A Malaysian low-cost housing project could lift some of the world's 860 million slum dwellers from poverty by helping to secure jobs and food as well as shelter, Malaysia's IRIS Corp. Bhd said on Thursday.

In a pilot scheme, the company built a four-story building of 32 apartments, put together like huge Lego building blocks, for $1.5 million including the cost of buying land in Pahang, Malaysia, it said.

Too often, slum dwellers are pushed out by new construction in cities, IRIS managing director Tan Say Jim told Reuters in a telephone interview about ways to rejuvenate urban slums.

A better alternative may often be to demolish one-story shacks and build four-story blocks on the site for the slum dwellers, he said. That can free up city space for everything from job-creating shops to schools, as well as rooftop greenhouses or fish tanks for aquaculture.

"We can put up buildings very quickly and build economic activity," he said. He said African nations including Senegal were interested in the idea. IRIS's turnover in the year to March was about $175 million.

So far, IRIS has built three rural villages in Malaysia - in which each of about 100 pre-fabricated homes costs about $3,000. Four more are under construction and 15 are planned in the next two years, including farms alongside.

"Fewer than one in 20 families invited to live and work in a rural 'smart village' decline the opportunity," it said in a statement.

"Achieving sustainable development requires the sort of imaginative innovation being pioneered through the smart communities program in Malaysia," said Tan Sri Zakri Hamid, science advisor to Malaysian Prime Minister Najib Razak.