Kota Kinabalu: Sabah government has dismissed claims that investors have backed out of the Tongod cement factory project, stating that all stakeholders remain committed to the development.
State Industrial Development and Entrepreneurship Minister Phoong Jin Zhe (PH-Luyang) said the project is still moving forward, despite recent assertions by Bung Moktar Radin (BN-Lamag) that it had stalled due to investor withdrawal.
“There is no investor withdrawal. All stakeholders are still on board with the project,” Phoong said.
He was responding to Bung’s remarks on Monday (April 14), where the Lamag assemblyman questioned the viability of placing a cement plant deep in the interior of Kawayoi Pinangah and suggested that one of the collaborating companies had withdrawn.
Phoong clarified that preliminary work at the site has already begun, with approval granted for earthworks, while full-scale construction is pending the green light for the Environmental Impact Assessment report.
The plant will be constructed by Sinoma Industrial Engineering (Malaysia) Sdn Bhd, a subsidiary of the world’s largest cement engineering firm. The project’s manufacturing licence was previously approved by the Malaysian Investment Development Authority and the Ministry of Investment, Trade and Industry in 2023.
He said the facility forms part of Sabah’s broader plan to reduce dependency on imported cement and to meet growing local demand, particularly for infrastructure and construction projects.
Addressing Bung’s separate concern about alleged logging at the site, Phoong said no fresh timber operations had taken place since 2023.
The 200-hectare project area is located within a forest concession held by Rakyat Berjaya Sdn Bhd and managed with Indah Serimas Sdn Bhd. Only previously felled logs—stok balak lama—are currently being cleared, he said, with confirmation from the Sabah Forestry Department.
Phoong defended the factory’s remote location, saying it was chosen for its proximity to essential raw materials such as limestone, shale, basalt and clay. He said the plant’s “mine-mouth” concept allows for on-site sourcing, reducing environmental impact and transportation costs.
“This approach helps us avoid the need to haul raw materials over long distances, which reduces strain on roads and infrastructure,” he said.
Once operational, the plant is projected to produce 1.75 million metric tonnes of cement each year, with 1.2 million metric tonnes to be sent to Cement Industries (Sabah) Sdn Bhd for packaging and local distribution. The remainder will be exported.
Phoong added that Borneo Cement (Sabah) Sdn Bhd and Cement Industries (Sabah) Sdn Bhd would not compete with one another, but instead work collaboratively, with the latter acting as the main off-taker of cement products.
He also noted that investors had already secured financial backing from development banks and were actively engaging with government agencies to ensure the provision of basic infrastructure such as water, electricity and roads.
On a separate matter, Phoong responded to a question from Sarifuddin Hata (Warisan-Merotai), who raised concern over the state’s plans for silica sand after noticing a RM7.5mil revenue projection listed in the 2025 state budget.
Phoong assured the assembly that there is currently no export of silica sand and that the figure was merely a forecast. He stressed that the state government has not approved any export activity and has no intention of doing so.
“We will not allow silica sand to be exported. Our priority is to process it in Sabah and generate high-value local industries,” he said.
He added that a state sales tax was imposed to regulate the resource, not to facilitate its export, and reiterated the government’s focus on keeping raw materials like silica sand in Sabah for downstream uses such as solar glass manufacturing.
