As Cemtech Asia hosts its annual industry event in the vibrant city of Kuala Lumpur, we take a look at the prospects for the Malaysian cement sector where progress of government-led investments and key infrastructure projects, as well as ongoing residential and commercial developments are likely to sustain demand growth at steady levels.

Malaysia is one of the pre-eminent economies in southeast Asia, the fruit of decades of industrial growth and political stability. Last year, the economy expanded by 4.7 per cent, driven by the continued strong growth in domestic demand, which remained resilient throughout 2013 thanks to robust private sector activity. Private investment registered strong growth in 2013, continuing the momentum from the previous year with the expansion underpinned by capital spending in the mining, services and manufacturing sectors. Although the government’s development expenditure declined during the year, public investment levels remained positive. The more moderate rate of overall economic expansion in 2013 compared to the previous year (2012: 5.6 per cent) was to a large extent attributable to developments in the external sector. Demand for Malaysia’s exports was affected by the slow growth in the US and weak economic activity in most of European economies.

A further advance of 4.5-5.5 per cent is forecast for this year by the Malaysian government, again driven by domestic demand, albeit at a more moderate pace. Private investment is expected to register its fifth-consecutive year of growth led by the implementation of multi-year projects as well as improvements in external demand leading to a pick-up in exports. Public investment is also projected to register higher growth, supported by both government and public spending.