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Asia Cement (China) records 50% increase in profit

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World Cement,

Asia Cement (China) Holdings Corporation has reported a 50% y/y increase in profit for the first half of this year, at RMB383.2 million. The company attributes the increase to higher sales volumes and average selling prices compared to 1H13, as well as a comparative decrease in the cost of coal.

Cement and clinker sales rose 14% y/y to 13.43 million t on the back of an adjustment in sales strategies, a strengthening of production management and enhancement of operating efficiency. Revenue for the period rose 23% y/y to RMB3909 million and gross profit was up 59% to RMB930.2 million.

Mr Hsu Shu-tong, Chairman of Asia Cement (China), said: “Against a complicated macroeconomic environment and industrial situation, we proactively faced the challenges by adopting flexible measures to cope with market competition. In April 2014, the Group acquired the entire equity interest in Sichuan Lanfeng Cement Co., Ltd, thus increasing its annual cement production capacity by 5 million tonnes to 35 million tonnes per annum. The company was therefore able to command the largest market share in the Chengdu cement market. We have been maintaining high environmental standards, implementing measures in compliance with national energy saving and emission reduction policies, and remaining at the forefront of the industry in reduction of denitration and nitrogen oxides emission. Through its efficient sales channel, the Group continued to maintain its objective of a 1 to 1 sales to output ratio during the first half of the year, and sold an aggregate of 13.43 million tonnes of cement and clinker, representing a year-on-year increase of 14%. Benefiting from increase in cement price and a continued low coal price, the Group achieved satisfactory results, with significant growth in overall profits when compared with the corresponding period of last year.”

Government stimulus measures are likely to increase cement demand while, on the supply side, overcapacity will be eased by the government’s continuing efforts to eliminate obsolete cement capacity.

Mr Hsu said: “Although cement price fell short of expectations in the second quarter, we are confident that the price will recover in the second half of the year. It is expected that industry players will be more proactive in exercising self-discipline to suspend the operation of kilns to conserve energy and reduce emission in the third quarter, which will further improve supply and demand situation. As such, we are optimistic about the future market trend. We expect the price to start to rise at the end of the third quarter, and to leap further as growth in demand accelerates after the arrival of the peak season in the fourth quarter.”

Adapted from press release by

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