Second-tier cement firms speed up deployment in Mainland China

Second-tier cement firms speed up deployment in Mainland China
Published: 14 February 2008

Following the footsteps of Taiwan Cement Corp. and Asia Cement Corp., Taiwan’s second-tier producers in this line, including Lucky Cement Corp and Hsing Ta Cement Co, will speed up production deployment in mainland China this year.

Lucky will set up a plant in Hebei Province this year, becoming the first Taiwanese cement producer to launch production in that province. Hsing Ta will build a new plant in Nanjing municipality this year.

At present, Lucky operates a production line in Taiwan. The company’s president L.C. Chen has set up a cement plant in Vietnam with annual production capacity reaching 2.2Mt of cement.

In the past Chen didn’t augur well for the development of the mainland China market, but at the end of last year he signed an letter of intent with the government of Hebei province’s Handan city for investing in there. According to the agreement, Lucky will invest three billion renminbi in Handdan to set up a cement plant with annual production capacity reaching 10Mt. The proposed plant’s first production line with 2.5Mt of cement in annual output is expected to be able to make profits in 2010.

With a production line of 1.56Mt of cements in annual output in Suao of Hualien County, Taiwan, Hsing Ta saw annual sales reach only 900,000t over the past several years. To develop new business opportunities, the company will set up a cement plant in Nanjing with annual production capacity amounting to 1.8Mt. The new plant will commence construction sometime this year.

According to Hsing Ta’s plan, the Nanjing plant will begin operations in 2010. To facilitate the production deployment, Hsing Ta has remitted US$15m to help its subsidiary in Jiangsu Province increase capital with an aim to expand its distribution channel in the mainland.