1

School of Architecture, Building and Design

Bachelor of Quantity Surveying (Honours)

BLD 61103 Industrialized Building System

Title: IBS Business Plan

Group members

1. Cecilia Tie Sing Lu 0314050

2. Stephanie Yeoh Sze Wei 0318954

3. Cassandra Wong XinYue 0313365

4. Lau Sii 0319027

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TABLE OF CONTENT

1.0 General Company Description 3

1.1 Mission

1.2 Vision

1.3 Objectives

1.4 Background of G-Steel Formwork Installation Sdn. Bhd.

1.5 Safety

2.0 Services 4

2.1 After-sale services

2.2 Applications

3.0 Marketing Plan 6

3.1 Strategy and Implementation Summary

3.2 Market Analysis

3.3 Marketing Strategy

3.4 Promotional Strategies

3.5 Pricing Strategies

3.6 Competitor

4.0 Operational Plan 13

4.1 Services

4.2 Cost

4.3 Location

5.0 Management and Organization 13

5.1 Personnel Plan

5.2 Management Summary

6.0 Financial Plan 16

6.1 Cash Flow Projection

6.2 Break-even Analysis

6.3 Profit and Loss Projection

6.4 Balance Sheet Projection

7.0 References 21

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1.0 General Company Description

1.1 Mission

The mission of G-Steel Formwork Installation is to provide first class service at an

affordable price.

1.2 Vision

Be approved as an industry leader in the conception, fabrication and equipment

installation of steel formwork systems.

1.3 Objectives

G-Steel Formwork Installation has the following objectives.

• Work efficiently and effectively - The Company dignifies itself in doing the job

right the first time by completing the project in the estimated time frame within

the budget.

• Eco-friendly – The Company applies building method and technology that use

nature resources efficiently and in an environmental friendly.

• Customer Service – Give our customers the first class services.

1.4 Background of G-Steel Formwork Installation Sdn. Bhd.

G-Steel Formwork Installation Sdn. Bhd. is a start-up business setup in January 2011

specialized in the installation of steel formwork. Mr. Eddie Lau and Mr. Tan Su Min

are the founding partners of the company. Mr. Eddie has 10years experience in

formwork installation. Mr. Tan specializes in providing customer service, working with

sales people and potential clients.

Our services normally involve propping and centring, shuttering, provision of camber

and cleaning and surface treatment. Our Company steel formwork installers have

many years experiences in the installation of the steel formwork and steel formwork

products. All of our installers are experienced and hold many industry qualifications.

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Currently, the company provides more than 50 installations of steel formwork per

year. The company is expecting and planning for moderate growth over the next 3 to

5 years due to increase demand s of houses in Malaysia. The company plans to

expand to providing installation for 80 buildings per year by 2020.

1.5 Safety

G-Steel Formwork Installation will be committed to conduct business in a manner that

protects the safety and health of all workers, customer and people living in the

community where it operates. To achieve it, G-Steel Formwork Installation will ensure

all construction works fulfils with current Health Administration and Occupational

Health and Safety Law. All employees in the construction site will have responsibility

to fulfil the requirement and established the safety rules to prevent injuries and

accidents to themselves and others. G-Steel Formwork Installation is very

emphasizing about job-site safety and commitment in provides job-safety training.

These programs are about fall protection, ladder safety, respiratory safety, personal

protective equipment, and welding safety.

2.0 Services

Steel formwork is categorized as one of the new method in Industrialized Building

System (IBS). It can be adapted to almost any construction requirement that calls for

fast installation. The steel formwork installation can be applied in large construction

projects and in situations where large number of re-uses of the same shuttering is

possible. G-Steel Formwork Installation provides solution for any type of structure.

The primary function of the company is to provide steel formwork installation in

commercial and residential buildings. Other application includes circular or curved

shaped structures such as tanks, column, chimneys and for structures like sewer

tunnel and retaining walls.

G-Steel Formwork Installation will offer major advance, cost effective price,

ecological, affordable and all at superior quality that under technical control. The

company provides formwork system boasts heightened construction speeds and

significantly lower life cycles. All installers in our company are experienced and hold

many industry qualifications.

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2.1 After-sale services

Reliable Sales Service

G-Steel Formwork Installation provide professional consultancy on product

selection and service that best suit customer needs. The company provides

experienced project engineers, surveyors and technicians that ensure the

customer’s projects are meeting target deadline and achieve the most

suitable and efficient solution for customer on cost saving basis.

Site Supervision

In order of a better on-site installation of steel formwork, our company has a

professional team ready to travel anywhere of the world to bring their

professionalism directly where it is needed: highly qualified support that is

capable of following any stage of the works, from the preliminary studies, to

the start-up and to the various executive stages. The company provides

customers with professional on site supervision together with training

courses.

Relocation/ Refurbishment Solutions

G-Steel Formwork Installation can relocate and reconfigure existing formwork

system to achieve best value. The company also offers ongoing maintenance

to deliver warranty service and repair.

Customer Service Center

G-Steel Formwork Installation also provides an easy channel of

communication between customer and all our services. The customer service

center handles all customer enquiries, complaints, and maintenance. It also

provides customer with information to address inquiries regarding to the

services.

2.2 Applications

The following application is used for G-steel Formwork Installation’s service:

Wall formwork

Slab formwork

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Column formwork

Climbing formwork

Self-climbing formwork

Circular formwork

Single-sided formwork

Tunnel formwork

3.0 Marketing Plan

3.1 Strategy and Implementation Summary

The company plans to rapidly develop marketing in relationship with the industry

leaders and pursue new sales of its services to not only residential but also

commercial builders. The market strategy is to capitalize on steel formwork

Installation's partnerships by securing city, county, and state and federal government

contracts.

G-Steel Formwork Installation will be dedicated to safeguarding that the products

used on the construction sites, including entry from scaffolding to steel frames and

forming equipment, are safe and approved by CIDB. Along with clients, the company

believes in a health and safety initiative that is persistent and able to minimize any

potential loss in the work environment.

G-steel Formwork Installation in our company will adopt a corporate plan that is

dedicated to improving the performance of activities on the critical path of its

customers' projects. The company will do this by building on its fundamental strength,

which includes the high technology equipment, design engineering expertise, and

project and site management, within an environment of safety excellence.

At G-Steel Formwork Installation, customer service is a positive partnership, a

relationship that ensures a professional, efficiently run, safe workplace. The

company's customer service philosophy starts at the top, is rooted into the fabric of

the company, and is closely related to our goal of contributing to its' customers

critical success factors.

Customer service can be divided into two interconnected areas, which include the

equipment and people. On the job site, with the help of a newly integrated technology

system and a well-trained staff, G-steel Formwork Installation will be able to maintain

excellent control over such key areas as inventory, shipments/deliveries, damage

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loss, and invoicing. On the people side, G-Steel Formwork Installation will provide a

highly qualified and well-trained labour force, ensuring that schedules and deadlines

are met and worker safety remains a top consideration.

3.2 Market Analysis

The housing industry has proceeded at a red-hot pace for several years running. An

all-time record was set in when the economic status in Malaysia is bubbling. The

demand of houses especially in developing state is very high. A study shows that an

increase of 9.8% on the demand of houses from the year of 2012 to the year of 2015.

The record setting string of the sales of home has forced builders to pick up the pace

of the construction activity. The total of houses build from 2012 to 2015 has

increased drastically by 13.76% to 803520 houses. The table below outlines the total

market potential of Johore state in the served markets (Daniele 2014).

Table 1 shows the estimated needs of houses by the year of 2015 and 2020. (Source

from Star Property 2014)

Besides that, the recent MRT project which is proposed on 2010 and started the

construction in 2011, which are known as the Sungai Buloh – Kajang Line and

Sungai Buloh- Serdang- Putrajaya Line. The construction of MRT projects uses the

steel formwork system because it has high sustainability.

Listed below are some of the reasons that Shah Alam are growing, and why it is a

good time for business such as ours.

The local economy is booming and virtually busting at a seams.

Many expatriates worked and stayed in Malaysia and eventually investing

houses and company in Malaysia which increase the demands of buildings.

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New facility is suggested and builds such as MRT and BRT.

The awareness of “green” and sustainability increases.

3.3 Marketing Strategy

G-Steel Formwork Installation plans to use a direct sales force, relationship selling,

and subcontractors to reach its markets. These channels are most appropriate

because of time to market, reduced capital requirements, and fast access to

established distribution channels. The overall marketing plan for G-Steel Formwork

Installation's services is based on the following fundamentals:

•

•

television, radio, sales associates, and mail order.

•

3.4 Promotional Strategies

Formwork Installation is committed to an extensive promotional campaign. This will

be done aggressively and on a broad scale. To accomplish initial sales goals, the

company will require an effective promotional campaign to accomplish two primary

objectives:

1. Attract customers who will constantly look to steel formwork installation for

their construction projects.

2. Attract quality sales personnel who have a desire to be successful.

3.4.1 Packaging and Customer Service

The job sites have to be kept tidy and clean at all the time during the construction

phase. The materials are neatly stacked and organized. Furthermore, the site must

be clear of nails, and the garbage is kept in the container and is removed every week.

The builders have a dress code during the installation process, which are the

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company t-shirts, safety helmet, black pants and safety boots when they are on site.

Also, the builders have to be polite and be clear on the job scope to provide the first

class quality of installation by avoiding any wastage occurs due to their

unprofessionalism.

We also provide customer care-line for 24 hours. If there are any needs of fast

completion of project, we do provide 24 hours service for urgent projects depending

on the situation. Upon completion of any projects, any mess that is made is cleaned

up before the service person leaves the site.

3.4.2 Public Relations

The company’s 5th anniversary will be on the 15th of June 2016. The Star

newspaper will be contacted to do a focus story about the company’s anniversary.

The anniversary will be held at our newly built factory located in Shah Alam and

media will be invited, as an opening ceremony will take place in conjunction with the

5th anniversary.

Besides that, as a member of Pertubuhan Arkitek Malaysia (PAM), monthly meetings

offer an opportunity to network and provide mouth advertising. We will offer to

provide a speaker on using the green method for formwork system by using the steel

formwork.

3.4.3 Advertising

We have a few of 4x6 signs advertising boards placed along the road of Jalan TUDM

with the service we provide and our company information. We will be purchasing 5

additional signboards over the year and be placed across other states.

Brochures are also given to portray G-Steel Formwork Installations' goals and

products as an attractive functionality. It also functions to show customers how to use

the latest in technology as it relates to construction and building services. Our

company will develop three brochures: one to be used to promote sales, one to use

to announce the product in a new market, and the other to recruit sales associates.

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As an incentive for our customers to remember G-Steel Formwork Installation's name,

the company plans to distribute coffee mugs, T-shirts, pens, and other advertising

specialties with its logo.

3.5 Pricing strategies

The pricing will be compatible to the competitor’s pricing. Although from the pricing

wise it is not as cheap as other competitors, but the quality of steel we used and the

services provided by the installer are of first class service because the installer had

undergone special training and hence able to install the formwork in a faster and

more accurate way.

3.6 Competitor

Dahtec Marketing Sdn. Bhd. is a company that specializes in manufacturing and

distributing of all types of steel scaffolding and formwork for construction and

industrial usage. Dahtec Marketing Sdn. Bhd. is located at 73, Jalan Kenari 20,

Bandar Puchong Jaya, 47100 Puchong, Selangor, Malaysia. Dahtec fabricates a

variety of scaffolding and formwork system to meet construction and building usage.

The Company usually provides installations of shear wall and column steel formwork.

Actually Dahtec will compete with us just for certain services in certain locations.

The Competitive Analysis table below shows the comparison between G-Steel

Formwork Installation Sdn. Bhd. and Dahtec Marketing Sdn. Bhd.

In the final column, estimate the importance of each competitive factor to the

customer.

1 = critical; 5 = not very important.

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Table 2: Competitive Analysis

Factor G-Steel

Formwork

Installation

Sdn. Bhd.

(Me)

Strength Weakness Dahtec

Marketing

Sdn. Bhd.

(Competitor)

Import

ance

to

Custo

mer

Products -Wall, slab,

column and

circular

formwork

-Climbing

and self-

climbing

formwork

-Single-sided

and tunnel

formwork

Our

company

has the

tunnel

formwork.

Less

companies

in Malaysia

have this

kind of

formwork

system.

G-Steel does

not provide

scaffolding and

safety netting

system.

-Formwork

-Shoring

-Modular

-Frame

scaffolding

-Tubular

-Safety

netting

1

Price RM 150-180

per square

meter

Cheaper

but good

quality.

Expensive, but

can provide in

a short time.

RM 165-200

per square

meter

4

Place Provides

services to

Selangor,

Malacca,

Johore and

Negeri

Sembilan

Dahtec

provides

services in

many

areas.

G-Steel only

provides

services to few

areas only.

Provides

services to

whole

Peninsular

Malaysia

3

Supply

Ability

11,000

Square

Meters per

Month

G-Steel

employees

more

workers and

has many

machines.

G-Steel cannot

deliver and

provide

services in a

short time

because too

many orders.

10,000

Square

Meters per

Month

4

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Service G-Steel

fabricates a

variety of

formwork

system to

meet

construction

and building

usage. G-

Steel also

provide after-

services.

Our

company

provides

after

services to

our

customers.

Our

technicians

will repair

the steel

formwork if

it is spoiled.

Our company

does not

provide any

scaffolding

system which

also very

useful in a

construction

site.

Dahtec

fabricates a

variety of

scaffolding &

formwork

system to

meet

construction

and building

usage.

Dahtec

serves better

in a shorter

time and with

a more

efficient

method.

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3.6.1 Advantages of competition analysis

Enables our company to identify gaps in the market for products, services or

initiatives.

Assists our company to price our goods and services both competitively and

strategically.

Might give our company ideas for new technology and methodology that

could be applied within our own organization.

3.6.2 Disadvantages of competitive analysis

Involves a commitment of resource which will have an inherent cost to the

business.

Flawed analysis of competitors might result in making poor business

decisions in order to compete.

Too much focus on the activities of competitors might lead a business into

becoming reactive instead of proactive, resulting in a lack of innovation and a

lack of unique identity in the market.

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4.0 Operational Plan

4.1 Service

4.1.1 Steel formwork installation process

The first floor circular columns are constructed using steel column forms. First,

survey and setting out. Then, the installation of wall and column reinforcement bars

and E&M concealed cable containment are followed by setting out. Install the wall,

column panels and the beam panels. Install the beam side panels and slab panels.

Install the beam reinforcement bars and finish the E&M cable containment. Adjust

and reinforce the wall panels and pillar panels. Install the slab reinforcing bars and

suspended formworks. Lastly, pour the concrete. The steel column form should be

oiled before concreting. After concreting to the first floor columns, the steel column

forms were dismantled easily.

4.2 Cost

Our cost for steel formwork installation is in the range of RM 150 – RM

180 per square meters.

4.3 Location

G-Steel Formwork Installation is a formwork installation formwork. Our company

located in Lot 2, Jalan TUDM, Kg. Baru Subang, 40150 Shah Alam, Selangor with

registered capital of RM 60 million. The total area of G-Steel Formwork Installation is

16,000 square feet. Our company’s factory located in an area that provide good

transport network that reduce transportation costs and make the movements of steel

formwork easier. Our company also selects a site which provides multiple sources of

power and has the current and future capacity to meet the company’s needs.

5.0 Management and Organization

The company's management viewpoint will be based on responsibility and mutual

respect. G-Steel Formwork Installation will maintain an environment and structure

that will reassure productivity and esteem for clients and fellow employees.

G-Steel Formwork Installation will be responsible to its employees who are working

with the company. Additionally, employees will be free to make proposals and

objections. The company will provide equal opportunity for employment, development,

and advancement for those eligible.

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Employees working at G-Steel Formwork Installation will be dedicated to:

• Providing a safe work environment to protect employees, the employees of

customers and subcontractors, and the public.

• Supplying harmless products for customers and clients.

• Continuously improving the company's safety program to reduce the risk of

accidents and occupational illness in a changing work environment.

5.1 Personnel Plan

G-Steel Formwork Installation's management is highly experienced and qualified. Mr.

Eddie Lau leads the management team. Other labor costs include only Mr. Tan's

assistant and a part-time accountant. The table 3 below outlines G-Steel Formwork

Installation's personnel plan for 2011-2013.

Personal Plan Year 1 Year 2 Year 3

Administration

Other

RM 43,980

RM 0

RM 35,700

RM 0

RM 47,560

RM 0

Total People 3 3 3

Total Payroll RM 43,980 RM 35,700 RM 47,569

5.2 Management Summary

Our management is comprised of people with many years of experience in the

industry. We have active shareholders and sleeping partner. The active

shareholders, which is Mr. Jason Chin holds the position of executive director and

the executive general manger, Mrs. Alice Lee reported to him. G-Steel Formwork

Installation Sdn. Bhd. organization are then divided into few subordinates which are

the sales department, finance department, research and development department,

infrastructure department, quality control department, cost and contract department

and marketing department. The general manager of these department reports to the

executive deputy of general manager, Mrs. Alice Lee. Below is the organizational

flow chart of G-Steel Formwork Installation Sdn. Bhd.

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6.0 Financial Plan

The following sections describe the financials for G-Steel Formwork Installation.

6.1 Cash Flow Projection

Projected cash flow statements for Year 2011-2013 are provided below.

Pro Forma Cash Flow Cash Received

Year 1 Year 2 Year 3

Cash from Operations Cash Sales Cash from Receivables

RM 154,968 RM 367,958

RM 456,872 RM 743,698

RM 367, 958 RM 874,720

Subtotal Cash from Operations

RM 522, 926

RM1,200, 570

RM 1,242,678

Additional Cash Received Sales Tax,VAT,HST/GST Received New Current Borrowing New Other Liabilities(Interest-free) New Long Term Liabilities Sales of Other Current Assets Sales of Long Term Assets New Investment Received

RM 0

RM 0 RM 0

RM 0 RM 0 RM 0 RM 0

RM 0

RM 0 RM 0

RM 0 RM0 RM 0 RM 0

RM 0

RM 0 RM 0

RM 0 RM 0 RM 0 RM 0

Subtotal Cash Received RM 522,926 RM 1,200,570 RM 1,242,678

Expenditure Year 1 Year 2 Year3

Expenditure from Operations Cash Spending Bill payments

RM 53,575

RM 677,899

RM 56,432

RM 895,674

RM 64,382

RM 1,802,346

Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Purchase Other Current Assets Purchase Long Term Assets Dividends

RM 731,474

RM 0

RM 0 RM 0 RM 0

RM 0

RM 105,000 RM 0

RM 952,106

RM 0

RM 0 RM 0 RM 0

RM 0

RM 100,000 RM 0

RM 1,866,728

RM 0

RM 0 RM 0 RM 0

RM 0

RM 120,000 RM 0

Subtotal Cash Spent Net Cash Flow

RM 836,474

(RM 104,575)

RM 1,052106

(RM 100,000)

RM 1,986,728

(RM 120,000)

Cash Balance RM 19,200 RM 119,200 RM 239,200

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6.2 Break-even Analysis

Table: Break-Even Analysis

Break-Even Analysis Monthly Revenue Break-Even Assumptions:

RM24,706

Average Percent Variable Cost 64%

Estimated Monthly Fixed Cost RM8,894

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6.3 Profit and Loss Projection

G-Steel Formwork Installation is in the early stage of development, thus initial

projections have only been made on accounts that are believed to most drive the

income statement.

Table: Profit and Loss Pro Forma Profit and Loss

Sales

Year 1 RM 600,000

Year 2 RM 1,020,000

Year 3 RM 1,323,000

Direct Cost of Sales Other

RM 454,000 RM 52,000

RM 535,478 RM 52,000

RM 723,650 RM 52,000

Total Cost of Sales Gross Margin Gross Margin%

RM 506,000

RM 94,000 15.67%

RM 587478

RM 432,522 42.40%

RM 775650

RM 547,350 41.37%

Expenses

Payroll Sales and Marketing and other expenses Depreciation Gasoline and oil Telephone Utilities Insurance Rent Payroll Taxes Other

RM 43,578 RM 26,500

RM 3,200 RM 2,500 RM 1,200 RM 6,000 RM 8,000 RM 5,000 RM 5,200

RM 0

RM 43,578 RM 60,204

RM 4,000 RM 3,200 RM 1,800 RM 7,050 RM 8,000 RM 5,500 RM 5,200

RM 0

RM 52,134 RM 56,722

RM 3,100 RM 5,000 RM 2,200 RM 7,525 RM 8,000 RM 6,000 RM 5,386

RM 0

Total Operating Expenses

RM 101,178 RM 138,532 RM 146,067

Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred

RM 95,245

RM 97,653

RM 0 RM 23,456

RM 282,346

RM 287,320

RM 0 RM 71,260

RM 621,657

RM 635,480

RM 0 RM 421,456

Net Profit RM 71,789 RM 211,086 RM 200,111

Net Profit/ Sales 11.96% 20.69% 15.13%

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6.4 Balance Sheet Projection

The table below provides G-Steel Formwork Installation's projected balance sheets

for 2011-2013. Table: Balance Sheet

Pro Forma Balance Sheet Assets

Year 1 Year 2 Year 3

Current Assets Cash Accounts Receivable Inventory Other Current Assets

RM18, 747 RM 81,560 RM 41,560 RM 31,000

RM 87,650

RM 131,750 RM 64,881 RM 31,000

RM 395,601 RM 198,125

RM 80,031 RM 31, 000

Total Current Asset

RM 172,867

RM 315,281

RM 704,757

Long-term Assets Long-term Assets Accumulated Depreciation

RM 124,000 RM 3,500

RM 224,000 RM 8, 500

RM 324,000 RM 14, 300

Total Long-term Assets

RM 120,500

RM215, 500

RM309, 700

Total Assets

RM 293,367

RM 530,781

RM 1,014,457

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities

RM 48,950 RM 0 RM 0

RM 65, 783 RM 0

RM 0

RM 87,096 RM 0 RM 0

Subtotal Current Liabilities Long-term Liabilities

RM 48,950

RM 0

RM 65,783

RM 0

RM 87,096

RM 0

Total Liabilities Paid-in Capital Retained Earnings Earnings

RM 48,950

RM 216,000 (RM30, 000)

RM 75,000

RM 65,783

RM 216,000 RM 35,650

RM 214,012

RM 87, 096

RM 216,000 RM 245,663 RM 465,519

Total Capital

RM 261,000

RM 465,662

RM 927,182

Total Liabilities and Capital

RM 309,950

RM 531,445

RM 1,014,278

Net Worth

RM 261,000

RM 465,662

RM 927,182

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7.0 Reference

Dahtec (2013). Scaffolding and Formwork System Products. [Website] Retrieved 8

June 2015 from http://www.dahtec.com/product/

Daniele, G. (2014). ‘Propenomics’ of Iskandar Malaysia: 10 reasons to buy

properties there. [Website] Retrieved 6 June 2015 from

http://www.starproperty.my/index.php/articles/investment/propenomics-of-

iskandar-malaysia-10-reasons-to-buy-properties-there/

MRT Crop. (2015). MRT Corp - Official webpage for the Klang Valley My Rapid

Transit. [Website] Retrieved 6 June 2015 from

http://www.mymrt.com.my/en/mrt-project

References for Business (2015). General Contracting Company. [Website] Retrieved

4 June 2015 from http://www.referenceforbusiness.com/business-

plans/Business-Plans-Volume-07/General-Contracting-Company.html