KUALA LUMPUR (Dec 12): Hume Cement Industries Bhd (KL:HUMEIND), which is 72%-owned by the Hong Leong Group, is selling its concrete business to YTL Corp Bhd (KL:YTL) for a base disposal price of RM215 million. The disposal is part of its strategic decision to divest non-core assets to enhance its operational focus and reallocate capital towards its cement operations.

The disposal, to YTL's indirect subsidiary YTL Cement (Sarawak) Sdn Bhd, involves 30 million ordinary shares that represent the entire equity interest in Hume Concrete Sdn Bhd (HCCT).

Hume Cement is expected to net an estimated one-off disposal gain of RM185.74 million from the deal. The final price tag will be subject to completion adjustments, including the redemption of redeemable convertible unsecured loan stocks (RCULS) amounting to RM42.5 million, and movements in HCCT’s shareholders’ funds.

Subject to shareholders' approval, the transaction is expected to be completed in the second quarter of 2026.

Widely regarded as a pioneer of Malaysia's precast concrete industry, HCCT traces its origins back to 1929, when its first precast concrete factory was established. The company currently operates two factories in Kota Kinabalu, Sabah that support supply across Peninsular and East Malaysia.

HCCT also owns a portfolio of industrial properties with an aggregate market value of about RM190.6 million, based on independent valuations. These include industrial premises and land in Beranang, Selangor, an industrial land parcel in Pasir Gudang, Johor, and a vacant industrial site in Kuantan, Pahang.

But HCCT has been loss-making for several years. Its FY2025 profit after tax was largely due to a one-off land disposal gain rather than operating performance. According to Hume Cement’s FY2025 annual report, its concrete segment accounted for about 5.7% of the group’s total revenue of RM1.11 billion.

According to Hume Cement’s latest annual report, the group had initiated the cessation of its concrete operations in Peninsular Malaysia in the financial year ended June 30, 2025 (FY2025) by reducing a number of manufacturing sites.  

The decision to reduce and exit its concrete manufacturing footprint in Peninsular Malaysia came after a comprehensive review aimed at optimising operations and ensuring long-term sustainability, the group added.

Of the RM215 million gross proceeds, RM148.9 million or 69.2% will be allocated for investment opportunities and expansion plans within its cement business, while RM63.8 million or 29.7% will be used for working capital. The remaining RM2.3 million will be set aside to cover fees, charges and costs related to the disposal.

Shares of the group closed up four sen or 1.36% at RM2.99 on Friday, valuing the company at RM2.17 billion. The stock has shed nearly 5% year to date.

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