There is no better time for adoption of IBS Solution as Construction Industry look forward to a positive 2021.
The concept of Industrialised Building System, or IBS in short have been around since the pyramids were being built in Egypt. The stone blocks, which are the main components of the pyramids were “manufactured” at a separate location from the construction site. This is done so that the blocks are in manageable sizes and volume before transporting them to the construction site, so as to ensure the construction process is at its most efficient.
Fast forward to relatively recent times, the adoption of IBS in the modern context first took place in Malaysia in 1964, when the Malaysian government started utilizing IBS components in major projects to accelerate their completion such as the Pekeliling Flats in Kuala Lumpur. Since then, quite a number of iconic buildings have been built by adopting IBS solutions, the Petronas Twin Towers, Bukit Jalil Sports Complex, and the Malaysian Light Rail Transit among them.
IBS allows construction projects to be able to achieve more with less. Quicker completion can be attained with less manpower, costs, and delays. It is estimated that IBS reduce the number of workers requirement by half and almost 1/8th of expenses. It is also a potential solution that might enable firms to gradually stop hiring low-skilled workers and hire more skilled ones that will better enable efficiency and productivity.
The obvious advantages of IBS, mainly being faster and costs lower, means that it will holistically supersede conventional building techniques. The advent of technology such as 3D printing strengthens IBS as the foremost solution in the construction industry.
The Malaysian Government has been promoting IBS since 1999 when the first IBS Strategic Plan was announced, followed by 2 roadmaps intended to boost the use of IBS by 2015, with quality control, research and development, and training programmes the key components of these initiatives in the effort to increase IBS adoption.
Furthering the cause for IBS adoption, several incentives and mandates were also issued in making IBS a more appealing solution. The Malaysian government mandated that 70% of materials in any state-funded projects must consist of IBS, which is more than 100% increase from the same mandate in 2004 when only 30% was stipulated to be IBS. In private projects, the same mandate stipulates 50% of materials must consist of IBS. These mandates were launched with the objective of bringing down costs, and at once increase IBS adoption rates in the industry, especially in the private sector. Several tax incentives were also offered to companies that implements IBS in their projects, such as the Acceleration Capital Allowance that enables IBS adopters to claim expenses against steel moulds used in precast concrete components. These incentives has seen the completion of almost RM 10 billion worth of projects adopting IBS by 2010, decreasing the cost of IBS, even before factoring in lower labour costs, proving that IBS is more economical than conventional methods.
Although the spread of the Covid-19 pandemic slowed down the construction industry in 2020, the year 2021 will see a 13.9% growth on account of the acceleration and revival of major infrastructure projects, coupled with affordable housing projects. With an expected CAGR of 4.7% over the forecast period of 2019–2024, the Malaysian construction industry is set to rebound. This outlook is further strengthened by the RM 7.35 billion allocation for the Works Ministry under the 2021 Budget, with RM 6 billion to be used for development expenditure, as stated by Works Minister, Datuk Seri Fadillah Yusof. In similar positive fashion, the IBS Investment Tax allowance has also been extended for another 5 years until 2025, to encourage more industry players to adopt the latest IBS solution in their work processes.
Thankfully, a pathway to become an IBS solution and service provider is already in existence in the form of CIDB IBS’ Vendor Development Programme (VDP).
The CIDB IBS VDP offers potential participants the opportunity to:
I. Further develop and strengthen their expertise as an IBS entrepreneur
II. Access to new IBS technology
III. Become a strategic partner with government and other private agencies to further develop their business
IV. Participate in CIDB IBS’ promotional activities to spread awareness about their business
The VDP is part of the Malaysian Government initiative to offer SMEs in the nation’s construction industry technical advisory in terms of capacity building, IBS technology, and Building Information Modelling (BIM). Other than that, participating companies will also be facilitated to a faster application for IMPACT Certification Programme, and guidance to adopt the IBS Design Standards for housing projects.
The objectives of the VDP are to create and develop successful SMEs in Malaysia’s construction industry, provide a platform for SMEs to take up opportunities in the IBS construction industry, and further strengthen existing IBS industry players, increasing the number of IBS manufacturers, in effect enriching the Malaysian IBS ecosystem.
It can be argued that there could not be a better time for the construction industry players in Malaysia to start adopting IBS solutions more widely. With obvious cost savings, productivity, and general efficiency benefits, matched with the positive industry outlook starting next year, participation in the IBS value chain should come as a no brainer, especially for the small to medium sized enterprises in the industry.