Anhui Conch Cement Company has reported its 1H13 results, which show a markedly different picture to the European majors’. Conch reports that in 1H13, China’s total cement production volume rose by 9.67% y/y to 1096 million t. Conch itself has developed what it terms ‘sensible marketing strategies’ to operate in accordance with the various regional market conditions and to make the best use of production capacity to increase product sales volumes. The Group has also successfully lowered procurement costs of fuel and raw materials.
In accordance with PRC Accounting Standards, Group revenue from its principal activities amounted to RMB23 209 million, up 14.33% y/y. Net profit attributable to equity shareholders of the company increased 4.89% to RMB3060 million.
Capacity expansion projects
Conch completed construction of three 5000 tpd clinker production lines and 11 cement grinding units during 1H13, resulting in additional clinker production capacity of 5.4 million t and additional cement production capacity of 12.1 million t. The Group’s first overseas project in South Kalimantan, Indonesia, commenced construction at the end of 2012 and secondary construction work is currently underway. Two residual heat electricity generation units also began operating in 1H13, adding 18 MW of residual heat electricity generating capacity. The Group further implemented staged combustion technology modification for 45 clinker production lines and SNCR flue gas denitration technology modification for 25 clinker production lines.
Cement sales across China
In all, the Group achieved an aggregate net sales volume of cement and clinker of 103 million t, an increase of 28.3% y/y. Sales revenue grew 14.33% y/y. Salves volumes differed from region to region, with increases in Central and West China as new capacity came online, while East China suffered a slight decrease in sales amount due to pricing pressures. Prices also dropped in South China. Exports remained relatively stable, with sales volumes growing just under 7% and sales amount increasing by a little over 4%.
As of 30 June 2013, the Group held 111 majority-owned subsidiaries, one jointly controlled entity and two associated entities.
Conch anticipates that competition in the cement industry will remain relatively intense in the second half, though the supply/demand scenario should improve. Efforts to phase out less advanced production capacities will continue throughout China, with 92.75 million t of outdated production capacity to be demolished before the end of the year. Government policies to maintain stable growth, promote reforms, improve infrastructure and redevelop shanty towns will all help to grow cement demand. The Conch Group will continue to adapt its strategies to regional market needs and aim to increase market share. Energy conservation, emissions reduction and operational efficiency will continue to be key targets, while the management process and efficiency will also be optimised to improve competitiveness. Construction projects already underway will be progressed with the aim of earlier realisation of operation and the Group will actively identify suitable projects to fine tune market layout. In addition, the Group will look to further its position in the industrial chain by exploring opportunities to enter the commodity concrete market.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/30082013/anhui_conch_results_1h13_cement_growth_135/