CMS Cement Committed to Support Sustainable Growth for Sarawak

Kuching (Sarawak), Tuesday, 8 December 2015 – To maintain the quality of our cement manufacturing and supply businesses and our other ongoing business investments to support the state’s socio-economic growth, CMS Cement Sdn Bhd (CMS Cement) today announced that it will be adjusting its cement prices upwards by an average of 4.6% effective 1st January 2016, due to the depreciation of the Ringgit.

The sustained major depreciation of the Ringgit since January 2015 has created an unprecedented increase in the cost of cement production, as over 60% of the key raw materials used to make cement namely clinker and gypsum are bought in USD. In addition, the equipment and spare parts for machinery and all shipping costs are paid for in USD. As at mid-November 2015, it was reported that the Ringgit recorded a 24.8% year-to-date loss, and a 30.9% deprecation over the same period last year. This steep decline in the Ringgit has resulted in major increases in raw material prices since early 2015.

Group Managing Director of Cahya Mata Sarawak Berhad, parent company of CMS Cement, Dato’ Richard Curtis said: “Our commitment is to the state’s growth and in order for us to achieve this vision, tough but essential measures need to be implemented. At group level, we have absorbed the significant impact of the unfavourable foreign exchange rate since the beginning of the year. Various strategic measures have been implemented to control our production costs, however the increase in costs due to the major decline in the Ringgit has seriously impacted the cement division and the group’s profitability. If continued, this will not allow us to fulfil our long term commitment to the growth of the state.”

Additionally, CMS Cement has invested over RM56 million in the last six years to improve its pan-State distribution capabilities, including its two cement terminals in Miri and Sibu. This is further to the RM80 million invested in upgrading its clinker plant’s production capacity and to improve its operational efficiencies and production quality and to the latest investment of RM200 million in the 1 million mt cement grinding plant at Mambong outside Kuching, scheduled to be commissioned in the first quarter of 2016. This new plant will increase CMS Cement’s production capacity by over 60% and will enable projected growth in cement demand in the state to be met for many more years to come.

“CMS Cement’s commitment has and will always be to ensure the state’s vision of growth and development is realised. As one of the key local private sector investors in the Sarawak Corridor of Renewable Energy (SCORE) and a major supplier of construction materials and services in the state, we understand that we must ensure the Group’s various businesses are kept fully optimised in terms of meeting the state’s growing needs. Rest assured that this will never be compromised by us,” added Dato’ Richard.