Good year for Chinese cement

Good year for Chinese cement
Published: 18 January 2007

China’s cement industry has made some notable gains. By the end of November, 2006, the national cement output reached 1.097bn tons, increasing by 19.7 per cent on 2005. It was predicted that the annual output of cement would exceed 1.2bn tons - reports the China Economic Net.

Secondly, sales revenue increased by a large margin. By the end of November, 2006, sale revenue reached RMB 286.8bn yuan, increasing by 24.1 per cent YoY. It was predicted that the annual sales revenue would break through RMB300bn yuan.

Thirdly, economical benefit hit a new high in the history. By the end of November, 2006, after deducting losses, the whole industry has made a profit RMB 12.238bn yuan, increasing by 104.8 per cent YoY.. It was predicted that the total amount of annual profit would reach RMB15bn yuan, exceeding the highest record in 2004.

Fourthly, international competitiveness was undoubtedly enhanced. By the end of November YoY. Especially that the completed cement plants, technical service and general contract project had accounted for over 25 per cent of the international market shares.

Fifthly, investment structure was further optimized. By the end of November, 2006, the fixed assets investment was RMB33.874bn, decreasing by 4.07 per cent YoY; however, newly-built projects were mainly concentrated on large new dry-process cement projects which were encouraged to develop by the state industrial policies. In 2006, 77 new dry-process cement production lines were built and put into production across the country, and production capacity of clinker newly added 84.48Mt; the proportion of new dry-process increased to 49 per cent, increasing by 10 percentage point year on year.

Sixthly, the proceeding of enterprises annexation and reorganization was accelerated. Some large corporations and groups, such as Anhui Conch Cement Company Ltd., China National Building Material (Group) Corp. and China National Materials Industry Group etc. have increasingly developed and expanded by purchasing and annexing small cement companies under the market operation; the industrial concentration was further enhanced.

In 2007, China’s national economy will continue to develop at a fast speed and cement industry will face a positive development situation. But cement industry still has difficult tasks to complete: accelerate structure adjustment, transform the ways to achieve economic growth, and realize the energy saving, consumption reducing and mitigation goals.

One should also encourage suitable cement companies to "go out" so as to make China’s cement industry develop towards internationalized operation: from product output to complete output including capital, equipment, technique, management and service – the report concludes.