Sunday, September 28, 2008

The Ball Gets Rolling…….

Jordie had his construction paraphernalia carried over to Rawang from Datuk’s house. This was the last week of September, 2008. He was happy. He managed to complete the renovation works of the house in Kelana Jaya. He met his deadline and Datuk could move back in time for Hari Raya.

His workers too have all gone for the Hari Raya break. Some even back to Medan apparently. However, Jordie is confident they should be back in one week as they normally do. A number of the workers have been with him for a few years now. He had good chemistry and good rapport with them. That is not a problem for him.

The same cannot be said for the construction industry though. It had gone through harrowing times these recent years. With a slew of events and occasions spanning the past decade it had been trying times. The 1997 financial crisis triggered off the rot. What with the price of cement, steel and other materials all on the upswing. And if that’s not all, the oil price broke the psychological barrier of US$100 a barrel just months ago.(culminating in US$145, the highest on July 02, 2008) It led to higher costs all round.

And President Bush had summoned both the contending parties, Obama and McCain just days ago pondering over the impending financial crisis looming over the horizon. The incoming President, whoever he is, runs smack into it come January 2009 when he takes office.

With the sub-prime hiccup on the starting blocks, it led to the demise of Bear Sterns, Freddy Mac, Fannie Mae, Lehman Brothers, Merril Lynch, and AIG for starters. Dubbed the ‘mother of all bailouts’ Congress had to agree to a US$700 bil (RM2.38 trillion) payout and it is still ticking. It is leading to the likes of the 1930’s Depression years of bank failures, fall in property prices, widespread foreclosures and unemployment. The difference this time around is slated to engulf not just the Americans but the whole world.

And to think the IMF (read the US) had refused ‘bailout’ for the 1997 Asian Financial Crisis as a way out for Asian countries. They are now taking a ‘leaf from the book’ of what Dr Mahathir did in averting us from the brink of disaster. The other asian economies were then left in the lurch when they sought IMF help. Some help it was!

There would be a fire-sale for the picking they must have thought gleefully. And it sure did! Asian corporations and companies fell by the wayside like ten-pins and the Americans had a heyday grabbing the juicy ones for themselves.

A global crisis… where will all these lead to. The ripples from the West may take a little time but it will eventually reach us. The recession is coming definitely. Hollering hoarse against the fuel/oil price rise is a lot of hot air. (though sweetened with 2 price cuts lately)

“This is a good time for us” Jordie said without batting an eyelid. The world will be in crisis, yes. It will take valiant efforts on their part.The ripples had already reached British shores, the 4th largest economy, and ultimately the whole of Europe. There’s nothing we can do about it!

“Wrong!” Jordie countered triumphantly. “We can.. The bird house industry can” he said. The birdhouse business is reputed to be recession proof. This was one of the arguments put forth for the business. Now is the opportunity to really put this to test - whether it is recession proof. Is it just sheer bunkum or will it prove otherwise? We will not have to think about it. We will not have to debate on it. We will not have to wait for it.

We will just follow our own time-line diligently knowing fully well there is an impending glitch in the financial markets and its resulting recession. We cannot influence it nor go against it. The big economies can work it out for themselves.

The birdhouse business will remain unscathed. So it seemed. Demand will remain as our market is mainly China and Hong Kong.The Chinese economy-plus (with Hong Kong,Taiwan and the overseas Chinatowns ) is supported by a 2 billion population and is sheer magic. It will have a life of its own and can sustain itself come what may in other parts of the world. So it is believed. The tainted milk scare/scandal is just a temporary setback which will be quickly forgotten.

The Rawang job should take about 4 weeks going into the whole of October. A spillover to November may occur but it will not matter.

After Rawang, we have assigned a reasonable lead time of 6 months for the next 2 jobs, one in Sabak Bernam and the other, my land in Kuala Pilah. Unlike Rawang which is a renovation of sorts both will take longer as we are starting from scratch.

By end of June 2009, we should have 3 birdhouses duly completed each of a different kind ie a converted shoplot (Rawang), by the sea (Sabak Bernam) and in an inland /rural setting (Kuala Pilah)
It would be interesting to discover if the 3 different settings could translate to different amounts in production ie whether ‘by the sea’ as often believed will be more productive than the other two? It can certainly be a guide in future network expansion.

Jordie has interests in all the 3 while I have only 1 with him. At this stage it is somewhat premature to strategise on a network build-up but it is in the offing. We’ll cross the bridge when it comes.

In the meantime, Selamat Hari Raya Aidil Fitri and may the ensuing year be blessed with good productivity and prosperity.

Sunday, September 14, 2008

A Converted Shophouse Option – (Segment A1)

We were in Rawang on the morning of 9th September, 2008 . We came to view the shophouse meant for conversion to a birdhouse. Jordie had been here sometime in late August just to give it a once-over from the outside.

He didn’t try to hide his excitement when we arrived. He was thrilled in fact. It was mainly because he managed to fulfil the first part of his dream of having a direct interest in a birdhouse.

Jordie’s involvement are on two counts. One, it is on a JV basis so that he has a share in its running and the returns accruing while the other is in the conversion job (being a contractor that he is). Jordie has to turn a bare and neglected three storey shoplot into a functioning and money-making structure.

When we went in it was not as bad as we had expected. Apparently the previous owner or tenant was a contractor of some sort as the remnants of rubbish comprised PVC materials, pipes and knick-knacks normally associated with plumbing works.

He (or his workers) did Jordie a favour by stripping off all of the wirings (copper wires fetch good money) and left the rubber strips strewn all over. It is good for Jordie as his workers need not do the stripping. He is also assured the wiring forthwith for the building would be all new and according to his fancy.

The location is perfect. It is one of a row of about 50 empty shoplots facing 4 big fish ponds and ex-mining land down below across the road. The row of shoplots is on higher ground so that one sees all the four ponds from the road (in the water then was a flock of what looked like migratory birds frolicking in the sun.)

An external water source is an added bonus (good for a birdhouse) and the higher ground makes for good feng shui, that’s what I gather later.

Cleaning work gets going by the end of the week. The water and electricity connection will follow and the converted shoplot option is off the ground!

Jordie had decidedly made certain observations and weighed his options. There is the small 2’x 4’ window-like opening at the wall at the top of the landing. In practically all houses it would remain closed as it is too high up to bother (even for would-be burglars) We had the initial tendency to make minimal changes to whatever is already there. We thought this opening could be the dog-house entrance for the birds. Jordie decided against this. The choice has to be based on some idiosyncracies favouring the swiftlets and not just convenience to the investors.

The direction of the dog-house entrance merits careful thought. This consideration is fundamental and may even be fatal if wrongly decided.

It has to do with the way the birds fly in. It can either be clockwise or anti-clockwise. For those flying clockwise the entrance should face 3 o’clock and it should face 9 o’clock for the reverse. If it is wrongly placed the birds might have to swoop in but make a U-turn to enter. This is the opinion of those long in the business which should not be taken lightly.

From their observations once the birds fly clockwise they would continue to do so in that manner. It is also true of the opposite. It can be in the same area and of a similar kind of specie and they will maintain their flying direction once established. It is therefore of utmost importance to determine the flying pattern during the initial Duress Test (From our experience on the road it is not easy to make a U-turn what more when in full flight)

In Jordie’s case it may even be a double whammy. There are already two or maybe three other birdhouses on the same row. The inconvenience of entering may prompt these birds to the other birdhouses. Jordie decided the dog-house should be an external one on the roof top and the entrance direction strategically placed.

There is ample water source provided by the fish ponds across the road. Jordie thought he may have to reconsider an earlier decision concerning water in the roving area at the top floor.

Some birdhouses have them externally in the open on the roof top while some others don’t have one at all.

A water feature is considered necessary. It may be of any dimension, say, 20’x30’ on the roof top and much smaller in the roving area. It provides a cooling-effect area and a playing area. The birds would fly low, for the quickie ‘cool dip and a sip’ and playfully fly around before proceeding into the nesting area in the lower floors below.

Jordie expects no change for the location of his water feature. Being placed inside the roving area is a better option as once inside and ‘loving it’ the birds will stay inside.The next best thing to do after that is not to fly out but to go down to the nesting area. They would then happily do what they are meant to do, to nest and to make nests and make more nests.

For my easier reference I have tagged subsequent postings according to segments under different categories. They go in series (of 1,2,3…) to easily compartmentalize and chart the progress.
1.Converted Shophouse – Segment A
2.By the Sea – Segment B
3.Rural Setting/Inland Areas – Segment C
4.Vicinity of Caves – Segment D

Wednesday, September 3, 2008

A Booming Industry but Lacks Enforcement

The government is aware that a birdhouse is a ‘new booming industry’. However, it is not adequately regulated. This was the answer given by the Minister (of Housing and Local Government) through Question Time in Paliament on July 10 , 2008.

“ The swiftlet farming industry in Malaysia was duly recognized as a valid contributor of important foreign exchange currency for the country by the Ministry of Housing and Local Government in 2004 with the gazetting of the "Guidelines on Swiftlet Farming" for all local, district, municipal and city councils throughout the country.

The Guidelines require that only premises within commercially zoned areas as well as being registered as commercial premises with the relevant council, which have not been designated as a Class 1 Heritage Building can be converted into a swiftlet farm.

The Guidelines also require that certain standards and levels of premises upkeep must be adhered to in areas of noise, health, pollution, scope of renovation works, building fa├žade, rendition and lighting be adhered to before swiftlet farming licences can be issued.”

The guidelines governing the running of birdhouses are already in place. It was specified that though birdhouses are forbidden in housing estates, they are allowed in the shophouses within.

The Housing and Local Government Minister had answered in Paliament that he would request the local authorities to ‘tighten enforcements of the guidelines’.

The guidelines are more of rules and regulations and may not be perceived as having the strength of a piece of legislation. As such there is a lot of leeway and common sense governing the handling of such birdhouses until now.

On July 13, 2008, a concerned reader ‘ML’ mailed to the Star with a heading ‘Keep swiftlet farms out of Geoge Town’ where he said,

“ …Ask anyone who has the misfortune of staying near one of these farms and you would hear complaints ranging from the incessant bird noise from speakers used to attract the swiftlets, unpleasant chemical smells from bird attractants, increased mosquitos from the stagnant water pools in the farms, bird droppings and…….

Many complaints have been made to the city council but so far their enforcement has been inconsistent..”

Again, enforcement is mentioned and the lack of it seems to be the reason for a lot of complaints and disapprovals of folks in the vicinity of these converted shophouses.

Interestingly, inconsistency in enforcement may be the result of
a)this being a relatively new industry here
b)those who convert the shophouses are not that responsible and considerate enough (though they risk running foul of the authorities and their investments may be in jeopardy)
c)those responsible for enforcement may not be aware of the norms of the business.

By implication therefore a birdhouse in an outlying area or a rural setting away from urban centres would be ideal. Our projected birdhouse in rural Kuala Pilah would likely be able to meet many of the provisions of the guidelines. It is a stand-alone birdhouse structure far away from others to be a nuisance to anybody.

Mr T, our consultant had earlier advised that we would have to determine and be aware of all the ‘dos and don’ts’ of the industry.It would help us and it would also get us on the good side of the authorities.

He said we should attend the designated seminars endorsed by them. Information not readily available elsewhere can be obtained at these seminars. A certificate is issued which is currently accepted as a “licence to operate the business’. Short of anything else, the authorities had to fall back on whatever that can make it convenient for all concerned.

For this, birdhouse owners ought to be thankful and reciprocate likewise to make it easier for the authorities and also for themselves.