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Malaysia’s total lockdown and what it means for Singapore’s construction industry

Jun 01, 2021

Malaysia has just announced a nationwide lockdown from June 1 to June 14, to arrest the sharp rise in the number of COVID-19 cases.

During the so-called phase one or ‘total lockdown’, most economic and social activities will be barred. 

As factories were a key source of workplace clusters even under earlier Movement Control Orders (MCO), only those involved in making essential products such as food and medical equipment will be allowed to operate.

Although Minister of Trade and Industry Gan Kim Yong has confirmed that the flow of goods and supplies will continue during this time, it is likely that import of building materials will be disrupted, as the factories would have stopped production.

Some of the building materials that Singapore imports from Malaysia:

  • Rockwool
  • Steel 
  • Plasterboard
  • Fibrous plaster
  • Cement
  • Aerated lightweight concrete panel
  • Pre-cast concrete
  • Ready-mix concete
  • Fibre-cement
  • Granite aggregates
  • Stone

It’s quite a long list of items! 

According to some sources, Singapore imports from Malaysia more than US$500 million annually. 

We think that many projects will be affected by material shortages.

For BTO flats which are already facing 6-9 month delays because of previous infections in dormitories, this spells further bad news. Singapore companies such as G&W Group operate precast yards in Senai, Malaysia. Precast assemblies are usually made and delivered “Just-In-Time” – as no one has space to store such large objects. Other bulky items like Rockwool depend on daily trips by trailer vehicles – similarly because of storage issues.

When the total lockdown is lifted and Malaysia progresses to a 4-week phase 2 lockdown, it is unlikely that Malaysia will let factories operate at full capacity. Factories were a key source of workplace clusters during earlier Movement Control Orders.

Like what we’ve seen throughout the world – when the lockdown lifts and the economy opens, there will be an initial surge of demand when factories reopen – this will cause logistics bottlenecks and increased costs.

With so many important materials coming out of Malaysia, industry members would do well to plan ahead for this contingency.

What we’re planning to do.

We’re in constant communication with our suppliers in Malaysia. For committed orders, our salespeople will keep you up-to-date with the latest information.

To ensure uninterrupted supply of materials, we are talking with alternative suppliers in other countries – for example Indonesia for plasterboard or China for steel channels. While these sources might be more expensive due to distance and shipping costs, they might be worth considering to avoid further project delays.

As always, please feel free to check with us if you need any updates about the situation.

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