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RM1b phosphate plant for Sarawak
Published on: Saturday, January 04, 2014

PETALING JAYA: Cahya Mata Sarawak Bhd (CMS) is teaming up with several parties to build South-East Asia's first integrated phosphate complex in Samalaju, Bintulu at an estimated capital expenditure of RM1.04bil.

The integrated infrastructure development group said in a statement that the cost would be funded via a mixture of shareholders' equity and long-term bank-funded debt, which is in the midst of being arranged.

The integrated phosphate complex with an annual production capacity of about 500,000 tonnes of phosphate products will be located in the Samalaju Industrial Park (SIP) within the Sarawak Corridor of Renewable Energy (Score).

Group managing director Datuk Richard Curtis said the phosphate complex represented CMS' second investment in Score-located energy-intensive industries, and was of special significance in that it embodied two firsts.

"This complex is the first of its kind in Malaysia and indeed South-East Asia, and is the first non-metal or alloy-based plant in SIP, thus taking Score and CMS into a dynamic new industrial sector that offers long-term sustainable demand growth."

Curtis added that phosphorus was an essential base nutrient for animal and plant growth with no substitute and was widely used in food, feed and fertiliser products.

"Demand is growing due to population growth, changing dietary preferences and the increased use of fertilisers."

The group said on Bursa Malaysia that the project was to take advantage of the competitively priced long-term power supply prices and supporting infrastructure that have been successfully attracting other energy-intensive industries to SIP.

Construction of the complex is expected to start in the first quarter of this year and be operational in phases, beginning from the first quarter of 2016, and be fully commissioned by the second quarter of 2018.

It will employ nearly 1,000 skilled workers and other staff.

CMS has also entered into a shareholders' agreement with Malaysian Phosphate Venture Sdn Bhd, a wholly owned subsidiary of Malaysian Phosphate Additives Sdn Bhd, Arif Enigma Sdn Bhd and Malaysian Phosphate Additives (Sarawak) Sdn Bhd (MPA Sarawak) for the project.

The joint-venture company for the project is MPA Sarawak.

Under the agreement, MPA Sarawak will be 40% owned each by Samalaju Industries Sdn Bhd and Malaysian Phosphate Venture, and 20% by Arif Enigma.

Samalaju Industries is a wholly owned subsidiary of CMS.

Concurrently, MPA Sarawak has finalised the power purchase agreement (PPA) term sheet with Syarikat Sesco Bhd for the supply of the 150MW required.

The parties are expected to sign the PPA term sheet early this month, to be followed with a PPA between the parties, which is expected to be signed in the first quarter.

MPA Sarawak has also entered in a sale and purchase agreement with Samalaju Industries to purchase 142ha in SIP to be used for the complex.

The land is strategically located near the Samalaju deep-water port which is currently under construction.

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