
[This article was originally published in Heights]
Industrialised Building Systems (IBS), also known as prefabrication, involves the manufacture of components off-site ready for installation. The benefits of IBS in construction has been well-documented, but despite high-profile projects such as the Petronas Twin Towers and Putrajaya, both of which include pre-fabricated components, uptake of IBS solutions in the Malaysian construction industry has been slower than expected. Heights looks at how IBS can save time and money for contractors, and examines why some are reluctant to adopt this efficient building method.
Manufacturing building components off-site to be transported to a project is nothing new. Freshly felled timber has been cut to size for easier transportation for centuries. We know that the ‘bluestones’ for England’s Stonehenge were shaped in the quarries of South Wales before being dragged 160 miles to their current site (though given that 4,000 years ago the ancient Britons had yet to invent the wheel, we can only marvel at how they managed it).
The difference between the masons of Neolithic Europe and the builders of today is the wealth of materials, manufacturing processes and transportation options available to us. We also have far greater demand for fast, cheap construction than at any time in history.
Industrialised Building System (IBS) is a home-grown term to describe the use of automation, mechanisation and prefabrication of components for the building industry in Malaysia. IBS components are manufactured off-site, and require little additional site work once installed. This means faster completion times, greater productivity, less waste, fewer accidents and lower overall construction costs for the industry.
Because components are custom-built to exact requirements in a controlled, factory environment, quality can be closely monitored and standardised, reducing defects. In projects with a high degree of repeatability, cost benefits appear as high-quality components can be replicated numerous times, reducing the price per unit.
A Proven Track Record

IBS solutions for contractors have been used in Malaysia for almost half a century. In the 1960s, at the start of Malaysia’s population boom, parliament sent government ministers, architects and engineers to Europe to study pre-fabricated building processes. Modern ‘pre-fab’ had begun in Europe as a reaction to the destruction of World War 2 and the massive numbers of displaced persons who were in desperate need of housing. With the first and second Malaysia Plans providing the legislative impetus, early projects planned for Malaysia were largely for affordable housing with a focus on function over form. They also featured a high degree of repetition in their design, making the methods learned in Europe ideal for the purpose. By the late sixties the first apartment blocks using pre-cast walls had been built in Kuala Lumpur’s city centre, with a casting plant a few kilometres away in Jalan Damansara.
Unfortunately, while early attempts fulfilled their primary purpose of reducing the housing shortage, the imported materials and methods used were sometimes found to be inappropriate for Malaysia’s climate. As issues including roof leaks and gaps in walls came to light, IBS fell out of favour with both the public and the industry. By the 1990s however, new approaches to IBS played an important role in Southeast Asia’s building boom. Kuala Lumpur’s Sentral station, the LRT system, and KL’s new international airport all used prefabricated components in their construction. Very large projects including Putrajaya and Cyberjaya, were heavily reliant on IBS. IBS steel beams and floor decking were used in the construction of the Petronas Twin Towers. The fact that at the time of its opening it was the world’s tallest building offered a further boost to IBS’s reputation among property development companies.
Since the turn of the century, IBS has been used in private residences and in the construction of much smaller projects, but its main use has still been in the building of projects with a high degree of repeatability in components such as student accommodation, schools, public housing and hotels.
Promoting Quality
Dato’ Ir Ahmad Asri bin Abdul Hamid, CEO of CIDB Malaysia, is a keen advocate of the time which can be saved by employing IBS techniques. “The advantage of IBS is that projects are faster,” he says. “You have faster delivery, and the quality is much better because you are making components in a controlled environment so the quality is much easier to monitor. Productivity also goes up. A project that normally takes a year can take only 6 months using IBS.”
The cost savings of IBS are also well-documented. Pre-casting offsite means faster installation and reduced labour costs. Down-time due to adverse weather conditions is reduced as workers spend less time exposed to the elements on-site. A controlled factory environment also reduces waste, lowering material costs, and allows for far closer monitoring of energy usage. Taken together, particularly if building in large volume, the financial savings can be significant.
One driver for IBS in recent years has been the call for more green building materials. Following the Paris climate talks last year, contractors will be keeping a close eye on parliamentary bills which call for more environmentally responsible building methods and materials. The manufacture of cement is one of the largest emitters of CO2. Kilns are heated to 1500 degrees centigrade. Limestone releases CO2 as a by-product, and coal is used to heat the kilns. By 2050, cement production will be responsible for emitting 5 billion tonnes of CO2 a year. This is many multiples of the amount of CO2 national governments have pledged to eliminate. In order to get anywhere near meeting these targets, governments will have to introduce legislation reining in the largest polluters. The search for greener materials in construction will become a regulatory (and therefore financial) issue for contractors, rather than a purely environmental one.
Malaysian IBS suppliers have demonstrated increasing innovation, and private companies, sometimes in conjunction with foreign players, have successfully created a local knowledge base for the industry. Construction companies themselves have also driven investment and innovation in IBS by creating their own in-house teams for the purpose of increasing suitability of IBS to their own projects.

Recent developments in 3D printing also allow for precise customisation of components. In recent years 3D printing has gone through two key transformations which make it ideal for the construction industry. Firstly, it has become cheaper. Home 3D printers can be bought for US$500 meaning individual, custom-made components from bathroom fittings to ornate bannisters can be manufactured directly from downloadable Computer-aided Drawing (CAD) files. Secondly, for the construction industry, 3D printers have become far, far larger. Printers with a ‘build volume’ of 1 cubic metre are common, allowing for ‘printed’ coffee-tables and other furniture. At the extreme end of the build volume wars, companies are currently engaged in is China’s Winsun printer with a build volume of 2,466 cubic metres. In 2014 it was used to ‘print’ a five-story apartment block and a 1,100 square metre villa in Jiangsu Province. The villa’s components were printed in Winsun’s factory, and assembled for a fraction of the cost – by a handful of workers – in just three hours. Governments around the world have been placing orders with large-scale 3D printing companies for housing projects involving multiples in the thousands.
“Not only can IBS shorten the construction period, but also cut costs on building materials and manpower, especially during this period of labour shortage.”
– Dato’ Ir Ahmad Asri bin Abdul Hamid, CEO of CIDB Malaysia
Analysing Cost Benefits
Although increasing use of IBS is seen in projects across Malaysia, and despite the proven benefits of the technology, uptake within the industry has been slower than the government had hoped. As with any new technology, IBS will only supersede conventional building techniques if it is better, or cheaper.
The principal reason why many developers have been unwilling to invest in IBS is because of the abundance of cheap foreign labour in Malaysia. When conventional methods of building can be done with cheap labour, further investment in equipment and training will often be seen as reinventing the wheel. Making IBS cost-effective also requires a buoyant housing market driving mass-production of components. In the current climate, unit prices may put off some contractors.
The long-term cost benefits of IBS are clear, but the initial outlay on equipment and training deters some developers. High interest rates and low profit margins mean developers keep a close eye on every penny. Investing in retraining your workforce or buying large-scale 3D printing equipment may seem extravagant, despite reduced labour costs and other future savings.
Following the success of government initiatives in the past, further drivers can again aid the industry. Standardised training programmes will create a skilled, local workforce, and investment in automation (and even robotics), will reduce the need for foreign labour. The Construction Industry Transformation Programme aims at increasing productivity through building information modelling and IBS. Universities also have an important role to play. Student architects and engineers need to be introduced to the potential of IBS before they join the job market. With around 400,000 foreign workers in the Malaysian construction industry, the government is keen to encourage greater use of IBS with skilled Malaysian workers using superior technology.
The general public has yet to make up its mind on IBS. When IBS is described as ‘pre-fabricated’, the stigma of the post-war European experience leads some to think that components are more likely to leak or – for those with an eye to property as an investment – that they cannot be renovated as easily as conventionally built houses. With IBS so ubiquitous in construction however, most private customers will be unaware how a project was completed.
Incentivising Change
The Malaysian government has been keen to promote IBS. In 1999 the first IBS Strategic Plan was announced, followed by two ‘roadmaps’ intended to boost the use of IBS by 2015. A key aspect of these initiatives has been to introduce quality control, R&D and training programmes to increase uptake.
As with any new technology, price was going to be a key factor in the appeal of IBS for Malaysian companies. In 2008 the government mandated that 70% of materials in any state-funded construction project had to be IBS (up from 30% in 2004). The proposal was designed to bring down costs, and by extension, encourage use in the private sector.
Tax incentives were also offered to companies which used IBS in projects. Acceleration Capital Allowance (ACA) was announced in 2006, giving users the right to claim expenses against steel moulds used in precast concrete components.
The 70% directive was based on the IBS Scoring System, and an Implementation and Coordination Unit was established to monitor compliance. By 2010, projects totalling almost RM10 billion had been completed using IBS. As a result, the cost of IBS has fallen considerably. In some cases, even before factoring in reduced labour costs, it can be cheaper than using conventional methods.
CIDB has a number of measures in place to increase adoption of IBS in Malaysia. These include promoting modularisation and standardisation in building processes. Computerisation and robotics are going to play increasingly important roles in construction. Education and training for Malaysian workers is also a priority as the new technology gains ground.
Developers have long been aware of the benefits of using IBS components in their projects, but with labour costs showing no sign of changing, more needs to be done to facilitate adoption of IBS’ cost-effective building methods, and the government needs to lead the charge by further incentivizing contractors.
The construction industry has busy times ahead. Industrialised Building Systems could help contractors increase profits, and can provide skilled work for the next generation of engineers.