No cement monopoly in Sabah, Malaysia

No cement monopoly in Sabah, Malaysia
01 August 2006

Sabah Economic Development Corporation (Sedco) subsidiary, Cement Industries (Sabah) Sdn Bhd (CIS), said it is not monopolising the supply of cement in the Malaysian State.

"There’s no such thing as a monopoly in the supply of cement in the State," said its Chief Executive Officer, Datuk Aslie Awang Hashim, Sunday, in response to a statement by the Sabah Builders Association (SBA). "Contractors in Sabah are free to import cement from Peninsular Malaysia. We hope this explanation will clear any misconception that consumers in the State, in particular the Sabah Builders Association had on us in the past," said Aslie.

As for the issue of acute shortage of cement supplies recently experienced by the State, he said that it was mainly caused by delay in the shipment of its clinker supplies following a series of typhoon incidents in the region. As the result, production was disrupted for half-a-day last Wednesday after it ran out of clinker supplies.

However, production immediately resumed on the following day when the ship was able to dock for the transportation of the clinker to CIS’ clinker grinding plant in Sepanggar Bay. Ever since, it has been working round the clock to clear all the backlog.

Aslie said the cement shortage in the State currently was unavoidable and would continue for a period of time. This was mainly due to a drastic increase in demand by the construction industry, parallel with the robust infrastructure development in the State under the leadership of Chief Minister Datuk Seri Musa Hj Aman. This year alone, the market demand for cement was projected to reach 950,000t, however, this would be more than the CIS’ capacity of 800,000t, therefore, Sabah is expected to experience a shortfall of 150,000t of cement this year.

According to him, demand was expected to hit one million metric tonnes next year, as more infrastructure development projects are expected to be implemented including the Kota Kinabalu International Airport (KKIA) expansion project going into full swing. He said CIS is importing about 20,000t from Peninsular Malaysia and neighbouring Asean countries to temporarily ease the shortage, especially in the east coast. They are due next month.

Besides this, Aslie thanked the Chief Minister for his prompt approval recently of its plan for a "bulk cement terminal" in Lahad Datu whicch would significantly boost CIS’ cement supply and delivery efficiency. He sees demand for cement in the east coast region escalating especially with the implementation of the Palm Oil Industrial Cluster (POIC) project, which is now ongoing. He said the terminal would also help to promote extensive use of bulk cement, which is much sought-after by contractors. At the moment, the supplies of bulk cement to the east coast region are somewhat difficult due to the long distance involved.

"The establishment of the "bulk cement terminal" will spare our east coast region customers the hassles of having to come all the way down to Sepangar to upload their cement supplies, and at the same time save us the transportation cost for brining in cement to the east coast," he said. Construction works will begin by end of this year and is expected to complete in early 2008.

As for its long term plan, SEDCO and CIS planned to set up its own clinker plant so that it would no longer have to import clinker from outside Sabah, perhaps sometime next year, he said.
Published under Cement News