Ninth Malaysian Plan to boost cement demand

Ninth Malaysian Plan to boost cement demand
Published: 14 July 2010

Malaysian cement producers are looking forward to a brighter second half in 2010 in anticipation of the roll-out of much delayed projects under the Ninth Malaysia Plan (9MP).

These may include the Light Rail Transit (LRT) extension and Low-Cost Carrier Terminal (LCCT) project, said ECM Libra Capital Sdn Bhd.

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Although these projects are gaining traction, it did not appear likely that they would lend a hand in boosting demand significantly in the remainder of the year," it said in a sectoral review released Wednesday.

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While contracts will be awarded this year, physical works may only start towards end 2010 or early 2011," it added.



ECM Libra said it did not expect margin expansion as the 10 per cent cement price increase in May 2010 was in response to rising coal prices.

"In fact, margins might yet feel the pinch if the subsidy rationalisation plan is approved and electricity tariffs are raised," the investment and research house said.

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On the flip side, due to the fact that major 9MP projects have been delayed, cement demand should see better days going into 2011 when construction works go into full swing," it said.