Lafarge Malayan Cement Bhd expects cement demand to rise considerably in the second half of this year as construction projects under the Ninth Malaysia Plan (9MP) get implemented.
President and chief executive officer Alain Crouy said the construction industry should get a shot in the arm in the later part of the year.
Alain Crouy said: “We hear that the order books of some developers and contractors are fast filling up and this should lead to increased purchase of raw materials, including cement, once they finalise the financing,” he told reporters after the Lafarge AGM yesterday.
For the financial year ended Dec 31, 2006, Lafarge posted an 11% increase in revenue to RM2.08bn compared with the previous year. Net profit stood at RM173mil against RM31m previously.
Crouy said the 2006 financial result was a record for the company in terms of revenue and net profit.
He attributed Lafarge’s good performance to the 9% hike in cement price, improvement in human resource management and manufacturing efficiency through the use of better technology.
Asked if mega projects under the 9MP had fuelled cement demand in recent months, Crouy said the cement industry had yet to feel the impact of the projects.
Lafarge has slightly over 40% share of the cement market in Malaysia and exports about 30% of its output.
“As the dominant player in the cement industry, we have yet to feel the demand from the mega projects under the 9MP,” he said.
However, Lafarge was confident cement demand would strengthen in the near future.
“It’s only a matter of time,” Crouy said.
On the company’s capital repayment of 20 sen cash for each share held, he said Lafarge wanted to reward shareholders for their support.
“The capital repayment is aimed at rewarding stakeholders as well as to improve our capital structure,” he said, adding that the exercise would be completed in the second quarter this year.
Looking ahead, Crouy said Lafarge was poised to achieve another set of good results this year.