BornOil doubles stake in Sabah’s sole cement plant to 60%

Borneo Oil Berhad (BornOil) has increased its stake in Sabah’s sole integrated clinker and cement manufacturing plant (“ILPP”).

In an announcement to the stock exchange, the company said that the company yesterday (28 Oct 2022) had entered into a conditional share sale agreement with Global 2332 Ltd for the acquisition of a 30.73% equity interest in Makin Teguh Sdn Bhd (MTSB) for a purchase consideration of RM100 million cash.

BornOil had previously held a 29.27% equity interest in MTSB. With this latest development, MTSB will become a 60%-owned subsidiary of BornOil – resulting in the BornOil Group diversifying its principal activities to include the manufacturing and trading of clinker, cement and related products.

This development bodes well for the BornOil Group as 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).

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

According to estimates, 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.

There certainly 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 in Lahad Datu.

BornOil is today the largest private owner of limestone reserves of cement grade quality in Sabah and has heavily invested in the resource. This development has enabled the BornOil group to move downstream its quarrying resources to further boost the BornOil Group’s bottom line.

Previous articleCICM: CPTPP Ratification Will Boost Chemical Industry, Open Up Access To New Marts
Next articleAVM’s ‘Cloud-in-a-Box’ now in Generation 2 to offer ‘best of both worlds’ OPEX model

LEAVE A REPLY

Please enter your comment!
Please enter your name here