In my earlier post, I had highlighted on the possible beneficiary of the Sabah portion of Pan Borneo Highway from land acquisition of palm oil land. While Kretam continue to be the top possible beneficiary from government force land acquisition of it's palm oil land, I would like to touch base on the parties that will benefit from the construction of Pan Borneo Highway.
So, how much do we understand about road and highway ? If you have a driving license, you will know how to hit on the road with you motor vehicle. But, honestly, how many people know how is the road being built ? Is it just mixing the bituminous road and paving it with a hot roller ?
Actually, I had to tell you that what you are seeing is just the surface. Road construction is more than just paving the bituminous road with a hot roller - at least by a few layers.
In order to construct a proper highway, there are several important steps to do, which is laying the foundation properly.
As you can see, what we can see is just the surface, but underneath is few other layer which are specially treated in order to spread the weight properly to prevent sinking. Those layer are treated with cement, which is called cement treated base.
Cement treated base is a treated base which consist of cement and bituminous emulsion. The combination of cement and bituminous emulsion will provide a stabilized base that can help spread the loads evenly in a larger area.
About picture will show you a graphic illustration of the differences between a stabilized base and unstabilized granular base when taking load. For construction of highway such as Pan Borneo highway, a stabilized base will be used as it is the standard for road construction.
Now, I am telling you that "cement" will also be a substantial beneficiaries from the Pan Borneo Highway.
You might be telling me, why spot now ?
The answer is very simple. This is because before the road is build, and before the material is used, the share price will definitely be at the lowest point. And that is probably the best entry for any investment if you believe that such event will help to boost the profit of the related company when the event happen.
Since Pan Borneo is East Malaysia project, the cement will be technically source from East Malaysia for cost saving purpose. So this company, which is B.I.G Industries Berhad (BIG - 7005) does cement supply in Sabah. Accordingly, the company also have a record of history in supplying high grade ready mixed concrete to projects such as Babagon Dam and Likas Bridge, and is a recognised as high grade quality supplier of RMC by JKR Sabah.
So, if all is good, the Sabah portion of Pan Borneo highway will also be supplied by BIG cement division since it is recognised as high grade quality supplier.
So, now I had briefed you on how cement is used to construct road. You must know that the Sabah Portion of Pan Borneo Highway is 706km long. Although not all are newly built, the project involves widening the existing road in a 2 lane dual carriageway, and some are new bypass and coastal road.
Now, BIG is being thinly traded, and had been trading at the range of RM 0.38 to RM 0.56 for the past 1 year. It can be considered as a very low point. If you are willing to hold this company for 2 years, I believe that this company can be very potential when the cement division earnings start to kick in. Better start finding a quantity surveyor to estimate how much cement will be used for this :D
But, this is for you to decide again whether to invest, or not.
Cheers
http://bonescythe.blogspot.my/2018/02/quiz-is-there-cement-inside-road-read.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+BonescytheStockWatch+%28Bonescythe+Stock+Watch%29
