Kimlun Corporation Berhad Annual Report 2018

Singapore Construction Sector The total construction demand in 2019 is projected to range between S$27 billion to S$32 billion in 2019, comparable to the S$30.5 billion (preliminary estimate) awarded in 2018. The projected outlook is due to sustained public sector construction demand, which is expected to reach between S$16.5 billion and S$19.5 billion in 2019. Public construction demand is expected to be boosted by major infrastructure projects and a pipeline of major industrial building projects. The private sector’s construction demand is expected to remain steady at between S$10.5 billion and S$12.5 billion in 2019, supported by projects including the redevelopment of past en-bloc sales sites concluded prior to the second half of 2018 and new industrial developments. The construction demand is expected to be improve over the medium term. Demand is projected to reach between S$27 billion and S$34 billion per year for 2020 and 2021 and could increase to between S$28 billion and S$35 billion per year for 2022 and 2023. (Source: Building and Construction Authority of Singapore) The Land Transport Authority of Singapore (LTA) has progressively awarded some civil contracts to construct the North-South Corridor Expressway (“NSC”) since 2018. The NSC is expected to be completed around 2026. Our subsidiary, SPC Industries Sdn Bhd (“SPC”) which has a strong track record in supplying precast concrete components to various projects in Singapore since 2006, including Singapore MRT projects, underground cable tunnel projects and sewerage system projects, is well positioned to compete for potential sales orders from NSC related projects In addition, your Board expects the expansion of the rail network in Singapore will present business opportunities for us to bid for TLS, sleepers and other precast concrete components orders till 2030. According to the Singapore Land Transport Master Plan, the Singapore government targets to extend its rail network to 360 km by 2030. Pursuant to the Singapore 2013 Land Transport Master Plan, there will be two new MRT lines with a total route length of 70 km and extension of a total route length of 8 km to existing lines to be built by 2030. Annual Report 2018 22 MANAGEMENT DISCUSSION AND ANALYSIS (cont’d)