Displaying items by tag: Lafarge Malaysia
Lafarge Malaysia railway supply contract suspended
13 July 2018Malaysia: A US$70m contract with Lafarge Malaysia to supply cement for the East Coast Rail Link project has been suspended by China Communications Construction pending a government review. The deal was originally announced in March 2018. The cement producer said that the suspension is not expected to have any significant financial impact its operations in the period up to the suspension, as completed work shall be compensated for in accordance with the terms and conditions of the contract. However, going forward the company could not rule out any negative financial impact following the government review of the project.Lafarge Malaysia railway supply contract suspended
Malaysia: Lafarge Malaysia has appointed Mario Bastian Gross as its chief executive officer (CEO). He will take up his new post on 1 April 2018. He succeeds Thierry Legrand who has been in post since mid-2015.
Gross, a German national aged 39 years, joins Lafarge Malaysia from Sika. He started his career with Sika in 2000 and has global experience with roles across Germany, China, Thailand and Switzerland. He was Asia Pacific Head of Procurement from 2007 to 2011, after which he was appointed Managing Director of Sika in Thailand. In 2013, he took the role Head of Global Procurement, Quality & Sustainability of Sika based in Switzerland.
He holds an MBA from the University of Strathclyde in the UK and a Bachelor of Economics from the VWA Koblenz in Germany.
Malaysia: Lafarge Malaysia has won a US$68.9m contract from China Communications Construction to supply cement for the East Coast Rail Link project. The contract will run until the end of 2019 with options for renewal by a further two years.
Mario Gross appointed head of Lafarge Malaysia
14 March 2018Malaysia: Lafarge Malaysia has appointed Mario Gross as its president and chief executive officer (CEO) from 1 April 2018. He succeeds Thierry Legrand, according to the Business Times newspaper. Gross, aged 39 years, holds 15 years of experience in the building materials industry, with roles in Germany, China, Thailand and Switzerland. He joins Lafarge Malaysia from Switzerland’s Sika.
Lafarge Malaysia faces clean-up costs after accidental dust discharge
19 September 2016Malaysia: Lafarge Malaysia is facing clean-up costs following the release of dust from its Langkawi cement plant on 12 September 2016. Dust from the plant was accidentally released due to repair work on a clogged processing unit. It was then blown by the wind to three nearby villages comprising around 1000 houses, according to the Free Malaysia Today newspaper. Management at the plant has apologised for the incident and has agreed to cover the cost of the clean up.
Lafarge Malaysia profits slump due to weak markets but plant expansions set to cut clinker transport costs
06 September 2016Malaysia: Lafarge Malaysia Bhd's management has said that for the first half ended June 30 2016, core net profit was down 69.4% mainly due to lower cement revenue (-5.3%) due to weaker demand for cement on the back of a slowdown in the property market and delay in the commencement of mega projects such as KL118 Tower project, Tun Razak Exchange; Holcim 'synergisation' costs of about US$4m and a higher effective tax rate (+13.8%) from lower capital allowances.
Management expects the effective tax rates to be normalised in the 2017 financial year from capital allowances from its newly-commenced Rawang (Selangor) and Kanthan (Perak) plants expansions.
With the new capacity expansion in the Rawang and Kanthan plants commencing in March and April 2016 respectively, management revealed that this would provide savings in overall transportation costs as clinker is no longer required to be delivered from Langkawi (Kedah) to its grinding units in Pasir Gudang (Johor) which can now be delivered from Kanthan instead - which is approximately half the travelling distance.
Malaysia is due to see an increase in overall cement production capacity of 13% in 2016 due to the completion of expansion projects and the weak market is expected to become tougher-still. Besides looking out for further cost-saving avenues, Lafarge Malaysia is also looking for differentiation in this competitive market through higher investment in dry-mix cement and strengthening of its brand name through more aggressive marketing.
Lafarge Malaysia’s profit plunges 72%
24 May 2016Malaysia: Lafarge Malaysia, part of LafargeHolcim, saw its net profit fall by nearly 72% to US$5m in the first quarter of 2016, from US$17.9m in the same period a year earlier. It reported lower contributions from its cement segment, following prolonged price competition. The one-off costs of integrating Holcim Malaysia within the company also affected earnings. Lafarge Malaysia’s quarterly revenue slipped by 3.8% to US$162m from US$168.8m in the first quarter of 2015.
Lafarge Malaysia buys Holcim
23 November 2015Malaysia: Lafarge Malaysia Bhd has bought Holcim Sdn Bhd from PT Holcim Indonesia in a deal worth US$71.2m.
"With this merger, our installed cement capacity will rise to 14.1Mt/yr from 12.9Mt/yr through the combined strength of three integrated cement plants, two grinding stations, over 40 ready-mix concrete batching plants and six aggregate quarries," said Lafarge in a statement. Lafarge Malaysia has now become part of LafargeHolcim.
Lafarge Malaysia profit jumps by 28% to US$16m in third quarter
19 November 2015Malaysia: Lafarge Malaysia has seen its profit rise by 28% year-on-year to US$16m for the third quarter of 2015. The boost has been attributed to higher sales revenue from its cement segment, improved plant performance, and higher foreign exchange gains. Overall revenue grew slightly to US$155m for the quarter. Lafarge Malaysia commented that the outlook for the construction sector remains positive in 2015.
Malaysian cement producers cope with a currency slide
28 October 2015A common refrain in the notes accompanying multinational corporate balance sheets are the adverse effects of currency exchange rates. So it goes this week with separate complaints from the Cement and Concrete Association of Malaysia and ARM Cement in Kenya. In Malaysia its local currency, the Ringgit, has fallen in value by 24% against the US Dollar since January 2015. The fall has been blamed on low prices for crude oil and for other commodities such as palm oil.
For the cement industry this is creating problems due to imported key inputs such as a coal and gypsum that are paid for in US Dollars. Similarly, clinker imports have risen by 20% as part of the same effect. The government hopes that infrastructure projects will prop up the construction sector for the time being. Local market leader Lafarge Malaysia has concurred with this cautiously. However, it is right to be realistic about the situation, as the problems with the falling value of the Ringgit seem to be reflected in its financial results.
Lafarge Malaysia has seen its revenue fall by 2.5% year-on-year to US$318m for the first six months of 2015 from US$326m for the same period in 2014. Net profit has fallen by 9% to US$32m. This follows a 3.8% year-on-year fall to US$640m for 2014 as a whole compared to US$666m in 2013. The drop in revenue was partly blamed on lower cement prices, aggravated by higher operating costs arising mainly from the increase in input and delivery costs. It also fits with the start of the fall in value of the Ringgit compared to the US Dollar since around the middle of 2014. Lafarge Malaysia's first half-year results in 2014 saw rises in revenue and net profit.
Lafarge Malaysia is far and away the market leader in cement production capacity in the country with a production capacity of 12Mt/yr, giving it a market share of nearly half the country's total capacity of around 25Mt/yr. However, it isn't the only cement producer struggling at present. YTL Corporation reported a 12.7% drop in revenue to US$3.85bn for its financial year that ended on 30 June 2015. Net profit fell by 31% to US$257m. Although the company operates across many business sectors, it too partly blamed the losses on its cement sector. This followed gains in profit, bolstered by its cement business, in the financial year that ended on 30 June 2014.
By contrast Cahya Mata Sarawak (CMS) Cement has benefitted from a construction boom in Sarawak state on the island of Borneo, a region separate from the rest of the country. On-going work on the Pan Borneo Highway has helped sales with other projects on the way. The sole producer with an integrated cement plant in the state ordered a cement grinding plant from Christian Pfeiffer in 2014 with commissioning planned for early 2016. It will be the company's third grinding plant in the state.
The effects of currency depreciation can be seen starkly in the financial results of Lafarge Malaysia and YTL Corporation. Infrastructure spending offers one route out of this as Lafarge are hoping and CMS Cement are experiencing in the relative isolation of Sarawak. However, a sustained low price of oil will test this even for a diversifying economy like Malaysia's. Cement producers in other oil producing nations should take note.