MIDA and CIDB Sign MoU to Boost Productivity and Sustainability in The Manufacturing, Services and The Construction Sectors

Kuala Lumpur, Aug 5, 2016 – The Malaysian Investment Development Authority (MIDA) and the
Construction Industry Development Board (CIDB) Malaysiaentered a momentous partnership today
with the signing ofa Memorandum of Understanding (MoU) to boost productivity and sustainability
practices for investment in the manufacturing, services and construction sectors.

Key areas of collaboration between MIDA and CIDB Malaysia under the MoU include enhancing the
adoption of Industrialised Building Systems (IBS), encouraging sustainable practices and promoting
compliance to construction material standards amongst construction industry players in Malaysia.
Towards this end, both agencies will leverage on each other’s strength and resources to conduct
joint programmes in policy and advocacy, awareness, promotion and education.

Signing on behalf of MIDA and CIDB respectively were Dato’ Azman Mahmud, the Chief Executive
Officer of MIDAand Dato’ Ir. Ahmad ‘Asri Abdul Hamid, the Chief Executive of CIDB Malaysia. They
were joined by Tan Sri Amirsham A. Aziz, the Chairman of MIDA and Tan Sri Dr. Ir. Ahmad Tajuddin
Ali, the Chairman of CIDB Malaysia, who both witnessed the momentous occasion. “MIDA and CIDB have been working closely in numerous initiatives over the years since CIDB’s establishment in 1994. The signing of the MoU will further deepen this strategic collaboration, particularly in enhancing the adoption of IBS in Malaysia. As part of the MoU, MIDA will collaborate with CIDB to provide advisory and other policy advocacy on matters relating to incentives, investment opportunities on IBS, green initiatives and building materials,” said Tan Sri Amirsham,
Chairman of MIDA.

Speaking at the signing ceremony, Tan Sri Dr. Ir. Ahmad Tajuddin Ali, Chairman of CIDB Malaysia
said, “The partnership between CIDB and MIDA marks an important milestone, not just for the
construction sector, but also for the nation as a whole. Partnerships like this are highly important as
we enter the final leg of our journey towards becoming an advanced, high-income nation by 2020.” The partnership between the two Government agencies is in line with the Construction Industry Transformation Programme (CITP), a five-year plan formulated by the Ministry of Works and CIDB Malaysia in consultation with construction industry players and stakeholders to elevate the standards of the local construction industry via four key thrusts – Quality, Safety and Professionalism; Environmental Sustainability; Productivity; and Internationalisation.

As part of the initiative to increase productivity in the construction industry, MIDA and CIDB will be
working closely to enhance the adoption of Industrialised Building Systems (IBS) amongst its players.
This is in line with the Productivity thrust of the CITP, which has identified modern construction techniques as one of the key drivers to increase productivity by two-and-a-half times.

Furthermore, the Government has announced that incentives will be granted to companies
manufacturing IBS components whereby the companies will be considered for either Pioneer Status or Investment Tax Allowance (ITA). These incentives are effective for applications received by MIDA from 10 September 2015 until 31 December 2020. “I am also pleased to share that Dato’ Azman, the CEO of MIDA, has been appointed as the Chairman of the CITP Initiative Working Group (IWG) on IBS. This working group reports to the Ministerial Committee via the Thrust Working Group (TWG) to steer and monitor the progress of IBS adoption,”said the Chairman of MIDA. Elaborating on the benefits of adopting IBS, Tan Sri Dr. Ir. Ahmad Tajuddin Ali said, “With the adoption of IBS, companies can be more cost effective, increase the speed of construction, reduce foreign labour issues and improve overall performance in terms of quality, occupational safety and health as well as waste reduction.” IBS is a modern technique of construction whereby building components are manufactured either off-site or on-site and then installed into on-going construction works. The CITP targets that by 2020,100% of public projects worth RM10 million and above must achieve a minimum IBS score of 70 whereas for private projects, the goal is to attain a minimum IBS score of 50.

The partnership between MIDA and CIDB also seeks to encourage industry players to embrace
environmental sustainability. This supports the CITP’s Environmental Sustainability thrust which has
identified industry adoption of sustainable practices as one of the key initiatives to transform Malaysia’s construction sector to be a low carbon, sustainable building and infrastructure hub by 2020.

In this regard, MIDA and CIDB will be collaborating to promote and facilitate incentives available for
industry players which invest in green technology. In fact, Investment Tax Allowance (ITA) and Income Tax Exemption (ITE) are also granted for those using green technology services and systems.
The incentives are part of the Government’s strategy to strengthen the development of green
technology in the country. The incentives offered cover a widespread of industries such as energy,
transportation and waste management, in addition to green buildings. “We would like to urge industry players to leverage on these facilities in order to reduce our carbon footprint and increase the prevalence of green technology for the construction industry in Malaysia,” said Tan Sri Amirsham .

Meanwhile, Gamuda Industrial Building System Sdn Bhd (GIBS) was announced as the first company to be granted the incentive. Szeto Wai Loong, Director of GIBS, said, “It is a great honour to be granted by MIDA for the incentive to manufacture IBS components. This scheme will benefit us in the setting up of the factory, heavy machineries and other systems.” The company, wholly owned by Gamuda Berhad introduces an innovative technology to the building construction industry. It takes the current IBS to an advanced level of automation with state-of-the art robotics production system. It also has the capabilities of offering turnkey solutions namely design, automated precast production, and installation at site (design & build concept). The GIBS factory is located in Tanjung Industrial Park, a 27-acre land within close proximity to KL International airport.

For more information, please visit www.cidb.gov.my or www.mida.gov.my