Change - S P Setia Berhad

17
S P Setia Berhad Group
Group Managing Director’s
Report
2008 was a year of uncertainties and challenges. Earlier in the year, the country
went through a period of political upheaval coupled with rising inflation. Made
worse by the spike in fuel prices, many industries along with the construction
sector suffered. Work slowed down at project sites as prices of construction
materials hit an all time high. The Group’s projects were also affected. However,
instead of taking a ‘wait and see’ attitude, the Group took a proactive stance
instead of a reactive one. To help expedite work progress, we incorporated
cost escalation clauses into fixed price contracts for a few key construction
materials to avoid over-pricing of overall contract costs during that period of
uncertainty. We also offered to purchase materials for our subcontractors so
that work could continue.
Thankfully, the cost of construction materials began stabilising in the final
quarter of the year under review but the continued pressure of a global financial
meltdown saw the nation tightening its belt. Property sales slowed down
as people became more cautious about making big ticket item purchases.
Nonetheless, the Group’s properties in the Klang Valley, Johor and Penang still
saw a credible uptake.