Contractors absorbing higher costs to complete projects on time amid Middle East war

Crucial materials such as waterproof membranes, paint and sealants – which are petroleum-based – have become more expensive as oil prices surge following disruptions at the strategic Strait of Hormuz.

Construction material wholesaler Eastern Win, for instance, is investing in a buffer for short-term disruptions, while keeping in mind the one-year shelf life of such materials.

“Stockpiling is something that we have to study and do carefully, because if we stock too much, there’s a risk of it going bad and we have to throw it away, and that (adds) costs to our bottom line,” said the company’s business head of construction Sylvester Lim.

“We have to plan our safety stocks carefully – and the reason we do safety stocks is because we must be able to supply to our customers when they need it. Otherwise, the construction timeline … will be extended.”

Building up buffer stock could raise costs by up to 15 per cent for the firm, Mr Lim added.

As for whether prices will return to pre-war levels, he said that it will “take a long while” for costs to go down, depending on market demand and how many projects the firm is handling.