Friday 29 Mar 2024
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KUALA LUMPUR (Nov 29): Cahya Mata Sarawak Bhd (CMSB) is acquiring a 56% stake in Borneo Granite Sdn Bhd (BGSB) for RM31 million to solve the shortage of stone supply in the Pan Borneo Highway project.

CMS Resources Sdn Bhd (CMSR), a 51% owned subsidiary company of CMSB, had entered into a share sale and purchase agreement with Kasuma Resort Sdn Bhd (KRSB) for the acquisition.

CMSB said the acquisition will allow the company to secure a reliable and immediate source of granite stone for its existing projects and further expand its quarry operations.

"BGSB is well placed to benefit from other projects such as the pending implementation of coastal road and the second trunk road project by the State Government. In addition, more infrastructure projects are already in the pipeline to be implemented for the next two (2) years by the State Government through open tenders. These projects are expected to also create a huge demand for stones during the construction period even after the Pan Borneo Highway project," CMSB said in a filing with Bursa Malaysia.

In a separate statement, Goh Chii Bing, CMSB chief executive officer — operations, said: "The acquisition is a strategic investment by the group in a granite quarry located in the southern region of Sarawak, which is a very limited natural resource in the state. Granite is required in large quantities for the construction of the Pan Borneo Highway project and this investment positions CMSR as the key supplier of granite for this project."

"BGSB is targeting an annual production of one million metric tons. Combined with CMSR's second production line with an annual production output of 1.3 million metric tons at Sibanyis Quarry, we will see a significantly enhanced capacity expansion of CMSR's quarry operations. This is particularly timely as peak demand of stone materials for Pan Borneo Highway project is between 2019 [and] 2021, particularly the requirement to use granite stones for its premix wearing course," Goh added.

Shares of CMSB rose 12 sen or 3.73% to close at RM3.34, valuing the company at around RM3.52 billion. The counter saw 3.5 million shares traded today.

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