CMSB plans third cement plant (2852)

KUCHING: Cahya Mata Sarawak Bhd (CMSB) plans to invest in a third cement plant to meet the growing demand in Sarawak.

Group managing director Datuk Richard Curtis said the new facility, which would have a production capacity of 600,000 to 700,000 tonnes per annum, would be built in Mambong near here where the group's clinker plant is located.

“The proposed third plant will cost about RM150mil. We (CMSB) will make a decision (on the proposed project) in the next three months,” he told StarBizWeek after a briefing yesterday.

The briefing was conducted by CMS Cement Sdn Bhd executive director and chief executive officer Othman Abdul Rani. CMS Cement, which is wholly-owned by CMSB, is Sarawak's sole cement manufacturer.

Curtis said the proposed new plant was to meet Sarawak's future cement requirements as the existing two cement plants were close to operating at their combined installed capacity of 1.75 million tonnes per annum.

CMS's first cement plant in Pending Industrial Estate here was built in 1978. It has an installed annual capacity of one million tonnes and caters for Kuching, Samarahan, Sri Aman and Sibu.

Its second plant was built in 1998 to cater for Sarawak's north-eastern region. It has an annual capacity of 750,000 tonnes.

Curtis said the company was looking at several options on the type of technology, including from Europe and China, to be adopted by the proposed plant.

Othman said CMS Cement currently produced 5,500 tonnes per day against the daily average demand of 5,300 tonnes. The company manufactures portland and masonry cement.

He said cement demand in Sarawak grew by 9% to 10% in the past two years due mainly to the construction of Murum hydro dam in Kapit and Bengoh dam near here.

“As both Murum and Bengoh are concrete-filled dams, the projects consume a lot of cement. The construction of concrete bridges also drives up the demand for cement,” he added.

Othman said the plan for a major dam in Baram was also expected to push up demand for cement in the next few years.

“The estimated year-on-year cement requirement growth is 6% per annum. The (new) demand comes from the development of Sarawak Corridor of Renewable Energy (Score), Samalaju (Industrial Park) and infrastructure projects,” he added.

Curtis said CMSB would relook at a proposal mooted three years ago to build a second production line for its clinker plant to increase production in order to cut down on the import of clinker, the main raw material in the manufacture of portland and masonry cement.

According to Othman, the proposed new production line would cost at least RM700mil.

The existing clinker plant, the only in Sarawak, will increase its production capacity to 896,000 tonnes per annum when a RM78mil upgrading project is completed and commissioned in the next few weeks.

“CMS Cement's requirement of clinker is about 1.6 million tonnes per annum. So, we have to import the balance from South Korea, Japan, Taiwan, Vietnam and Thailand to meet the needs,” said Othman.

Othman said the current cement selling prices in Sarawak were between RM320 and RM340 per tonne the same as in Peninsular Malaysia after this week's price increment by manfacturers there.

Before the increment, cement was cheaper by about RM20 per tonne in the peninsula.

Curtis had said earlier that CMS Cement would not raise its cement price as it remained committed to Sarawak's socio-economic growth.

The local market, added Curtis, depended on CMS Cement to ensure a reliable supply of quality cement for its infrastructure needs, especially now that Score's potential was being realised.

CMS Cement contributes about 48% to CMSB group profit.