Section 4 UEM Edgenta Berhad HOW WE CREATE VALUE 46 OUR OPERATING ENVIRONMENT AND MARKET TRENDS Amidst a challenging year marked by uneven economic growth worldwide, inflationary pressures and geopolitical tensions – UEM Edgenta has continued to navigated the headwinds by leveraging our diversified portfolio of businesses. This year, we made significant headway in our regional expansion with the full operationalisation of our Kingdom of Saudi Arabia (“KSA”) facilities management (“FM”) business. We also repositioned our asset consultancy to take advantage of the burgeoning sustainability solutions market. The FM market, in mature markets like Malaysia, Singapore, and Taiwan are growing at 5-7% while the emerging markets like the United Arab Emirates (“UAE”) and the Gulf Cooperation Council (“GCC”) are growing at 13-15%. Transformative and technology-driven trends continue to reshape the FM landscape which UEM Edgenta has aligned with, positioning our business for growth opportunities and continued success. These include the integration of digital technology, environmental, social and governance (“ESG”) considerations, and integrated service delivery, all aimed at enhancing the customer experience. Nevertheless, challenges exist in the form of inflationary pressures impacting profitability as a result of rising manpower and material costs. Competition has also intensified considerably with a mix of traditional and new players in the FM market competing for a share of the pie, in addition to the demand for high-quality services requiring investments in further upskilling and training. MALAYSIA Trends • Inflationary forces and minimum wage increase escalated operating costs • Competitive pressure by smaller/ localised operators • Growing demand for high-quality services at lower costs • Increased demand for technology and sustainability solutions Response • Continued our cost optimisation exercise by implementing automation and mechanisation, streamlining finance and procurement processes and rationalising our business structure • Enhanced operational efficiency through asset and facility digitalisation via Asseto roll-out and implementing smart building technologies for asset owners • Delivered sustainable solutions to support our clients’ sustainability agenda • Allocated RM200 million for our Sustainable Zero-Capex Programme in Peninsular Malaysia and Sarawak to promote energy efficiency and sustainable asset management The base of our operations, Malaysia is home to our four primary divisions: Healthcare Support, Property & Facility Solutions, Infrastructure Services and Asset Consultancy. A key part in our ability to deliver value lies in Edgenta NXT as the provider of end-to-end facility management solutions and smart built-environment master integrator.
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