Chinese cement companies back on track due to an increase in construction

China has seen an increase in infrastructure and building projects in the east and south of the country. The eastern Jiangsu and Zhejiang and southern Guangdong provinces are experiencing widespread construction in a bid to resolve the areas’ problems with overcrowding and cement companies are set to benefit from this. Low coal prices have also led to increased production.

Major cement companies, such as Anhui Conch Cement Co Ltd and Asia Cement China Holdings Corp, reported a decrease in profits in 2012, however earnings and profit growth have risen this year with many cement firms announcing strong results and there are predictions of further increases in the coming year.

Financial results

• Anhui Conch announced a 37% y/y increase to RMB5.38 billion, compared to 4.3% growth in the first half and a 45% fall in earnings in 2012.
• Asia Cement reported a 166% jump in net profit from January to September to RMB391 million.
• Huaxin Cement's earnings rose 131% to RMB558 million.
• Gansu Qilianshan Cement Group Co Ltd saw an increase of 118.5% in net profit to RMB365.32 million during the period.

However industry insiders note that this progress could be impeded in the coming months by factors such as a decrease of investments in railways and a slowdown in the property market.

Edited from various sources by Rosalie Starling

Read the article online at: https://www.worldcement.com/asia-pacific-rim/29102013/chinese_cement_companies_back_on_track_due_to_an_increase_in_construction_352/