Encouraged by the promising outlook of mainland China’s cement market, Taiwan’s major cement firms, including Taiwan Cement Corp, Asia Cement Corp, and Chia Hsin Cement Corp, are aggressively expanding their presence there.
A domestic institutional investor noted Taiwan Cement and Asia Cement will post higher profits because of the inauguration of their new production facilities in the mainland in 2007.
Chia Hsin Cement said it would build distribution channels by setting up wharves along the Yangtze River, and would seek strategic partnership with peer cement producers in the mainland.
At present, Taiwan Cement has three production bases in southern China region, including those each located in Yingte of Guangdong Province, Fuzhou of Fujian Province, and Gueigang of Guangxi Province. The company said it has launched mass production for two production lines at the Yingte plant and another two lines are under construction.
In addition to the expansion at the Yingte plant, Taiwan Cement is also building four production lines at the Gueigang plant to boost cement output by six million metric tons per year. The company estimated it would be able to roll out a total of 17.8 million metric tons of cement in the mainland in 2007.
An industry insider predicted Taiwan Cement would be able to break even in mainland operations in 2006 and earn NT$400 million (US$12.19m at US$1:NT$32.8) in 2007.
Although Asia Cement currently has smaller production capacity than Taiwan Cement in the mainland, it is expected to challenge NT$100 million (US$3.04m) in earnings in 2006 because of higher price tag of its products.
Chia Hsin anticipated its output in the mainland to stay at 3.9 million metric tons in 2007 as the level posted in 2006.