Malaysia: CMS relies on cement demand

Despite its stock falling in April, Cahya Mata Sarawak Bhd (CMS) has managed to pick up momentum, registering a share price growth of 17.7 per cent between May and 12 August 2016. The company will be looking to capitalise on the MYR16bn (US$4bn) Pan Borneo Highway infrastructure project.

MYR9bn (US$2.2bn) worth of contracts have already been awarded by Lebuhraya Borneo Utara Sdn Bhd for the project and local market players will now be focussing on increasing capacity and sourcing materials. Those securing contracts are likely to turn to CMS for the supply of construction materials as it holds a dominant market share in the state’s cement business. CMS owns the only two cement plants in the area, with a combined capacity of 1.75Mta. Alliance DBS Research have said that CMS will “benefit from the higher demand for its cement as well as construction materials and trading divisions.”

The Pan Borneo Sarawak Highway project is expected to triple CMS’s order book to MYR1.45bn.