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Chinese cement companies to benefit from consolidation

World Cement,

Companies to cash in on consolidation

China has ordered more than 700 polluting and energy-intensive cement plants to close by the end of September. As a result large cement producers are said to benefit from the industry consolidation through the acceleration of the phasing out of outdated production capacity. The Ministry of Industry and Information said this would cut the cement industry’s annual production capacity by 107 million t.

Companies that fail to comply with the instruction will be barred from obtaining loans and will not get government approval for new investments, and will not get access to additional land. It will also face the withdrawal of their production license and pollution permit.

Qinghai, Shanxi and Beijing are the top three areas with most affected plants, according to Guotai Junan Securities. Secretary General of the China Cement Association, Kong Xiangzhong said, “Governments will be the first to benefit from the measure, as it will help them achieve environmental targets and save energy. In addition large cement companies will benefit from an increased market share”.

TCC completes acquisition

TCC International Holdings Ltd announced that it had completed the acquisition of the cement business in mainland China under Prosperity International Holdings (H.K.) Limited for a total of HK$ 3.8 billion. The move will help TCC to replace Anhui Conch Cement Company Limited as the largest cement manufacturer in southwest China.

Three cement production lines that are under construction in Guang’an in Sichuan, Anshun in Guizhjou, and Hechan in Chongqing will be put into use in 2011 and will lift TCC’s capacity on the mainland to 46.35 million t.

CR Cement to invest in Shanxi

China Resources Cement Holdings Ltd has linked a strategic agreement with Shanxi Guoneng Group Co Ltd to inject nearly RMB 5 billion into a large cement project in Shanxi Province. The project, which will cost RMB 6.8 billion and will have an annual output capacity of 12 million t, will be 72% held by China Resources Cement.

According to local sources the Hong Kong listed company recently accelerated its expansion in Shanxi Province, through the acquisition of a cement producer with an annual output of 4 million t of cement and 3.1 million t of clinker, as well as teaming up with Shanxi Yaohua Cement to jointly start a production line with a daily cement output of 2500 t.

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