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YTL Cement acquires a further 32.74% stake in Perak-Hanjoong Simen

   

Kuala Lumpur, 5 November 2004

YTL Cement Berhad (YTL Cement) announced today that it had entered into a sale and purchase agreement to acquire a further 32.74% stake in Perak-Hanjoong Simen Sdn Bhd (Perak-Hanjoong) for a total cash consideration of RM109.7 million (US$28.87 million) from Danaharta Managers Sdn Bhd.

Earlier in the year, on 16 July 2004, YTL Cement announced that it had entered into sale and purchase agreement with Doosan Heavy Industries & Construction Co. Ltd. (DHI) of Korea,? to acquire a 32.10% stake in Perak-Hanjoong, for a total cash consideration of RM75.3 million.

Upon completion of these acquisitions, Perak-Hanjoong will become a 64.84% subsidiary of YTL Cement and this will enable YTL Cement to consolidate the earnings and control the management and operations of Perak-Hanjoong.

YTL Cement Managing Director, Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping said, “These acquisitions will enable YTL Cement to expand our presence nation-wide, as well as augmenting the Group’s access to new markets regionally. The Group has capitalised on the efficiency of its logistics and distribution networks and the quality of its products to build up a strong and loyal customer base, and sees a solid opportunity to expand this blueprint to include new acquisitions.?The addition of Perak-Hanjoong to the Group is expected to complement our core business activities and consolidate the YTL Cement Group’s position in the cement market. We remain optimistic about the prospects of the cement industry both in the immediate and long term future.”


   

The proposed acquisitions are a natural extension of YTL Cement’s development and expansion process, well in line with its policy of pursuing viable opportunities as they arise, to enhance its operations in niche markets. The investment in Perak-Hanjoong is an opportunity to acquire an operating asset that has garnered substantial market share in a competitive industry, thereby enabling YTL Cement to further develop and expand its presence and market share in the cement industry.

Perak-Hanjoong is the second largest integrated cement producer in the country with a 16% share of the domestic cement and clinker markets. Operating two plants located in Padang Rengas, Perak, Perak-Hanjoong has a plant capacity of 3.0 million metric tonnes (MT) per annum for clinker and 3.4 million MT per annum for cement, both of which are manufactured for local and export markets. The company also has a cement depot and packing plant in Batu Caves, with an annual capacity of 600,000 MT. Perak-Hanjoong’s products are marketed under the trade name “Camel”.

Upon completion of these acquisitions, YTL Cement will hold 64.84% equity interest in Perak-Hanjoong. Pursuant to Part II of the Malaysian Code on Take-Overs and Mergers, 1998 (Code), YTL Cement will be obliged to undertake a mandatory take-over offer to acquire the remaining shares in Perak-Hanjoong it does not already own upon completion of the acquisitions.


   

Information on Perak-Hanjoong Simen Sdn Bhd

Perak-Hanjoong is principally involved in the manufacture and sale of cement and clinker for local and export markets, with a current plant capacity of 3.0 million MT per annum for clinker and 3.4 million MT per annum for cement.

Perak-Hanjoong currently operates two plants situated in Padang Rengas in Perak Darul Ridzuan.  Plant 1 is located on an 82-acre site at the foot of a limestone range outside Padang Rengas and was completed in October 1986 on a turnkey basis by DHI, with commercial production commencing in April 1987. Plant 1 has cement and clinker production capacities of 1.6 million MT per annum and 1.4 million MT per annum respectively.

Perak-Hanjoong subsequently embarked on an expansion programme to increase its production capacity through construction and installation of a second cement plant (Plant 2), adjacent to the existing plant. DHI was also the contractor for Plant 2. Plant 2 was completed and commenced commercial operations in the second half of 2002, with a production capacity of 1.8 million MTN per annum for cement and 1.6 million MT per annum for clinker.

Perak-Hanjoong’s market share for 2003 was 16% based on its clinker and cement sales, making it the second largest integrated cement producer in the country.


   

Information on YTL Cement Berhad 

YTL Cement Berhad is one of the nation’s largest producers of ready-mixed concrete and operates cement and slag grinding facilities in key locations, West Port, Port Klang and Pasir Gudang, Johor. YTL Cement also owns a 100% stake in Pahang Cement Sdn Bhd, the only integrated cement plant located in the eastern corridor of Peninsula Malaysia. 

YTL Cement has also won a number of awards for its commitment to a long-standing policy of enhancing shareholder value, such as the Smart Investor–KPMG Malaysia Annual Shareholders’ Value Award and the Forbes Global 200 Best Under a Billion companies.

The YTL Cement Group contributes significantly to the industry’s infrastructure and construction works. These include several large scale projects such as the Express Rail Link, roadbuilding works, bridges, infrastructure works, port facilities, residential housing projects and hospitals. 

The Group’s renowned range of products and brand names include Slagcem, SRC (sulphate resisting cement), Marinecem, Orang Kuat and Dragon.


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