Sarawak’s phosphate complex to start ops in 4Q


CMS group managing director Datuk Seri Sulaiman Abdul Rahman Taib said the delays in commissioning the MPAS complex had persisted throughout 2021 due to the pandemic, the unavailability of foreign workers as well as supply chain disruptions.

KUCHING: Malaysian Phosphate Additives (Sarawak) Sdn Bhd (MPAS) is expected to commence the first phase production of its integrated phosphate complex project in Samalaju Industrial Park, Bintulu in fourth quarter of 2022 (4Q22).

The project, which was originally scheduled for completion by 2020, has been delayed due to issues related to the Covid-19 pandemic.MPAS is a joint-venture company following a strategic alliance between Samalaju Industries Sdn Bhd – a wholly-owned subsidiary of Cahya Mata Sarawak Bhd (CMS) –Malaysia Phosphate Ventures Sdn Bhd and Arif Enigma Sdn Bhd.

CMS group managing director Datuk Seri Sulaiman Abdul Rahman Taib said the delays in commissioning the MPAS complex had persisted throughout 2021 due to the pandemic, the unavailability of foreign workers as well as supply chain disruptions.

“We have taken proactive measures to commission the plant and we target for the commissioning and trial operations of the furnaces to take place by mid-2022,” he added in the company’s 2021 annual report.

Under phase one, three plants, namely yellow phosphorus, technical phosphoric acid and food grade phosphoric acid, with an annual capacity of 48,000 tonnes, 75,000 tonnes and 60,000 tonnes respectively were originally scheduled for completion by end-financial year 2020.

However, CMS said construction works for the integrated complex slowed as a result of the multiple lockdowns throughout 2020 and 2021. Apart from delays in equipment delivery, this was further compounded by strict border closures that prevented Chinese technical and commissioning specialists from entering Malaysia.

“There were also occasions where on-site plant pre-commissioning activities had to be suspended due to the development of Covid-19 clusters. In the second half of 2021, 44 workers were tested positive for Covid-19 and underwent quarantine which resulted in the closure of the site for over 10 weeks. Overall, the pandemic had resulted in an excess of 10 months delay to MPAS’ project execution,” the company said.

The commissioning of the first yellow phosphorous furnace began in July 2021 but works were temporarily put on hold to allow the team to carry out certain modifications and rectifications which were typical of a new plant.The sourcing of new raw materials continued to progress but at a slower rate due to the backlog experienced in global logistics, particularly for sea freight. This was due to countries slowly relaxing their Covid-19 restrictions and the reopening of trade borders,” the company said in its operational review report.

CMS said although the issues are being addressed expeditiously, the situation is expected to spill over to 1Q22. Subject to the delivery of additional raw materials, the targeted date for the commissioning and trial operations of the furnaces is mid-2022. MPAS has engaged a globally-recognised phosphate consulting firm to assist in the sourcing of new raw materials and in other areas to expedite the generation of revenue stream for the project. “From a market perspective, the outlook (for MPAS) is very promising. Since the last quarter of 2021, global prices of yellow phosphorus almost doubled as a result of the Chinese government imposing restrictions on energy-intensive industries, such as yellow phosphorus plants are are currently powered by fossil fuels. This shift is part of China’s pledge to be carbon neutral by 2060.

“MPAS is well-positioned in this regard as the plant is the only one in the world that is entirely powered by renewable hydroelectric energy. The company believes that prices of yellow phosphorus will continue on an upward trajectory once a new equilibrium is established as more plants that rely on fossil fuels are forced to reduce their operating capacity,” said CMS.

MPAS integrated phosphate complex, which is the first of its kind in Malaysia, is slated for two-phase development.

CMS’s investment in MPAS represents one of the two major strategic investment in Sarawak corridor of renewable energy. The other investment is in joint-venture OM Materials (Sarawak) Sdn Bhd (OM Sarawak), which owns and operate a ferroalloy smelting plant, also in Samalaju Industrial Park. OM Sarawak is a 75:25 joint venture between OM Holdings Ltd and CMS.

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