China Runji Cement benefits stimulus plan

China Runji Cement benefits stimulus plan
Published: 08 February 2010

China Runji Cement Inc (CRCI) a leading producer and distributor of cement in Anhui Province of China, announced that the Company is benefited from the Chinese rural economy stimulus policy in 2010, where the Company’s selling price of cement clinker has increased $1.46 per ton in January, 2010, representing extra monthly revenue of $245,973 in current production capacity of 5,600 tons per day.

In 2010 China vowed to put more investment, subsidies, fiscal and policy support into rural areas, quoted from the first policy document jointly issued on January 31, 2010 by the Central Committee of the Communist Party of China and the State Council. In particular the policy document stressed budget expenditure should first support development of the agriculture and rural area, and fixed-asset investment first be channeled into agricultural-related infrastructure and projects in relation to rural livelihood.

Citizens living in rural areas will receive allowance from local provincial government to construct new houses to have better housing conditions. In China, there are over 900 million people living in villages. With the implementation of the policy, it is believed that the village architectural market demand for cement and other architectural materials will grow substantially with more and more village people constructing new houses with government allowance in 2010.

As a result of the policy, the Company’s cement clinker selling price increased $1.46 per ton in January 2010, which represents extra revenue of $8,199 per day and $245,973 per month.

"Thanks to the rural stimulus policy our sales volume and prices both increased in this low season, we have even decided to maintain production during the long holiday of China New Year in February to meet the growing demand," commented Mr. Zhao Shouren, the Chairman and CEO of CRJI. "Rural market of China is becoming one of our most important markets in the future. We expect our cement sales volume to rural market will be much higher in the next several years. Our marketing department has adjusted new strategies and initiatives to capture the rural market, so as to create more value for our shareholder and investors."