3.1.1 What is the size of your industry?

An industry or sector is the manufacturing of a good or service within a category. Although industry is a broad term for economic activity and trade, in economics and urban planning industry is a synonym for the secondary sector, which is a type of economic activity involved in the manufacturing of raw materials into goods and products.

Figure 3.1: Malaysia Economics Sectors

According to the figure 3.1, it shows that service industry is the major part in the Malaysia economics sectors. According to the market demand, high qualities of raw materials are increasing day by day. Therefore ACS Supplier Sdn. Bhd. wants to grab this opportunity to become one of the most successful suppliers for this materials business. Our business is including in the service industry. Because of that, we want to be one of the contributors in this industry. Addition, we want to develop this industry become more successful and profitable in our country. So, our company was involving in the business that has 52% size in industry and as a major role in contributing in economic growth.

The tertiary sector of economy (also known as the service sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately manufacturing) and the primary sector (extraction such as mining, agriculture and fishing). Sometimes an additional sector, the quaternary sector is defined for the sharing of information (which normally belongs to the tertiary sector).

The tertiary sector of economy involves the provision of services to businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. Goods may be transformed in the process of providing a service, as happens in the restaurant industry or in equipment repair. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods.

3.1.2 What sectors does this industry include?

There are four key industrial economic sectors which are the primary sector, largely raw material extraction industries such as mining and farming. The secondary sector are involving refining and manufacturing. The tertiary sector, which deals with services and distribution of manufactured goods and the quaternary sector, a relatively new type of knowledge industry focusing on technological research, design and development such as computer programming, and biochemistry. A fifth quinary sector has been proposed encompassing non-profit activities. The economy is also broadly separated into public sector and private sector, with industry generally categorized as private.

Our business is including in the tertiary sector. The tertiary sector of economy also known as the service sector or the service industry is one of the three economic sectors. The tertiary sector of economy involves the provision of services to businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest contril or entertainment. Goods may be transformed in the process of providing a service, as happens in the restaurant industry or in equipment repair. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods.

Our company is contributing in the service sector where we are running the services in the construction industry. Our company as a supplier the high quality of cements that needs in construction work and we also provide the best services in this sector which is a major role in contributing economic growth.

3.1.3 Who are the major players in this industry?

In Malaysia, the major player in this industry are:

• YTL Technologies Cement Berhad.

The YTL Group's are including:

1. YTL Corporation Berhad
2. YTL Power International Berhad
3. YTL Cement BerhadYTL Land & Development
4. YTL E-Solutions Berhad
5. Starhill Reit
   
   

• Lafarge Cement Malaysia
  

Lafarge Malayan Cement Berhad (LMCB) is the leader of the Malaysian cement industry and a major player in the Asian export market. It was incorporated in 1950 with its first cement plant built in Malaysia in 1953. Lafarge Malayan Cement is proud to serve Malaysia for the past 58 years and is committed to "Building Malaysia Together" in the coming years.

3.1.4 What are the markets and customers for this industry?

The market for our business is in the construction industry and consultants. We can see the construction in growing rapidly in East Coast Peninsular Malaysia so that the product from ACS Supplier which is cement is really important. The customers for this industry are mainly contractor, consultant and personal person.

3.1.5 What are the industry's estimated sales this year? Last year? The year before?

The Construction Industry in 2006-2008

The construction industry is recording positive growth of 0.7% in 2006. (2005: -1.6%) The civil engineering sub-sector is envisaged to pick up with the roll-out of infrastructure projects under the RMK-9 and ongoing projects.

Among the RMK-9 projects are the 880 new construction projects totaling RM15 billion. In light of the limited construction opportunities and excess capacity in the domestic market, several local construction companies have ventured abroad, mainly to India and the Middle-East, where they have secured projects mainly to construct roads, highways and buildings.

Data from the Construction Industry Development Board indicated that local contractors are currently undertaking 48 projects worth RM15.3 billion in 36 countries.

1. Private developers completed a total of 77,027 houses during the period, increasing the existing stock level to 3,734,280 units at end-June 2006.
   
2. Incoming supply, that is residential units under construction, sustained at 631,790 units during the period backed by a 12% increase in housing starts of mainly condominium and terraced units.
   
3. The Government through Syarikat Perumahan Negara Berhad (SPNB) continues to build affordable houses priced below RM70000. SPNB is currently involved in developing 16 projects at an estimated cost of RM2116 million in various locations in the country. (Source: Economic Report 2006/2007, Ministry of Finance)

4. According to CIDB Construction Quartetly/Statistical Bulletin, in 2006, 3450 construction contractor is registering with CIDB.

5. 3765 in 2007 and 2189 is registered until March 2008. The graph shows the number of contractors that registered to the member is increasing.

6. Including in 2008, the numbers is estimated by the CIDB to increase greatly. This is a great opportunity for our company to involve in Malaysia construction industry.

   

Figure 3.2

3.1.6 What national/economic trends have affected this industry and how?

Malaysian Economy in 2008

1. The growth momentum in Malaysia remains strong driven by robust domestic demand and favorable export performance. Construction expanded at a strong pace of 5.9% in the second quarter, following a growth of 5.5% in the first quarter of 2008. For the second quarter of 2008, the Leading Index registered a growth of 6.3% (January-March 2006: 2.9%).
2. The private sector, which resumed its role as the key engine of growth since 2003, continues to drive domestic economic activities in 2008. Private sector expenditure is anticipated to contribute 4.7 percentage points to Construction growth in 2008. Accordingly, the share of private sector in the economy is expected to increase further to 63.2% in 2008.
   

3.1.7 What national/economic trends might affect it in the future and how?

The construction industry, particularly those activities in the residential, commercial and civil engineering sub-sectors, expanded strongly in the 1990s as reflected in the high growth of output value, total employment, and salaries and wages of the industry. The expansion of the industry was supported by the strong growth in bank lending to the sector.

In 1997, the industry contributed some 4.8 per cent to GDP and employed about 9.2 per cent of total workforce. The industry has strong linkages with other industries in the economy such as sawmills, distributive trades, and construction-related manufacturing. For RM1 billion worth of output from the building and construction industry, about RM505 million of input will be generated from domestic industries. Imports constituted about one-fifth of the industries output.

In the present environment, contractors are forced to cut cost by reducing salaries and retrenching workers. Performance in the construction related industries such as building materials, distributors, machinery and equipment suppliers, and consulting engineering is significantly affected.