to coordinate and oversee data centre projects.

“We want to ensure that the data centres adhere to best practices in power usage effectiveness and water usage effectiveness, aligning with international industry standards.

“With the guidelines, local authorities will also recommend that data centre operators use existing or vacant buildings,” he added.

Source: NST

Johor emerges as data centre hub powerhouse in Southeast Asia

The Batang Ai power plant is set to be the first in Malaysia to produce up to 158 megawatts (MW) of energy from the combination of hydro and solar, said Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.

He said this would be achievable after Sarawak’s first floating solar farm project is fully completed, supplementing the existing hydroelectric plant (HEP).

“I was made to understand that the floating solar farm project will be fully completed soon. At the moment it is more than 30 per cent complete.

“The floating solar farm has the potential to produce at least 50 MW of power and adding to the existing 108 MW from the hydro dam, would mean that Batang Ai could be producing 158 MW of electricity in total soon,” he told a press conference during a working visit to Sarawak Energy Berhad’s (SEB) floating solar farm at Batang Ai in Lubok Antu, Sri Aman today.

Among those present were Minister of Utility and Telecommunication Dato Sri Julaihi Narawi; Deputy Minister of Energy and Environment Sustainability Datuk Dr Hazland Hipni; Deputy Minister of International Trade, Industry and Investment Datuk Malcolm Mussen Lamoh, who is also Batang Ai assemblyman; Lubok Antu MP Roy Angau Gingkoi; SEB Chief Executive Officer Datuk Sharbini Suhaili and Sri Aman Resident Mahra Salleh.

In view of the fact that Batang Ai dam is 8,500 hectares in size, Abang Johari said the capacity generated from such combined methods could be increased in the future.

At the moment, he said, only 86 hectares were covered for the floating solar farm.

He said if 60 per cent of this 8,500 hectares are to be used, Batang Ai has the potential to produce around 2,000 MW of solar power.

“I have shared with SEB on this matter, that Batang Ai dam development can be intensified with foreign investment pouring in, now that we have laws allowing foreigners to invest in power generation in Sarawak. This means that there is indeed room for increasing our power capacity to 2,500 MW, just from Batang Ai alone,” he said.

He pointed out that the state government, too, has identified the HEP in Bakun and Murum for foreign investment, where Bakun would be able to produce 500 MW whereas Murum 600 MW, adding that the state government had signed a memorandum of understanding (MoU) with Abu Dhabi Future Energy Company (Masdar) for the purpose of developing these two HEPs.

Source: Borneo Post

Premier: Batang Ai to be first in M’sia to produce 158 MW energy after completion of floating solar farm

The Johor Sustainability Centre (JSC) would collaborate with Sarawak on the state’s renewable energy capacity (TBB) initiatives, especially through the use of hydrogen technology, said chairman Datuk Seri Hasni Mohammad.

He said Johor Menteri Besar Datuk Onn Hafiz Ghazi will lead a state government delegation to Sarawak this month to explore this.

“Among other things, the visit also aims to strengthen cooperation and exchange expertise to consolidate efforts towards development and the state’s TBB initiatives.

“It is one of the state government’s strategies to form a collaboration, either with the private or public sectors to strengthen Johor’s renewable energy initiatives,” he told reporters at a signing ceremony between Paragon Globe Berhad (PGB) and UOB Malaysia here today.

Present at the event were PGB executive chairman Datuk Seri Edwin Tan Pei Seng and UOB Malaysia’s head of banking Andy Cheah Shu Kheem.

Hasni, who is also a former menteri besar, said it was important for the state government to forge a close cooperation with its Sarawak counterpart to better understand hydrogen technology as a renewable energy source.

“We learnt that Sarawak intends to export the TBB to Singapore. If the initiative employs hydrogen technology, then Johor has the potential to use it as a renewable energy source,” he said.

On June 10, Sarawak unveiled an energy transition policy incorporating renewable energy sources and technology to ensure a clean and sustainable future for the state.

The policy, known as SET-P, was the state’s roadmap towards green energy.

Premier Tan Sri Abang Johari Openg reportedly said Sarawak will become the largest producer and supplier of hydrogen fuel in the South-east Asian region from 2023.

He said Sarawak has the ability to produce and supply hydrogen because it has many rivers, and the water sources can be processed to be used as hydrogen for vehicles.

Source: Malay Mail

Hasni: Johor keen to work with Sarawak on green energy initiatives

Foreign countries showing keen interest in the renewable energy sector

Renewable energy (RE) investments will be a key focus area under Sarawak’s Post Covid-19 Development Strategy (PCDS) 2030 to position the state on a sustainable growth trajectory.

According to Investsarawak chief executive officer Timothy Ong, one of the immediate goals to be undertaken for the rest of 2024 involved firming up the strategic direction of the agency in terms of focus investment areas.

Investsarawak is the Investment Promotion, Industry Development and International Trade agency that operates under the purview of the International Trade, Industry and Investment Ministry of Sarawak.

It was incorporated with the aim to serve as a one-stop centre for investors. “We have had interest from investors from quite a balanced pipeline of countries including the United States, China, Singapore, South Korea and members of the European Union,” Ong said during the Sarawak Corporate Day here yesterday.

He noted that high-quality foreign and domestic investments must be nurtured correctly into a climate where both the private and public sector can flourish.

“Our mission is to transform and position Sarawak into the preferred location for sustainable investments while remaining reliable to investors providing sustained growth, anchored on strong economic and investment policies,” added Ong.

The state welcomes investments into priority areas such as high-tech industries, a highly skilled workforce and sustainability efforts which will drive its growth, according to Ong.

As such, Sarawak aims to become a developed state by 2030 and achieve Rm282bil in gross domestic product (GDP) with a monthly household income median of RM15,000.

The World Bank had recognised Sarawak as a high-income state last year.

“Achieving Rm282bil will mean an 8% annual growth under PCDS 2030. We foresee a 3% growth if we continue with business as usual.

“PCDS is a common target for all, one that would help rally the troops and galvanise us towards a concrete goal.

“I’m hopeful to be able to achieve that. Let’s say we fall short of achieving Rm282bil, but achieve Rm250bil, I don’t think anyone would fault us for an additional Rm110bil to Sarawak’s GDP,” he said.

Leveraging on Sarawak’s inherent strengths such as having 56.5% of forest, four million ha of land used for agriculture, and 1.4 million ha for settlement and water bodies, Ong said the state’s abundant natural resources will further elevate its potential.

“In terms of RE, it is important to become self-sufficient, if we are not producing enough power for our own, then we will be held hostage to those who are. We must try our best to do this,” he said.

While hydro is a good option to generate clean electricity, it also takes a long time to develop.

“Hydro takes up to 10 years for it to be fully functional, as we have seen in the Batang Ai hydro dam, as well Bakun, Murum and the anticipated Baleh dam. The goal is to have produced 60% of RE mix by 2030 so it’s vital we look at other means of producing clean energy,” he said.

The mix will include biomass, floating solar, solar and wave.

For now, the state has been utilising hydro particularly in its hydrogen buses as well as Petroleum Sarawak Bhd’s multi-fuel station with electric charging and a hydrogen pump.

The hydrogen bus is currently able to travel up to 300km using a single refill, and gives out zero emissions.

Its transportation system, also known as the Kuching Urban Transportation System has adopted the green hydrogen methods in its decarbonisation efforts.

“Green hydrogen provides a higher efficiency range of 40% to 60% compared with a combustion engine which has 30% to 40% in efficiency. It also has a cleaner output,” Ong said.

The transit system that will span 70km is expected to be fully completed by 2027.

He said four units of the official cars used by the Sarawak premier Tan Sri Abang Johari Tun Openg and deputy premier Datuk Amar Douglas Uggah utilised hydrogen.

“We are either looking into or already producing RE. These include carbon capture and storage, cultivating renewable sustainable feedstock like algae and renewable oil for sustainable aviation fuel,” he said.

Meanwhile, Ong also said some of the other plans under the PCDS 2030 would include revamping their education system, whereby a free tertiary-level education policy would be implemented in 2026.

“We expect some 25,000 students to be able to access free education. This will include free education in international schools for the bottom 40 segment. Science and Mathematics will also be taught in English,” he said.

A good education system will go hand in hand with good talent, which has been a part of their efforts in bringing back skilled Sarawakians to grow the economy, according to Ong.

Additionally, the Sarawak Digital Economy Blueprint 2030 will act as a framework and guide in helping the state realise its goals.

“This will include creating 39,000 to 48,750 new skilled jobs, 50% growth in investment and partnerships, 96% highspeed connectivity and 20% contribution to Malaysia’s GDP.

“We also want to cultivate 500 high-tech startups. We need a strong digital infrastructure, talent, data governance, research and development as well as digital inclusivity,” he added.

“Achieving RM282bil will mean an 8% annual growth under PCDS 2030.” Timothy Ong

Source: The Star

Sarawak on sustainable growth trajectory

Analysts at MIDF Amanah Investment Bank Bhd (MIDF Research) see a potential rise in foreign direct investments (FDI) for data centres as demand in the tech sector continues to surge.

In a report, it said: “We opine the robust FDI growth in ICT is highly related to data center and 5G rollout projects.”

It predicted the electrical and electronics (E&E) sector would likely remain in radar and in fact contribute higher following the New Industrial Master plan (NIMP) 2030 agenda.

“The blueprint aims to expand Malaysia’s semiconductor industry to Integrated Circuit Design and Wafer Fabrication.

“According to MITI, Malaysia’s strengths for semiconductor are the back-end segments; electronics manufacturing services and assembly and testing. Apart from that, the blueprint targets to deepen the specialty chemical vertical and launch locally made electric vehicles,” it said.

The research team also opined that Malaysia’s industrial landscape is on a promising trajectory, with significant developments across key states.

“Selangor stands out with ambitious projects such as the Selangor IC Design Park, Selangor International Aeropark and the Green Industrial Park. Johor is experiencing robust growth with ventures like the Johor-Shenzen Industrial Park and Eco Business Park VI.

“Negeri Sembilan is positioning itself for long-term success with initiatives like the SPD Tech Valley and Malaysia Vision Valley. Also, Pulau Pinang is enhancing its high-tech sector with the Penang Science Park South and Batu Kawan Industrial Park.

“In East Malaysia, Sabah’s

20,000-acre International Industrial Park and Sarawak’s Bintulu Industrial Park reflect substantial regional advancements.

“These strategic developments underscore Malaysia’s dynamic and forward-looking industrial future,” it highlighted.

Meanwhile, the global trade war between China and US is also expected to be beneficial to exporting countries such as Malaysia.

MIDF Research noted that prior to 2012, the re-exports to total exports ratio stayed below 10.0 per cent.

After one year under former US President Donald Trump, Malaysia’s re-exports ratio hit above 20.0 per cent for the first time in January 2018.

The re-exports grew by 25.3 per cent y-o-y in 2017 and +39.5 per cent y-o-y in 2018. In comparison, domestic exports only expanded by +17.7 per cent y-o-y and +1.5 per cent y-o-y respectively.

“Looking ahead, if there is a change of leadership in the US by end of this year, we expect greater intensity of existing global trade war.

“As for Malaysia, re-exports are poised to rise strongly benefiting from potential increase of global and regional distribution hubs,” MIDF Research opined.

By product, it noted that there are four products that make about 90.0 per cent of the reexports namely Machinery & Transport Equipment, Mineral Fuels, Manufactured Goods and (iv) Chemicals.

Among the four, it pointed out that Mineral Fuels and Machinery & Transport Equipment have the large re-exports rate of 36.5 per cent and 27.8 per cent in 2023 respectively.

“We may see re-exports activity improve above 10.0 per cent for Manufactured Goods if global trade war intensified,” it said.

All in, MIDF Research opined that looking ahead, we might see a stronger pick-up in export-oriented sectors such as manufacturing, mining and agriculture in 2H24 amid improving global trade activities and stable global commodity prices.

It also foresee a stronger pickup in export-oriented sectors such as manufacturing, mining and agriculture in 2H24 amid improving global trade activities and stable global commodity prices.

Source: Borneo Post

Data centres, external trade revival key FDI supporters

SD Guthrie Bhd is in a favourable position to ramp up its future renewable energy (RE) business, partly thanks to the recently launched Kerian Integrated Green Industrial Park (Kigip) master plan in Perak.

Maybank Investment Bank Research said besides Kigip, Penang could also be a potential buyer of RE from SD Guthrie’s solar farm at Kigip to offset carbon dioxide generated at its Silicon Island project.

“While the master plan has been launched, it is still unclear what SD Guthrie’s final equity structure in Kigip will be. What we know is Kigip will provide SD Guthrie with land disposal gains (when it opens up in stages) while its solar farm (likely 100% owned) will provide future recurring income.

“The project could house 157MW to 178MW of solar capacity, and form part of the company’s ambition to grow its RE capacity to 1,000MW in the next three to five years,” the research house added.

Kigip borders the states of Penang and Kedah. The master plan would be developed through the collaboration of the federal government, Perak state government, SD Guthrie, and Permodalan Nasional Bhd.

Solar will be Kigip’s main source of power, and the project aims to attracting high quality investments especially in sectors such as electrical and electronics.

This 1,000-acre Kigip site, to be developed in stages, would be supported by SD Guthrie’s 660 acre solar farm that would be built adjacent to the site.

Besides Kigip, there are other opportunities and potential projects in line with federal and state governments’ initiatives.

The brokerage said its earnings forecasts have yet to incorporate contributions from Kigip or large scale solar farms, noting that it is maintaining its “buy” call on the stock with a target price of RM4.96 per share.

Source: The Star

Potential for SD Guthrie to ramp up its RE business

Telekom Malaysia Bhd (TM) is partnering Nxera, the regional data centre arm of Singapore’s Singtel’s Digital InfraCo unit, to develop data centres in Malaysia starting with a sustainable, hyper-connected artificial intelligence (AI)-ready data centre campus in Johor.

The data centre campus in Iskandar Puteri – 16 kilometres from Singapore – would be the largest to date for both TM and Nxera.

The initial phase of the data centre is planned for 64 megawatts (MW) and could be scaled up to 200MW in response to market demand, the telecommunications service providers (telcos) said in a statement today.

According to the statement, the strategic partnership aims to serve the needs of hyperscalers, next-generation AI application providers, and enterprises pursuing accelerated digitalisation and cloud in the region.

“This high-power density campus will be able to host large computing and AI capabilities such as requirements by cloud hyperscalers, graphics processing units (GPU)-as-a-service providers and features advanced technologies such as liquid cooling to support high-power density workloads and operations efficiently.

“The data centre will be a Leadership in Energy and Environmental Design (LEED)-certified green building, emphasising its commitment to greater energy efficiency and sustainable practices,” it said.

TM group chief executive officer (CEO) Amar Huzaimi Md Deris said the collaboration of two main telcos in the region is unique and has a positive impact on the development of a digital ecosystem that not only benefits businesses but also nurtures future talent.

“Establishing a hyperconnected AI-ready data centre marks the next phase in our long-standing partnership with Singtel, leveraging our strengths and commitment to elevate ASEAN as the preferred digital hub destination.

“TM brings the largest domestic network infrastructure, extensive international subsea cable systems, and the largest interconnected data centre in Malaysia, a solid backbone for this project,” he said.

Amar Huzaimi noted that the data centre would catalyse high-performance computing and lay a solid foundation for the future advancement of cloud and AI applications.

He also said that through the partnership, TM continues to demonstrate its dedication to delivering innovative and sustainable solutions, marking a pivotal step in its aspiration to become a digital powerhouse by 2030.

Meanwhile, CEO of Nxera and Singtel’s Digital InfraCo unit Bill Chang said the collaboration advances its vision to be the region’s leading sustainable, hyperconnected AI-ready data centre platform, supporting businesses with the digital infrastructure needed for the growing demand for cloud, digitalisation and AI.

“The first data centre campus development in Johor, which can be expanded in phases, demonstrates our ability to scale quickly in markets that are important to our customers.

“With our joint industry expertise and strong track record, we will build and operate one of the most efficient, sustainable and connectivity-rich data centres in Malaysia,” he said.

In addition to data centres, Chang said the company would be expanding the submarine cable connectivity between Singapore and Johor to enhance digital connectivity.

He said the joint venture would also partner with institutes of higher learning in Malaysia to nurture talent for projects and the industry.

Source: Bernama

TM, Singtel’s Nxera form joint venture to develop next-gen data centres

Investments from technology companies in Malaysia will definitely improve and enhance the artificial intelligence (AI) ecosystem in the country, said Minister of Science, Technology and Innovation (Mosti) Chang Lih Kang.

He said this in response to questions from reporters regarding TikTok owner ByteDance’s plan to invest RM10 billion in Malaysia.

“When technology companies invest in Malaysia to expand their operations, they will help us enhance the AI ecosystem.

“This means more computing power and more data centres. I believe this will help us build infrastructure and encourage the adoption of AI,” he told reporters after officiating at the National Science Week Carnival 2024, today.

Regarding Nvidia’s investment, Chang mentioned how the government could utilise its investment in terms of technology and expertise.

“Nvidia is investing with Malaysian partners. We foresee a transfer of technology, which will help us in terms of infrastructure. They will establish data centres using GPUs (graphics processing units) with high computing power. This will help us push AI development in our country,” he said.

Additionally, he said Mosti, through the Malaysian Research Accelerator for Technology and Innovation (MRANTI), has established an AI sandbox in collaboration with Nvidia to benefit from its expertise.

“Nvidia has also discussed and agreed to provide cloud credits to Malaysia for AI start-ups in our country,” he added.

Source: Bernama

Tech giants’ investments to boost Malaysia’s AI ecosystem, says science minister

TH Plantations Bhd has partnered with Cenergi SEA Bhd to undertake the development, construction and operations of a 1.2 megawatts (MW) biogas power plant in Kluang, Johor.

The project will be executed through a joint venture between THP Applications & Services Sdn Bhd and Cenergi RE Sdn Bhd.

TH Plantations chief executive officer (CEO) Mohamed Zainurin Mohamed Zain said the biogas power plant is targeted to be operational in 2026.

Once operational, he said the electricity generated from this biogas power plant will be sold to the national grid managed by Tenaga Nasional Bhd (TNB) under the SEDA’s (Sustainable Energy Development Authority) Fit Scheme.

“At TH Plantations, we are always looking for ways to enhance Tabung Haji’s investment value while prioritizing environmental sustainability,” he said at the signing ceremony here, today.

The biogas power plant is set to generate enough electricity to power up to 1,500 homes annually.

In term of environmental impact, this biogas power plant could help avoid about 20,000 tons of carbonemissions annually, which is equivalent to 4,760 cars driven in a year.

Mohamed Zainurin said the project aligns with TH Plantation’s Al-Falah 22/22 strategies, aimed at optimising the treatment of palm oil mill effluent and reducinggreenhouse gas emissions.

He said the introduction of green technology initiatives will enhance the existing factory treatment system without causing environmental harm.

“Renewable Energy (RE) is poised to play an increasingly significant role in Malaysia’s electricity generation, given the abundance of biomass and biogas resources. TH Plantation is committed to exploring opportunities to become a reliable supplier of bio-stock for the RE industry,” he said.

Meanwhile, Cenergi group CEO Hairol Azizi Tajudin said through this partnership, the company will offer its expertise and services to support TH Plantations with its sustainability journey, particularly in reducing carbon emissions.

“As part of our strategic collaboration with TH Plantations, we should collaborate more not only on biogas but in other areas such as biomass pellets and solar.We are also open to explore other areas of RE technology with TH Plantations should the opportunity arise, and the time is right,” added Hairol.

Source: NST

TH Plantations to work with Cenergi SEA for 1.2MW biogas power plant in Kluang, Johor

WITH the implementation of the China Plus One strategy, expansion of third-party logistics (3PLs) and space upgrades, along with growth in sectors such as electrical and electronics (E&E), pharmaceuticals and medical devices, cold chain logistics and automotive, the demand for industrial warehouses has surged.

PTT Synergy Group Bhd (KL:PTT), a construction company that also provides warehouse solutions and distribution centres, is planning to distinguish itself from other players in the logistics space by transforming into a high-tech total intralogistics and industrial solutions provider.

Its founder, joint controlling shareholder and managing director Teo Swee Phin says demand for warehouse space remains high, with manufacturers being the main drivers as they expand their logistics space.

“We wish to transition to a company with sustainable earnings for our stakeholders and become an ‘A’ Class industry leader in high-technology industrial solutions, not just locally but also regionally,” he tells The Edge in an interview.

PTT has three main business segments: (i) construction; (ii) industrial property development and warehouse and logistics; and (iii) trading of building materials.

The group specialises in developing built-to-suit automated industrial warehouses featuring Automated Storage and Retrieval System (ASRS) technology, which consists of a variety of computer-controlled systems for automatically placing and retrieving loads from defined storage locations.

“As a construction company specialising in earthworks and infrastructure works, we leverage our expertise to enhance the cost efficiency of our industrial warehouse development projects,” says Teo.

PTT staged a turnaround with an annual profit of RM8.41 million in the financial year ended June 30, 2022 (FY2022), from a net loss of RM1.09 million in FY2021. However, its bottom line declined by a sharp 81% to RM1.59 million in FY2023. In the nine months ended March 31, 2024 (9MFY2024), the group reported a net profit of RM7.68 million,which is 16.68% lower than a year ago.

Teo says the significant drop in PTT’s earnings in FY2023 was primarily due to the accretion of interest on deferred trade payables of RM3 million — associated with the group’s industrial development projects — and a one-off corporate exercise cost for the acquisition of Pembinaan Tetap Teguh Sdn Bhd (PTTSB).

“Looking ahead, we anticipate a positive revenue and profit growth over the next three to five years, driven by enhanced operational efficiencies and the maturity of our ongoing industrial property developments,” he says.

In FY2023, PTT’s construction division remained the group’s largest revenue contributor, accounting for 70% of its turnover. The trading division accounted for 29% of its total revenue, while the industrial property development and warehouse and logistics division contributed 1%.

“We expect our construction division to continue to be the main driver for our core earnings in the short term. In 9MFY2024, the construction division accounted for 82% and the trading division 18% of total revenue.

“We expect construction to contribute 70% to FY2024 total revenue; with 15% from industrial property development and warehouse and logistics; and another 15% from the trading division,” Teo estimates.

On the construction front, PTT clinched a RM299 million contract in March to build a bridge and connecting roadworks from Tumpat to Kota Bharu, Kelantan, before it went on to secure two earthworks contracts from Sime Darby Property Bhd (KL:SIMEPROP) totalling RM169.8 million in May. On average, gross margins for the group’s construction division are between 15% and 20%.

For FY2025 to FY2027, PTT expects its industrial property development, warehouse and logistics segment to grow as there are more industrial property projects featuring advanced technology in the pipeline, supported by increasing demand for efficient supply chain solutions and warehouse spaces.

“We remain highly focused on industrial development projects as they are a core part of the group’s businesses. Our strategic pivot and investment in these areas are in line with government initiatives to promote advanced technologies and automation in order to reduce reliance on labour,” says Teo.

Apart from the ongoing Tropicana Industrial Park in Johor, PTT has five more industrial property development projects in the pipeline, consisting of smart warehouses equipped with ASRS technology and other automated solutions, with a monthly capacity of 237,000 pallets, over the next two years, which could accelerate the group’s earnings in the coming years.

System pallet serves as the structural foundation for the efficient handling and storage of unit load systems. Tenants for these projects are diversified across growing sectors in the 3PLs providers, fast-moving consumer goods (FMCG), semiconductor, E&E and commodity space.

In March, the group held a groundbreaking ceremony to launch its first smart warehouse development in PTT Logistics Hub 1 at Sime Darby Property’s Elmina Business Park, Shah Alam, Selangor. With an estimated gross development value of RM145 million, the project is expected to be completed in the fourth quarter of next year.

On May 23, PTT announced it had entered into a non-binding letter of intent with a prominent multinational corporation (MNC) based in the northern region of Peninsular Malaysia that specialises in semiconductors.

Under this agreement, PTT will develop a built-to-suit automated warehouse equipped with comprehensive Internet of Things and artificial intelligence technology and lease it to the MNC in Penang. This state-of-the-art infrastructure, encompassing a built-up area of 401,701 sq ft, will feature an ASRS with an annual capacity of 552,000 pallets.

Change of ownership in 2020

PTT, previously known as Grand Hoover Bhd, saw a change of ownership in 2020/21.

Aim Tetap Teguh Group Sdn Bhd (ATTG) — jointly owned by Teo, his elder brother Teo Swee Leng (PTT deputy chairman) and Datuk Abd Rahim Jaafar (PTT executive chairman) — surfaced as a substantial shareholder of the company with a 17.07% stake in October 2020.

Following a rights issue, which raised RM30 million in September 2021, ATTG became the controlling shareholder of PTT with a 57.91% stake.

As at Oct 2 last year, the trio’s private vehicle owned 55.96% equity interest in the company. At the same time, the Teo brothers collectively owned direct stakes of 18.08%.

PTT’s top 30 largest shareholders include Fortress Capital Asset Management (M) Sdn Bhd and Tradeview Capital Sdn Bhd.

Teo says PTT’s management team has been “continuously laying strong fundamentals” since the new major shareholders took over the company in 2021.

“We position ourselves differently from other Bursa Malaysia-listed stocks, as a unique total intralogistics solutions provider specialising in developing industrial warehouses featuring ASRS technology.

“Coupled with our strategic growth initiatives, we are optimistic that if the company continues to demonstrate strong financials, growth potential or strategic initiatives, it could support further appreciation in stock price,” he says.

Shares gaining traction

Over the past month, shares of the Main Market-listed PTT jumped 77.24% to close at RM2.18 last Thursday, giving it a market capitalisation of RM436.9 million.

“From the perspective of market trends, if there is rising interest in construction and property stocks on Bursa Malaysia, it could positively impact PTT’s stock price, especially if investors perceive it as belonging to a similar sector or benefiting from similar market dynamics,” Teo says.

As at end-March, PTT’s net debt stood at RM319.8 million, with net gearing at 1.76 times.

Teo acknowledges that PTT’s increased borrowings over the past years were due to “strategic borrowing aimed at accelerating the development” of the group’s key projects, as well as the acquisition of PTTSB in August 2023.

“We are vigilant about our leverage and are considering optimising our debt profile through ongoing private placement and land disposal exercises when the time is ripe,” he says.

In March 2023, the group completed a private placement and raised RM9.63 million cash by issuing nine million new shares at RM1.07 apiece.

In August that same year, PTT acquired the entire equity interest in PTTSB for RM152 million. The acquisition was deemed a related-party acquisition given the substantial ownership and directorial overlap between PTT and PTTSB.

Later in October, PTT proposed a private placement of up to 36 million new shares, representing 20% of its share base. The issue price for the third tranche of the placement shares was fixed at RM1.11 each.

PTT said the acquisition was to consolidate the private construction business and construction-related assets of major shareholders into the group. The move effectively eliminated the potential conflict of interest between the group and its major shareholders while aligning the interests of the group and PTTSB in future construction projects. 

Source: The Edge Malaysia

PTT Synergy aims to be a high-tech industrial solutions provider