Cahya Mata Sarawak Bhd (CMS) will team up with Bina Puri Holdings Bhd to tender for Pan Borneo Highway project’s construction job.
CMS group managing director Datuk Richard Curtis hoped the consortium could secure one work package in Sarawak’s single largest infrastructure project costing an estimated RM16bil. Eight remaining work packages of the highway project are expected to be awarded in stages over the next few months.
Last month, a Hock Seng Lee Bhd-Dhaya Maju Infrastructure (Asia) Sdn Bhd consortium clinched a RM1.71bil contract to undertake one of the work packages in central Sarawak. A Zecon Bhd-Kimlun Corp Bhd joint venture won another package worth RM1.46bil to construct a 73km stretch between Serian roundabout and Pantu junction, Sri Aman Division in southern Sarawak.
Meanwhile, Curtis said the group was expected to keep itself busy supplying road construction materials for the Pan Borneo Highway project over the next few years.
“The key construction materials are aggregates, premix (asphaltic concrete) and steel bars,” he said after CMS’s AGM here yesterday.
He said the group, which owns five quarries involved in the production of crushed stone aggregates, micro tonalite and limestone, would invest in a second production line in Sibanyis quarry along Kuching-Serian Road to raise output capacity to cope with the growing market demand. The proposed new facility would have a crushing plant capacity of 1.3 million tonnes per annum.
The proposed new investment came less than a year after the (Sibanyis) quarry had its production capacity increased by 50% to 900,000 tonnes per annum.
To increase loading ability and speed up deliveries of crushed aggregates by barges to areas outside Kuching, CMS is developing new wharf facilities in Samarahan, with infrastructure works and ramp construction scheduled for completion by September this year.
CMS group owns eight premix plants in major towns in Sarawak with a combined rated capacity of 1,440 tonnes per hour, and a 15 tonne per hour emulsion plant. The group commands some 60% of the premix and bitumen emulsion market in Sarawak.
Curtis said CMS’s RM190mil third cement plant in Mambong near here was expected to be fully operational by next month. The new plant would raise the group’s cement production capacity by 60% to 2.75 million tonnes per annum. The existing plants in Kuching and Bintulu have combined annual capacity of 1.75 million.
“Going forward, we hope there will be no need for us to import cement (anymore). If one of the plants is shut down for maintenance, the other plant can beef up production,” he added. Last year, CMS, which is Sarawak’s sole cement manufacturer, imported about 200,000 tonnes of cement. Early this year, it brought in a further 20,000 tonnes.
While the increased capacity would enable the group to meet with growing local demand, Curtis said the group was exploring opportunities to export cement to neighbouring countries, probably to west Kalimantan, Indonesia as a start as it would have the reserve capacity to do so.
He said the company had also studied the cement markets in Brunei and Sabah.
On CMS’s plan to raise up to RM1bil in syariah-compliant fund, Curtis said the company was likely to issue the sukuk programme in the second or third quarter of this year, adding that “we plan to draw down RM500mil (initially)”. The proposed sukuk programme is to help fund the group’s working capital and capital expenditure (capex).
He said the group had budgeted for RM275mil capex this year, with the bulk of it to pay for the construction of the new cement plant, proposed Sibanyis quarry’s new production line and a proposed ready-mix concrete plant in Bintulu.
For financial year ended Dec 31, 2015, CMS posted a 14% jump in group pre-tax profit of RM388.6mil from RM341.5mil in FY2014 while revenue rose by 7% to RM1.79bil from RM1.67bil during the same period.