With the approval from mainland authority, Asia Cement Corp, one of Taiwan’s leading producers of cement, will begin building a fourth kiln at its plant in Jiangxi Province and will launch mass production by 2009.
The plant will see annual production capacity reach six million metric tons after the fourth kiln becomes operational. The inauguration of the new kiln will make Asia Cement secure overall annual production capacity of 16 million metric tons of cement in the mainland.
At present, Asia Cement operates three kilns at the Jiangxi plant with daily production capacity of 4200t of cement. Merrill Lynch Securities anticipated Asia Cement to score NT$2bn (US$61.91m) in earnings in the mainland in 2008, compared to an estimate of NT$1.6bn (US$49.53m) for this year.
Asia Cement is also expanding production capacity in Chengdu of Sichuan Province. To four million metric tons per year by the end of 2008.
T.H. Chang, a board director of Asia Cement, said his company has slashed cement supply to the Shanghai market because of a slowdown in selling prices over the past two years. By contrast, the cement prices quoted in the markets of Chengdu, Wuhai and Jiangxi have been on the rise.
An institutional investor noted the cement price in the Chengdu market would continue to rise, as a capacity of five million metric tons of cement will be trimmed in Chengdu because of inferior quality, accounting for 33% of the total demand in that market.
Asia Cement said the ex-factory cement price in Chengdu has risen to RMB450 (US$60.81) per metric ton from RMB370 (US$50) quoted in the first half of this year.