Cahya Mata Sarawak (CMS), one of Sarawak’s largest public-listed conglomerates, began as a cement manufacturer in 1974. It has diversified into sectors such as building materials, construction, road maintenance, propertydevelopment, financial services and education. The company’s major shareholders linked to Sarawak Chief Minister Pehin Sri Haji Abdul Taib Mahmud’s family (42.7%) and Sarawak Economic Development Corp (8.2%). Given its dominance in Malaysia’s largest state, we expect CMS to play a crucial role in driving SCORE’s developments, where its involvement is via 51%-owned Samalaju Property Development (SPD) and a 20%-owned OM Materials Ltd plant.
Workers camp an eye-opener. We visited SPD‟s Samalaju Workers Camp and were shown around by its General Manager Mr. Goh Chii Yew. Touted as the best of its kind in Malaysia, the RM40m site now accommodates 5,000 people. The majority of these work with Tokuyama Corp, which has invested USD2.5bn in a polycrystalline silicon plant, to be built in two phases in Samalaju Industrial Park (SIP). Accommodation charges range from RM1,000 per month for a site worker to RM5,000 per month for an executive. Expansion plans are already in place to cope with rising demand from Tokuyama, which will need 8,000 workers at the peak of its construction cycle. Meanwhile, the construction progress at OM Materials‟ and AML‟s manganese ferroalloy plants is also gaining pace.
Best proxy to Samalaju’s property play. Tipped to be the master developer of the planned Samalaju township, SPD is currently looking at developing over 3,300 acres of land about 12km away from SIP. Although the project‟s GDV is not known for now, we understand that the construction of its first phase, done over 1,300 acres, will likely kick off next year. This township is targeted to have a population of at least 45,000 by 2018.
20% share in OM Minerals. CMS holds a 20% stake in OM Materials‟ proposed USD600m manganese ferroalloy plant in SIP, with the remaining 80% held by Australia‟s OM Holdings, one of the world‟s largest manganese ore producers. Upon completion, the plant is expected to produce 575,000mt of manganese and ferroalloy p.a. Site preparation works for the manganese and ferroalloy smelter is nearing completion and construction works will commence in 3Q12 with operations expected to come on-stream by 1Q14.
Workers camp an eye-opener. We visited SPD‟s Samalaju Workers Camp and were shown around by its General Manager Mr. Goh Chii Yew. Touted as the best of its kind in Malaysia, the RM40m site now accommodates 5,000 people. The majority of these work with Tokuyama Corp, which has invested USD2.5bn in a polycrystalline silicon plant, to be built in two phases in Samalaju Industrial Park (SIP). Accommodation charges range from RM1,000 per month for a site worker to RM5,000 per month for an executive. Expansion plans are already in place to cope with rising demand from Tokuyama, which will need 8,000 workers at the peak of its construction cycle. Meanwhile, the construction progress at OM Materials‟ and AML‟s manganese ferroalloy plants is also gaining pace.
Best proxy to Samalaju’s property play. Tipped to be the master developer of the planned Samalaju township, SPD is currently looking at developing over 3,300 acres of land about 12km away from SIP. Although the project‟s GDV is not known for now, we understand that the construction of its first phase, done over 1,300 acres, will likely kick off next year. This township is targeted to have a population of at least 45,000 by 2018.
20% share in OM Minerals. CMS holds a 20% stake in OM Materials‟ proposed USD600m manganese ferroalloy plant in SIP, with the remaining 80% held by Australia‟s OM Holdings, one of the world‟s largest manganese ore producers. Upon completion, the plant is expected to produce 575,000mt of manganese and ferroalloy p.a. Site preparation works for the manganese and ferroalloy smelter is nearing completion and construction works will commence in 3Q12 with operations expected to come on-stream by 1Q14.
Spill-over from SCORE projects. Although CMS is not actively involved in SIP‟s construction projects, we see potential growth for its cement, clinker and concrete products as well as its construction materials manufacturing divisions. It is the sole player in Sarawak for the former two industries and has a 60% market share in the latter. In view of the increasing demand, CMS has proposed building a new cement plant in Mambong by end-2014 and potentially, a second steel wires and mesh plant in Bintulu.
Source: OSK
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