CIMA building on growth in Johor, Malaysia

CIMA building on growth in Johor, Malaysia
Published: 09 August 2004

Cement Industries of Malaysia Bhd (CIMA) is closely monitoring the development of Bandar Nusajaya in Johor as it plans to set up a new plant in the southern state.

Managing director Datuk Rosli Shariff said the impending shift of Johor’s administrative centre to a new township in Gelang Patah will trigger further development in the surrounding area, which will boost demand for CIMA’s products.

"Once Nusajaya takes off on a larger scale, we will be able to build one more plant to serve the south of Johor and to increase our market share in Singapore," he told Business Times.

Currently, CIMA owns two manufacturing plants in Perlis and Negri Sembilan. They have a combined annual capacity of 2.8Mt of clinker, which is the raw material primarily made from limestone and used to make cement.

CIMA is the second largest cement manufacturer in the country, commanding 18 per cent market share in Peninsular Malaysia. It also exports over 300,000t each year to strategic foreign markets such as Singapore and Myanmar.

Last month, the group’s parent company UEM World Bhd, together with the State Secretary Johor Inc (SSJI), signed a joint-venture pact with the Johor State Government to design, construct and maintain a new administrative centre for the State Government in Bandar Nusajaya.

The centre will be built on 129.50ha, owned by CIMA’s sister firm Prolink Development Sdn Bhd. The project will be developed in phases, with the first phase involving the development of the state government precinct on 109.2ha expected to take three years to complete.

Rosli said that prospects for the company, and Malaysia’s cement industry as a whole, appear brighter this year amid the improved domestic demand. The stronger economy has led to a pick-up in construction activities and the low interest rate environment has spurred demand for property.

Rising demand for cement from West Asia has also benefited the company indirectly as it has helped absorb excess capacity in the region.  To improve its domestic market share, CIMA intends to form strategic partnerships with other government-linked companies, especially those involved in construction projects that use lots of cement.

The group has also set its sights on the East Coast states, which are expected to see more infrastructure-related projects in the near future.

"There’s going to be shift of expenditure towards the East Coast, such as in Terengganu and Kelantan. We are well-positioned to serve that market," Rosli noted.