Conditions ripe for large-scale reshuffle of China’s cement industry

Conditions ripe for large-scale reshuffle of China’s cement industry
Published: 09 May 2007

The conditions for large-scale strategic restructuring are ripe for China’s cement industry, while a number of big enterprises will grow strong in this process, according to a recent international cement summit meeting held in Beijing. 
Lei Qianzhi, president of the China Cement Association, said that fostering large enterprise groups of international competitive edge through strategic restructuring and raising production concentration are the priority tasks of structural adjustment of the cement industry. 
Lei listed four factors to prove that the conditions for restructuring of cement industry are ready.  
• A group of large enterprise groups have become the backbone force in the cement industry.  
• The present sound financial environment is beneficial to structural adjustment of the industry, including the state support policy to key cement enterprises and inflow of international financial and industrial capital.  
• Enterprises’ expansion of production has been mainly focused on new dry-process clinker production lines with the market share increasing.  
•  People have reached a common sense that stepping up restructuring and raising production concentration are the ways to improve efficiency.  
An official with the National Development and Reform Commission said that the state policy supports cement enterprises to speed up restructuring, and acquisition and merger in order to raise the concentration of production.  
China published the list of 60 cement enterprises under the priority of the state support in the end of 2006, and has recently issued a circular on getting rid of the outdated and backward cement production capacity. 
Analysts held that stimulated by the state policy and other factors, the cement industry will enter a stage of large-scale acquisition and mergers, and the big and strong enterprises will win and become strong in the process of restructuring.