Malaysia Cement Industry Report - H1, 2013

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Malaysia Cement Industry Report - H1, 2013

The cement industry is one of the strategic industries of Malaysia. It acts as the feeder to several other industries like real-estate, construction and infrastructure. The industry witnessed a period of subdued growth during 2006-2010. However, cement consumption has grown in the last two years owing to the development of key infrastructure projects under the 10th Malaysia Plan and Economic Transformation Programme (ETP).

The recent growth in demand for cement is driving companies towards capacity expansion. By the end of 2013, the total installed capacity in Malaysia is expected to increase by around 25%. Many companies have commissioned new projects for enhancing their existing capacity. Around 80% of cement produced in Malaysia is consumed by the domestic market itself and the remainder is exported. Indonesia, Singapore and Sri Lanka are the major export destinations. Annual cement consumption recorded a growth of more than 5% year on year in 2012 backed by strong demand arising from residential and civil construction sectors.

The outlook for the Malaysian cement industry is positive backed by stable domestic demand and government support for infrastructure development under the 10th Malaysia Plan and ETP. The major challenges in front of the Malaysian cement industry are rising fuel prices and rising transportation costs. The industry will also have to meet global pollution and emission standards which will take considerable amount of investment.

Key Points:

• The Malaysian government has allocated MYR 230bn for development expenditure under the 10th Malaysia Plan (2011-2015). The government has decided to invest substantive portion of the amount in developing infrastructure across the country.

• The recent growth in demand for cement is driving companies towards capacity expansion. By the end of 2013, the total installed capacity in Malaysia is expected to increase by around 25%. West Malaysia leads in terms of integrated production capacity accounting for around 90% of the existing capacity while East Malaysia accounts for 10%.

• During 2006-2010, the annual cement consumption in Malaysia was stagnant and grew at a CAGR of only 0.5%. However, the industry has witnessed a steep demand recovery in the last two years. In FY12, the consumption grew by 5.9% year on year after growing by 6.3% y/y in FY11.

• Rise in cement demand has also led to increased imports of cement in the country. The ratio of imports as a percentage of total consumption rose to 20% in FY12. The major portion of imports predominantly came from China.

Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-Malaysia
2.2 Installed capacity
2.3 Cement production
2.4 Cement consumption
2.5 Cement trade
2.6 Cement prices
2.7 Construction trends
2.8 Infrastructure spending
2.9 Industry forecast

3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 Lafarge Malayan Cement Berhad
3.1.3 Tasek Corporation Berhad
3.1.3 Cahya Mata Sarawak Berhad (CMS)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables & Charts

Table 1: Key infrastructural thrust areas of 10th Malaysia Plan
Table 2: World cement consumption statistics
Table 3: Integrated cement plants in Malaysia
Table 4: Balance sheet parameters
Table 5: Valuation matrix

Chart 1: Per capita cement consumption trend in Malaysia
Chart 2: Breakup of world cement production by countries
Chart 3: Market share of Malaysian cement companies
Chart 4: Growth rate of Malaysian cement industry
Chart 5: Major political parties in Malaysia by percentage of seats in parliament
Chart 6: GNI per capita
Chart 7: Quarterly GDP growth rate-Malaysia
Chart 8: Average monthly USD to MYR exchange rate
Chart 9: Y/Y change in inflation indices-Malaysia
Chart 10: Benchmark interest rate-Malaysia
Chart 11: Market share in terms of installed capacity
Chart 12: Total annual cement production
Chart 13: Total annual cement consumption in Malaysia
Chart 14: Annual cement demand as a ratio of domestic production
Chart 15: Cement exports from Malaysia
Chart 16: Cement imports in Malaysia
Chart 17: Price of a 50 kg bag-Ordinary Portland Cement
Chart 18: Operating margins of cement producers
Chart 19: Y/Y growth-Construction sector
Chart 20: Y/Y growth-Residential construction
Chart 21: Y/Y growth-Civil construction
Chart 22: New projects awarded-Annual
Chart 23: Forecast for cement consumption in Malaysia
Chart 24: Lafarge Malaysia-Shareholding
Chart 25: Annual revenues of Lafarge Malaysia
Chart 26: Profit margins of Lafarge Cement
Chart 27: Tasek-Shareholding
Chart 28: Annual revenues of Tasek
Chart 29: Profit margins of Tasek
Chart 30: Debt to EBIDTA ratio of Tasek
Chart 31: CMS-Shareholding
Chart 32: Revenue by segments-CMS
Chart 33: Annual revenues of CMS Cement Sdn Bhd
Chart 34: Profit margins of CMS

Number of pages: 30
Release Date: Fri, 30 Aug 2013