China cement demand remains high

China cement demand remains high
Published: 01 March 2010

China’s cement demand will continue to pick up this year, predicts Kong Zhongxiang, vice chairman of China Cement Association.

The cement production kept its double-digit growth last year. Some 176 new production lines were put into operation and the total investment in the cement sector topped CNY100bn, he said.

The massive investment in infrastructure last year is translating into demand for cement.

Meanwhile, the cement industry will greatly benefit from the country’s efforts to expand building materials sales to the countryside through a trade-in subsidy program, which was proposed at the central government’s No. 1 document for this year.

Currently, the details for the trade-in subsidy program are still under discussion. More policies for supporting the cement industry will come out this year, said Kong.

And existing policies encouraging the power generation by residual heat of clinkers, the installation of waste disposal facilities and the integrated use of resources will continue.

However, due to overcapacity concerns, the government will also step up efforts to eliminate outdated capacity in the cement sector. The access requirements for the cement industry, for example, are being crafted, which will help adjust the industrial structure.

Large cement producers should take the opportunity for mergers and acquisitions, Kong suggested.

Kong estimated that the number of cement producers in China might be reduced to around 2,000 in the next two to three years.