Serba Dinamik Annual Report 2018

98 ANNUAL REPORT 2018 SERBA DINAMIK HOLDINGS BERHAD WATER UTILITY We also ventured into the water utility industry in Malaysia and have generated a portion of our revenue from the industry. As such, development of the water utility industry would also have an impact on our business. Global As water is essential for human well-being and to facilitate social and economic activities, global water demand is largely influenced by the global population and economic growth. The global population is forecasted to grow from the current 7.7 billion to 9.8 billion in 2050 and the global economy is projected to grow at a rate of 3.7% in 2019. The growth in population and economic performance is likely to encourage development in the water utility industry. Malaysia We expanded our reach into the water utility industry in Malaysia through acquisition of minority interest in a water treatment plant in Terengganu, as well as winning EPCC contracts for two sewerage treatment plants in Kuala Lumpur. Dynamic development in the water utility industry in Malaysia is likely to have a positive impact on our business. Water Production and Supply Over the years, water production in Malaysia has been growing in line with consumption level. Growth of water consumption recorded a CAGR of 2.3% between 2013 and 2017, slightly outpacing water production which grew at CAGR of 2.1%. In 2017, water production stood at 16,884 million litres per day (mld), exceeding total consumption by approximately 6,100 mld ( Figure 4-27 ). Overall, water supply coverage in Peninsular Malaysia grew from 96.1% in 2013 to 96.3% in 2016. As of 2016, water coverage in the urban and rural area stood at 96.7% and 95.8% respectively ( Figure 4-28 ). In the 11th Malaysia Plan, the government is aiming to achieve 99% coverage of access to clean and treated water in the rural area through the Rural Water Supply Programme. In addition, RM738 million was allocated to improve water coverage in rural areas and, RM160 million was allocated for water supply projects to support FELDA developments. Water Treatment As of 2016, there were 500 water treatment plants (WTP) in Malaysia with a total design capacity of 19,056 million litres per day (MLD). The WTP capacity in Malaysia increased at a CAGR of 1.7% between 2012 and 2016 ( Figure 4-29 ). In 2016, WTP capacity grew by 1.1% arising from a new WTP in Perak with total capacity of 23 MLD, as well as increased capacity of six WTP in Negeri Sembilan, Perak, Penang and Sarawak during the year. Some of the recent developments in the water utility industry include, among others, the RM68 million Pokok Sena water treatment plant that has commenced operation in November 2018, the RM2 billion Papan 1 sewerage upgrading project in Ipoh that will be completed by 2021 and the RM8 billion Langat 2 water treatment plant that is targeting completion in 2022. Figure 4-27: Water Production and Consumption in Malaysia (Source: Department of Statistics) 2013 2014 2015 2016 2017 Water Production Water Comsumption 5,000 10,000 15,000 20,000 Million Litres Per Day (MLD) 15,531 15,768 16,159 16,536 16,884 9,854 10,174 10,445 10,737 10,786