KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - Chinese developer Country Garden Holdings said over 40 per cent of contracts have been awarded to Malaysian companies in the second-stage development of Forest City project in Johor, refuting criticisms that the project has not helped local companies or the population.
The Chinese developer also dispelled the view that the company is depending mainly on the sale of residential units for revenue.
Country Garden Pacificview Sdn Bhd president Yu Runze said of its RM4.7 billion (S$1.5 billion) capital expenditure (capex) spent between early 2015 and December 2016, about RM2 billion, or 42.55 per cent, was spent on the services provided by local consultancy firms and construction materials.
This year, the property developer will spend a further RM5 billion in capex for facilities such as the Jack Nicklaus-designed golf course, another hotel and new infrastructure items, as well as a factory to manufacture ready-to-assemble concrete structures like staircases, beams, columns and walls.
"Cement, sand and other materials were bought locally. We did not import them from China," Yu told StarBiz.
He said the Chinese developer also used consultancies such as law firms, planners and architects, to name some.
"So, it is untrue to say that Forest City has not benefited Malaysia or its people," said Yu.
He said Forest City was more than just about marketing residentials; it was the building of whole townships with facilities and amenities to create a new destination.
Yu also disputed perceptions that the Chinese developer was in fire-fighting mode as a result of Beijing's capital controls, which have affected sales.
"The number of withdrawals is about 60, compared with the 15,000-unit sales by the end of 2016, the bulk of which were sold to Chinese buyers. We have to look at the issue in perspective.
"If we are not confident about Forest City, we will not be investing some RM470 million to build a factory to manufacture ready-to-assemble concrete structures like staircases, beams and columns," he said.
The company is also shifting focus from selling to Chinese to target Malaysians with the setting up of 20 sales galleries in Malaysia and several others in other Asian cities and the Middle East.
"Forest City is a project that spans 20 years or more. It is more than just the selling and marketing of residentials. We are managing the landscape, building management, sewage, utilities and every component that goes towards building a township. We are essentially the builder and operator," he said.
Yu, who also wears the chief strategy officer's hat, said the group is planning to diversify into new revenue streams like leasing, property management and pre-fabrication.
He said by the end of this year, its duty-free area will be ready and operational. This will be unlike other duty-free areas like Langkawi, Labuan and Stulang in Johor.
Yu said the island was not duty-free, but had a portion that is designated as a duty-free area. Within this duty-free area is a township, so that its population will be able to enjoy a lower cost of living because the retail goods and consumables will cost a lot less.
Many things in Forest City will be "unprecedented", so in that sense, the project will be exciting, Yu said.
Bloomberg reported that the Forest City project - to be built on four artificial islands in the Johor Straits facing Singapore - will house 700,000 people when ready.