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Gamuda
1.
2. Construction Sector
• Construction is a process that consists of the
building or assembling of infrastructure
• In Malaysia, construction industry is generally
separated into two areas
– General construction
– Special trade works
3. Construction Sector
• Construction industry makes up an important
part of the Malaysian economy due to the
amount of industry linked to it such as those
for basic metal products and electrical
machinery
• Hence, the construction industry could be
described as a substantial economic driver for
Malaysia
4. BACKGROUND OF THE COMPANY
• The company was incorporated on October 6,
1976
• Gamuda was listed on the main board of the
Kuala Lumpur Stock Exchange on 10 August
1992
5. OVERVIEW OF THE COMPANY
• Gamuda Berhad is a Malaysia-based investment
holding company engaged in civil engineering
construction
• operates in three business segments: engineering
and construction, property development and club
operations, and water and expressway
concessions
• Its subsidiaries include Gamuda Construction Sdn.
Bhd. and Gamuda Engineering Sdn. Bhd
• The Company operates in Malaysia, Taiwan,
Republic of China, Mauritius, Qatar, Bahrain and
Vietnam.
6. Competitor
• YTL Corporation
– Core business activities are :
• Utilities
• High Speed Rail
• Operation and Maintenance (O&M)
• Cement Manufacturing
• Construction Manufacturing
• Property Development & Hotels
• Technology Incubation
• Carbon Consulting
7. Competitor
• In Malaysia, YTL Corporation is the leader in
construction sector
• However, it is not a serious threat for Gamuda
Berhad
8. VISION STATEMENT
• We deliver innovative world-class
infrastructure and homes for our customers
through our core businesses in infrastructure
development and construction, operation and
maintenance of public infrastructure
concessions, and large-scale urban township
development.
(Comment: Good statement)
9. MISSION STATEMENTS
• To provide viable solutions for our clients and
customers
• To ensure responsible conduct towards all our
stakeholders, including our customers, employees,
shareholders and the community and environment in
which we operate.
• To improve our efficiency and relevance amidst the
changing needs of our customers and markets
• To ensure that we have a sustainable future
10. NINE ESSENTIAL COMPONENTS
OF A MISSION STATEMENT
• Gamuda Berhad mission is to place an innovation in our
concepts, services, product and delivery system (4) to provide
viable solution for our clients and customers (1). We will be
responsible to conduct towards all our stakeholders, including
our customers, employees, (9) shareholders and the
community and environment in which we operate (8). We will
constantly improve our efficiency and relevance amidst the
changing needs of our customers and markets (7). We take
the long view in our business policies and actions (6) to
ensure that we have a sustainable future (5).
(Comment: Statement lacks of two components: Products or Services and
Markets)
11. THE NINE COMPONENTS
1. Customers
2. Products or Services
3. Markets
4. Technology
5. Concern for Survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
12. THE EXTERNAL ASSESSMENT
OPPORTUNITY
• Expected housing boom by 15% in 2011
• Strategic alliance with government in public sector
project such as SMART and MRT
• Land and housing in 500 radius around the MRT
station will increase 10% to 30% in its value.
• RM9 billion Pahang Selangor water transfer
project in bidding process
13. THE EXTERNAL ASSESSMENT
Threat
• YTL is the leader in the industry by manufacturing
their own raw materials.
• Penang state government order to stop double
railways project due to flood.
• Gamuda expose to foreign exchange risk due to
their project in overseas.
• MRT project cost expect to increase from RM35
billion to RM50 billion because of the global crisis.
14. External Factor Evaluation (EFE) Matrix for Gamuda Bhd
Key External Factors Weight Rating Weighted Score
__________________
Opportunities ______
1. Expectec housing boom by 15% in 2011 0.16 4 0.64
2. Strategic alliance with government in public
Sector project such as SMART and MRT 0.17 4 0.68
3. Land and housing in 500 metre radius around the
MRT will increase 10% to 30% in its value 0.14 3 0.42
4. RM9 billion Pahang Selangor water transfer project
in bidding process 0.12 2 0.24
Threats
1. YTL is the leader in the industry by manufacturing
their own raw materials 0.12 3 0.36
2. Penang state government order to stop double
railways project due to flood 0.10 2 0.20
3. Gamuda expose to foreign exchange risk due to their
project in overseas 0.12 4 0.48
4. MRT project cost expect to increase from RM35 billion
to RM50 billion 0.07 1 0.07
Total 1.00 3.09
16. THE INTERNAL ASSESSMENT
STRENGTH
• Establish construction company in construction
sector since 1976.
• Company finance it assets more on equity
financing rather than debt financing.(debt to equity
ratio 0.32 times)
• Increase in dividend by 50% from 8 sen to 12 sen
in 2010.
• Gamuda’s profit in 2010 rose to 20% .
• High quality product produce such as SMART and
MRT.
17. THE INTERNAL ASSESSMENT
WEAKNESSES
• Not enough expertise in manufacturing raw
material compared to competitor in term of
cement manufacture.
• Revenue decrease by 9.98 % from 2009 to 2010.
18. Internal Factor Evaluation (IFE) Matrix for Gamuda Bhd
Key Internal Factors Weight Rating Weighted Score
__________________
Strength ______
1. Established construction company in construction sector
since 1976 0.20 4 0.80
2. Company finance it assets more on equity financing
rather than debt financing.(debt to equity ratio 0.32 times) 0.14 4 0.56
3. Increase in dividend by 50% from 8 sen to 12 sen
in 2010 0.12 3 0.36
4. Gamuda’s profit in 2010 rose to 20% 0.10 2 0.20
5. High quality product produce such as SMART and MRT 0.18 4 0.72
Weaknesses
1. Not enough expertise in manufacturing raw material
compared to competitor in term of cement manufacturing. 0.16 3 0.48
2. Revenue decrease by 9.98 % from 2009 to 2010 0.10 2 0.20
Total 1.00 3.32
19. A SWOT Matrix for GAMUDA BERHAD
Strength Weaknesses
1. Establish construction 1. Not enough expertise in
company in construction manufacturing raw material
sector since 1976 compared to competitor in
2. Company finance it term of cement manufacture.
assets more on equity 2. Revenue decrease by 9.98
GAMUDA BERHAD financing rather than % from 2009 to 2010
SWOT Matrix debt financing.(debt to
equity ratio 0.32 times)
3. Increase in dividend by
50% from 8 sen to 12
sen in 2010
4. Gamuda’s profit in 2010
rose to 20%
5. High quality product
produce such as
SMART and MRT
Opportunities SO Strategies WO Strategies
1. Expected housing boom by 15% in 1. Develop more housing 1. Try to get more project from
2011 properties by 3% inside and outside the
2. Strategic alliance with government (S1,O1) country 2% (W2,O2)
in public sector project such as 2. Establish rapport with 2. Develop more properties and
SMART and MRT government to get more commercial project within the
3. Land and housing in 500 radius project such as RM 3 radius of the MRT station by
around the MRT station will billion second Penang 2%. (W2,O3)
increase 10% to 30% in its value. bridge and etc. by 2%.
4. RM9 billion Pahang Selangor (S5,O4)
water transfer project in bidding
process
Threats ST Strategies WT Strategies
1. YTL is the leader in the industry by 1. Involve in manufacturing 1. Withdrew overseas projects
manufacturing their own raw sector to compete with that give too low profit and
materials competitors by 10% in shows a downtrend in their
2. Penang state government order to cement. (S1,T1) currencies (W2, T3)
stop double railways project due to 2. Issue more share to
flood fund the cost increase in
3. Gamuda expose to foreign MRT project (S2,T4)
exchange risk due to their project in
overseas
4. MRT project cost expect to
increase from RM35 billion to
RM50 billion because of global
economic crisis.
20. A SPACE Matrix for GAMUDA BERHAD
Financial Position Rating
Gamuda Bhd return on investment increase by 0.95 percent to 4.42 percent 3.0
Gamuda Bhd net income was 97.5 million, increase 3.5 percent from a previous year 3.0
The company paid out dividend payment to its shareholder increase from 8 sen to 12 sen 4.0
Gamuda Bhd assets are finance more through equities which is 65% 2.0
12.0
Industry Position
Construction industry in Malaysia has potential growth by 3.5 percent this year 4.0
Expected housing boom by 15 percent in 2011 5.0
Financial position of Gamuda is stable due to increase in dividend payment by 50%,
EPS by 44% and net profit by 3.5%. 4.0
13.0
Stability Position
Gamuda berhad exposed to foreign exchange risk due to operates in oversea -4.0
The inflation rate in Malaysia was last reported at 2.9 percent in February of 2011 -3.0
Gamuda has to compete with other construction companies such as IJM, UEM, and YTL
in order to get project -6.0
-13.0
Competitive Position
High quality product produces such as SMART and MRT -1.0
Most of the Gamuda’s project offered by government -3.0
Advance in construction technology in term of tunneling expertise -2.0
-6.0
Conclusion
SP Average is -4.3
CP Average is -2.0
IP Average is +4.3
FP Average is +3.0
X axis = -2.0 + 4.3 = 2.3
Y axis = -4.3 + 3.0 = -1.3
22. THE STRATEGIC POSITION AND ACTION EVALUATION
(SPACE)MATRIX
• Product Development
- Gamuda Berhad can apply their product development strategy such as in
cement manufacturing in order to compete with YTL which is the leader in
construction industry. Furthermore, with the retained earning almost RM
140 million, we believe that Gamuda able to involve in cement
manufacturing.
• Market Penetration
- Gamuda Berhad already penetrated in overseas such as in South East Asia
country (Thailand and Vietnam) and Middle East ( Qatar and Bahrain).
Now, Gamuda Berhad has an opportunities to expand their business in
other Asia country such as India, Korea, Hong Kong and etc.
23. GAMUDA BHD Balance Scorecards
Strategic Objectives Measure Target Primary
Priorities Responsibility
Financial 1. Increase in 1. ROA 1. Increase from 1. Finance
1. Financially Return on Investment 4.42% to 5% Manager
strong 2. Increase in net income 2. EAT 2. Increase from
3.5% to 4.5%
3. Increase in profit 3. NPM 3. Increase from
margin 11.79% to 13%
Customer 1. Complete the 1.Market 1. Increase from 1. Marketing
1. Government project within the share 49.3% to 52% Manager
and Public sector time allocated growth
Internal 1. Innovative product 1. Project 1. Increase by 3% 1. R&D Manager
1. Operational and services gained in develop new 2. Sales and
Excellence project Department
2. Increase 2. Low cost at high 2.Customer Manager
customer value quality project and acquisition
services
