Oleh/By		:	DATO' SERI DR. 	
			MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	HILTON HOTEL, KUALA LUMPUR 
Tarikh/Date 	: 	07/12/98 
Tajuk/Title  	: 	THE OFFICIAL OPENING OF MALAYSIAN 
			STRUCTURAL STEEL
			ASSOCIATION CONVENTION 1998 



        I  wish  to  thank the organiser of this convention,
  the  Malaysian Structural Steel Association for  inviting
  me to address and declare open its two-day convention.
  
  2.    Steel  industry and its progressive but  consistent
  development  has  always  been  linked  to  the   success
  stories  of many developed nations.   On this basis,  the
  idea of setting up our own steel company was mooted,  way
  back  in  1982  under the Government's industrial  master
  plan.   Perwaja was set up to be Malaysia's main producer
  of  steel  products.  Billions of ringgit has been  spent
  to  enable  Perwaja  to realise the goal  of  becoming  a
  fully  integrated  steel  mill  producing  high  quality,
  value-added    steel   products   for   the   automotive,
  engineering and construction industries.
  
  3.    It  had  not been a smooth passage but I would  say
  that  the company is still heading in that direction  and
  with  the  support from all parties, especially those  in
  the  construction sector, I am confident that it will  be
  able to achieve the objective for which it was set up.
  
  4.     Our  ultimate  aim  is  for  Malaysia  to  be   an
  industrialised  nation approximately 20  years  from  now
  and this has been outlined in what we have designated  as
  Vision  2020.  We should be developed  not  only  in  the
  economic  sense but also developed politically, socially,
  spiritually, psychologically and culturally.
  
  5.    Vision  2020 is not merely a slogan but a framework
  of  action that would guide all Malaysians towards taking
  the  necessary steps for Malaysia to develop and  prosper
  in   a  balanced  way.   In  order  for  the  vision   to
  materialise,  several  things  need  to  be  done.  These
  include  attitude and value changes, improvement  on  the
  quality   of   workforce,  application  of  science   and
  technology  and  the creation of a more  dynamic  private
  sector.
  
  6.    Currently  we  are  still in a  state  of  economic
  turmoil  but  the  Malaysian economy  has  already  shown
  early  signs of recovery and we should be among the first
  South-East Asian countries to regain our dynamic  growth.
  The  package  of  policy measures  introduced  under  the
  National  Economic  Recovery Plan (NERP)  spearheaded  by
  the  National Economic Action Council (NEAC) are  now  in
  place  and  are  achieving  their  objectives.  The  1999
  budget  that  was  presented in October  this  year  also
  detailed   the various measures that the Government  will
  take  in order for our country to regain its high  growth
  pattern.
  
  7.    However, Malaysians cannot afford to just sit  back
  and  wait.  We may have stabilised the domestic, economic
  and  financial environment but many things can happen  to
  the   international  economy  which  can   threaten   our
  stability  and  our  growth.  We must  therefore  develop
  greater  intrinsic  strength  through  better  management
  practices  and  maximising  all  the  resources  at   our
  disposal.   If  we  audit all the  resources  within  the
  country,  including  our financial capacity  and  skilled
  manpower, and we apply them skillfully we should be  able
  to  insulate  much of our economy from the  uncertainties
  of  the world environment.  That way we can be much  more
  sure of achieving recovery.
  
  8.    In  order  for  us  all  to  sustain  our  economic
  recovery  efforts, all sectors must play  their  role  in
  the  sectors that they are involved.  The Government will
  provide  the  administrative, policy and legal  framework
  for  the private sector to succeed in whatever enterprise
  they  may be involved.  The private sector must of course
  seize  upon  the opportunities created and  exploit  them
  fully.   It  is  of  utmost importance that  all  parties
  continue  to be committed towards the rebuilding  of  our
  economy as expeditiously as possible.  God willing,  with
  each  of  us pulling our weight and contributing  to  the
  national effort, we will succeed.
  
  9.    The construction industry is one sector which  will
  always  play  a major role in our country's  development.
  Construction   stimulates  numerous   manufacturing   and
  service  industries which all contribute towards economic
  growth.   Such is the spin-off from construction that  it
  can  be  regarded  as the foundation  of  many  important
  industrial  activities.  That is why the  Government  has
  decided  to  revive numerous infrastructure  projects  in
  order to facilitate economic recovery.
  
  10.    From  1964  to  1998,  the  construction  industry
  suffered  four business cyclical setbacks,  i.e,  firstly
  in  1968-69;  secondly in 1976-78; thirdly  in  1984-1987
  and  the  current  setback that the  industry  is  facing
  since last year.
  
  11.   Prior  to the present economic turmoil, the  growth
  rate  in the construction industry was approximately  10-
  12   percent.    However,  this  year,  the  construction
  industry  has  experienced  a  negative  growth  of  19.2
  percent.    This  contraction  was  due  to  the   slower
  infrastructure  development and  subdued  performance  of
  the  non-residential sub-sector.  The virtual IMF  policy
  adopted  by  the  previous  financial  authority  in  the
  Government resulted in total stoppage of construction  as
  not  only  new loans could not be obtained, but  approved
  loans  were  also  withdrawn.  The construction  industry
  was  labelled  as a non-priority sector and was  actively
  discouraged.
  
  12.   Now  Government wants to re-start the  construction
  sector  but  as far as the economy is concerned  tangible
  effect  will  only be felt when the funds are  disbursed.
  This  will  take  a much longer time than mere  decision-
  making.   The  sector's  contribution  to  reviving   GDP
  growth  will only be seen in 1999.  Nevertheless a  start
  has  to  be  made  now  and  the private  and  Government
  sectors must collaborate in kick-starting the industry.
  
  13.  During the period of high economic growth, we saw  a
  tremendous  amount  of construction activities  all  over
  the  country.  We were so busy that we did  not  stop  to
  think  about  what  and  how  we  were  doing.   We  were
  satisfied with the technologies we had acquired  and  did
  not  seek to improve or upgrade them.  We made no  effort
  to  develop  our own technologies or even to acquire  the
  latest  construction methods.  When  we  found  ourselves
  without  enough  construction workers we merely  imported
  them.   We  did not seek to reduce reliance on labour  by
  developing  less  labour-intensive building  methods  and
  technologies.   As  a result when the  economic  downturn
  came,  we  were left with thousands of unskilled  foreign
  workers   and  outdated  construction  techniques.    Our
  losses  were  higher  because of our  high  wastage,  low
  productivity, high labour content, long delivery  period,
  poor workmanship and often low quality products.
  
  14.   The  pause  that  has been forced  upon  us  should
  enable  us  to  reexamine  the  industry.   We  must  now
  consider  how  we  can  become more  efficient  and  cost
  effective.   To  do this we must look  into  how  we  can
  truly  industrialise the industry.   The  idea  of  doing
  most  of the work at the worksite is outdated.  We should
  be  producing  the components of building  in  factories,
  using more automation, and precision.  The component  can
  then be transported to the worksite and assembled.
  
  15.  Unless we do this our country will continue to be  a
  haven  for immigrant workers. Currently, there are  about
  1.14  million  legal  migrant  workers  constituting   13
  percent  of  the workforce.  However, illegal  immigrants
  constitute  another eight hundred thousand workers  (with
  four hundred thousand dependants).  Overall they make  up
  approximately  2.3 million workers.  Although  they  have
  contributed  to  our  economic  growth  the  social   and
  financial  cost  is very high.  We really  cannot  afford
  the  luxury, for indeed having foreigners work for us  is
  a luxury.
  
  16.   This  scenario needs to be changed if  we  want  to
  move  forward in the construction industry.  The industry
  must  not  be  labour  intensive.  We  must  develop  new
  technologies  which  will reduce the need  for  unskilled
  workside  labour.  The technology must be  based  on  new
  techniques  which  require  minimal  but  highly  skilled
  labour  inputs.   These skilled workers  can  be  trained
  from  our  own  local workforce and they should  be  paid
  wages which are attractive.   
  
  17.    The   use   of   steel  in   construction   offers
  opportunities  for factory fabrication of a sophisticated
  kind.  Most of the construction steel used presently  are
  embedded in concrete and require very little forming  and
  shaping.   Even  when  steel rods are  bent  and  shaped,
  these  are not required to be precise and depend  largely
  on   workers  with  low  skill.   Yet  these  low-skilled
  workers have to be highly paid.
  
  18.   Steel  need  not always be hidden inside  concrete.
  Steelwork  can  be  exposed and  shaped  as  to  beautify
  buildings   and  other  structures.   Bridges,   elevated
  highways  and certain parts of buildings lend  themselves
  to  such  aesthetic use of steel.  The skeletal framework
  of  buildings  can  be  formed with  steel  girders  with
  scientific  precision.  While the cost may be higher  but
  the  speed of construction would be greater and this will
  expedite  earnings.  Besides, as more steel is  used  the
  steel  making  industry  would grow  and  cost  would  be
  reduced.
  
  19.   Steel  components of building should be  pre-shaped
  and  manufactured in off-site factories.   The  component
  parts  which are precision-made should be transported  to
  the   construction  sites  for  assembly.    This   would
  eliminate   the  necessity  for  shaping,   bending   and
  fabrication at unsightly and cramped construction  sites.
  Factory-produced  parts should be  better  in  every  way
  than  parts produced at worksites by relatively unskilled
  workers.
  
  20.   There  are  presently in Malaysia a lot  of  highly
  qualified  and experienced steel fabricators.   They  are
  capable  of fabricating numerous products such as cranes,
  modules and building parts.  There is a need for them  to
  enlarge  and  enhance their capacities.  The  quality  of
  their  fabricated products are of world standards.   They
  should  all look into the construction industry in  order
  to  identify  more parts which they can fabricate.   They
  should  also look abroad where fabricated parts are  very
  much in demand.  Malaysia's costs are low enough and  our
  quality  is high enough for us to be competitive  in  the
  world market.
  
  21.   There  is also a need for us to train more  workers
  in  steel-based  fabrication.   Presently  there  are   a
  number  of training institutions but from the speed  such
  trainees are snatched up by the industry in Malaysia  and
  abroad,  it  is  clear that we are not  producing  nearly
  enough.   The  steel  people  in  Malaysia  must  put  up
  sufficient  training facilities for all kinds  of  skills
  needed in the steel industry.   
  
  22.  The use of computers in the design and machining  of
  steel parts is increasing by leaps and bound. Mastery  of
  computer-aided design and manufacturing must be  the  aim
  of  all training institutions for the steel industry. The
  Government  has  a duty to provide some of  the  training
  but  the  private  sector must also do its  bit.   Indeed
  privately-owned    training    schools    for    computer
  application  in  the  steel  industry  and  other   metal
  industries  would  be worthwhile investing  in  by  those
  involved in the educational business.
  
  23.   The  steel-making  industry  cannot  be  successful
  without  adequate domestic demand for steel.   To  create
  this  demand  and also to reduce cost we  must  use  more
  steel  in  the  construction  and  fabrication  industry.
  Presently we tend to use more concrete.  Although we  can
  produce   enough  cement  to  meet  our   needs,   cement
  production  tends to destroy and disfigure our  beautiful
  limestone hills.  We can reduce the demand for cement  by
  resorting  to  the  use  of more steel.   With  increased
  consumption   of  steel  we  can  have  a  viable   steel
  industry.  And a viable steel industry will be a  measure
  of  the  level  of  our  industrialisation  even  in  the
  Information Age.
  
  24.   We have seen that steel is a material that has been
  used   widely   in   other  developed  countries.   These
  countries   have   their   own  steel-making   facilities
  especially  section  mills. Their  construction  industry
  does   not   rely  solely  on  concrete  as  construction
  material.
  
  25.   In the United Kingdom for example, up to 60 percent
  of  their  buildings are based on structural  steel.  For
  decades  in the United States, the traditional method  of
  construction  has  involved  structural  steel.   It   is
  abnormal  for  the consultants to specify material  other
  than  steel for their projects whereas in Malaysia it  is
  otherwise.
  
  26.   If Malaysia is looking into the export market,  our
  construction industry must be able to compete in the  use
  of steel for fabrication and construction of all kinds.
  
  27.   Prior  to  1996,  all of steel  sections  (h-beams,
  channels,  angles) were imported.  This could be  due  to
  the  unavailability  of  these products  then.   However,
  since  1997  with  the availability of  locally  produced
  sections, there is no reason to use imported steel.   But
  our  local  industry  especially the traders  that  stock
  these  materials  do  not seem to heed  the  Government's
  call to use local material.  In 1997, 300,000 metric  ton
  of   steel sections were used in the country, of which at
  least 70 percent were imported.
  
  28.   I  hope  the  panel discussion that  will  be  held
  tomorrow will come out with constructive suggestions  and
  commitment from all parties. I sincerely hope  that  this
  convention  will be a catalyst towards all  the  relevant
  parties  in  the  construction industry  to  formulate  a
  strategy that will see structural steel be featured  more
  dominantly in our country.
  
  29.   On  this note, I have the pleasure to declare  open
  this two-day convention.

 



 
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