Industrialised building systems specialist, Sarawak Consolidated Industries Berhad (“SCIB” or the “Company”) is pleased to announce that its wholly-owned subsidiary, SCIB Holdings Sdn. Bhd. has entered into a conditional Share Sale and Purchase Agreement (“SSPA”) with YTL Cement (Sarawak) Sdn. Bhd. (“YTL Cement Sarawak”), an indirect subsidiary of YTL Corporation Berhad for the proposed disposal of 100% equity interest in SCIB Concrete Manufacturing Sdn. Bhd. (“SCM”) for a total cash consideration of RM113.0 million, subject to adjustments in accordance with the terms of the SSPA.
This Disposal Consideration is equivalent to the indicative offer previously made by YTL Cement Sarawak on 2 October 2025.
The proposed disposal is for 18,581,702 ordinary shares in SCM (“Sale Shares”), representing 100% equity interest, to YTL Cement Sarawak. The Sale Shares will be transferred free from encumbrances and together with all rights and advantages attached to them as at the completion date of the transaction.
The proposed disposal is subject to the approval of the shareholders of the Company at an Extraordinary General Meeting to be convened in due course.
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 the 7 parcels of land at pre-agreed purchase prices, exercisable for up to 30 years.
Lot 1166 and Lot 1541 carry a total pre-agreed purchase prices of RM24.0 million, subject to adjustment in accordance with the Tenancy Agreement. Lot 787, Lot 788, Lot 789, Lot 790 and Lot 791 carry the total pre-agreed purchase prices of RM14.19 million, subject to adjustment based on conditions stipulated in the Right to Build and Operate Agreement.
Separately, SCM has granted SCIB an Option to Sell these 7 parcels of land to SCM at the same pre-agreed prices, ensuring mutual rights for both parties to complete the future sale of the Lands as part of SCIB’s long-term asset realisation strategy.
Together, the Disposal Consideration of RM113.0 million and the pre-agreed land values of RM24.0 million and RM14.19 million, amounting to a total potential value of RM151.19 million, will further enhance SCIB’s financial flexibility to its Construction and EPCC projects and support the Group’s long-term growth plans.
The agreement formalises SCIB’s intention to divest its Manufacturing Business, which includes the trading of construction materials and the manufacturing and sale of precast concrete pipes, prestressed spun concrete piles and related concrete products.
The proposed divestment will enable the Company to streamline its operations and sharpen its focus on the Construction and Engineering, Procurement, Construction and Commissioning (“EPCC”) segment.
The Disposal Consideration represents a premium of 14.77% to SCM’s latest unaudited net assets of RM98.46 million as at 30 June 2025, and a premium of 26.91% to its audited net assets of RM89.04 million as at 30 June 2024.
The Proposed Disposal is estimated to generate a gain of RM11.29 million, which is expected to strengthen the Company’s net assets and earnings in the near term.
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 channel the proceeds primarily toward funding ongoing and future construction and EPCC projects, supporting working capital needs, and strengthening the Company’s operational capacity.
The construction and EPCC segment continue to see encouraging opportunities, driven by public infrastructure development and state-led economic initiatives. These prospects are further supported by the Sarawak State Government’s development plans, where large-scale public infrastructure projects are expected to generate spillover opportunities for contractors.
As a Sarawak-based player with established capabilities, SCIB is well positioned to participate in these upcoming projects.
SCIB remains committed to disciplined execution, prudent financial management and sustainable growth as it progresses into its next phase of strategic realignment.
For more information, visit scib.com.my.
