KUCHING: The Sarawak Economic Development Corp (SEDC) and Bintulu Development Authority (BDA) are expected to set up a joint-venture (JV) company to import cement from Thailand this year to address the issues of cement shortage and the price hike.
The proposed JV firm would be importing between 500,000 and one million tonnes a year from Siam Cement Group (SCG), according to a statement issued during a recent study tour to SCG Bangkok by a Sarawak delegation led by SEDC chairman Tan Sri Abdul Aziz Husain and BDA general manager Datuk Muhamad Yakup Kari.
SGC, is one of the oldest and largest cement and building material companies in Thailand and South-East Asia.
The expected outcome of the initiative would see an increase of cement supply in Sarawak to address the immediate needs of the construction industry in the state, it added. “To date, the average unit price of cement in Sarawak is 15% higher compared with Peninsular Malaysia and also 4% higher than in Sabah.” said the statement.
It pointed out the supply and price issues have impacted and delayed major development projects in Sarawak.
In retrospect, the importations of cement are subjected to the certificate of approval issued by Construction Industry and Development Board and the domestic trade and cost of living ministry, which is the custodian for policy decisions on the import of cement.
Cahya Mata Sarawak Bhd’s (CMS) wholly owned subsidiary Cahya Mata Cement Sdn Bhd and the sole cement manufacturer in Sarawak had last raised the cement prices by an average of 10%, subject to product type and location, on February 17, 2022.
The company had justified the price adjustments to the significant and sustained rising costs of raw and packaging materials and freight charges.
Two month ago, CMS Cement apologised to its customers for the shortage of cement supply due to the maintenance shutdown of its Mambong grinding plant,Jalan Penrissen near here.
Furthermore, the production activity was further hampered by the unexpected delay of raw material delivery to its Pending plant here by 14 days, explained the company.
In early November, the disruptions of cement supply in Kuching and nearby areas was resolved, it added.
CMS Cement also gave assurance that it had more than enough cement to supply and meet all the requirements of its customers.
“All of our cement plants in Pending, Bintulu, Mambong and all our bulk terminals in Sibu and Miri are fully operational to serve the supply needs of all our customers,” it said.
CMS Cement’s three grinding plants have a combined production capacity of 2.75 million tonnes per annum.
In the financial year 2021 (FY21), CMS cement division recorded higher sales of RM483.2mil from RM476mil in FY20. Its pre-tax profit rose to about RM61.7mil in FY21 from RM48.4mil a year earlier.
Meanwhile, demand for cement in Sarawak is expected to surge with the rollout of several major infrastructure and petrochemical plant projects as well as the implementation of ongoing mega road projects.
The projects include the Sarawak coastal road, second trunk road and Sarawak-Sabah link road and also, the water and electricity supply projects.
SEDC has been tasked by the Sarawak government to play a bigger and critical role in the state’s infrastructure, industrial and economic development.
SEDC’s wholly-owned subsidiary Sarawak Metro Sdn Bhd has been entrusted by the Sarawak government to implement the RM6bil Kuching Urban Transportation System (KUTS) project.
Under KUTS Autonomous Rapid Transit (ART) phase one, covering 69.9km, it will involve the construction and operation of three lines (blue,red and green) and 31 stations in Samarahan and Kuching divisions.
Sarawak Metro has recently awarded a RM64.3mil contract to Hock Seng Lee Bhd for the construction and completion of the advanced works for the ART Rembus depot in Kota Samarahan. This also marks the commencement of the physical construction of the project.
The Rembus depot is scheduled to begin operation in the fourth quarter of 2025, which coincides with the opening of stage one of ART passenger service for the blue line from Rembus to Hikmah exchange in the Kuching city centre, covering 27.6km.
In addition, SEDC is also spearheading the development of the Petrochemical Hub and Medical Hub in Tanjung Kidurong, Bintulu on 432ha it acquired for RM340mil in 2020.
Currently under construction at the Petrochemical Hub is a billion-ringgit methanol plant and other upcoming projects, which include a hydrogen plant.