PROSPECTS OF THE LMB GROUP. The soft property market and the delay and suspension of some major infrastructure projects have impacted the construction market, which in turn has affected cement demand. Cement demand for 2018 declined marginally with contraction happening mainly in the second half of the year. The cement industry continued to be plagued by excess capacity and this has put pressure on selling prices. Coupled with higher energy costs, the profit margin in domestic sales continued to decline. On the export front, the market has turned more positive in the second half of the year with stronger demand for clinker and improvement in export prices especially in the 4th quarter. In the current competitive environment, the LMB Group has taken steps to improve plant reliability and invest in capital expenditure projects which will improve productivity, maximise output and lower production costs. Geocycle Environmental Services Sdn Bhd, a unit focusing on developing and sourcing of alternative fuels and raw materials is growing from year to year and contributing to increasing its thermal fuel substitution rate. The LMB Group’s priorities for 2019 are to enable all its plants to run at high reliability and at lowest cost possible in order to compete effectively in the market and at the same time, to improve on its services to customers in terms of product quality and delivery services. The LMB Group is maximising the production of all its plants to take full advantage of the improving export markets. The LMB Group’s earlier years’ strategy to establish a construction development laboratory which is also its innovation hub has started to bear fruit and the LMB Group will continue to innovate and develop a niche in highly complex projects. The LMB Group has embarked on simplifying the management structure and comprehensive cost reduction initiatives since mid-2018 and the LMB Group has laid the groundwork which will improve its productivity and lower its cost base. The LMB Group’s ability to carry out what it plans to do relies on its employees and the LMB Group is taking the necessary steps on talent retention, its employees’ learning and development and in making sure that rewards are matched with performance and results. The LMB Group is also continuing its Young Engineers Programme to attract new talent. The domestic cement market in Malaysia is expected to remain challenging in 2019 with over- capacity in the industry and likely increase in energy prices. The outlook of the exp...
