IJM Bets Big on Automation—And the Numbers Are Starting to Add Up

What happens when a century-old construction giant decides to go all-in on robots and data?

For IJM Corp Bhd, the answer is starting to look like a very smart bet. The Malaysian infrastructure heavyweight has poured roughly RM300 million—land included—into one of Southeast Asia's largest automated spun pile plants. And if the early projections hold, that investment could reshape not just its cost structure, but its entire competitive position in the region's booming infrastructure market.

A Factory That Thinks for Itself

The new facility, operated by IJM's subsidiary Industrial Concrete Products (ICP) in Bestari Jaya, isn't your grandfather's concrete plant. It's a living showcase of Industry 4.0 in action: fully automated bar-cutting systems, robotic cage-making, machine-assisted spinning processes, and a centralized digital platform that runs predictive analytics on everything from sludge management to precision bar placement.

The result? Annual production capacity jumps from 1.8 million tonnes to over 2.2 million tonnes. But the real headline here is what CIMB Research calls the plant's "biggest competitive advantage": automation.

Let's Talk Numbers

Here's where it gets interesting. CIMB estimates the new plant will achieve 5% to 10% lower production costs compared to conventional facilities. How? Through a 40% reduction in labour requirements.

Think about that for a moment. In an industry where labour costs are volatile and skilled workers are increasingly hard to find, shaving 40% off the workforce while actually increasing output isn't just efficiency—it's a strategic moat.

Location, Location, Automation

But cost savings are only half the story. The Bestari Jaya plant sits just eight kilometres from IJM's SMART Industrialised Building System (IBS) facility. That proximity isn't accidental—it's deliberate.

By integrating spun pile production with IBS precast solutions, IJM can now offer clients a seamless, end-to-end construction package. For large-scale, time-sensitive projects—particularly advanced manufacturing facilities and data centres—that integrated offering is a game-changer. It means faster execution, fewer coordination headaches, and a single point of accountability.

From Malaysia to the World

ICP Piles isn't exactly a newcomer to the game. Since 1977, the company has supplied nearly 40 million tonnes of spun piles across 13 production lines at nine facilities nationwide. And its reach extends far beyond Malaysia's borders.

The company has exported to more than a dozen markets—Singapore, Brunei, Indonesia, Vietnam, Saudi Arabia, the UK, Canada, and the US, to name a few. Its resume includes landmark projects like Singapore's Gardens by the Bay, the Temburong Bridge in Brunei, and the Shebara Resort in Saudi Arabia. Not bad for a company that started life making concrete poles.

A Blueprint for the Future

CIMB Research sees the Bestari Jaya plant as more than just a new facility—it's a blueprint. The research house believes IJM could replicate this automation and digitalisation model across ICP's other facilities, further improving economies of scale and reinforcing its leadership in Malaysia's spun pile market.

If that happens, the RM300 million investment starts to look less like a capital expenditure and more like a strategic multiplier.

What This Means for Investors

CIMB has maintained its "buy" recommendation on IJM with an unchanged target price of RM2.95. And it's not hard to see why.

The construction segment is expected to post revenue exceeding RM4 billion for the financial year ending March 2027. The group's outstanding order book already stands at RM7.3 billion, with a tender book of RM18 billion in the pipeline. Add to that a growing presence in Sarawak, potential new projects in Indonesia, and a steady stream of data centre contracts, and the picture starts to look remarkably solid.

The Bottom Line

IJM's automation drive isn't just about cutting costs—it's about changing the game. In an industry where margins are thin and competition is fierce, the ability to deliver faster, cheaper, and more reliably is a powerful differentiator.

The Bestari Jaya plant represents a RM300 million statement of intent: IJM isn't content to be just another construction player. It's building the infrastructure of the future—and it's building it smarter.

Whether that bet pays off remains to be seen. But if the early numbers are any indication, the smart money is already on board.