Lafarge Expects Revenue To Rise Over Five Pct This Year


31 May 2008


SUBANG JAYA: Lafarge Malayan Cement Bhd expects revenue growth of 5% to 10% for the year ending Dec 31, senior vice-president for sales Mah Poon Keat said.  He said the company's sales were not affected despite delays in the Ninth Malaysia Plan projects, adding that it expected cement revenue to expand by more than 5% this year.  "So far we are on track based on sales since the beginning of the year," Mah told reporters after a talk on Lafarge's latest products yesterday.


"Of course, cement demand would be affected if the Government halts mega projects such as the Ipoh-Padang Besar electrified double-track project," he said.


Mah said the company's latest bulk cement product, Mascrete Pro, soft-launched last year, would also boost sales.  "Sales of this product have been very encouraging and now comprises 25% of our bulk cement sales,'' he said. "Based on the response, Mascrete Pro could be our predominant product, comprising 50% of our bulk cement sales within three years."


Mah, however, voiced concern about the impact of cement's ceiling price on the industry and appealed to the Government to implement the automatic price mechanism (APM) or liberalise controls on the price and imports.


"The cement price was last increased by 10% in December 2006 and before that in 1995. However, from 1995 to end-2007, the industry's cost of production had increased by about 60%, hence lifting the price controls would help the industry tremendously," he said, adding that the price of coal had doubled over the past year.


He said coal was at very high price levels currently and might not rise further this year.  "We have secured the contract for coal supply for the whole of this year," he said.


To mitigate the effects of the rising coal price and also as a voluntary initiative to reduce carbon dioxide emissions, Lafarge's plants in Rawang (Selangor) and Kanthan (Perak) had substituted coal with palm kernel shells, a biomass alternative.


Palm kernel shells now account for over 5% of the energy used in cement production. As a result, carbon dioxide emissions have been reduced by more than 60,000 tonnes a year, equivalent to planting four million trees a year.