China Shuangji Cement Ltd announced that it has ceased production of its main 500,000t cement plant in Zhaoyuan City and will begin relocating its equipment and operations to its new 1Mt cement plant in the nearby Zhaoyuan industrial park. As reported previously, the Company received in excess of US$$5m and other concessions from the government to relocate its Zhaoyuan City operations away from the encroaching population to a more industrialized area.
The new cement plant should commence production in May 2009 with an initial annual production rate of 800,000t. The rate is expected to increase to 1Mt in 2010. Due to the slowdown associated with the plant relocation, 1Q09 cement production (total) will be approximately 275,000t compared to 1Q08 production (total) of 317,000t. The relocation did not affect the Company’s other two cement plants.
The Company also is announcing that it is in advanced negotiations to acquire a 500,000t capacity cement plant in Shandong province. The specifics of the acquisition will be announced following the closing of the transaction. It is expected that China Shuangji will close the transaction in March 2009 and will acquire fifty-one percent ownership of the plant operations.