THE UEM Group is believed to be reviewing its position in Cement Industries of Malaysia Bhd (CIMA) after the current price war has affected the bottomline of the latter, analysts covering the industry said. "The UEM Group is questioning the purpose of staying in the cement industry because the recent results have been poor and the returns on investment low," an analyst with a foreign stockbroker said. The UEM Group owns a 53.9 per cent stake in CIMA, the third largest cement producer in Malaysia. The UEM Group, however, declined to comment on the matter when contacted by local reporters.
The price war, which has pushed the price of cement to as low as RM90 per tonne, has hit cement companies hard. Lafarge Malayan Cement Bhd posted a net loss of RM13.8 million for the quarter ended March 31, 2005, compared to a net profit of RM17.9 million a year ago, while CIMA suffered a net loss of RM14.89 million for the same quarter compared to a net profit of RM6.42 million a year ago. Meanwhile, YTL Cement Bhd said its net profit for the nine-month period ended March 31 dropped 3.54 per cent to RM58.44 million against the previous RM60.59 million.
Lafarge Malayan Cement, with a 44 per cent market share, is Malaysia’s largest cement producer followed by YTL Cement (24 per cent), CIMA (16 per cent) and Tasek Corp Bhd (13 per cent).