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IJM is one of Malaysia's leading construction groups and is listed on the main board of bursa Malaysia. Its business activities encompass construction, property development, manufacturing and quarrying, infrastructure concessions and plantations.
Headquartered in Selangor, Malaysia, IJM's regional aspirations have seen it establish a growing presence in neighbouring developing markets with operations presently spanning 11 countries, with primary focus in Malaysia, India, United Arab Emirates, China and Indonesia.
IJM's phenomenal growth over the past two and a half decades is the result of its unwavering focus on its core competencies, diversification into strategically related businesses and selective expansion into new markets.
A product of a merger between three medium sized local construction companies - IGB Construction Sdn Bhd, Jurutama Sdn Bhd and Mudajaya Sdn Bhd, IJM was born in 1983 with an overarching purpose of competing more effectively against bigger foreign rivals. The Company rapidly established itself as a professionally managed construction group and soon gained market acceptance. Over the years, the Company progressively built on its competitive prowess, financial capacity and repute to strengthen its footing as a serious local contractor.
In April 2007, IJM acquired the Road Builder Group ("RBH"), its nearest competitor, to augment its position as the country's second biggest builder. In addition to bolstering its construction order book, property land bank and infrastructure portfolio, the enlarged Group enabled IJM to realise considerable synergistic benefits from the merger, greater local prominence as well as attain a more sizeable balance sheet to bid for larger jobs and facilitate its expansion into overseas markets.
IJM's undertaking as a property developer began as a natural progression from its vast experience and expertise in construction. The Group's property arm has since grown considerably. Listed on the Main Board of Bursa Malaysia, IJM Land Berhad is presently one of the largest property developers in Malaysia with sprawling townships, commercial buildings and high-rise condominiums under development in key growth areas throughout the country. The Group has also made significant inroads as a reputable developer into India in recent years. Besides this, it has also undertaken ventures overseas in the past such as in USA, Singapore and Australia.
Initially supporting its manufacturing and quarrying operations with in-house orders, the Group's Industry Division quickly grew its operations into scalable core activities focused on demand outside the Group. IJM continued to expand on its operations in the Division through strategic acquisitions such as the takeover of Industrial Concrete Products Berhad in 2004 and successful market diversifications into China, India and Pakistan.
Leveraging on its construction expertise, the Group also targeted infrastructure investments to create long-term recurrent income streams. Initial advancements into concession assets in Malaysia however proved elusive, thus an international focus was adopted. IJM's involvement in overseas infrastructure privatisation (Build-Operate-Transfer) schemes met with tremendous success. Amongst the Group's investments in major overseas infrastructure projects are the Western Access Toll way in Argentina, five tolled highways in India and the Binh An water treatment concession in Vietnam. In Malaysia, IJM operates two urban highway and port concessions from the RBH merger and has one toll road currently being constructed. The Group had previously invested in and profitably sold several infrastructure assets in China.
The Group also showed considerable foresight by venturing into plantations in 1985 as a source of steady income to cushion the cyclical nature of its core construction business. This investment has since paid off handsomely. Now listed on the Main Board of Bursa Malaysia, IJM Plantations Berhad has contributed significantly to the Group's earnings over the years and also helped bolster the Group during the economic downturn in the Asian financial crisis in 1997. It is currently expanding its plantation land bank into Indonesia and is at the initial stages of its oil palm fresh fruit bunches purchasing and milling business in India.
When IJM went public in 1986, it had a market capitalisation of RM66 million and total assets of RM172 million. As at 31 March 2009, the Group's market capitalisation and total assets stood at around RM4 billion and RM12 billion respectively.
To be an internationally competitive Malaysian builder of world class infrastructure and buildings.
To deliver the highest standards of performance in all our ventures with the IJM Mark of Excellence
We strive to:
Uphold the highest standards of professionalism and exemplary corporate governance to maximise the benefits for all stakeholders;
Respect the different cultures, gender, religion, human rights and dignity of our stakeholders;
Ensure the quality of our products and services exceeds our customers' expectations;
Create a conducive environment for team spirit among our employees to work towards a unified workforce; and
Be a responsible and respected corporate citizen with concerns for social, safety, health and environmental issues.
Construction has been IJM's core business since its formation. Synergies for growth were forged as the Group sought to diversify into other sectors related to its core construction business. IJM's merger with Road Builder (M) Holdings Berhad in early 2007 further bolstered the Group's construction prowess and enhanced its scale of operations. Today, IJM is one of Malaysia's largest and most diversified construction group in terms of projects undertaken and geographical spread. Having earned a solid reputation in each of its specialised construction fields, IJM is effectively Malaysia's largest "Construction Supermarket".
Highways, Roads and Bridges
Airports, Railways & Monorails
Foundation, Water Supply & Marine Work
Power, Oil & Gas
Projects undertaken and successfully completed include:
The North Klang Valley Expressway,
Several sections of the North-South Expressway,
The Jelutong Expressway in Penang,
The U4 Expressway in Putrajaya,
The Kuala Lumpur International Airport Runway 2 and MAS Cargo Terminal,
The Kuala Lumpur Light Rail Transit,
KTM double tracking, pelabuhan tanjung pelepas rail link,
Petronas Gas Processing Plant 5 and 6 in Terengganu,
Port Klang Power Station, and
The Kuala Terengganu Water Treatment Plant.
Resorts, Hotel & Clubs
Condominiums & Housing
Commercial & Cultural Complexes
Hospitals, Clinics & Medical Centres
Preservation and Refurbishment
In building construction and industrial building systems, IJM has successfully built magnificent high-rise buildings and landmarks that characterise the country's skyline.
In its portfolio of construction projects, IJM has built:
The world-class Mid Valley Megamall in Kuala Lumpur,
Luxurious condominiums such as the Hampshire Park, Riana Green and Sri Pangkor Condominiums, and
Impressive hotels, resorts and clubs such as the Renaissance and the New World hotels in Kuala Lumpur, the Pan Pacific Resort in Pulau Pangkor, the Berjaya Hotel and Beach Resort in Mauritius and the Riviera Bay Resort in Melaka.
Other landmarks to add to its impressive portfolio are turnkey projects undertaken that include:
The Putrajaya Convention Centre
The National Heart Centre,
The Ministry of Works Office Complex,
The National Theatre in Kuala Lumpur,
The Putrajaya Clinic and Hospital, and
The Putrajaya Library.
Leveraging on the Group's construction expertise, the Group expanded into property development and management. This Division was among the pioneers to enter into the privatized mass housing projects in Selangor and Penang in the early 80's. Its success spearheaded the Group into property development that has now become a major part of the Group's activities. Since then, the Properties Division has made impressive inroads into the development of massive mixed-use developments, ambitious satellite townships, large-scale condominium projects, industrial and office parks and corporate headquarters of major local and international corporations.
The Properties Division takes pride in its meticulous planning to deliver projects that meet customer expectations in every aspect of design, environment, landscape, function and aesthetics. Every project is guaranteed of completion on time with high standards of quality backed by IJM Construction's ISO 9002 standards as well as the IJM Quality and Safety Assessment System (IQSAS).
After completion, IJM's property ventures are well serviced and managed. Its subsidiaries and an associate company provide maintenance and security services for properties managed or developed by the Group. These include the full range of property management, post-completion management and other maintenance services. The Group's high-quality maintenance standards of its buildings ensure a clean and healthy environment for its occupants and continued high value for properties. These are the important factors that contribute to IJM's success in property development.
Today, IJM's property development are concentrated in the high growth areas of the country, covering the entire range of residential, commercial, retail, industrial and mixed-use developments.
IJM took the opportunity to transform its internal building material operations, such as quarrying and ready-mixed concrete, into a core activity when demand grew significantly outside the Group, setting the foundation for the Group's present Industries Division.
Besides being one of Malaysia's largest quarrying groups, the Industries Division's expansion in steel fabrication plants, scaffolding rentals and the manufacture of prestressed concrete piles business has become a substantial contributor to the Group's activities.
Today, IJM's subsidiaries, Strong Mixed Concrete Sdn. Bhd. have emerged as a niche player in the highly competitive ready-mixed concrete business while Scaffold Master Sdn. Bhd.'s business in scaffolding rentals is the largest in the country. Malaysian Rock Products is one of Malaysia's largest quarrying groups, with an annual capacity exceeding 6.5 million tons of granite and industrial-use stones. It is the first quarry in Malaysia to be awarded the ISO 9002 certificate for its quality management in aggregate and premix production. Its quarries are located in the Klang Valley, Johor Bahru and Kuantan.
Industrial Concrete Products Berhad, a public listed associate company of the Group, is the country's largest manufacturer of prestressed spun concrete piles. An ISO 9002 certified company; its products are also exported.
Other products manufactured by the Group include HDPE pipes and tanks.
IJM's diversification strategy also saw its entry into the oil palm plantation business.
Incorporated in 1985, IJM Plantations Berhad has an extensive area of well-managed oil palm plantations of over 22,000 hectares comprising of 14 estates and a plantable reserve of 8,000 hectares in Sandakan, Sabah.
Complementing the plantations, the Division has three palm oil mills capable of processing 750,000 tonnes of oil palm fruits per year. These state-of-the-art processing mills consistently produce results above the industry's average. In addition, the Division has set up a palm kernel crushing plant with a capacity of 250 tonnes per day for the processing of by-products.
Significant investments have also been made in Research and Development and training to maintain the Division's competitive edge well into the future. A Research and Training Centre has been established for this purpose along with trials on oil palm variety improvement and agronomy. Training programs have been initiated to keep staff abreast with the latest best practices and to enhance operational efficiencies. The Division takes pride in its own production of quality hybrid seeds to meet the demands of its expansion.
The Division's other complementary and downstream activities include the trading of agrochemical and fertilizers and agromanagement services. Activities in the pipeline include port and bulking services for the industry.
IJM Plantations Berhad was listed on the main board of the Malaysia Securities Exchange Berhad (MSEB) in July 2003 and is a subsidiary company of the IJM Group.
Following its merger with Road Builder (M) Holdings Berhad in early 2007, IJM fully owns and operates two urban toll concessions in Malaysia, namely the Sungai Besi Highway and New Pantai Highway. In addition, IJM wholly owns Kuantan Port and 39% of Kemaman Port, both located on the East Coast of Peninsular Malaysia.
â€¢ Highway Toll Concessions
The 6-lane Sungai Besi Highway commenced tolling in 1999 and has since been a vital artery that runs southbound from the Jalan Istana Interchange in Kuala Lumpur to Universiti Putra Malaysia, Putrajaya and Seremban. The toll way provides convenient accessibility for road users to reach landmark destinations such as the Selangor Turf Club, The Palace of Golden Horses, Mines Wonderland, Mines Shopping Center and South City Plaza. The toll way also offers users a host of facilities from automated toll collection lanes to petrol kiosks, food stalls and more and is furthermore ISO 9002 certified.
The New Pantai Expressway, opened in early 2004, is a 19.6 km dual 3-lane carriageway and incorporates an Intelligent Transportation System that relies on fiber optic communication to convey variable messages to drivers ahead of time. The highway, which was initially intended to alleviate traffic congestion along the Federal Highway Route II, is increasingly becoming a popular alternative for motorists from the densely populated areas of Subang Jaya, Old Klang Road, Pantai and Bangsar enjoy a smoother drive into Kuala Lumpur City Centre.
â€¢ Port Operations
In line with government's plan to turn the East Coast of Peninsula Malaysia into a regional petrochemical hub, Kuantan Port and Kemaman Port both play prominent roles as leading maritime trade and logistic centres in the region.
Strategically located in the state of Pahang on the eastern seaboard of Peninsular Malaysia, Kuantan Port is developing into a major international port in tandem with the rapid expansion of the industrial and manufacturing activities of the East Coast Corridor. Supported by excellent port facilities and services, a vast market outreach and a strong network of global shipping connections have strengthened the position of Kuantan Port as a petrochemical hub port and a major container terminal of the East Coast region.
Kuantan Port Consortium Sdn Bhd also operates Kemaman Port's 510 metre long West Wharf. Besides the West Wharf, we have taken 39% interest in the privatization of Kemaman Port to manage and operate the East Wharf and Liquid Chemical Berth under Konsortium Pelabuhan Kemaman Sdn Bhd.
In addition to the Kemaman Port operations, we have also taken interest in the development of the adjacent Teluk Kalung Industrial Area in Kemaman. The area provides excellent logistics and is a cost effective solution for heavy, chemical and petrochemical industries.
IJM has also made its mark in several major international joint venture projects involving infrastructure investments in Latin America, India, Vietnam and China.
In 1996, the Group entered into an agreement with companies from Argentina, Brazil and Mexico to participate in the Western Access Tollway Project in Buenos Aires, Argentina. The resulting joint-venture company was granted a "Build, Operate and Transfer" concession for the impressive 55km expressway from Buenos Aires to Lujan. The joint-venture company, Grupo Concesionario del Oeste S.A is now listed on the Buenos Aires Stock Exchange.
In India, the Group has made significant inroads into the construction of major highways and is today one of the leading foreign road contractors there. IJM has to date, secured 5 toll concessions on a built-operate-transfer ("BOT") basis - Swarna Tollway in Andra Pradesh, Rewa Tollway in Madya Pradesh, Jaipur-Mahua Tollway in Rajasthan and Trichy Tollway in Tamil Nadu, of which the latter 2 are presently under construction.
In Vietnam, the Group has a major stake in the first ever built-operate-transfer ("BOT") Binh An Water Supply scheme. The scheme now supplies over 100,000 cubic meters of potable water daily to Ho Chi Minh City.
The Group's concessions in China, acquired in the mid-90's, have been profitably disposed of in recent years. These include:
A significant stake in the Guangdong Provincial Expressway Development Co Ltd, which operates two expressways that form a national trunk road plus a major bridge across the Jiujiang River.
A joint-venture company operating the concession rights for toll collection, management, operation and maintenance of the Yangzhong Changjiang Bridge for 25 years, and
A joint-venture company which successfully completed the construction and operation of the Wuxi Nenda Co-Generation Plant, Xishan City, Jiangsu Province.
CORPORATE SOCIAL RESPONSIBILITY
Corporate responsibility ("CR") is an integral part of IJM's business philosophy and corporate culture.
Our embrace of good CR stems from our aspiration to deliver sustainable value and improvements to society, over the long term, by employing best practices in our key roles as:
A harbour for capital and enterprise in the marketplace;
A nurturer of the environment;
A developer of communities; and
A provider of opportunities at the workplace.
The policy statement is further expanded in the Group's CSR Framework. The Group strongly subscribes to the basic principles of CSR as set out in Bursa Malaysia's CSR Guidelines, as a basis for its own CSR Framework as reflected in the diagram:
IJM's emphasis on Corporate Social Responsibility (CSR) reflects its conviction that economic success must be accompanied by a sustainable positive impact on the environment and society. This philosophy is guided by the Group's CSR Framework and policy statements, and is embraced in all its operations through a wide range of environmental-friendly and operational best management practices to achieve long term sustainable gain for all stakeholders. The Group's construction business, cognisant of its imprint on the environment, has committed itself to the code of conduct prescribed in Environmental Management System ISO 14001, while our plantations unit employs sound agronomic environmental practices and continues to be involved in the Roundtable on Sustainable Palm Oil (RSPO) to promote environmental issues, growth and sustainable production and use of palm oil.
The Group is committed to ensure the highest standards of good governance, ethical business conduct and values are practised throughout its operations. As part of the Group's philanthropic efforts, it has carried out numerous community programmes in areas of social welfare, education and sports development and will continue to identify activities where its support can make a real difference. The Group is also committed to provide for the wellbeing at the workplace through increased awareness, accountability and continual training of employees and contractors towards the conduct of all activities in an ethical, environmentally responsible, safe and healthy manner.
Outlook for order book enhancement appears promising as governments accelerate fiscal stimulus spending to spur economic growth whilst input cost management will be accentuated following volatile price fluctuations the previous year. Continued focus on both these objectives is imperative for better performance.
The Domestic Construction Sector recorded a positive growth for the second successive year in 2008 by registering a growth rate of 2.1% (2007: 4.6%). The growth was supported by activities across the three sub-sectors in civil engineering, residential and nonresidential.
The Federal Government's development expenditure increased by 23.5% in the first half year of 2008, mainly to finance the construction of new projects and upgrading of existing infrastructure facilities.
FY 2009 was a difficult year for the Division due to the unprecedented increase in global prices of building materials at a time when the Division's order book was at a record high. In addition, the intensification of the global financial turmoil and ensuing credit crunch further dampened the performance of the Division.
During the financial year ended 31 March 2009, the Construction Division recorded a turnover of RM2,355.26 million which represented a marginal increase of only 0.1% from the previous period (FY 2008: RM2,353.15 million) resulting from a slowdown in billings due to constraints faced in building materials supplies following protracted increases in material prices. Its pre-tax profit decreased substantially by 76% to RM40.33 million (FY 2008: RM165.56 million) largely due to soaring construction material costs and higher borrowing costs incurred by its overseas projects, particularly in India. The results were also impacted by the write down of profits recorded in previous years due to reduction in ultimate profits to completion.
In FY 2009, the Division successfully completed several projects including the PJ8Development in Petaling Jaya, KLCC Luxury Condominium in Kuala Lumpur, Alam Warisan Package 2 & 3 and Maritime Centre Package 2 in Putrajaya, and The Spring condominium in Penang. In India, completed projects included the elevated viaduct and three elevated stations on Shahdara-Dilshad Garden Corridor of the Delhi MRTS (Phase II) in New Delhi. In the Middle East, the Shaikh Khalifa Bin Salman Highway - Phase V Zallaq Flyover in Bahrain was also completed.
The Division successfully replenished its order book to RM4,238.00 million in FY 2009 by securing additional contracts amounting to RM2,143.00 million. Among the major projects secured in Malaysia included the Hotel Grand Hyatt (RM544.90 million), Package 1 of the Electrified Double Track Project from Seremban to Gemas (RM343.09 million) and SS2 Commercial & Shopping Complex (RM157.55 million). In India, major projects secured included the Six Laning of Chilkaluripet- Vijayawada Section of National Highway-5 from KM355 to KM434.15 (RM550.00 million) and DMRC Amel C-2 for the Viaduct and Dhaula Kuan Station of the Airport Metro Express (RM144.93 million).
Given the current subdued economic environment, the Construction Division expects to continue facing challenging times. Nevertheless, with the implementation of the Government's pump-priming efforts for instance in Malaysia, via an initial RM7 billion stimulus package and another RM60 billion "mini budget" during FY 2009, opportunities are now appearing for order book enhancement.
In response to the highly uncertain and difficult economic and financial environment, the Division recognises the need to strengthen its performance and sustain competencies by enhancing its operational efficiency and effectiveness. In its efforts for continuous improvement to deliver high quality products to our valued customers, the Division continues to improve on its environmental, safety and health practices, quality control procedures to ensure compliance with all applicable Government regulations and legislations. As part of its risk management programme, the Division continues to regularly review its policies, procedures and processes to improve on controls towards achieving the Company's objectives. In addition, the Division has placed greater emphasis on effective cost and resource management by continuously improving on budgeting and reporting processes in all its projects.
These can be part of attachments:
PBT: Profit Before Tax
*includes share of associate and joint venture's revenue
**excludes non-recurring impairment of goodwill