BornOil launches Sabah’s sole cement plant due to strong demand

Borneo Oil Berhad (BornOil) recently hosted a ‘firing up ceremony’ to mark the commencement of Sabah’s sole integrated clinker and cement manufacturing plant (“ILPP”) located in Lahad Datu.

This development is the result of BornOil’s recent acquisition of a thirty per cent stake in Makin Teguh Sdn Bhd (MTSB) which owns the ILPP, and which is in the business of manufacturing and trading of clinker, cement and related products.

BornOil executive director Datuk Joseph Ambrose Lee (left pic above) said that the outlook for Sabah’s clinker and cement industry is favourable given the high cement prices in Sabah and the ILPP’s proximity to the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).

“The already high price of cement in Sabah has been made worse in recent months due to the drastic increase in logistics costs and fluctuation in foreign exchange rates,” said Ambrose.

“The commencement of operations of Sabah’s only ILPP is a timely one as our beloved state can no longer afford to rely on 100% imported clinker and cement.”

Currently, there are 12 integrated clinker and cement plants in Malaysia of which 11 are in West Malaysia and 1 in Sarawak.

Sabah has an annual demand of between 1.2 million to 1.4 million metric tons of cement per year.

“These numbers do not include the future development projects planned on the East Coast of Sabah, and the demand in the BIMP-EAGA region with close proximity to the east coast of Sabah,” said Ambrose.

He also explained that there are strong synergies between BornOil’s existing limestone quarrying business operations and the ILPP, among which include the ILPP being situated adjacent to BornOil’s limestone quarry lands.

BornOil is today the largest private owner of limestone reserves of cement grade quality in Sabah and has heavily invested in the resource.

MTSB has also entered into a long-term supply contract for limestone with BornOil’s subsidiaries on the current stockpile and overburden waste from existing quarrying operations to supplement the ILPP’s initial limestone feedstock requirements.

This development has enabled the BornOil group to move downstream its quarrying resources to further boost profits, said Ambrose.

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