KUALA LUMPUR (Feb 14): Cahya Mata Sarawak Bhd (CMS) said its wholly-owned subsidiary, CMS Cement Industries Sdn Bhd, will raise its price of cement by an average of 10% subject to product types and location.

The price revision effective Thursday (Feb 17) is due to significant and sustained rising cost of raw and packaging materials and freight charges, CMS said in a statement.

Noting that cement production cost has increased by an average of 9% over the past year, CMS expects the upward trend to continue in view of the current macro-environment.

The group added that its subsidiary has been absorbing cost increases over the last six years as there has been a steep rise in global dry bulk freight rates, with the benchmark Baltic Dry Index rising 64% in 2021.

The sack kraft paper index, meanwhile, has risen by 33% during the same period, which in turn has increased packaging costs for the cement industry.

Following the price adjustments, CMS said the average unit price of cement in Sarawak remains competitive compared with other regions in Malaysia, especially now as prices of cement in both Sabah and Peninsular Malaysia have been increasing over the last several months.

“As a further comparison, the prices of other building materials such as steel have also surged across the board since January 2021.

“The Building Materials Cost Index (BCI) has increased by 2.3% in Peninsular Malaysia, while the BCI saw increases of 2.1% and 1.5% in Sabah and Sarawak respectively during this period,” it said.

CMS shares were last traded at RM1.25, giving the group a market capitalisation of RM1.34 billion.

Source: EdgeProp,  February 14, 2022