Cahya Mata Sarawak Berhad’s (Cahya Mata) upcoming Clinker Line 2 has received all necessary approvals at both the domestic and Sarawak levels, with only federal Department of Environment (DOE) clearance pending resubmission for clarification, said analysts from MIDF Amanah Investment Bank Bhd (MIDF Research).
Once operational, analysts said Line 2 will eliminate the need for clinker imports, currently sourced from Vietnam, and increase output capacity from 1.7Mta to 2.75Mta. If both lines run concurrently, total output could reach 3Mt.
“Once Line 2 comes online, Cahya Mata will become fully self-sufficient in clinker supply, with the flexibility to shut down Line 1 intermittently while maintaining stable production volumes.
According to management, cement demand in Malaysia is expected to exceed 1.7Mt in the coming years, driven by a flurry of state-backed infrastructure projects. “Among these are the ongoing development of the Autonomous Rapid Transit (ART) system, a new industrial factory requiring cement supply, and a naval base, which will add moderate but consistent demand.
“Management also shared that several other major projects are in the pipeline across Sarawak, reinforcing expectations that Cahya Mata’s order book will remain healthy in the coming quarters.
“Medium-term projections point toward volumes exceeding 2Mt as these developments gather pace,” it said.
Addressing concerns about cheaper imported construction materials due to US-China trade tensions, MIDF Research said Cahya Mata remains confident in its competitiveness. “Cahya Mata expects its new clinker line to make it cost-competitive, with limited risk from import-driven price pressures. Fears of cheap material dumping were dismissed,” it said.
