HeidelbergCement expands into Chinese growth region

HeidelbergCement expands into Chinese growth region
Published: 05 October 2006

HeidelbergCement has signed an agreement on the acquisition of a majority stake of 80% in the Chinese cement manufacturer Liaoning Gongyuan Cement. The company is located in Liaoning province in Northeast China and operates three cement plants in the greater Shenyang/Benxi area, one of which is a newly erected plant near the provincial capital Shenyang with a kiln production capacity of 2,500 tonnes per day. Furthermore the company operates a grinding plant in Inner Mongolia. The total sales volumes of Liaoning Gongyuan Cement amount to around 3Mta. The purchase agreement is still subject to the approval of the authorities.

The main markets of Liaoning Gongyuan Cement are the cities of Shenyang with 7 million inhabitants and Benxi with 1.5 million inhabitants. With its nearby iron ore and coal deposits, Shenyang is the center of the heavy industries in Northeast China. The strong growth potential of Shenyang is supported by the “Revive Northeast” development policy of the government. With the erection of a second kiln line in the new Gongyuan plant and the upgrade of the existing kilns, HeidelbergCement intends to increase the production capacity up to 5.6Mt by the end of 2008. Rich limestone reserves and a direct access to blast furnace slag – important factors for sustainable and cost efficient cement production – are competitive advantages of this location.