Lafarge improving in Malaysia

Lafarge improving in Malaysia
Published: 22 May 2006

Lafarge Malayan Cement Bhd, which swung into the black in the first quarter of the year, expects to continue as the local market leader this year, riding on improved operational efficiency and increased production.  Its chief executive officer Alain Crouy said the company, which commands about 40 per cent market share, plans to increase its current production capacity of 8Mt of clinker and 12Mt of cement.  
 
“We are running at 100 per cent capacity now. Capacity will be increased using the current tools, without any additional investment,” he told reporters after Lafarge’s AGM in Subang on May 19.   “On the marketing side, we would also launch new products over the next few months and years,” he said.  
 
Crouy added that the company and other industry players have been in talks with the government to revise the ceiling price of cement of RM198 per tonne (government-controlled price) now.   “Our cost (of production) have increased by 30 per cent in the past 11 years, and we would like (price increase) to be as close as that. But we are not sure that (price) would be feasible to the government.  “The increase in price is to compensate for the (operation’s) cost increase which accelerated in the last three years, particularly with regards to fuel,” he said.  
 
On its outlook, Crouy said: “The market is growing and in the first quarter, the market has grown over five per cent. This year, we expect the market to be above last year’s. We should be able to control cost better as we don’t have the impact of the coal increase, and at the same time with our internal operations efficiency.”   However, he believed the infrastructure spending would not impact its business significantly this year, despite the hefty allocation to the construction sector under the Ninth Malaysian plan (9MP).   He said the impact of the 9MP would only be seen from the second half of the year onwards.   Crouy said the company also expects better contribution from its overseas operations, particularly in Vietnam and Singapore. (abstracted from The Edge).