Gamuda draws strength from innovation-driven strategy
16 Sep 2023 | The Star
The Asia Outstanding Companies poll acknowledges listed firms excelling in financial performance, management team excellence and investor relations. Over 1,225 fund managers, research analysts and bankers voted across 12 Asian markets.

The resonance of Gamuda Bhd ‘s innovation-driven strategy continues to reverberate, with industry analysts crediting this approach for the company’s unparalleled success.

Founded in 1976, Gamuda has never been content with the status quo. Instead, it has consistently challenged conventions and sought out inventive solutions to industry challenges.

The commitment to innovative thinking has allowed the company to thrive and set new benchmarks, both nationally and internationally.

In a resounding affirmation of its accomplishments and outstanding capabilities, Gamuda was recently named the “Overall Most Outstanding Company in Malaysia” by the Asiamoney Asia’s Outstanding Companies Poll 2023, for the second consecutive year.

Moreover, Gamuda’s triumph extends further, as the group clinched the title of “Most Outstanding Company in Malaysia” for the construction and engineering sector for the fifth consecutive year.

The Asia Outstanding Companies Poll acknowledges listed firms excelling in financial performance, management team excellence and investor relations.

Some 1,225 fund managers, research analysts, and bankers cast their votes in the poll, resulting in a total of 7,653 votes from across 12 Asian markets.

Analysts believe this remarkable achievement solidifies Gamuda’s unwavering position as the nation’s foremost engineering and construction powerhouse, exemplifying both reliability and innovation in equal measure.

Loong Chee Wei, a senior associate director at Affin Hwang Investment Bank Bhd, is of the opinion that Gamuda excels in terms of expertise and vision.

Regarding expertise, Loong believes that the group has introduced innovative approaches to the country, such as their groundbreaking work in underground construction for Mass Rapid Transit 1 (MRT 1), MRT 2, and the Stormwater Management and Road Tunnel (Smart Tunnel).

“They are the only contractor that has built up a strong track record in undertaking these projects,” Loong tells StarBizWeek.

This view is echoed by KAF Investment Bank Bhd senior investment analyst Mak Hoy Ken, who says: “While Gamuda’s astute strategic differentiation policies have been pivotal in underpinning its sturdy growth strategy, what really stands out to us are its innovative capabilities.”

Mak believes that Gamuda’s adept strategic leadership and technical skill sets, honed over 40 years, have led the company to deliver several groundbreaking infrastructure projects.

“The core distinction lies in the group’s cultivated strengths – innovation, human capital, resilience and strategic acumen,” he says.

Loong also points out that Gamuda has gone regional, having expanded into Australia, Taiwan, Singapore and Britain in recent years.

Even within its property development arm, Gamuda Land, the progress achieved over two decades in Ho Chi Minh City and Hanoi acts as a foundation for growth.

Gamuda’s global presence now spans nine countries, with multiple international partnerships.

This year alone, Gamuda has won five regional projects, including the Sydney Metro West – Western Tunnelling Package, Coffs Harbour Bypass, and M1 Motorway Extension to Raymond Terrace: Black Hill to Tomago in Australia.

Remarkably, in June, the group expanded its presence in Australia by acquiring Downer EDI’s Australian transport projects business, through an asset-sale agreement with Downer EDI Works Pty Ltd and VEC Civil Engineering Pty Ltd, for an enterprise value of A$212mil.

The acquisition is earmarked to complement the growth and success of Gamuda’s wholly owned foreign sub-subsidiary in Australia, DT Infrastructure Pty Ltd, in line

with its growth plan of achieving A$3bil in revenue annually in Australia within the next two to three years.

While embarking on a major expansion, Gamuda has also been involved in a significant development in Malaysia.

Amanat Lebuhraya Rakyat Bhd had made a bid for highways under Kesas Holdings Bhd (Kesas), Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd (Sprint), Lingkaran Trans Kota Holdings Bhd (Litrak) and Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd (Smart).

Gamuda held substantial equity interests in the highway companies, with a 70% effective equity interest in Kesas, 51.3% in Sprint, 42.7% in Litrak and 50% in the Smart, with the combined value of Gamuda’s ownership in the highway companies totalling RM2.35bil.

“Since they divested the tolled-highway assets, which were providing them recurring income, the group needs to look for recurring earnings streams from its new investments,” Loong says.

“At the moment, the group is very much focused on expanding their construction order book and property development land bank regionally,” Loong says.

Loong adds that the company is pursuing a more aggressive expansion in both its construction and property development businesses, which is expected to play a pivotal role in helping Gamuda sustain its earnings growth trajectory.

He believes that Gamuda has been dynamic in terms of its business strategy.

“When some assets are mature, they divest it and reinvest it as capital in new growth areas,” he explains.

This proactive approach to asset management enables Gamuda to adapt to changing market conditions and seize opportunities for expansion.

He further emphasises that the successful completion of mega-infrastructure projects by Gamuda in Malaysia has proven its ability to compete with global players in the industry.

This track record has not only solidified its position domestically but also allowed it to confidently expand operations overseas, he adds.