Prosperity, which operates a cement manufacturing business in the People’s Republic of China and an iron ore trading business serving the same market, today announces two acquisitions and two proposed new investments, all strategically located near their target markets in the capital cities of the respective provinces in China. Together with the current programme at Anhui Chaodong Cement Company Limited, this expansion is expected to increase the Capacity of cement and clinker controlled by Prosperity (including the equity interests of Prosperity’s partners) by 80% to 30Mta by the end of 2009.
Prosperity has reached agreement to acquire an effective interest of 40% in a cement grinding facility in Guangzhou for RMB85m (approximately US$11.9m). The grinding facility has a current capacity of 840,000tpa which, following approval from the PRC Government, will be increased to 2Mta.
The Group has reached agreement to invest in a 30% interest in two cement and clinker plants in Yunnan Province for an investment of RMB400m (approximately US$56m). The plants have an existing capacity of 4.5Mt of cement and clinker per annum from new lines.
The Group plans to invest RMB852.5m (approximately US$119m) in staged payments in two cement and clinker plants to be built in Northern and South Western China, each with a planned capacity of 2Mt of cement and clinker per annum
Supporting this investment, Prosperity is arranging financing of approximately US$100m, which the Directors believe will be completed before the end of April 2008
Chairman & CEO David Wong said "these new investments are important steps for Prosperity in its continued mission to expand the scale of our business and earnings. They will take us into new markets in Northern and South Western China, as well as providing a synergistic benefit to our operations in Guangdong. The relative scale of Prosperity’s cement and clinker business will take a quantum leap forward in what remains a vibrant marketplace in the PRC."