Hong Leong Asia (HLA) recently sat with The Edge Singapore for an interview on the company’s latest efforts to meet housing demand more sustainably. Below is an excerpt of the interview published on 30 August 2023, with Chief Executive Officer Mr Stephen Ho, Chief Investment Officer Mr Patrick Yau, and Head of Sustainability and Corporate Affairs Ms Kwek Pei Xuan.

Hong Leong Asia (HLA), part of the sprawling Hong Leong Group, recently signalled a further commitment to its building materials business. In a 51:49 joint venture with Malaysia’s Sunway Construction Group, it opened Singapore’s largest integrated construction and prefabrication hub at Punggol Barat Lane.

HLA’s CEO Stephen Ho says in an interview with The Edge Singapore: “People are looking at alternative ways of construction to produce some of these apartments more quickly. The process also sits very nicely with the whole sustainability discussion that’s confronting a lot of players like ourselves. What it means is that you can reduce the noise and dust pollution at the site level. Efficiency is also gained from greater automation and we rely less on manpower,” he adds.

HLA’s Chief Investment Officer Patrick Yau says precast may become the dominant method of building for high-rise construction, at least for the residential sector in Singapore. He adds that usage of the material has been given a boost as the Singapore government requires developers to use precast in about 60% of the project’s structure above the basement if it buys a piece of land from government land sales (GLS).

The use of precast in construction is not new although it has not gained widespread use. Detractors list factors including costs as a reason why the take-up rate isn’t as high as expected. However, HLA’s executives disagree that cost is an issue. Ho maintains that the pricing of prefab parts made in Malaysia remains “competitive”. The bottleneck is finding enough storage space, adds Kwek Pei Xuan, HLA’s director and Head of Sustainability and Corporate Affairs.

The recent opening of HLA’s prefab hub, whose development was underway before the Covid-19 outbreak, gained greater urgency especially after the pandemic. When borders were shut during the pandemic and construction activity ground to a halt, both the supply of workers and materials were affected. Specifically, precast parts, which had readily been imported from Malaysia, were hit as they were deemed non-essential. “That’s why the rebalancing to have Singapore produce a bit more has begun,” explains Yau.

Diversifying its sources of supply was also another key lesson due to the lessons learnt from the pandemic lockdown, in case one of the sources — even if it is the cheapest — suddenly becomes unavailable, notes Yau.

HLA has long-standing ties with other industry players including Japanese cement company, Taihaiyo Cement Corporation, which has been a business partner since HLA was founded 60 years ago. To further strengthen its vertically-operated business model, HLA recently acquired new quarries in Indonesia and Malaysia.

“Upstream, we have our own quarries producing cement. Downstream in Singapore and Malaysia, we’re a ready-mix concrete player. Further downstream, we see opportunities in enhancing our precast capabilities,” Ho explains. “All of that when you look at the value chain, we can capture more value in the downward chain and hopefully that model is going to give us that resilience.”