10 Market's Economic in Malaysia

Table of Contents 1.0

Introduction.....................................................................................................................1

2.0

Type of Market................................................................................................................2

2.1 Reinforcement..................................................................................................................2 2.1.1. Introduction..............................................................................................................2 2.1.2 List of companies......................................................................................................2 2.1.3 Type of products supplied.........................................................................................3 2.1.4 Market and justification............................................................................................4 2.2 Lighting............................................................................................................................6 2.2.1. Introduction..............................................................................................................6 2.2.2 List of companies......................................................................................................6 2.2.3 Type of products supplied.........................................................................................7 2.2.4 Market and justification............................................................................................7 2.3 Roller shutter....................................................................................................................9 2.3.1 Introduction...............................................................................................................9 2.3.2 List of companies......................................................................................................9 2.3.3 Type of products supplied.......................................................................................10 2.3.4 Market and justification..........................................................................................10 2.4 Landscape.......................................................................................................................12 2.4.1 Introduction.............................................................................................................12 2.4.2 List of companies....................................................................................................12 2.4.3 Type of products supplied.......................................................................................12 2.4.4 Market and justification..........................................................................................13 2.5 HVAC (air conditioner)..................................................................................................15 2.5.1 Introduction.............................................................................................................15 2.5.2 List of companies....................................................................................................15 2.5.3Types of product supplied........................................................................................16 2.5.4 Market and justification..........................................................................................17 2.6 Sanitary fitting (WC)......................................................................................................18 2.6.1 Introduction.............................................................................................................18 2.6.2 List of companies....................................................................................................18 2.6.3 Type of products supplied.......................................................................................19 2.6.4 Market and justification..........................................................................................19 2.7 Door................................................................................................................................21 2.7.1 Introduction.............................................................................................................21 2.7.2 List of companies....................................................................................................21 1

2.7.3 Type of product supplied.........................................................................................22 2.7.4 Market and justification..........................................................................................23 2.8 Paint................................................................................................................................24 2.8.1 Introduction.............................................................................................................24 2.8.2 List of companies....................................................................................................24 2.8.3 Type of product supplied.........................................................................................24 2.8.4 Market and justification..........................................................................................25 2.9 Cement...........................................................................................................................27 2.9.1 Introduction.............................................................................................................27 2.9.2 List of companies In Malaysia that have 8 of the cement industries in Malaysia. .27 2.9.3 Type of product supplied.........................................................................................27 2.9.4 Market and justification..........................................................................................28 2.10 Tiles..............................................................................................................................29 2.10.1 Introduction...........................................................................................................29 2.10.2 List of companies..................................................................................................29 2.10.3 Type of product supplied.......................................................................................30 2.10.4 Market and justification........................................................................................31 Inidividual Assignment............................................................................................................32 Yung Kong targets RM500mil revenue on rising steel demand...........................................32 Rising Cost Worries Oil Palm Planters................................................................................33 How RBM building technology works................................................................................34 House Price Hike Likely......................................................................................................35 Construction forecast to grow by 13 percent.......................................................................37 References................................................................................................................................38

1.0 Introduction There are 4 structures in market structure which are monopoly, oligopoly, monopolistic competition and pure competition. In this assignment our group is required to select 10 markets that relevant to the building construction. From the 10 markets, we are required to give the justification and determine which of the market structure for the each market. The 10 market we choose are reinforcement, lighting, roller shutter, landscape, HVAC (air conditioner), sanitary fittings (WC), door, paint, cement and tiles. The details of each market is shown as the report below. 2

2.0 Type of Market 2.1 Reinforcement 2.1.1. Introduction Reinforcement or can be known as steel is a main component in the construction site. It not only use as main bar for beam, column and others, but also use as BRC, link and hook. Based on Oxford Dictionaries (2013), reinforcement has been described as the strengthening structure or material employed in reinforced concrete. 2.1.2 List of companies There are not many companies in Malaysia which supply reinforcement in the Malaysia. There are 7 major steel suppliers in the whole Malaysia. Each state has 3 to 4 major steel suppliers. The major steel suppliers in Malaysia are: i)AYS Marketing Sdn Bhd ii) Perkasa Trading Sdn Bhd iii) Tet Tafa Hardware Sdn Bhd iv) Yontai Hardware Sdn Bhd v) RM Wire Industries Sdn Bhd vi) Kamen Steel Industries Sdn.Bhd. vii) Asia Wire Steel Mesh Manufacturers Sdn Bhd AYS Marketing Sdn Bhd

Tet Tafa Hardware Sdn Bhd

RM Wire Industries Sdn Bhd

Perkasa Trading Sdn Bhd

Yontai Hardware Sdn Bhd

Kamen Steel Industries Sdn.Bhd.

Asia Wire Steel Mesh Manufacturers Sdn Bhd

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2.1.3 Type of products supplied There is various type of steel that supplied by the supplier above as shown in below Companies AYS Marketing Sdn Bhd

Type of products  BRC Wire Mesh (BS)  Steel C Channel  Steel Checkered plates  Steel Flat Bars  Steel Rectangular Hollow Section  Steel High Tensile Reinforcement Bars  Steel Mild Round Reinforcement Bars Perkasa Trading Sdn Bhd  BRC Wire Mesh (BS)  BRC Wire Mesh (CQ)  Steel Flat Bars  Steel High Tensile Reinforcement Bars  Steel Mild Round Reinforcement Bars  Steel Rectangular Hollow Section  Steel Square Hollow Section  Steel U Channel  Steel Unequal Angle Bars Tet Tafa Hardware Sdn Bhd  BRC Wire Mesh (BS)  BRC Wire Mesh (CQ)  Steel Checkered plates  Steel Equal Angle Bars  Steel High Tensile Reinforcement Bars  Steel Mild Round Reinforcement Bars  Steel U Channel  Steel Unequal Angle Bars Yontai Hardware Sdn Bhd  BRC Wire Mesh (BS)  Steel High Tensile Reinforcement Bars  Common Wood Nails RM Wire Industries Sdn Bhd  BRC Wire Mesh (BS)  Steel High Tensile Reinforcement Bars  Steel Mild Round Reinforcement Bars Kamen Steel Industries Sdn.Bhd.  BRC Wire Mesh (BS)  Steel High Tensile Reinforcement Bars  Steel Mild Round Reinforcement Bars Asia Wire Steel Mesh  BRC Wire Mesh (BS) Manufacturers Sdn Bhd  Steel High Tensile Reinforcement Bars  Steel Mild Round Reinforcement Bars

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High Yield Steel Bar

Steel Flat Bars

BRC Wire Mesh

Steel Mild Round Reinforcement Bars

Steel U Channel

2.1.4 Market and justification Steel industry can be said as an oligopoly market. Oligopoly is a structure that in between of pure competition and pure monopoly (Robert H. Haven, 1981, pg 207). It is few sellers compete for the entire market. In this kind of market each firm has enough power to avoid being a price taker, but they are still subject to a sufficient amount of competition to know the market is not entirely under their control (Danny Myers, 2008, pg.122) Number of firms There are only 7 major steel companies in Malaysia and each of it can be state as big companies. Thus, it full fill the oligopoly market which is a field that occupied by few large companies.

Control over price 4

There is only 7 steel suppliers in the Malaysia, thus the market of the steel is just competition among 7 of it. Therefore the price of demand will be very inelastic. Due to fewer companies they can easy to control the price in market when all the companies do the same decision. However, the government, Ministry of Domestic Trade and Consumer Affairs (MDTCA) has set a range of price, thus the control over price of each companies will be lower. Degree of product differentiation In degree of product differentiation, the steel product that provide by each companies is almost the same However there is some products that those company is different to the other companies such as steel C channel which only supply by AYS Marketing Sdn Bhd. Thus, it is full fill the properties of oligopoly market which the products can be standardized or differentiate. Conditions of entry The condition of entry of the reinforcement market is hard. This is because the size of each company is large make that the entrances become harder. Other than that, the new enter companies need to have the source of raw material, large capital to having the machine for produce the steel.

2.2 Lighting 2.2.1. Introduction Lighting is a type of product in building or construction equipment. Lighting not only for the 5

light up the room but also can be decoration purpose. Lighting is very important to the human being for the comfortable purpose. It is especially in the night time, without the sunlight the only one thing can light up the room is lighting.

2.2.2 List of companies There are many companies in Malaysia which supply lighting in the Malaysia. There are more than 50 companies that supplied lighting features suppliers in the whole Malaysia. The lighting suppliers in Malaysia are: i. ii. iii. iv.

Philips Malaysia Sdn Bhd Panasonic Malaysia Sdn Bhd Khind Electrical (Malaysia) Sdn Bhd Hibikii Global Sdn Bhd

Philips Malaysia Sdn Bhd

Khind Electrical (Malaysia) Sdn Bhd

Panasonic Malaysia Sdn Bhd

Hibikii Global Sdn Bhd

2.2.3 Type of products supplied

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There is various type of steel that supplied by the supplier above as shown in below

Led light bulb

Circular fluorescent

Fluorescent tube

2.2.4 Market and justification Lighting industry can be said as monopolistic competition market. Monopolistic competition is a structure that in between of pure competition and monopoly (Robert H. Haven, 1981, pg 207). It is many sellers compete for the entire market. In this kind of market each firm can earn above normal profits, but only for a short while because others companies will respond by produce the similar products (Danny Myers, 2008, pg 122) Number of firms There are many lighting companies in Malaysia and each of it can be state as small companies. Thus, it full fill the monopolistic competition market which is a field that occupied by huge number of small companies. Control over price There is many supplier in the Malaysia, thus the supply of lighting is much higher than the demand of it. There for the price of demand will be very elastic. Other than that, supplier need to competitive with many suppliers so the control over price will lower. However each of the companies has their unique so it will make the control over price higher than the pure competition but lower than the oligopoly structure. Degree of product differentiation In degree of product differentiation, the function of lighting can direct influence the total sales. The differentiation can be energy in use, design and their performance. Examples, both 7

companies have same type of the product, but one input voltage is 75V and another is 60V. Due to the power supply might affect the electric fees per month. Therefore, buyers can easily determine which products more suitable for their concern. This also affected by the design of the bulb head because it can make the room more decorative. Conditions of entry The condition of entry of the air-condition market is medium. This is because the numbers of companies is many make that the entrances become easier however each of the companies has their own unique this might make the new companies need to have their own unique to sustain in this market. The new market need to have the capital and technology to produce the light bulb by itself.

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2.3 Roller shutter 2.3.1 Introduction Roller shutter is normally defined as a vertical revolving barrier at the entrance of a building or room. Roller Shutter is mainly made out of metal or bullet proof glass. During the opening position its leaf, curtain or slats will rolled upwards and downwards during closing position. Roller shutter are widely found in malls, banks, garage, restaurant and many other places. The functional requirements of a roller shutter are basically almost the same with the functional requirement of a door. Roller shutter should have:     

Fire protection Durable Provide safety for the building Weather resistance (against rain) Reduce space during operating (opening and closing does not use much space



compare to door) Some roller shutter also allow ventilations

2.3.2 List of companies There are a wide range of roller shutter firms in Malaysia. Those are:      

BC ROLLER SHUTTER SERVICES SDN BHD Seng Kong Shutter Industries Sdn Bhd STAR ROLLING Shutter Sdn. Bhd. COL shutter specialist SKB Shutters Manufacturing Sdn Bhd Kimico Sdn Bhd

2.3.3 Type of products supplied   

Transparent polycarbonate roller shutter Aluminium shutter door Fire resistance roller shutter 9

 

Light and heavy duty shutters See- through shutters / transparent shutter

2.3.4 Market and justification The market structure for roller shutter companies in Malaysia is in a form of Monopolistic Competition. This could be identifying as it has the characteristic of monopoly and competition. Not only that, even though there is a numbers of firm but the product sold is not homogenous. Control over price

Firms for roller shutter could control over their price. This is because each supplier have their own unique product but the price could not have a big different between the firms. Compare to Pure Monopoly market the supplier has the full power marketing the price.

Degree of product differentiation Firms in roller shutter market have a low degree of product differentiation. This is clearly seen as most of the firms are supplying the same type of product but different in patterns based on customers preferences. Condition of entries The entries for a roller shutter firms is easier compare to oligopoly and pure monopoly market, but it is not that mobile compare to pure competition. This is because there are few 10

rules and condition by the government to enrolled in to the business.

2.4 Landscape 2.4.1 Introduction Landscaping is very common in the construction site. Landscaping is widely found after a building is completed to enhance the look of the building and create a good environment for the resident to stay. Not only that, landscape was result by a combination of plants, turf, trees and others even pavement. Sometimes fountains and lamp post are included in design for 11

affordable residents. Other common function for landscape is to reduce the amount of haze, create a harmonious environment to distress and reduce the level of noise in the cities.

2.4.2 List of companies The landscape companies in Malaysia are:      

Asia Flora & Landscape Sdn. Bhd. Bumi Hijau Landscape Walker & Jansen Sdn Bhd Greenlife Landscape Home Garden Enterprise MARKHAM Landscape Products

2.4.3 Type of products supplied Type of product:  Aggregate 

Plants and flowers



Turf



Pavement

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2.4.4 Market and justification The market structure for landscaping in Malaysia is Monopoly Competition. This is due to the homogenous decorative product supply by the supplier. Moreover producer have easily start up their own business with the help of their plot of land. Based on this factor it had become a competition between other firms. Control over price In landscaping business the price control is a bit different compare to other Monopoly competition. Landscaping business is based on the architecture design to demand for the products. Therefore supplier could control on the price until both the supplier and consumer agree on it. Degree in product differentiation In landscaping design there are few basic homogenous supply from the firms but they also do have other unique product in their market to attract customer. Therefore the degree of differentiation of landscape is quite moderate. Home designer will then had to redeem product from many kinds of supplier.

Condition of entries The condition of entries in a landscape business is moderate as in it is easier to enter or exit compare to oligopoly and pure monopoly market. This is because plants and aggregate are natural sources on earth and it is easy to kick start a firm through it.

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2.5 HVAC (air conditioner) 2.5.1 Introduction HVAC is a type of product in building or construction equipment. HVAV can be differentiated to two categories, which are ventilation and air conditioner.Ventilation is defined as the process of changing air in an enclosed space.Air conditioning is the process of altering the properties of air (primarily temperature and humidity) to more favorable conditions.

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2.5.2 List of companies The market of air conditioner in Malaysia is full with competition. There are 29 companies in Malaysia. The producers in Malaysia are: 1. 2. 3. 4. 5. 6.

Samsung Malaysia Electronics (SME) Sdn Bhd York (Malaysia) Sales & Service SdnBhd Acson Malaysia Sales & Service Sdn. Bhd. Mitsubishi Electric (Malaysia) Sdn. Bhd. Hitachi electronic products (m) sdnbhd And etc.

2.5.3Types of product supplied

Samsung Malaysia Electronics (SME) Sdn Bhd York (Malaysia) Sales & Service SdnBhd

Mitsubishi Electric (Malaysia) Sdn. Bhd.

Acson Malaysia Sales & Service Sdn. Bhd.

Hitachi electronic products (m) sdnbhd

Vendors provide many types of product to achieve maximum satisfaction of Malaysian. Air conditioner provides a comfort environment to Malaysian and good regulation of air.In 2010 year, the total sale of air conditioner in Malaysia is achieved 50 million units. Below show the products provided from difference companies: Company SAMSUNG

YORK ACSON

Products  Floor Standing AC  Wall Mounted Split AC  Window AC  DVM system  Wall mounted  Portable air conditioner  Wall mounted 15

         

MITSUBISHI HITACHI

Wall mounted

DVM system

MOVEO Portable air conditioner Ceiling cassette air conditioner Water cooled modular chiller Floor standing series Wall mounted Air curtain Wall mounted split dc inverter Wall mounted split constant speed Window AC Ceiling cassette

Floor standing AC

Window AC

Ceiling cassette EQ

2.5.4 Market and justification The market structure of air conditioner is MONOPOLISTIC COMPETITION. Based on my research, the products produced by companies are slightly differentiated. Each seller may set price for their own product. There are many sellers in the air conditioner market. Control over price In my opinion, there is many supplier in the Malaysia, thus the supply of HVAC is much higher than the demand of it. There for the price of demand will be very elastic. Other than that, supplier need to competitive with many suppliers so the control over price will lower. However each of the companies has their unique so it will make the control over price higher than the pure competition but lower than the oligopoly structure. 16

Degree of product differentiation In degree of product differentiation, the function of air conditioner can direct influence the total sales. The differentiation can be energy in use, design and their performance. Examples, both companies have same type of the product, but one input voltage is 2400V and another is 3200V. Due to the power supply mightaffect the electric fees per month. Therefore, buyers can easily determine which products more suitable for their concern. Conditions of entry The condition of entry of the air-condition market is medium. This is because the numbers of companies is many make that the entrances become easier however each of the companies has their own unique this might make the new companies need to have their own unique to sustain in this market.

2.6 Sanitary fitting (WC) 2.6.1 Introduction WC is main type of the building products or material.It can be divided to squatting style, sitting style, and standing style.

2.6.2 List of companies There are a lot of company supplied WC in Malaysia. A total of 34 companies developed in Malaysia. There are: 1. Claytan group c/o. Clay industries sdnbhd 2. Goldolphin(m)sdnbhd 3. Johnson Suisse (Malaysia) Sdn. Bhd 4. Saniton Ceramic (M) Sdn. Bhd 5. Potex Industries Sdn Bhd 6. And etc.

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Claytan group c/o. Clay industries sdnbhd

Johnson Suisse (Malaysia) Sdn. Bhd

Goldolphin(m)sdnbhd

Saniton Ceramic (M) Sdn. Bhd

Potex Industries Sdn Bhd

2.6.3 Type of products supplied In the WC market, the vendors provided too many type of WC for customer to choose.

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Squatting pan

Floor mounted

Wall hung

Bidet

One piece

Urinal

2.6.4 Market and justification The market structure of WC is MONOPOLISTIC COMPETITION. As the name implies, this form of industry structure processes characteristics of both competition and monopoly. Although it is characteristics by many firms like competition, each firm does not produce and sell a uniform or homogeneous product. (Robert H. Haveman, 1981, pg.220) Control over price The sellers may hard to control their own product’s price. In my opinion, there are many suppliers in the Malaysia. This make the supplier need to competitive with many suppliers so the control over price will lower. However each of the companies has their unique so it will make the control over price higher than the pure competition but lower than the oligopoly structure.

Degree of product differentiation The product produced by each firm is highly substitutable with the products produced by the other firms in the industry or group which is the competitive element. This high degree of 19

product similarity is what distinguishes the monopolistically competitive market from either monopoly or competition (Robert H. Haveman, 1981, pg.221). Conditions of entry Monopolistic competition occurs where large number firms are free to enter the market with a differentiated or similar product. There are no close substitutes for the product of a firm(Robert H. Haveman, 1981, pg.221).The condition of entry of the sanitary market is medium. This is because the numbers of companies is many make that the entrances become easier however each of the companies has their own unique this might make the new companies need to have their own unique to sustain in this market.

2.7 Door 2.7.1 Introduction Door is a solid barrier that is fixed in a door way or opening of a wall with the help of iron lugs or hold fasts in the walls. Door consist of two parts, one partis frame of the door and other part is shutter of the door. 20

2.7.2 List of companies Number of firms : 

30

Competitor firms : 

Gaya Murni Sdn Bhd



New Century Security Door Enterprise Sdn Bhd



Artilux Sdn Bhd



Big Bath (Kepong) Sdn Bhd



Jee Lee Industrial Supply Sdn. Bhd.



E.V. Oilfield Supply & Services Sdn Bhd

Gaya Murni Sdn Bhd

Big Bath (Kepong) Sdn Bhd

Artilux Sdn Bhd

E.V.Oilfield Supply & Services Sdn B

2.7.3 Type of product supplied Decorative Entrance Doors, Vendor or Service Doors, Fire rated Doors, Swinging Traffic Doors, Cooler and Freezer Doors and Vinyl Strip Doors.

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Decorative Entrance Doors

Swinging Traffic Doors

Fire rated Doors

Vinyl Strip Doors

Vendor or Service Doors

Cooler and Freezer Doors

2.7.4 Market and justification Model of market structure 

Monopolistic Competition 22

Control over price 

Certain price decisions are made according to the production cost of the products due to their different quality, size requirement and etc.

Degree of product differentiation 

Door from each manufacturer can be differentiated through their size, strength to resist the compression and tension stresses, quality and texture etc.

Conditions of Entry 

The firms must have sufficient technology and skilled workers to produce high quality products.



The quality of some products must be certified by the ISO and SIRIM because the products may for public usage and will affect the public safety.



Must have sufficient capital because those products consume a lot of production costs.



The manufacture firms must have their own sources for raw materials to make sure their supplies to the market are continuous.

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2.8 Paint 2.8.1 Introduction Paint market. In this market it supply and produce paint product such as water based , acrylic based emulsion paint, wall finish , emulsion paint , Interior & Exterior Gloss Finish, Exterior Timber Finish, Exterior Wood Varnish ,Solvent-based Protective Coating, thinner, putty wall, paint remover, wood paint, primer and sealer.

2.8.2 List of companies

Seamaster

OD Paints

Colourland

Sissons

2.8.3 Type of product supplied    

Super Glo Plus (Wood Paint ) Timber Colour ( Wood Paint) Ecolux Ecowood ( Wood Paint ) Synlac (Wood Paint )

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2.8.4 Market and justification Model of market structure 

Oligopoly

Number of firms Although there are not too many company or firms in the market but it will also cause competitive among them due to the homogeneous product. This will cause difficulty to promote their own product to their customer. They will have to think out of the box in order to attract more customers to purchase their product. Control over price 

They using the concept of influence on the price-output policies of their rivals.



Every company is so influential that his rivals cannot ignore the likely adverse effect on them of a given change in the price-output policy of any single manufacturer. The rival consciousness or the recognition on the part of the seller is because of the fact of interdependence. The demand curve under oligopoly is indeterminate because any step taken by his rivals may change the demand curve.



More elastic than under simple monopoly and not perfectly elastic as under perfect competition. It is often noticed that there is stability in price under oligopoly. This is because the oligopolistic avoids experimenting with price changes. They knows that if raises the price, it will lose customers and if he lowers it will invite rivals to price war.

Degree of Product Differentiation 

Differences in quality which are usually accompanied by differences in price



Differences in functional features or design



Ignorance of buyers regarding the essential characteristics and qualities of goods they are purchasing



Sales promotion activities of sellers and, in particular, advertising



Differences in availability (e.g. timing and location).

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Conditions of Entry 

Difficult to maintain their position of dominance in a market (too costly or difficult for potential rivals to enter the market. )



Economies of large scale production. (if a market has significant economies of scale that have already been exploited by the incumbents, new entrants are deterred)



Ownership or control of a key scarce resource. (Owning scarce resources that other firms would like to use creates a considerable barrier to entry, such as an airline controlling access to an airport.)



High set-up costs. (High set-up costs deter initial market entry, because they increase break-even output, and delay the possibility of making profits. )



High Research and Development costs ( a signal to potential entrants that the firm has large financial reserves. )

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2.9 Cement 2.9.1 Introduction Cement is a very important material in the construction industry. It is the main component to make produce the concrete. It can be said as the main material need in the construction even the substructure or the superstructure. 2.9.2 List of companies In Malaysia that have 8 of the cement industries in Malaysia  Aalborg Portland Malaysia Sdn Bhd (APMSB)  Holcim (Malaysia) Sdn Bhd (HMSB)  Cement Industries (SABAH) Sdn Bhd (CIS)  CIMA Group of Companies  CMS Group  YTL Cement Group  Tasek Corporation Berhad (TCB)  Lafarge Malayan Cement Berhad (LMCB) Group.

2.9.3 Type of product supplied

Blue lion cement Type I Portland cement

BLUE LION COMPOSITE CEMENT

NS COMPOSITE CEMENT NS CEMENT Type I Portland Cement and Type II

NS Brick

NS Eco Crete LH

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2.9.4 Market and justification After the research I found that cement industry is in pure oligopoly market. This word comes from the Greek “oligos” meaning "little or small” and “polein” meaning “to sell.” When “oligos” is used in the plural, it means “few.” As information oligopoly is a market structure in which the number of sellers is small. Furthermore, in oligopoly can be divide to two that is 

Pure oligopoly – have a homogenous product. Pure because the only source of market power is lack of competition. An example of a pure oligopoly would be the steel industry, which has only a few producers but who produce exactly the same



product. Impure oligopoly – have a differentiated product. Impure because have both lack of competition and product differentiation as sources of market power.

Control over price There is only 8 cement suppliers in the Malaysia, thus the market of the cement is just competition among 8 of it. Therefore the price of demand will be very inelastic. Due to fewer companies they can easy to control the price in market when all the companies do the same decision. Degree of product differentiation In degree of product differentiation, the cement product that provide by each companies is almost the same .Thus, it is full fill the properties of oligopoly market which the products can be standardized or differentiate. Conditions of entry The condition of entry of the cement market is hard. This is because the size of each company is large make that the entrances become harder. Other than that, the new enter companies need to have the source of raw material, large capital to having the machine for produce the cement.

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2.10 Tiles 2.10.1 Introduction Tiles is to organize a building to become beautiful it can be divide to wall tiles, floor tiles and bathroom design. Besides that tiles also have a lot of the size to fix in to a building to make sure the building more amazing and beautiful

2.10.2 List of companies On the other hand, in Malaysia have 1454 of firm and supplies in this industry and this is the 10 of the example firm in Malaysia.  A&I Trading & Consulting Sdn. Bhd  Link International Kl Limited  Future Deco Marketing Sdn. Bhd  Lalang Resources Sdn. Bhd  Jubin Bms (1990) Sdn. Bhd  Monacol Trading Company  Antai Resources Sdn Bhd 8X8 Mickey Milano Blue 8X8 Mickey Milano Chocolate 12X12 Puangpayom Blue 12X12 River Stone Beige  Red Link Enterprise  Liux Sdn. Bhd  Niro Ceramic Sales & Services (M) Sdn Bhd

24X24 Riverwood Oak

24X24 Adratic Beige

2.10.3 Type of product supplied

29 24X12 Rocky Stone

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2.10.4 Market and justification Tiles industry is in monopolistic competition because those have many firm including in tiles industry. Monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product. Monopolistic competition as a market structure was first identified in the 1930s by American economist Edward Chamberlin, and English economist Joan Robinson. Control over price There are over 1000 tiles suppliers in the Malaysia, thus the market of the tiles are full with competition. Due to many companies they can’t easy to control the price in market. This is because it is hard to let all the companies to have the same goals. Degree of product differentiation In degree of product differentiation, the tiles product that provide by each companies is same type but different in terms of design. Thus, it is full fill the properties of monopolistic competition market which the products are differentiate in terms of design. Each of the company has provide the different of the tiles just like JUBIN BMS (1990) SDN. BHD have provide a lot of the ceramic tiles with different size and design. Conditions of entry The condition of entry of the tiles market is medium. This is because the size of each company is small, it makes that the entrances become easier. However, the new enter companies need to have the source of raw material, and the ability to have a unique design to sustain in this market structure .

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Inidividual Assignment Yung Kong targets RM500mil revenue on rising steel demand Yung Kong Galvanising Industries Bhd (YKGI) targets group revenue to hit the RM500mil mark this year on improving demand for its products as the local steel industry recovers from its doldrums. YKGI, which has manufacturing facilities in Selangor and here, is Malaysia's top three flat steel producers among the seven players. The group's main products are pickled and oiled coils, cold rolled coils, galvanised iron coils and pre-painted galvanised iron coils. They expect a 25% increase in group production to 250,000 tonnes this year from about 200,000 tonnes last year. YKGI group sourced its imported raw material and hot rolled coils from Nippon Steel Corp, which has a 10% equity interest in it to lower production cost. The private placement of more than 39.1 million shares will raise gross proceeds of RM19.55mil. They agreed to subscribe to a minimum of 10 mil placement shares and the remaining new shares would be placed out to third party investor. The restricted issue of 48.8 mil shares to Marubeni-Itochu Steel Inc will raise gross proceeds of RM24.4mil. From the gross proceeds, RM1mil will be used to pay for the expenses of the corporate exercise. On completion of the acquisition, Starshine will become YKGI's wholly-owned subsdiary. Starshine group is principally involved in the manufacturing and trading of both long and flat steel products. YKGI state that increase the demand for its product can increase the total revenue. This is because the total revenue is based on the value of sale times with the price. In order to increase the demand of the company, the increase of the production is needed. The imported raw material from Nippon Steel Corp which has equity interest can reduce the cost to produce. Thus the production can be increase with the same cost. The company is doing the process of acquisition is to increase the capacity of its company. This is because Starshine group has the same field and manufacture the same products which are flat steel products. Total Revenue ( TP )=Price ×quantity demand

BY: PAN MING CHUAN (12WTD01607)

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Rising Cost Worries Oil Palm Planters Oil palms have been the basic need of consumers in Malaysia; this would cause government and oil palm planters to face huge stress if there is a rise and fall in the oil palm economy. Therefore what worries the oil palm planter the most is that the rise in their worker wedges and the fall in consumer demands. Not only that, based on Mapa (Malayan Agricultural Producers Association) exclusive director Mohamud Audong, the rise of oil palm price is due to the costlier fertilizer, more expensive foreign worker recruitment fees, higher transportation cost and various taxes imposed by the federal and state governments. Moreover, if oil palm price drops below RM2000 per tonne, small holder or oil palm planter would incur losses. Additionally, if the losses continue, the planters will hire fewer workers and the harvest would reduce. Based on this factor, the amount of oil palm supply will fall and price of oil palm will rise, but due to oil palm is a consumer necessity, the surplus of oil palm will eventually become a shortage for consumers.

BY: SEE WEN PIN JONATHAN (12WTD01497)

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How RBM building technology works ● Foam concrete is used instead of concrete mix Foam concrete or lightweight concrete is made in 3-in-1 patented mixer, the RBM-1000. Once set, this building material is as strong as normal concrete, weighs much less, is easier to transport, so that can reduce the cost of transportation fees. The maintenance fees also will be reducing duo to concrete has better insulation and fire rating properties. ● Easy to operate The RBM-1000 functions like a mini continuous batching plant. It is mobile and can be located at the construction site itself. It is easy to operate and has a pump that can deliver the foam concrete to locations as high as 125m above ground (35 storeys) or 250m away. The apparatus is very effective so that construction firm can spend less money on worker. ● Formwork is made from steel panels, not timber planks The foam concrete is poured into formwork made from RBM steel scaffolding panels. The panels are modular in design and the position of electrical sockets, for example, are fixed before the foam is poured in. Once the foam has set and the scaffolding removed, a finished wall with a smooth surface is obtained. Plastering is unnecessary. Construction firm reduce the construction cost of the building by construct this method. ● Low operating cost The RBM system is less costly to operate. It uses less manpower, produces less waste, delivers a product of consistent quality, and has a faster turnaround time. RBM claims the system can improve site productivity by more than three times, and reduce construction cost by as much as 20%. The total cost will decrease duo to a lot of expense had been reduce. ● Better return on investment RBM technology is also less capital intensive. The company claims that two units of RBM1000 costing RM800, 000 can deliver an output equivalent to that of a conventional system that can cost RM8mil-RM10mil. Such a system would consist of a concrete batching plant, trucks to transport the concrete to the construction site, and heavy duty pumps to transport the mix to the upper floors of a building. RBM technology is very functional because that can replace a lot of apparatus. BY: SHE ZHEN RUI (12WTD 07423)

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House Price Hike Likely 16 14 12 10 D2

8

D D3

6 4 2 0 A

B

C

This demand graph show the increase price will base on the labour, transport and another material increase. For the article the selling price of properties in Penang will soon increase by 5%-10%. A 50kg bag of cement is now priced at RM17.50, compared to RM16.50 before the hike. 60% to 80% of the materials used for a building comprised cement and cement-related materials. That why increase in cement prices will influence property prices. Due to cement firm is under oligopoly market model, if they want to make the profit maximization, they will raise prices together. And they give signals already. Only Sarawak has confirmed it would keep the prices in current level. Sand and aggregate increased also. Due to this phenomenon, house prices on the island will rise by at least 10%, in Seberang Prai, housing prices are expected rise by 5%, because of the additional transportation charges

to

ferry

the

raw

materials

to

the

island.

Besides that, construction cost will go up by between 15% and 20%. Due to the cost of labour and transportation charge has also increase in this year. The cost of labour had increase to RM 45 per day this year compared to RM 35 a year ago. Transportation charges for sand have increased to RM 450 per truck load this year from RM400 a year ago. The price also impacted by labour shortage, as many Indonesian workers have gone back to Indonesia. This is booming currently. The cement price hike would have less than a 1% impact on construction cost. But other 35

raw material such as brick, sand, aggregate, rebar and tiles were to increase drastically, the price of housing have to review and adjust property selling price accordingly. Price increased are by themselves not anti-competitive in nature. However, if there is evidence of collusion among the competition to increase prices, this would be of concern of MyCC and may merit an investigation. BY: NG YI MING (12WTD05752)

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Construction forecast to grow by 13 percent The construction sector is expected to fare better in 2013 compared with 2012 on the back of numerous projects in the pipeline. Due to impending 13th general election, there is the buzzword ‘political risk’, which seems to be casting a shadow over the industry. The president of Master Builders Association Malaysia (MBAM), Matthew Tee says that the construction industry has fared well in 2012 on a year-on-year basis, with a growth in excess of 20% and in budget 2013, we are looking at 13% growth this year. MBAM expected the construction sector to grow to RM92bil from RM85bil in 2011. In note to investors, CIMB Research analyst Sharizan Rosely says the delay in the signing of the RM7.1bil West Coast Expressway, the award of the RM3bil-RM4bil Kinrara-Damansara Expressway and the slowdown in the rollout of the Rubber Research Institute tenders had led to the slight deceleration in the momentum of awards in the second half of 2012. In 2012, the ultimate challenge the industry faced was the shortage of skilled workforce, it problem continuing when entering 2013. Besides, the material costs, political factor and managing margins are some of the reason to cause the construction forecast to grow up. In my opinion, nations generally measure their economic performance base on the market value of GDP in their annual income. National income is the aggregated earning of all enterprises and individuals within the society. Since income is earned by producing and selling goods, we can equally well use output or expenditure to measure the economy. In order to overcome the price of the construction to raise the government should spend the nation money wisely when they need to invest or purchase any goods and to ensure it bring benefit to the people in our country and will return the profit to our country. Governments also can encourage the nation people to work in construction firm and promise will return in good income. Besides, the government also can produce the construction material in our own country rather than import from other country. This is because it can reduce the import fees and other taxes from other country and it will be more efficient to solve the material costs problem. BY: PRAVEEN NAIR A/L KRISHNA MURTHI (12WTD07165)

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References   

Cockeril,F, 1984, The economic management of firms, Oxford, Allan Philip. Colander, David C, Microeconomics 7th ed. Page 288 McGraw-Hill 2008. Danny Myers, 2008, Construction Economics, Great Britain by Cromwell Press, Trowbridge, Wiltshire.(pg.122)

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Hashem,E. 2002. Economic : Model Structure of Economic. Oxford University Press.

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Negbennebor, A, 2011, Microeconomics, The Freedom to Choose, page 291 Pindyck, R & Rubinfeld, Microeconomics 5th ed.Prentice-Hall 2001.D: (page 424,425,427) Robert H. Haven, 1981, The Market System, John Wiley & Sons, United States (pg 207,220,221). Alibaba, Reinforcement Steel, View on 18 June 2013 Door, Door supply in Construction, viewed on 24th June 2013 Economics online , Available from [Accessed: 18 JUNE 2013] JUBIN BMS (1990) SDN. BHD ,Tiles Supplies, Available from [Accessed: 18 JUNE 2013] Oxford University Press, 2013, Oxford Dictionaries, View on 18 June 2013 Persatuan Pemborong Binaan Malaysia Master Builders Association Malaysia (MBAM), 2008, Master Builders Association Malaysia (MBAM) Supports Proposal To Remove Price Control Mechanism, View on 26 June 2013 TABS Cricket Club and Collingham JFC, Oligopoly , Available from

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[Accessed: 18 JUNE 2013] The Best Air Conditioner Brands, view 12 June 2013 Toilet bowls, view 12 June 2013 Cement Industries of Malaysia Berhad 2011,Cement Supplies, Available from [Accessed: 18 JUNE 2013]

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