YTL Cement Bhd, a cement producer that is a unit of YTL Corp Bhd, has agreed to buy a fifth of Singapore rival Jurong Cement Ltd (JCL) as it seeks to grow its business abroad.
The deal comes as YTL Cement expanded its local operations by buying over competing cement makers and turned associates into subsidiaries amid a sluggish construction sector.
"The proposed acquisitions will enable YTL Cement to develop its presence and market share in the cement industry in Singapore and China," YTL Cement said in a statement to the stock exchange. The company said its Singapore subsidiary has agreed to buy 13.96 per cent of JCL from Kindo Pte Ltd and another 6.98 per cent from Andree Halim at Liem Sien Tjong for a total of S$8.82m cash.
JCL has an annual rated production capacity of about 500,000t.
"JCL has grown its presence in China over the past 10 years, with four manufacturing plants with a potential capacity output of over 3.5Mt of cement a year in China," YTL Cement said.
JCL is a loss-making company, YTL cement said, although it has managed to cut down losses substantially over the last five years. The deals are expected to be done in 10 business days, subject to approvals from Bank Negara Malaysia and other relevant authorities.