Malaysia anticipates infrastructure-led boom in cement demand

A drive on infrastructure projects in Malaysia is set to boost cement demand, according to a recent report from Kenanga Investment Bank Bhd. The implementation of mass rapid transit and high-speed rail projects, combined with property development in Iskandar Malaysia, will increase cement consumption, says the research firm, who also indicated that the goods and services tax and subsidy rationalisation due in 2015 is likely to have a minimal impact on steel and cement companies.

Capacity expansion plans

Lafarge Malaysia Bhd recently announced plans to construct two ready-mix batching plants in Kuala Lumpur and open another quarry in Nilai to boost concrete and aggregate output. In addition, the group is expanding its cement capacity by a combined 1.2 million tpa at the Rawang and Kanthan plants in Perak, which are due to go online in 2015.

President and CEO Bradley Mulroney told press, “There is a number of significant projects that we are negotiating, but will wait for the right moment to announce them,” adding that all the projects are located in the peninsula.

Earlier this summer, Cahya Mata Sarawak Bhd (CMS), which is based in Sarawak, approved a proposal for a new 1 million tpa grinding line to meet the expected boom in construction demand over the coming years. RHB Research Institute released a report indicating that cement demand is likely to grow by 5% this year and next, and by 2.5% from 2015 onwards.

Edited from various sources by Katherine Guenioui

Read the article online at: https://www.worldcement.com/asia-pacific-rim/10102013/malaysia_anticipates_boom_in_cement_demand_278/