KUCHING: Sarawak Consolidated Industries Bhd (SCIB) and its wholly-owned subsidiary, SCIB Holdings Sdn Bhd, have signed a conditional share sale and purchase agreement (SSPA) with YTL Cement (Sarawak) Sdn Bhd for the proposed disposal of SCIB Concrete Manufacturing Sdn Bhd (SCM) for an indicative cash consideration of RM113 million.
SCM, a 100 per cent-owned unit of SCIB Holdings, is principally involved in trading construction materials and manufacturing precast concrete pipes, prestressed spun piles and related products.
The disposal would see SCIB exit its manufacturing business and refocus on its construction, engineering, procurement, construction and commissioning (EPCC), and project management operations, the group said in its filing with Bursa Malaysia.
YTL Cement Sarawak is a wholly-owned subsidiary of YTL Cement Bhd, which in turn is 96.11 per cent controlled by YTL Corporation Bhd.
SCIB currently leases land in the Demak Laut Industrial Park, Kuching, to SCM for its manufacturing plant.
On March 1, 2025, both parties also entered into a “right to build and operate” agreement involving five adjoining parcels where SCM has commenced construction of a new factory. Under a July 1, 2025 tenancy agreement, SCIB granted SCM an irrevocable option to purchase the land.
Following the proposed disposal, SCIB and SCM executed a supplemental letter on Nov 18, 2025, agreeing to a purchase price of RM24 million for the existing land, subject to adjustments. A similar supplemental letter set the purchase price for the five parcels at RM14.19 million, with the option exercisable within 30 years.
SCIB said the RM113 million disposal consideration reflects a premium of RM14.54 million, or 14.77 per cent, over SCM’s unaudited net assets of RM98.46 million as at June 30, 2025, and a premium of RM23.97 million, or 26.91 per cent, over audited net assets of RM89.04 million as at June 30, 2024.
The group expects to record a gain of RM11.29 million from the sale.
“An independent business valuation is in the midst of being conducted to ascertain the fair value of the entire equity interest in SCM. Details of such valuation will be disclosed in the circular to shareholders to be issued in connection with the proposal disposal in due course,” SCIB said.
The group said the disposal offers an opportunity to unlock value “potentially at or close to the peak of [SCM’s] recent financial performance.” SCM’s revenue rose from RM85.01 million in FYE2022 to RM122.56 million for the 12-month period ended June 30, 2025. Earnings also improved from a net loss of RM0.09 million in FYE2022 to a net profit of RM10.33 million in FYE2024, before moderating to RM8.66 million in FPE2025.
“The proposed disposal would result in SCM ceasing to be a subsidiary of the company, and therefore, the discontinuation of the group’s manufacturing business. In turn, the group would not longer be able to derive a major source of revenue and earnings from SCM moving forward,” SCIB said. It added that the group would also lose the ability to participate in the future growth of Malaysia’s precast concrete industry.
With the exit from manufacturing, SCIB said it will channel its focus and financial resources to strengthen its construction and EPCC operations. As at Sept 30, 2025, the segment manages projects with a remaining contract value of RM146.75 million.
Of the RM113 million proceeds, SCIB plans to allocate RM44.56 million to ongoing and future EPCC projects, RM20 million for property development in Bintulu, RM10 million for working capital (within 24 months), RM35.188 million for settling inter-company receivables, and RM3.25 million for expenses related to the disposal.
SCIB previously acquired five parcels of land totalling 9.84 hectares in Bintulu for RM27.64 million between September and November 2024. The group plans to jointly develop residential housing projects on the land.
“The development of the Bintulu land represents part of the group’s initiative to venture into property development with the aim of diversifying its revenue and earning stream,” SCIB said. “At the same time, the group aims to capitalise on its existing construction & EPCC segment to assist the group’s venture into the property development segment.”
SCIB added that prospects for the construction and EPCC segment remain positive, supported by the broader outlook for Malaysia’s building and construction industry. “The group’s construction & EPCC segment may also stand to benefit from spillover effects arising from the development plans of the Sarawak state government over the coming years, including the construction of public infrastructure projects throughout Sarawak,” it said.
