Goldsun mulls acquisition in Fujian Province, China

Goldsun mulls acquisition in Fujian Province, China
Published: 02 May 2008

In an attempt to expand production of cement, Goldsun Development & Construction Co of Taiwan’s will set up new plants and acquire others in mainland China.

Aimed at boosting market share, the company has projected its annual output at 20Mt of cement within the next five years.

It is expected Goldsun is assessing the acquisition of Fujian Cement Corp., the largest cement producer in Fujian Province, which has a production capacity of 5Mta of cement.

HH Lin, Goldsun president and CEO, noted his company is gradually boosting production of cement in the mainland and has seen steady development of producing ready mixed concrete in Yangtze River Delta.

In addition, the company will begin mass production at its cement plant in Changsha of Hunan Province in the second half of 2009. At that time, the company will be able to score annual sales of over NT$10 billion (US$331.12m), or NT$2bn (US$66.22m) in pretax earnings, in the mainland and will launch an initial public offering on the stock markets of Japan or Hong Kong.

Goldsun currently owns a cement plant in Lungyenkan City of Fujian Province with annual production capacity reaching 2.4Mt of cement. The plant is now building a second kiln.

In July this year, the company will break ground a new cement plant in Hunan Province. The company predicted the new plant will have an annual production capacity of 2Mt of cement by the end of next year.

Concentrating on the production of ready mixed concrete domestically, Goldsun began building its first cement plant in Lungyenkan in 2005 and began commercial operation in April 2007. IN the first year of operation, the Lunyenkan plant earned in NT$180m (US$5.96m), making Goldsun the first Taiwanese cement concern to post earnings in the first year of operation for a cement plant in the mainland.

Lin predicted the demand for cement in the mainland will grow at a pace of over 10% annually in the next few years and the prospects for the industry there will be very promising in the decade to come.

In the next few years, the company will seek appropriate land sites in Guangxi and Anhui provinces to facilitate construction of new cement plants.

Goldsun estimated it sold 1.65Mt of cement in the mainland in 2007, contributing NT$180m (US$5.96m) in net profits to the parent. The company predicted it would be able to earn CNY100m (US$3.31m) on sales of 2.08Mt of cement and clinkers in 2008.