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Malaysia’s construction pipeline remains active but expectations have shifted. With tighter compliance, rising cost pressures, and growing ESG scrutiny, developers and contractors must rethink execution, durability, and documentation. We speak with Damian Lusty, Head of Direct Business at Sika Malaysia, on what project teams must get right in 2026 and why building right now matters more than ever.
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00:15Thank you for tuning in to Niagawani, Malaysia's construction pipeline remains active from infrastructure and industrial projects to commercial and
00:24urban developments.
00:25Now that we are already in 2026, the reality on the ground is clear.
00:29What it takes to deliver a project successfully has clearly changed and speed and cost are no longer the only
00:35benchmarks.
00:36Projects today are more complex, more regulated and more closely scrutinised by clients, regulators, financiers and also future asset owners.
00:45So the big question is, what must developers and also contractors get right, not just to win projects but to
00:51deliver them well and sustainably?
00:53So joining us today is Damien Lasty, the Head of Direct Business, Niagawani.
00:57Good morning, how are you?
00:57Good morning, thanks for having me.
00:59Thank you for coming all the way to our studio, Onya Gawani.
01:02Perhaps we could start to actually ask you to open the discussion.
01:06Firstly, before we go deeper, on your vantage point, Damien, how would you describe the current construction landscape in Asia
01:14Pacific as a whole and also specifically for Malaysia?
01:18How do you see it's going in 2026 and further?
01:22Asia Pacific in general is quite fractured.
01:25We're seeing a massive decline in China, which is affecting surrounding countries as well.
01:31But as a standalone, Malaysia is relatively buoyant.
01:37We've had growth in Malaysia 8 plus percent over the last couple of years.
01:42And with the expectation that it's going to continue to grow 4 percent, which could even be greater with the
01:48foreign investment that's coming into Malaysia.
01:52And before we go further, perhaps you can share on briefly the history of Sika, especially when it comes to
01:58showcasing commitment on innovation and also sustainability.
02:03So Sika is a very well-established company globally.
02:07We operate in 103 companies with over 400 production sites, as well as innovation hubs by the regions.
02:18In Malaysia, we have six factories.
02:21So we're able to cater to all regions in Malaysia, including East Malaysia, with the expectation of our customers that
02:30we partner.
02:31We don't we don't customer customer supplier relationship, meaning that we see the entire value chain by seeing the entire
02:40value chain from from design to to construct.
02:44We're able to pull these global resources and share best practice from from outside the region to inside the region
02:52to inside the countries.
02:53Tim and I want to understand understand further about the industry.
02:56We often hear that the project pipeline remains strong, but yet many industries say delivery is becoming harder and not
03:03easier.
03:04So from your perspective, what's actually driving demand and also urgency across the key sectors right now?
03:10And why does it feel different from previous previous cycles?
03:14I think several reasons.
03:16Listen, when we look at it in Sika, we look at the vertical market structure, depending on whether it is
03:23a government infrastructure, whether it's a key project with multinationals or whether it's residential and commercial developments.
03:33So each industry has a different role to play.
03:36For example, maybe 60% of the market right now is residential versus 40% in government.
03:44And then we break it down further and look at what is new build versus what is repair.
03:50So if you're looking at government projects, it's up around 80% is new build.
03:54Only 20% is refurbishment, where the split with the private sector is more 70-30.
04:00So our focus and how we approach each market is very different.
04:06Obviously, the big driver right now is the data centres and semiconductors with some major infrastructure projects coming up.
04:14But you mentioned on the factors that contribute to the risk that we have right now.
04:21But when we talk about complexity, it's not just the design anymore.
04:24It's how regulatory requirements, the compliance standards and documentation expectations that change the way projects are now executed on the
04:32ground.
04:33So what do you think about that?
04:35Yes, complexity in the market is definitely changing.
04:38Like you mentioned with the introduction of the major companies like Google, Amazon, Meta, especially with the data centres, it's
04:47coming with new specifications.
04:48New specifications, especially around sustainability and the requirements for CO2 reduction as well as cumulative energy demand reduction.
04:58So these multinationals are really looking at their scope one, scope two and scope three developments.
05:05This is adding levels of complexity to specifications that we're seeing coming in.
05:11And companies like Seeker are having to significantly adapt the way we approach our products, our innovations and our approach
05:20to the market is definitely becoming far more technical.
05:24And let's take a step back.
05:26In the past, speed and cost, these two things could actually sometimes compensate for other gaps that we see right
05:33now.
05:33So today, in comparison, would it be fair to say that execution, quality and also compliance discipline are now just
05:40as critical, if not more?
05:42And why is that shift happening, Damon?
05:45Well, when we talk about this, this links back to sustainability.
05:50So sustainability in the past has been a term to talk about diversity.
05:56It's been a term to talk about all cross functions, EHS, as well as sustainable products.
06:03Sustainability now is moving more into what we would call circular economy.
06:08So everything you talk about speed and cost and all the way through to recycling, end of life.
06:15This is now encapsulated in what you call circular economy, which will be more of a catchphrase than sustainability itself.
06:22When we look at circular economy, we need to not only look at the first phase, which is the raw
06:29material to the production, to the design of the building, to the in-use phase, but also the recycling phase.
06:36And how can we address each part of the circular economy to significantly reduce our cost to the environment?
06:46In doing so, we add pressure to our wallets.
06:51There are costs involved with this, especially around documentation.
06:56The documentation side with environmental product declarations, with lifecycle assessments, adds complexity to both products as well as to the
07:07bottom line of major developers.
07:10And for this, everyone needs to change.
07:15How would you describe the difference of the complexity of today, if we were to compare it with perhaps 10
07:21to 20 years ago, where sustainability is not the common topic now, and also there were less demand on data
07:30centres?
07:31How would you describe that?
07:32You can't fake sustainability.
07:36When you have a demand for a product, which is a commoditised product, that you can buy anywhere with maybe
07:45some fishy QC or some issues in development or the location that you get it, whether it's from China or
07:52whether it's local or whether it's imported from Europe, et cetera, et cetera.
07:56With sustainability, we have to track every aspect of the product and every aspect of the construction.
08:02So sourcing is a big issue because transport is a big issue.
08:06This is all captured and documented in sustainable documents like EPDs, and it's governed by the World Business Council for
08:15Sustainable Development.
08:16So we have framework around it.
08:18All these documents also have to be third-party verified and then published onto a global database.
08:24So there is no getting around.
08:27Originally, in the early days of sustainability, this term came up called greenwashing.
08:33This is when people would try to profit off sustainability.
08:38Greenwashing, yeah.
08:38And this is no longer possible because it's so highly regulated.
08:42Even in Malaysia now, MyCrest has just been established, and this is an online tool that will monitor and regulate
08:51the sustainable requirements for Malaysia.
08:54Let's talk further about challenges.
08:56We've touched on a cost which will eventually affect our pockets with higher material costs and tighter timelines and also
09:04more scrutiny.
09:05Where are project teams feeling the most pressure today?
09:08Because you're in industry, you're the head of business, so is it cost control, risk management, or something else that
09:15you can share?
09:16Again, it's all of the above, and it all fits into the sustainability category.
09:21So cost control is always going to be an issue.
09:26Reasonable, sensible supply is the key.
09:31You have to have a very good procurement.
09:32You have to have a good idea of where your product's coming from, as well as partner with suppliers that
09:38are relevant to the market, to your market.
09:42Durability is now also a key topic.
09:46I think we can look at the Malaysian construction industry in the past, and we look at the statistics for
09:54the buildings.
09:55For example, 90% of our buildings in Malaysia leak in some way, shape, or form, whether it's coming through
10:01the roof, whether it's coming through the waterproofing failure, whether it's coming through the walls, whether it's a wet room.
10:07We leak.
10:10Now, there are additional costs to repair.
10:12So this is looking at the use phase cycle of construction.
10:16So when there are costs to repair, yes, is it decreasing the estimated useful life of the building, or is
10:23the repair effective enough to increase the estimated useful life of the building?
10:28But these are things that we have to balance between the technologies we use and the initial investment of the
10:36building, in terms of getting a better quality material,
10:41versus getting something constructed quickly, as well as cost-effectively, and you're pushing the cost further down to the end
10:47users.
10:48So basically, what we can say is any small specification, misalignments, can actually quickly turn into costly side issues.
10:56That's what you'll be saying.
10:56So can you explain why that risk has become much bigger in today's environment, if you were to compare to
11:02before?
11:03Historically?
11:06It's right now, we can calculate these impacts, or we can do advanced estimations on these impacts early on in
11:16the construction.
11:17Previously, we weren't doing these calculations.
11:20So the design life is extremely important, but the floor space is also extremely important.
11:25We're now having concrete, for example.
11:27High-strength concrete is available, so we can make slender columns rather than large columns to hold the same amount
11:34of weight.
11:35So you maximize your floor space.
11:38In the future, we expect that carbon tax will be implemented at some stage.
11:43So this comes into our scope one on two.
11:46So the office building that we're working in and what powers this office building.
11:51There is a big push now to reduce the power consumption of buildings.
11:55This is looking at the Green Building Index.
11:56So will that building itself have a higher value to people coming in?
12:03It may be a different aspect that we need to start considering because taxation is going to be an additional
12:09cost for the end users, which wasn't considered previously.
12:12Amazing.
12:13Damien, I hope we can stay put into viewers.
12:15We have a lot more to discuss after this, but we have to go for a short break.
12:54Welcome back to Niagawani.
12:56And we're still in the discussion about the construction industry in Malaysia 2026.
13:01And moving forward, we have discussed a major of challenges and also when it comes to the complexity of the
13:08industry before you go break.
13:10So in that sense, Damien, let's continue our discussion.
13:13We can see that challenges are no longer just technical.
13:16They're also about process, discipline, coordination, also documentation accuracy.
13:21So my question to you now is, what are you seeing separate well-run projects from problematic ones?
13:28Sorry?
13:29What are you seeing separate well-run projects from problematic ones?
13:32Perhaps you can share some of the stories that you've done before.
13:36Well-run projects?
13:37Every project has issues at some stage.
13:41The data centres that we're doing now are very specific.
13:47For SICA, I mean, we see construction as chemistry.
13:52We look at construction from the concrete and the waterproofing into the floor to the waterproofing in the ceiling and
13:59everything in between.
14:00With this approach, we need to be very connected to the entire value chain.
14:07So with the likes of Googles and Amazons, we need to be very close with the owner, the designers, the
14:17architects.
14:18We have to partner very well with our applicators as well.
14:22Our applicators are an extremely important partnership to us because we also share the liability.
14:28If we have poor application in any of these, then our liability significantly increases.
14:35The chance of failure increases.
14:36So education as well is very important.
14:41So complexities around these data centres for such major projects, it's so important to have alignment all the way through
14:49the value chain,
14:50which means that you can have five or six different companies working together as one, which is actually quite a
14:55feat in itself.
14:56So sustainability is one thing, durability is another.
15:01There is a growing view that durability isn't just about engineering, it's actually a risk management in any industry, not
15:07just construction.
15:08So why is durability becoming such a critical conversation for developers and contractors today to actually build successful projects?
15:16So it depends what you call durability.
15:19Durability is what we would generally say the in-use phase of any given structure.
15:25This is durability around how long the products last, how long the structures last, whether they're easy to repair or
15:35difficult to repair.
15:37And ultimately as well, durability also includes the end of life, which previously we haven't really discussed because mostly when
15:46you have come to demolition time of the building,
15:49it's also durable if you can reuse the demolition waste from a structure.
15:54So this is also needs to be taken into consideration when designing a durable structure.
16:02But with rising material and logistic costs, how does designing for long service life and fewer repairs actually translate into
16:10better cost outcomes over time in the future?
16:16There's always a playoff.
16:18If you're having to repair a building over and over, it means the building also has some kind of downtime.
16:24When people are working on the building, there's an increased chance of health and safety issues as well because you
16:30have people at heights, you have people in enclosed spaces.
16:33And of course you also have the costs of having to redo mistakes.
16:38When we look at these costs, whether they add up to more than the initial design, rather than cheapening the
16:47design initially, and how they get transferred to the end users, this also needs to take into consideration.
16:54Are these borne by the people buying into the structure or are they borne by the owner of the structure,
17:01the developer of its construction?
17:03So it's a very hard question to answer directly, and it really does depend on the structure of your building.
17:12But design life, obviously, if you can expand the cost of the material over 100 years rather than 20 years,
17:20then obviously your CO2 is decreasing.
17:23But would you agree that the most sustainable building is often the one that doesn't require repair frequently or replacements?
17:31Or how should teams think about the durability in that broader sustainability context?
17:37Yes, if you're designing a building that you don't need to touch over time, this is decreasing liability, it's decreasing
17:46additional costs in both material as well as manpower.
17:52However, however, it also depends on the material you're using.
17:56The material you're using, if it's a recyclable material, it can also be a perishable material.
18:02So this is built into the design life calculations as well, because it's expected that it will fail or it
18:08will require periodic maintenance.
18:12This can all lead to greater design life, but it can also lead to further failures.
18:19So there's a playoff between how green the building is, but ultimately, when you talk about CO2 reduction, you're talking
18:26about the scope one and two, so the direct and indirect costs to CO2.
18:30And the biggest concern for people right now is the energy demand of these buildings, energy to heat and cool.
18:38So you're looking at insulation and products more advanced to help insulate the building and things like lighting as well.
18:47So these all have aspects towards CO2 and durability, which needs to be considered in the entire structure and design
18:54of the building.
18:55And as we speak right now, viewers that contains clients, financiers and regulators are now asking tougher questions towards the
19:02industry.
19:03So from what you're seeing, Damon, how have sustainability expectations have changed, especially for contractors and suppliers from the point
19:11of view of SICA?
19:13Yes, so there is additional value to making green buildings.
19:18There are a lot of companies, especially multinational companies, that bring in sustainability specifications to the country.
19:26And they have scope one and two CO2 reduction targets, which are net zero targets, most people, well-known phrase.
19:35This isn't just the multinational companies.
19:38This is also the people financing these.
19:40A bank has scope one, scope two, scope three targets.
19:44Scope three is your products.
19:46So if a bank's product is their cash, they're financing a building.
19:50A green building has a lower CO2 footprint for their scope three.
19:54So they're more likely to invest into a green building than they are into a heavily CO2 structure.
20:02So it touches every aspect.
20:05The regulation part is outside of this.
20:08The regulation is to monitor that everything is done according to the ISO and EN standards.
20:13And earlier on, you mentioned about EPDs, and now we're hearing more about that, also lifecycle assessments and carbon data,
20:21and also data sensors.
20:22So why is it verified data becoming so important, and not just for certification, but also for project credibility, Damon?
20:30For avoidance of greenwashing.
20:32Like I said before, these documents are required.
20:36Initially in the sustainability journey, these documents were required just to have a record of data.
20:43And now these documents are required to do eco-efficiency analysis.
20:48This is where they compare different EPDs or LCAs to each other.
20:52That's environmental product declarations or lifecycle assessments.
20:56And we want to show now that we're moving in the path of reduction of CO2, reduction of cumulative energy
21:03demands, ozo depletion rates, water depletion rates.
21:07It's not just CO2 that we're looking at.
21:10There are several aspects of sustainability.
21:12And the regulation part is making this effective so that we are not just producing the documents, but we can
21:19show that we're decreasing our footprint as we do it.
21:22But what happens, this is for the project teams that are listening to us today, what's the risk of leaving
21:29sustainability documents too late in the process?
21:32And what advantage do teams gain by securing credible proof points at early stage?
21:39The big advantage will come when taxation comes.
21:42You need to have a baseline established for what you're doing.
21:48If you don't know your baseline, when the taxation starts, that will be your baseline.
21:55You'll need to calculate it then.
21:56So anything you've done between then and now to improve could potentially be lost.
22:02So if you've done as an early actor, but you're not recording and establishing your baseline, then you've got no
22:10way to prove what you've done and you could make a 40% reduction in your footprint.
22:15Now you're starting from there.
22:17That's your starting point and you've got to go further.
22:22For the project teams, I would strongly emphasise working with people that have sustainability documentation and not just that, companies
22:33who have sustainability targets.
22:36Because these companies will be able to show their records and then you can use those records in your development
22:42of your sustainability roadmap.
22:45And we have about four minutes left.
22:48Maybe you can share if you had to narrow it down, what should developers and also contractors prioritise now to
22:55stay competitive and credible in the next few years, five to ten years perhaps?
22:59Is it the quality?
23:00Is it the durability, compliance, sustainability?
23:03How can actually they bring all of this together effectively?
23:08Ah, this is a very complex question to answer, but I simply take a step back.
23:16A lot of what we've been doing over the past 20 years is being copy and paste.
23:22So when we talk about specifications, when we talk about how we apply and how we approach projects, this has
23:29been generation by generation passed down and taught in the same way.
23:34Time is changing, however.
23:36There's a lot more innovation open to every aspect of the build.
23:42Please take a step back and look at what is new, what is available and what additional benefits your structure
23:49can get from that.
23:51I want to add one question.
23:53Perhaps on the future outlook of this industry, construction industry, and what's in the pipeline for SICA in the future?
24:01For SICA, education.
24:03So we try to keep our sustainability targets, our performance targets, our innovation targets ahead of all the markets.
24:14If we're ahead of the markets, we need to lobby how we're ahead of the markets.
24:19So we will do a lot of work with specifiers.
24:22We'll do a lot of work with construction companies.
24:24But we'll also do a lot of work with universities.
24:27We want to show these developments and these improvements and showcase what we're doing in order to help the market
24:34grow with us.
24:35So education for me, not just internally, but we educate and share what we have to our partners.
24:42So education is actually a strong base, despite we see the technological advancements, we have AI and great innovation right
24:50now.
24:50So the message now is clear.
24:52Malaysia's construction pipeline remains strong, but success will increasingly depend on execution quality, durability, and also credible sustainability evidence, not
25:01just speed and cost.
25:02So Damien, thank you so much for taking the time to speak with us today, this morning.
25:07And again, that was Damien Nelasti, the head of direct business SICA Malaysia.
25:10And thank you for sharing your insights.
25:12And you can find this whole discussion on all of our social media platforms.
25:16And that includes Astro1a.com.
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