Taiwan’s two leading cement producers, namely Taiwan Cement Corporation and Asia Cement Corporation, are reaping harvests in mainland China.
Taiwan Cement delivered 590,000t of cement in May alone in the mainland, hitting a historic high record. The company estimated it will see profits double in the second quarter of this year from the preceding quarterly base as the selling prices for its products surged approximately 15% year-on-year in the second quarter.
Thanks to the product price hike and introduction of new production capacity, Asia Cement is expected to see overall annual earnings reach NT$7.8bn (US$237.8m) this year.
Taiwan Cement’s Yingde plant in Guangdong Province saw production capacity utilization rate reach 60% last year when it began mass production. But the plant has raised the rate to over 90% in the first five months of this year. At present, the company’s monthly production capacity has reached 590,000 metric tons in the mainland.
In addition to the increased output in southern China region, Taiwan Cement has also seen a hike in product prices. The prices of cement products sold in Guangdong and Fujian provinces reached 320RMB and between 420RMB and 430RMB per metric ton, respectively, up 40RMB up to 50RMB year-on-year.
An institutional investor estimated Taiwan Cement will see earnings contribution from the mainland reach CNY2.3m in the first quarter of this year and CNY4.6m in the second quarter.
Taiwan Cement president C.C. Huang said his company would raise product prices in the mainland market in September as the demand for the product there will peak in the fourth quarter of this year.
Asia Cement noted it would see annual output reach 8Mt in the mainland this year as it will add a new production line with yearly production capacity reaching 2Mt at its Jiangxi plant in July.
Asia Cement raked in CNY29.5m in earnings in the mainland in the first quarter of this year. An institutional investor estimated the company would see monthly earnings grow to CNY25m in June from April’s CY21.1m in the wake of the price hike in cement in Hubei and Sichuan provinces.