China: Ministry urges restructuring of cement industry

China: Ministry urges restructuring of cement industry
Published: 30 November 2009

Ministry of Industry and Information Technology (MIIT) will encourage big enterprises’ mergers and acquisitions (M&A) and restructuring of the cement industry, it said in an circular. Meanwhile, a group of new policies to support M&A will be introduced.

Redundant construction in cement industry is very serious, said the ministry. Capacity of China’s cement industry totaled 1.87 billion tons in 2008, and 1.4 billion tons were produced. By the end of September 2009, newly-established and on-going cement projects had a total capacity of over 600 million tons, which will lead to more severe overcapacity.

MIIT will further raise the industry access threshold of energy consumption, environmental protection and comprehensive utilization of resources. At the same time, it will coordinate with other related government branches to sort out the cement projects which have not started construction before September 30, stop illegal construction projects. New cement projects won’t be approved.

Local governments are urged to promote cement industry planning, and to implement the plan seriously. Local governments should maintain the balance between output and demand of cement and ensure the restructuring following national and local plans.

In addition, local governments are asked to formulate the timetable on eliminate low-level cement capacity from 2010 to 2012.