Holcim Malaysia poised for higher sales despite economic slowdown

Holcim Malaysia poised for higher sales despite economic slowdown
Published: 02 January 2009

Holcim Malaysia Sdn Bhd expects to record better sales in 2008 despite a slowdown since the third quarter.

Its chief executive officer Mahanama Ralapanawa said in New Delhi that the cement maker was expected to hit sales of 700,000t compared with 575,000t in 2007.

He said that the company, which has a plant in Pasir Gudang, was recording sales of between 60,000 and 70,000t until August last year but by year-end, the figure had dropped to about 50,000t a month.

He told StarBiz that the company had to date invested about RM180mil since starting operations in Johor nine years ago.

"We are presently investing RM38mil more for our plant expansion to recycle industrial waste," he added. Asked whether Holcim planned to acquire a rival cement company to increase its market share, he said that at present, there was no such plan.

"Our existing plant is capable of producing 1.2Mt of cement annually," he said, adding that besides cement, Holcim also produced ready-mix concrete.

"Previously we were selling about 16,000m3 a month but since September our sales have dropped to about 10,000m3," Mahanama added.

He said the Government should take advantage of the present economic slowdown and continue spending on infrastructure projects, especially in Iskandar Malaysia.

Such projects should continue due to the lower construction costs, especially involving labour, cement and steel.

"This will also help stimulate the local economy. Since September, we have seen a 20% drop in our business, especially orders involving housing and government-related contracts," Mahanama said.

"Most of the old projects are being completed but the new ones are not kicking off," he said, adding that Holcim was a major player in the construction industry, especially in Iskandar Malaysia, as it controlled 34% of the local cement market.

"We have about 15 major clients in Johor alone," he noted.

He said the price of cement, which was as high as RM290 per tonne before August last year, had dropped between RM270 and RM275 per tonne.

Mahanama, who is also a council member of the Cement and Concrete Association of Malaysia, said that the Government should also consider investing in concrete roads.

"While the initial investment may be higher, concrete roads are more cost effective in the long term."