Cahya Mata Sarawak Berhad’s Jv Company Appoints EPC Contractor

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OM Materials (Sarawak) Sdn Bhd teams up with Sinohydro and Sinosteel Jilin

Kuala Lumpur, 4 February 2013 – Cahya Mata Sarawak Berhad (CMSB – 2852), Sarawak’s largest and integrated infrastructure development conglomerate, is pleased to announce that OM Materials (Sarawak) Sdn Bhd (OM Sarawak), the joint venture company in which CMSB has a 20% equity interest through its wholly owned subsidiary, Samalaju Industries Sdn Bhd (SISB), has appointed Sinohydro Corporation (M) Sdn Bhd (Sinohydro) as its lump-sum turn-key engineering, procurement and construction (EPC) contractor, and Sinosteel Jilin Electro-Mechanical Equipment Co. Ltd (Sinosteel Jilin) as a nominated sub-contractor for the construction and commissioning of OM Sarawak’s Ferro Alloy Smelting Project in Samalaju Industrial Park (SIP), Sarawak (the Project).

The scope of the turn-key EPC contract includes amongst others, the design, civil works, procurement, manufacturing and transportation as well as installation, commissioning and testing of all equipment, facilities and associated infrastructure of the Project.

The EPC contracting framework for the Project will allow OM Sarawak to leverage the significant large-scale project management experience of Sinohydro, including its longstanding and significant EPC experience in Malaysia and Sarawak, and combine it with the unique equipment and control system experience and capability of Sinosteel Jilin.

SISB entered into a 20:80 joint venture with OM Materials (S) Pte Ltd, a wholly owned subsidiary company of OM Holdings Limited, which is listed on the Australian Stock Exchange, to build and operate a 575,000 MTpa Ferro Alloy smelter which is expected to commence production in SIP in late 2014.  CMSB, through its subsidiary, Samalaju Property Development Sdn Bhd, is also involved in the provision of accommodation and other related services to workers within SIP as well as in the master developer role for the township on the property adjacent to SIP.

Group Managing Director, Dato’ Richard Curtis said, “The market demand for Ferro Alloy is expected to be strong which will be driven by the long term prospects in steel production in the region.  This is coupled with the change in industry dynamics which is largely driven by rising power prices and labour costs, growing demand from China for ferrosilicon alloys, higher environmental standards and the Chinese Government’s disincentives to export energy intensive products.”

Sinohydro is the world leading Chinese state-owned construction group with operations in more than 58 countries focusing on excavation, earthmoving, dredging, reclamation as well as civil engineering and infrastructure projects in the global construction industry. Sinohydro undertook the construction of the USD1 billion Bakun hydroelectric project in Sarawak and its current contracts include the construction of the Murum Hydroelectric Project (approximately USD1.3 billion) in Sarawak and the Hulu Terengganu Hydroelectric Project (approximately USD276 million) in West Malaysia.

Sinosteel, a Fortune 500 corporation, is engaged in the development and processing of metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, the provision of related engineering technical services, and the manufacture of equipment.

Sinosteel is one of China’s largest manufacturers of submerged electric arc furnaces, furnace automation, control systems and furnace transformers, and has designed, built and commissioned more than 200 submerged electric arc furnaces.

The appointment of both parties represents another significant milestone in the execution of the Project.