CMS to benefit from Pan Borneo Highway construction

Construction of the Pan Borneo Highway in Malaysia is expected to boost demand for construction materials including an additional million tonnes of cement.

Cahya Mata Sarawak Bhd (CMS), which is the sole cement producer in the country’s largest state, will be the main beneficiary of the mega highway project.

"It is estimated that the project would need up to a million tonnes of cement over the course of the construction of the Pan Borneo Highway [in Sarawak], said Richard Curtis, managing director of CMS, in an interview with according to a report in the Edge Financial Daily.

"This demand will not be so visible in 2017, so we will see that impact in our P&L (profit and loss statement) in 2018 onwards," he added.

Curtis said the overall infrastructure development activities in Sarawak have been regaining momentum after construction work for the 1073km highway began.

CMS net profit fell 31.82 per cent in FY16 from MYR169.18m (US$38.7m) from MYR248.15m in FY15, while revenue declined 13.24 per cent to MYR1.55bn from  MYR1.79bn. The fall in profit was due to sluggish construction activity and the steep depreciation of the ringgit against the US dollar.

CMS expanded its production in 2016 with the completion of its new grinding line at Kuching, expanding overall company capacity by 60 per cent to 2.75Mta.