Taiwan Cement aiming to invest US$800m in China

Taiwan Cement aiming to invest US$800m in China
Published: 22 June 2009

The Taiwan Cement Corporation plans to invest as much as US$800m to double its cement production in China by 2012, aiming to become the third largest supplier in the Chinese market, said the company’s chairman yesterday.

Taiwan Cement’s annual output in China will increase to 52Mt in 2010, twice the present 26Mt, and more than five times the company’s total capacity in Taiwan, said the chairman, Koo Cheng-yun.

Koo told a shareholders meeting that the company will become the largest cement supplier in southern China, and the third biggest in the whole of China.

Taiwan Cement has already spent ¥3.4bn buying land and constructing plants in Guangxi, southern China over the past two years, the chairman revealed.

The Guangxi plants have a combined capacity of nine million tons each year, almost the total annual Taiwan market size of 11Mt, he said.

It took the company 50 years to build up a capacity of that size in Taiwan, but the company was able to set up the Guangxi plant in just two years, he said.

But he stressed that the company headquarters will remain in Taiwan despite the huge market in China.

Koo said he is optimistic about the cement sector in both China and Taiwan, as the governments on both sides of the strait are gearing up infrastructure development.

China is expected to allocate four trillion yuan, and Taiwan a few hundred billion NT dollars to stimulate their respective economies, he said.

He said the cement market in Taiwan already hit bottom in June, and is expected to grow steadily beginning in July.

Demand for cement in southern China is already rising steadily, he said.

Koo predicted that China will see its economy recover in the third quarter of 2009, with recovery in Taiwan coming a quarter later.

The easing of cross-strait political tensions will attract businesses from Taiwan and China to invest in each other’s property market, he said.

It will also attract investments from other countries, facilitating Taiwan’s bid to become the operation hub of the Asia-Pacific region, he said.

Many Taiwan companies have geared up for the China market since President Ma Ying-jeou took office in May 2008 and started liberalizing cross-strait investments.