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Adelaide Brighton Cement to buy 30% of Malaysian Aalborg Portland Malaysia

World Cement,

Australian company, Adelaide Brighton Cement has announced that it will buy a 30% per cent stake in a Malaysian white cement producer Aalborg Portland Malaysia Sdn. Bhd. (APM) for around US$28.5 million.

APM’s white cement plant is situated in Ipoh, approximately 180 km north of Kuala Lumpur. The plant is a fully integrated white clinker and white cement production facility, turning out 180 000 tpa clinker and 200 000 tpa white cement.

In addition to the stake sale, the companies have agreed a 10-year supply agreement. Perhaps in light of this, APM is to consider a US$18.6 million expansion project that would increase its white clinker production capacity to around 330 000 tpa. If the project goes ahead as expected, the new capacity would come online in 2015.

Spokespeople for Adelaide Brighton have said that the deal will leverage its Australian production operations. Indeed, this is objective is further displayed by two further recently signed clinker supply agreements agreements with Japanese suppliers, for 7 and 10 years, respectively. Combined, these moves to diversify its supply base should provide the company with some shelter from exchange rate fluctuations.

Written by Jack Davidson.

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