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Malaysia construction industry offers positive news

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World Cement,

Malaysia is a “brightening spot” in the Asia Pacific infrastructure market, according to recent analysis from BMI Research, providing good news for the country’s construction industry. Growth in the construction sector is now expected to hit an annual average of 6.3% between 2017 and 2021, after growth of 10.6% in 1H2017.

The boost to growth forecasts comes as the Malaysian government prioritises infrastructure development with MYR46 billion (US$10.8 billion) allocated in 2017 to infrastructure projects. The country is also on the received end of significant inward investment from China as part of the Belt and Road Initiative.

The Belt and Road Initiative is a Chinese development strategy that aims to boost land and maritime connectivity from China to Europe. The maritime element – the so-called 21st Century Maritime Silk Road – includes investment in infrastructure in southeast and south Asia, the Middle East and North Africa.

Despite this, Malaysia’s largest cement producer, Lafarge Malaysia Bhd, a subsidiary of Swiss-based major, LafargeHolcim, is cautious on the outlook for cement demand this year, after a 6% contraction in 2016.

“This year we see a number of infrastructure projects that are gaining momentum and this will have more of an impact in the second half of the year,” said Lafarge Malaysia’s President and CEO, Thierry Legrand told reporters after the company’s Annual General Meeting in May. “With infrastructure projects gaining momentum, it should bring more volumes. But how fast this will happen, it is difficult to say.

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