3.1 - Industry Overview

3.1.1 What is the size of your industry?

Chart 1: Malaysia Main Economy Sector Estimated KDNK, 2008 (Source: Department of Statistics & Ministry of Finance Malaysia)

From chart 1, service sector is the biggest economy contributes to Malaysia with 52 %. Followed by four sector which is Mining Sector (29 %), Agriculture (8 %), Manufacturing Sector (8 %) and Construction sector (3 %)

Chart 2: Services Sector Performance Forecast for 2008 (Source: Dept. Statistic and Ministry of Finance, Malaysia)

Analysis from chart 1, we choose service sector for our business. Chart 2 shown three (3) sector performance which is Intermediate (43.46 %), Final (43.46 %) and Government (13.08 %).

3.12 What sectors does this industry include?

Chart 3: Final Services Forecast for 2008(Source: Dept. of Statistic and Ministry of Finance, Malaysia)

From chart above, shown the Final Services forecast for 2008. From that, the Wholesale and Retail Trade in first rank with 53.39 % .Followed with Others Services (24.15 %), Utilities (12.71 %) and Accommodation and Restaurants (9.75 %)

Chart 4: Others Services Forecast for 2008 (Source: Dept. of Statistic and Ministry of Finance, Malaysia)

In Other Services, there are 6 types which are Health, Education, Professional, Transportation & Communication, ICT and selected. From Chart 4, Health was the biggest percentage in the Other Services with 33.0 %. Meanwhile, Education in second with percentage 27.80 % and follow with Professional (14.50 %), Transportation & Communication ( 11.90 %), ICT (8.0 %) and Selected (4.50 %).

Chart 5: Professional Services Forecast for 2008(Source: Dept. of Statistic and Ministry of Finance, Malaysia)

As shown in Chart 5, Engineering Consultancy has the lowest percentage with 0.21%.This mean that, the sector we choose does not have a lot of competitor. Meanwhile, surveying has the largest percentage in Professional Services

Chart 6: Consultancy Services in Construction Project(Source: Pusat Khidmat Kontraktor & CIDB, 2007)

Chart 6 shown that the Consultancy Services in Construction Project. From the analysis, Structure is the biggest contribute to the construction project with percentage 40.80 %. Followed with Mechanical & Electrical (32.20 %), Soil & Geotechnical (19.0 %) and Hydrology (8 %).



3.1.3 Who are the major players in this industry?


Geolab (M) Sdn. Bhd

Geolab (M) Sdn. Bhd. was formed in 1991 as an independent Geotechnical, Environmental and Construction Materials testing company providing services to both public and private sectors. Already for more than a decade, Geolab (M) Sdn. Bhd. has been recognized as the provider of test solutions required to evaluate the mechanical properties, strength and durability of a wide variety of structures and roadways to their client. In response to their client’s needs, they have set up our first mobile laboratory unit in 2004. This additional flexibility allows them to offer a convenient, personalized, complete service package, from sampling to data delivery. All equipment in their mobile laboratory is always kept calibrated and ready to go


Foundtest (M) Sdn Bhd

Foundtest (M) Sdn. Bhd. was incorporated under companies’ act, 1965 on 2^nd April 2004 as an independent specialist contractor which principally provides testing services on soil, foundation and building. Formerly known as Tri Dimension Engineering, the company serves as a professional engineering firm specialized in providing on site and lab testing, analysis and consulting services for the construction industry. Their quality services provided includes High Strain Dynamic Load Test, Cross Hole Ultrasonic Monitoring on piles, Site Investigations, Soil Test, and Concrete Lab.


Soilpro (M) Sdn Bhd

Soilpro began operation in April 1994 as a partnership and was incorporated as a private limited operation in March 1996. Soilpro’s business is in providing geotechnical testing services for the construction industry in Malaysia. The company specializes in laboratory tests on soil samples from site investigation works and in-situ earthwork control soil tests, that is, soil testing for civil engineering purposes. The company is commonly identified as a soil laboratory


Gue & Partners

Gue & Partners Sdn. Bhd. is an independent consulting company specializing in Geotechnical and Geo-Environmental Engineering and is providing consultancy services in Malaysia and South East Asia. The Company provides innovative problem solving, giving safe, cost effective and practical engineering solutions of the highest standards. They have a group of highly qualified and experienced Geotechnical Engineers and Engineering Geologists.



3.1.4 What are the market and customers for this industry?


In this business, the market is in the construction industry. This is because all construction projects will involve the geotechnical testing to identify the properties of the soil and underground condition. For examples, construction of building, bridge, road and highway, retaining wall and other construction projects.

The customers for this industry are mainly soil drilling and earthwork contractors



3.1.5 What are the industry’s estimated sales this year? Last year? The year before?

Chart 1 : Prestasi industri pembinaan dari segi output kasar ( Department of statistics, Malaysia)

Chart 1 had shown the construction industry performance between year 1996 and 2005. Civil engineering industry had increase 0.2 % during 9 years. Construction industry for residential is also increase drastically for about 7.6 % and these data shown that construction industry either for residential or factory is increase year by year.

Virtually every successful civil engineering project begins with a high quality subsurface investigation program of the site. In support of the other Sectors, the Geotechnical Engineering is responsible for overseeing these subsurface investigation programs for a wide variety of projects

Civil engineering consist of Geotechnical is a part of construction project that contribute 5 to 10% from the whole construction. That’s means for the increase of construction sector; the geotechnical sector is also increase



3.1.6 What national/economic trends have affect this industry and how?


Based on Economic Report 2007/2008, the statistic shows the services sector increase from 7.2% in 2006 to 9.0% in 2007 then decrease to 8.6%. This means the services is decrease and open a lot opportunity to others involved in this sector.


In the other hand, construction had been from 2006 until 2008. This will effect this business which is it can increase the number of job in geotechnical field.



3.1.7 What national/economic trends might affect it in the future and how?


From RMK 9, there are many program and project in purpose in developing process. Besides that, it is also to rid the poverty and squatters area in Malaysia. For example, about 844043 residential units had been built which is 137.2% from the target unit. East Cost Economic Region (ECER) recorded that the property transaction for 2006 were:

Residential - 9.1% of Malaysia’s total
Commercial - 6.5% of Malaysia’s total
Industrial - 8.3% of Malaysia’s total

The construction sector is expected will increase time by time. ECER expected that this sector will contribute about 3.3% by the year 2020. By that year, the property sector in ECER capital cities is expected to more than double it current size. These entire projects will involve geotechnical work in about 5% from the total worth the project. Therefore, this will open and enlarge the market of this business.


3.1.8 What is the long-term outlook for this industry?


Value added of all sectors in the economy is expected to record positive growth, which was led by the services sector as shown in Table 1.1. In 2007, the services sector is expected to register solid growth of 9.0% (2006: 7.2 %), exceeding the overall expansion of the economy. Growth on the services sector is also followed by construction sector which increase from 5.2 (2007) to 6.3 (2008). Table 1.1 had also shown the increasing of services factor of share of GDP from year 2006 to year 2008. It was slightly incrase from 51.8 to 54.3 respectively. This increment had illustrated how the services factor can be develop especially on construction services

3.2 - Position In The Industry

3.2.1 What products or services will your business are selling?

Our company will provide three types of service primarily based for the site investigation (SI). First, is a laboratory testing including test for particle size analysis, moisture content, Atterberg limit, Specific gravity, consolidation, triaxial compression test, consolidated undrained triaxial test, direct shear and point load test. Second, is la field testing which covers boring test, field inspection vane, dynamic cone penetrometer, proving ring penetrometer, and sampling of soil. The third service that provided by this company is a designing in geotechnical structures such as foundation, retaining wall, soil improvement and geo-materials. This service is add-on to the other two services which is the information from the testing will be used in design the structures

3.2.2. Unique Selling Propositions

QGES provided good services where once the laboratory testing or field testing is applied the design will be proceed on time. This service is important in preventing an error occurred in designing.

QGES maintain an office, laboratory and stores complex together with extensive modern workshop facilities for the maintenance and development of the specialized equipment required in our operations.

Laboratory testing is an essential element of our geotechnical analyses. QGES regional centers throughout the world have laboratories that are accredited to internationally accepted standards by SAMM. Testing is performed using state-of-the-art equipment and the latest testing standards.

The unique of QGES Company is looking to the skilled staff. Its entire staff works under a continued professional development (CPD) scheme to ensure they are at the leading edge of their professions.

The unlimited design based on the software. As an emerging players, QGES providing numerical modeling and intelligent system based solutions to the Geo-Engineering for the design.

3.2.3 What are the barriers to entry in your industry?

Government regulations

Government regulations may make entry more difficult or impossible. In the extreme case, a government may make competition illegal and establish a statutory monopoly. Requirements for licenses and permits, for example, may raise the investment needed to enter a market.

Competitors' reactions

As known, for the new company in this industry, commonly we have to fight with many competitors. Competitor's reactions may take various forms of marketing warfare. For example, competitors may plan a tactic barriers such as cut prices to the lower price when enter the market, it show the plan is for the short term profit, but they designed to inflict losses on new firms and protect their market position for the long term.

High upstart cost

To start up the business, we need the high cost. Our company specializes in geotechnical field so that, it needs the high start upstart cost. The cost is the most important thing to start the business. In this industry, we use a large amount of expensive capital, such as a laboratory and high technology of equipment. To be competitive with existing firms, a new entrant needs this capital

Accreditation by SAMM

As known, our companies services are provide laboratory testing, field testing and design. In order to make sure this company can be established it is hope that this company will given an accreditation from SAMM. This accreditation process by SAMM needs the complicated procedure.

Network Effect

Network effect is also can be a barrier to the new company. When a good or service has a value that depends on the number of existing customers, then the new company/entrant, may have difficulties to enter a market where a strong and experience company has already captured a significant user base.

3.2.4 How will you overcome these barriers?

Applying loan

High capital requirements are inherent in start-up businesses. Financial resources can be a massive barrier especially if a company is reliant on expensive raw material. Again, financial planning is of the essence here. Small companies have to learn to work within their means. Financing for small-scaled businesses is, however, available, but is incumbent on a strong business plan with a reasonable but promising financial forecast. Applying for a loan from a bank / corporation / consortium is possible but small companies have to ensure that they factor in the costs in repayment into their financial forecasts.

Accreditation by SAMM

In order to prove that our company is the excellent in geotechnical field, the accreditation by SAMM is important and this is the one way where the customers can confident with our services. Above are the criteria and requirements in order to get the accreditation by SAMM. The accreditation certificate is valid for three years and renewable, subject to terms and conditions of the SAMM scheme

Access to Distribution Channels

There are ways to overcome this hurdle. One way would also be to concentrate on a niche product or service. This would help eliminate the main competition with the big players in the market. Alternatively, small companies can find ways to "complement" the networking channels (with their niche products and services) to increase bargaining presence in the industry.

3.2.5 Main competitor


G&P Geotechnics Sdn Bhd

G&P Geotechnics Sdn Bhd is an independent engineering consulting company specialising in Geotechnical and Geo-Environmental Engineering and is providing consultancy services in Malaysia and Asia. The Company provides innovative problem solving, offering safe, cost effective and practical engineering solutions of the highest standards

Geolab (M) Sdn. Bhd.

Geolab (M) Sdn. Bhd. was formed in 1991 as an independent Geotechnical, Environmental and Construction Materials testing company providing services to both public and private sectors.

Soilpro Technical Services Sdn Bhd

Soilpro began operation in April 1994 as a partnership and was incorporated as a private limited operation in March 1996. Soilpro is registered (No.1970423-WP029542) with CIDB - Construction Industry Development Board, Malaysia. Soilpro’s business is in providing geotechnical testing services for the construction industry in Malaysia. The company specializes in laboratory tests on soil samples from site investigation works and in-situ earthwork control soil tests, that is, soil testing for civil engineering purposes. The company is commonly identified as a soil laboratory.

Foundtest (M) Sdn. Bhd.

Foundtest (M) Sdn. Bhd. was incorporated under companies’ act, 1965 on 2nd April 2004 as an independent specialist contractor which principally provides testing services on soil, foundation and building. Formerly known as Tri Dimension Engineering, the companies serve as a professional engineering firm specialized in providing on site and lab testing, analysis and consulting services for the construction industry.

3.2.6 Market share with competitor

3.2.7. Business Competitive advantages


To reduce the need for multiple assessments on laboratories - Related with the development of the country, Malaysia has less provide geotechnical consultancy. So that, there are take a month or year for one project to begin constructing because of the lack of the geotechnical consultancy. With a portfolio of high profile clients and a reputation for thoroughness, lateral thinking and reliability, QGES team of skilled staff are committed to offering the highest level of service or whatever the size of client’s project which begins from field/laboratory testing to designing.


People can design their structure down to the inch- QGES provide a comprehensive service in the field of Geotechnical and Geo-Environmental consultancy.

3.2.8 Target Market

3.2.9. The way in protecting the product.

Our services is protecting by National Laboratory Accreditation Scheme of Malaysia known as Skim Akreditasi Makmal Malaysia (SAMM).