M&A trend in China’s cement industry to continue

M&A trend in China’s cement industry to continue
Published: 09 November 2007

The trend of merger and acquisition (M&A) in China’s cement industry will continue in the coming few years, said Kong Xiangzhong, general secretary of the China Cement Association, in an interview.  
The country will promote structural adjustment, support the formation of large enterprises, and raise the production concentration of the industry in a bid to change disorderly competition in the sector. As result, a number of small enterprises and even some midsize companies will be forced out of the market.  
Kong held that there will be more enterprises involving in the M&A and restructuring of the cement industry.  
According to Kong, some large enterprises such as China Building Materials, Conch Cement, Sunnsy Cement and China United Cement are now leaders of the country’s cement production, but have not formed an absolute advantage on the market.  
The cement market in northeast China, Henan, Hunan and Shaanxi areas is still in scattered operation, which will surely become a focus of competition next year.  
Kong said that the strong growth of demand for cement in China will last for a long time to come, with demand in rural areas is huge.  
In recent years, China’s demand for cement has maintained average growth of about 30 per cent.  
Kong also listed problems in the industry including low degree of cement production and shortage of funds for M&A and development by large enterprises.