p.65 1 2 3 4 5 6 7 8 9 MANAGEMENT DISCUSSION & ANALYSIS p.64 UEM EDGENTA BERHAD INTEGRATED ANNUAL REPORT 2022 OUR OPERATING ENVIRONMENT AND MARKET TRENDS OUR OPERATING ENVIRONMENT AND MARKET TRENDS With the reopening of borders and ceasing of movement control orders, 2022 provided us with the opportunity to deepen our foothold across our international business presence. Nevertheless, our ability to execute our strategies was impacted by an uncertain macroeconomic outlook and continued supply chain disruptions which led to escalating costs of raw materials and fuel, causing businesses to rein in spending and adopt a cautious stance. In Malaysia, the reopening of the economy resulted in a surge of infrastructure and construction projects, equating to an increase in work orders secured by our Infrastructure Services division. This is set to be bolstered by further infrastructure projects under the Public Private Partnership (“PPP”) 3.0 model as well as upcoming projects in East Malaysia. Meanwhile, political uncertainty was eased with the formation of the unity government, providing optimism for a more stable and globally competitive national economy. MALAYSIA Malaysia is our home country and the hub of all four of our business divisions – Healthcare Support, Property & Facility Solutions, Infrastructure Services and Asset Consultancy. SINGAPORE We provide healthcare support solutions to a wide range of public and private hospitals in Singapore, steadily expanding our presence to include IFM, hospitality sector services and digital solutions. • C ontinued our cost optimisation exercise by implementing automation and mechanisation, streamlining finance and procurement processes and rationalising our business structure • Enhanced process efficiency by implementing smart building technologies for asset owners • Delivered sustainable solutions to support our clients’ sustainability agenda • Developed a strong presence in East Malaysia by partnering with the Sarawak Economic Development Council (“SEDC”) • Developed new ESG solutions, including our recycled asphalt premix plant • Implemented cost optimisation measures to minimise margin erosion • Diversified our sources of manpower while increasing our hiring of local talent • Implemented technology-based solutions - including our UETrackTM system and robotics solutions - to drive operational excellence and lower costs • Entered the hospitality market with the provision of room attendant and laundry attendant services at two hotels • Launched and commercialised our digital solutions business with the implementation of the UETrackTM – Smart Toilet System at a chain of polyclinics • Escalation in operating costs due to manpower sourcing challenges and implementation of new minimum wage • Infrastructure boom in East Malaysia • Resumption of traffic volume in the endemic phase • Increased demand for sustainability solutions in infrastructure and asset management • Rising operating costs due to inflation and manpower scarcity • Growth in demand for asset and facility management services across sectors • Intense business competition • Stringent demands in service and quality TRENDS: TRENDS: ACTIONS TAKEN: ACTIONS TAKEN: TAIWAN In Taiwan, we deliver hospital support services that include portering, housekeeping and cleaning, with our housekeeping services progressively expanding into other commercial sectors. INDONESIA We established a presence in Indonesia by providing maintenance services for toll roads and have since expanded our presence by becoming involved in highway construction projects. • Diversified our clientele base into the high tech, arts and leisure, transportation and education sectors • Implemented technology-based solutions – including UETrackTM • Adopted strategic pricing while focusing on mid-size projects • Gained a better understanding of the local supply chain with the aim of tendering more competitively • Partnered with local entities to improve market access • Rising operating costs due to inflation and manpower scarcity • Increasingly stringent service standard demands • Rising operating costs due to inflation and manpower scarcity • Intense business competition UNITED ARAB EMIRATES Through Operon Middle East, we provide end-to-end facility management solutions in Dubai. • Became a smart city solution implementation partner for the Middle East by collaborating with Al-Futtaim Technologies as the master integrator • Became an IoT Platform Solution Reseller for the Middle East while securing sole distributorship of the Disrupt-X IoT platform in the UAE • Established other strategic partnerships to deliver valueadded services to our clients, with the overarching aim of reshaping facilities management through interoperable solutions that seamlessly connect all parties • Increasing adoption of advanced data-driven technologies such as IoT, Artificial Intelligence (“AI”) and machine learning • Rapid emergence of Smart City developments KINGDOM OF SAUDI ARABIA We are present in KSA through Edgenta Arabia Limited (“EAL”), a wholly-owned operating company in Riyadh under UEM Edgenta Berhad’s international business division. Edgenta Arabia aims to deliver value through technology and sustainabilitydriven solutions, supplemented by traditional IFM services. • Partnered with MASIC by taking a 60% stake in MEEM, an established facilities management company, to provide EAL with accelerated participation in the country’s facility management industry • Built relationships and engaged with various stakeholders in KSA, such as the Ministry of Investment, PIF and PPP entities, for potential direct and indirect participation in mega and giga projects • Formed strategic partnerships to deliver end-to-end, best-in-class IFM services with value-added solutions in sustainability and energy efficiency • Saudi Vision 2030 is driving the growth of new sectors, companies and jobs, spearheaded by the Public Investment Fund (“PIF”) • Giga and mega projects worth around USD1.3 trillion provide great opportunities for the integration of IFM and value-added services • Multiple Public-Private Partnership (“PPP”) projects are being launched across the country, with IFM a key part of the solution TRENDS: TRENDS: ACTIONS TAKEN: ACTIONS TAKEN: TRENDS: ACTIONS TAKEN: TRENDS: ACTIONS TAKEN:
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