Cahya Mata’s Clinker Line 2 to boost output, cut imports as demand rises; phosphate and oil tools units show growth - Borneo Post Online (2025)

KUCHING (April 23): Cahya Mata Sarawak Berhad’s (Cahya Mata) upcoming Clinker Line 2 has received all necessary approvals at both the domestic and Sarawak levels, with only federal Department of Environment (DOE) clearance pending resubmission for clarification, said analysts from MIDF Amanah Investment Bank Bhd (MIDF Research).

This was confirmed during a meeting between MIDF Research analysts and Cahya Mata management on Tuesday.

Once operational, analysts said Line 2 will eliminate the need for clinker imports, currently sourced from Vietnam, and increase output capacity from 1.7 million to 2.75 million tonnes.

If both lines run concurrently, total output could reach 3 million tonnes.

“Once Line 2 comes online, Cahya Mata will become fully self-sufficient in clinker supply, with the flexibility to shut down Line 1 intermittently while maintaining stable production volumes.

“The new line is designed with green features including up to 6.0MW in heat recovery systems and an advanced dust filtration system which would reduce emissions by up to 50 per cent aligning with Cahya Mata’s broader ESG commitments,” it said.

It added that Cahya Mata has engaged Sinoma Industry Engineering (M) Sdn Bhd for plant maintenance and has helped boost production through operational efficiencies.

According to management, cement demand is expected to exceed 1.7 million tonnes in the coming years, driven by a flurry of state-backed infrastructure projects.

“Among these are the ongoing development of the Autonomous Rapid Transit (ART) system, a new industrial factory requiring cement supply, and a naval base, which will add moderate but consistent demand.

“Management also shared that several other major projects are in the pipeline across Sarawak, reinforcing expectations that Cahya Mata’s order book will remain healthy in the coming quarters.

“Medium-term projections point toward volumes exceeding 2 million tonnes as these developments gather pace,” it said.

Addressing concerns about cheaper imported construction materials due to U.S.-China trade tensions, MIDF Research said Cahya Mata remains confident in its competitiveness.

“Cahya Mata expects its new clinker line to make it cost-competitive, with limited risk from import-driven price pressures. Fears of cheap material dumping were dismissed,” it said.

Cahya Mataalso confirmed it has no exposure to the US market – no revenue, exports, or projects are linked to the US – shielding it from the direct impact of tariffs.

Meanwhile, the group’s phosphate plant has entered the sellable commissioning phase.

All four furnaces are now operational, processing raw material and producing goods that meet commercial purity standards. This has already contributed to revenue recognition in the fourth quarter of FY24, MIDF Research said.

Although arbitration with its energy partner remains unresolved, management is optimistic that an agreement will be reached in the coming months.

“Once stabilised, they expect product purity to match levels seen in China’s leading plants. The end products are targeted for export to Japan, Korea, and Russia, with Russia identified as a particularly high-potential market due to ongoing supply constraints,” it said.

Cahya Mata’s Oiltools segment, once under financial strain, has also stabilised and is regaining momentum. Positive developments have been seen in Indonesia, the Middle East, and Russia.

In Indonesia, Cahya Mata is actively working with Pertamina, which remains the segment’s key revenue driver.

Meanwhile, the exit of Western players from Russia has created additional headroom for Cahya Mata’s Oiltools unit to scale further.

“The Federal Government have expressed satisfaction with Cahya Mata’s Russian involvement and are hopeful that phosphate trade will follow suit to deepen bilateral commercial ties,” it said.