West China Cement Ltd has announced its acquisition of 100% shareholding of Shaanxi Xiushan Cement (Group) Ltd Co. for RMB 180 million.
The acquired business includes the 600 000 tpa Xiushan cement plant in Shaanxi Province, and the Xunyang Xiushanlong cement milling facility, which has the capacity to process 100 000 t of slag.
The deal is the first acquisition for WCC since joining AIM in December 2006, raising £22 million. In the six months ending June 2009, WCC reported a rise in revenue of 70% to RMB 575 million, while operating profits increased 121% to RMB 225.2 million.
Xiushan made a pre-tax profit of RMB 23.8 million in 2008 and as per the terms of the agreement, earnings will accrue to WCC from August 2009.
According to WCC chairman Robbie Robertson, this is the group's first acquisition and it is expected that said the company’s capacity will reach 8 million tpa during the course of next year, reaching the lower end of WCC’s declared 8 – 10 million target for 2010.
The Xiushan cement plant has limestone reserves to support the operation for at least 30 years.