Driven by the promising cement market in China, Taiwan’s two leading producers, Taiwan Cement Corp and Asia Cement Corp, have announced to start heavy investments in China.
With annual output of 50Mt in China that will surge to 60Mt in 2012, Taiwan Cement’s output in China will double to 100Mta in five years to become one of China’s three largest cement conglomerates, while Asia Cement will set up new plants in Hebei province to achieve an output of 50Mta in four years.
To continually boost capacity in China, Taiwan Cement will increase paid-in capital by 50% to TWD60bn (US$2.08bn). The maker has also developed conductive concrete to tap the Hunan and Shanghai markets.
Taiwan Cement Corp through its subsidiary, TCC International Holdings Ltd in which has a 40% stake, is planning to set up a production base in Shaoguan in China’s Guangdong province. TCC International has signed an agreement with the Shaoguan authorities for the investment which is expected to total CNY1.85bn (US$286.13m). The investment project is pending approval from the Chinese central government.
Under the agreement, TCC will build four production lines at Shaoguan with a capacity of 10Mta. In the first stage, the production capacity is expected to reach 5Mta.
Taiwan Cement said as Shaoguan is located along the border between Guangdong province and Guangxi Zhuang autonomous region, the new investment is expected to help TCC International secure business from southern China.
In addition to the two provinces, Taiwan Cement said the product from the Shaoguan base will be shipped to southern Yunnan province to meet infrastructure needs.
Asia Cement chairman Douglas Hsu said his company’s capacity will be raised by 10Mt to 30Mt in China. By the end of the third quarter, Asia Cement will set up four cement kilns in Hebei province to raise output by 10Mta in China. Hsu noted the producer aims to invest over US$1bn in the next four years to boost capacity to 50Mt in China.
With the 95% anti-dumping tax on imported cement from China, Hsu predicted the company will sell 12.5Mt in Taiwan and the export price of cement will increase by 10% this year.