China to rein in cement overcapacity in 12th Five-Year Plan

China to rein in cement overcapacity in 12th Five-Year Plan
Published: 07 December 2009

In an effort to curb the cement industry’s production overcapacity, the China Cement Association has changed its development policy for the cement industry.
 
Accordingly, the association will step away from the 11th Five-Year Plan (2006-2010)’s vigorous development of new dry process cement production technology towards appropriate development in the 12th Five-Year Plan (2011-2015).
 
According to statistics released by the Ministry of Industry and Information Technology, China’s cement output hit 1.34bnt in the first ten months of this year, up 18.7 per cent YoY.
 
With the new dry process prevalently being used in cement production, the proportion of new dry process cement rose to 71.8 per cent in 2009, a 9 percentage-point year on year increase. This achieved the 11th Five-Year Plan’s development goal proposal which targeted a 70 per cent proportion of new dry process cement by 2010.
 
The ministry pointed out that although China has accelerated the elimination of backwards cement production capacity, it still contains 500Mt of it.
 
Kong Xiangzhong, secretary-general of the association, expressed that another key point of the 12th Five-Year Plan for the cement industry would be mergers and acquisitions.
 
The country will promote the development of energy saving and emission reduction technological transformation projects as well as the industry’s structural adjustment for urging the formation of large enterprises. It also aims to raise the industry’s production concentration in a bid to solve chaotic competition. As result, a number of small and medium sized companies will be forced out of the market.