KUCHING: Sarawak is expected to see the entry of two major regional cement manufacturers, namely YTL Cement Bhd and SCG International (Thailand), under a bold plan by the state government to strengthen the cement supply chain.
This followed their (YTL Cement and SCG International) signing of a memorandum of understanding (MoU) with Innocement Sdn Bhd, a joint venture between Sarawak Economic Development Corp and Bintulu Development Authority, here last Friday.
SCG is a subsidiary of Siam Cement Group, while YTL Cement is Malaysia’s oldest and biggest cement manufacturer.
Sarawak Premier Tan Sri Abang Johari Tun Openg said Innocement’s mission is to strengthen Sarawak’s cement supply chain and to ensure the long-term reliability of supply and stability of prices of cement in the state.
He said to achieve Innocement’s goals, there must be sufficient supply of cement throughout Sarawak, adding that these supplies can be accessed in a timely and cost-effective manner and that prices are stable and transparent.
Abang Johari also said the cement has to be of high quality that fully meets Malaysia’s national standards
“Innocement will play its role to cater for the needs of cement supply in the northern part of Sarawak,” he said after witnessing the MoU signing ceremony.
Cahya Mata Cement Sdn Bhd, a wholly-owned subsidiary of Cahya Mata Sarawak Bhd
, is currently Sarawak’s sole cement manufacturer.
Cahya Mata Cement owns an integrated cement plant in Mambong near here and two grinding plants in Pending (Kuching) and Bintulu.
Last month, Cahya Mata Sarawak announced that Cahya Mata Cement will construct a new clinker line in Mambong, which is estimated to cost RM750mil.
The project is expected to take 36 months to complete.
The new clinker line will have a daily production of 6,000 tonnes (1.9 million tonnes per year). Clinker is the key raw material in the manufacturing of cement.
According to Cahya Mata Sarawak, the project will meet Sarawak’s growing domestic cement demand and increase production efficiency, which leads to reduction in carbon footprint and ensures continuous sustainability.
Abang Johari said demand for cement in Sarawak has surged and will continue to remain high, as a total of 960 projects with a combined value of about RM46bil has been allocated for the state’s infrastructure development.
These infrastructure projects, which are in various stages of completion, include the Pan Borneo Highway, Sarawak’s Second Trunk Road and Coastal Road, Sarawak-Sabah Link Road, Trans Borneo Highway and those undertaken by Integrated Regional Samarahan Development Agency, Regional Corridor Development Authority and Projek Rakyat.
Earlier this year, the Sarawak Infrastructure and Ports Development Ministry received a list of 92 infrastructure projects worth about RM1.1bil from the federal government.
According to the Statistic Department, over the last eight quarters, the construction works value for Sarawak averaged RM3.45bil per quarter against the national average of RM29bil per quarter.
“Sarawak requires a reliable and adequate supply of construction materials to ensure the timely completion of all these projects.
“Delays would result in additional cost and impact the lives of Sarawakians, especially for critical projects such as schools, hospitals and infrastructure.
“Shortage and disruption of suppliers tend to result in escalation of prices to the point that budgets need to be revised and additional funds required.
“Cement accounts for 3% to 7% of construction costs.
“Concrete is among the most consumed materials in the world. Cement is as basic to construction as rice is to our daily meals,” said Abang Johari when speaking earlier at the signing ceremony.
He said Sarawak has an undeveloped cement industry as there is currently only one single supplier.
“It is imperative for the development of Sarawak to reduce the risk of total dependence on a single supplier to create a healthy competitive environment and that new blood be injected into the state’s cement industry.
“The cement supply chain of Sarawak needs to be strengthened,” he added.
The Premier said with the collaboration with YTL Cement and SCG International, Innocement can fast track the growth and cut short the time-to-market.
YTL Cement has operations across Malaysia, Singapore and Vietnam.
SCG International, on the other hand, has a total cement production of 34 million tonnes across 11 cement plants located in Thailand and throughout the Asean region.
