Asia Cement Corporation, Taiwan’s leading cement producer, recently announced it has signed, through its subsidiary—Asia Cement (China) Holdings Corp. which is listed in Hong Kong, a memorandum of understanding (MOU) with Sunnsy Group of China to acquire a 30 per cent stake of the group’s subsidiaries in northeastern China and Inner Mongolia.
In addition, Asia Cement will also obtain a 10 per cent stake in Sunnsy Group to tap northeastern and northwestern China markets. All the acquisition deals will be settled by May 1, 2011.
In the past, Asia Cement concentrated on central China market. Since the beginning of this year, Asia Cement has twice invested in Sunnsy Group, each in May and October. Up to date, Asia Cement China has obtained over 1.7 per cent shareholdings in Sunnsy Group.
Sunnsy Group is currently the largest cement conglomerate in Shandong province and has tapped such markets of Liaoning province of northeastern China, and Inner Mongolia of northwestern China.
Over the past decade, Sunnsy Group has expanded annual production capacity 60Mt of cement from less than two million metric tons in 2000. Thanks to its dedication to expanding production capacity, the group has grown into one of China’s top-10 cement conglomerates in terms of output and one of China’s top-five most profitable cement conglomerates.
Relatively, Asia Cement Group has an annual production capacity of 30Mt of cement both in Taiwan and China. Asia Cement China chief executive T.H. Chang said there is ample room for his group to develop in China.
Asia Cement China predicted its annual production capacity will be able to reach 32.4Mt of cement in 2014, not enough for it to squeeze into the list of China’s top-10 cement conglomerates.
As the China government is encouraging large-sized cement groups to expand production capacity, Asia Cement China will continuously seek growth room in northeastern and northwestern China by way of acquisition and industrial cooperation.