PETALING JAYA: Malayan Cement Bhd will be closing its cement plant in Rawang for a three-year period for refurbishment purposes.
According to a circular that was sighted by StarBiz, this refurbishment would allow the company to carry out crucial upgrades to its Rawang plant.
“The decision to rejuvenate the 70-year-old Rawang plant - the oldest cement plant in the nation - and restore it to its past glory is a business decision made after careful consideration and detailed analysis, ” the company said in the circular.
Sources said the company has continued to view the plant as a long term investment decision and that the closure was only for the time being.
“It is a long term view being taken here to reinvest and bring more efficient technologies and also introducing a more green and sustainable factory in Rawang, ” the source said.
The circular said that the decision to close the Rawang plant was made in February before Covid-19 was declared a global pandemic by the World Health Organisation.
This intention had also been conveyed to the Cement Industry Employees’ Union (CIEU), the circular added.
To facilitate the upgrade works, the company said in the circular that it had consulted with the Human Resources Ministry and had submitted the retrenchment notification form to the government on March 13.
“In carrying out this retrenchment exercise, the company had communicated with the CIEU and also consulted the Human Resources Ministry for extra assurance. In compliance with the law and the collective agreement (CA) in force between the company and the CIEU, the company has issued the notices of retrenchment to employees, ” it said.
It added that each and every affected employee of the company will be paid a severance sum due according to the laws of the land and under the CA.
The Rawang plant is one of three of Malayan Cement’s integrated cement plants that it owns in the country.
The company’s other two integrated cement plants are located in Langkawi and Kanthan, Perak.
Malayan Cement, which was previously known as Lafarge Malayan Cement, is now 77% owned by YTL Corp Bhd following YTL’s acquisition of LafargeHolcim Ltd of Switzerland’s majority stake one year ago.
In a report last month, RHB Research said Malayan Cement will reap significant synergistic benefits from its ongoing integration with YTL Cement Bhd.
It noted that the company could see a sharp earnings rebound in the second half of this year on recovering average selling prices and a decline in key input costs.
RHB Research has a “buy” rating and a target price of RM3 on Malayan Cement.
Malayan Cement shares last closed at RM2.80 on Friday.