Industrialised building systems specialist, Sarawak Consolidated Industries Berhad (“SCIB”) announces that its subsidiary, SCIB Holdings Sdn. Bhd., has entered into a conditional Share Sale and Purchase Agreement (“SSPA”) with YTL Cement (Sarawak) Sdn. Bhd. for the proposed disposal of 100% equity interest in SCIB Concrete Manufacturing Sdn. Bhd. (“SCM”) for RM113.0 million. This amount aligns with YTL Cement Sarawak’s previous offer made on 2 October 2025.
The transaction involves the sale of 18,581,702 ordinary shares in SCM, which will be transferred free from encumbrances. Approval from SCIB shareholders at an Extraordinary General Meeting is required for the proposed disposal.
SCIB had previously entered into the following agreements with SCM:-
(i) tenancy agreement dated 1 July 2025 between SCIB and SCM for the tenancy by SCM of 2 parcels of land measuring a total of 5.297 hectares located in Demak Laut Industrial Park, Kuching, which are owned by SCIB and are where SCM’s existing factories are erected thereon (“Lot 1166 and Lot 1541”) (“Tenancy Agreement”); and
(ii) right to build and operate agreement dated 1 March 2025 between SCIB and SCM in relation to 5 parcels of land owned by SCIB measuring a total of 8.8544 hectares located in Demak Laut Industrial Park, Kuching, which are owned by SCIB and are where a new factory is intended to be constructed thereon by SCM for its manufacturing operations (“Lot 787-791”) (“Right to Build and Operate Agreement”).
Under these agreements, SCIB has granted SCM irrevocable Options to Purchase 7 parcels of land at pre-agreed prices for up to 30 years. Lot 1166 and Lot 1541 total RM24.0 million, with adjustments per the Tenancy Agreement. Lots 787 to 791 total RM14.19 million, with adjustments based on the Right to Build and Operate Agreement. SCM has also granted SCIB an Option to Sell the lands at the same prices, supporting SCIB’s asset realisation strategy. The total potential value, including the Disposal Consideration of RM113.0 million and land values, is RM151.19 million, enhancing SCIB’s financial flexibility for Construction and EPCC projects.
The agreement also formalises SCIB’s intent to divest its Manufacturing Business, focusing on Construction and EPCC. The Disposal Consideration offers a premium of 14.77% over SCM’s latest net assets of RM98.46 million (30 June 2025) and 26.91% over RM89.04 million (30 June 2024). The Proposed Disposal is estimated to generate a gain of RM11.29 million, strengthening the Company’s net assets and earnings shortly.
Datuk Chong Loong Men, Executive Chairman of SCIB, commented, “This strategic initiative marks an important milestone in SCIB’s long-term transformation. The divestment of our manufacturing arm unlocks significant value for the Company and will place SCIB in a stronger financial position with a net cash balance and lower gearing. With increased financial flexibility, we will be able to sharpen our focus on scaling our Construction and EPCC business and pursue higher-quality projects that deliver greater value creation for our stakeholders.”
Moving forward, SCIB will use the proceeds mainly for funding ongoing and future construction and EPCC projects, as well as to bolster working capital and operational capacity. The construction and EPCC segment sees promising opportunities, notably from public infrastructure development and state-led initiatives, especially driven by the Sarawak State Government’s development plans. As a local player with established capabilities, SCIB is positioned to engage in these projects.
SCIB is dedicated to disciplined execution, prudent financial management, and sustainable growth in its strategic realignment.