China’s cement industry faces sharp integration

China’s cement industry faces sharp integration
Published: 25 September 2006

China’s cement industry will usher in a period of big turbulence, diversification and reorganization in the years to come and the state will actively push forward adjusting the industrial structure, support big enterprises and raise the concentration rate of enterprises.
 
The remarks were made by Lei Qianzhi, chairman of the China Association of Cement Industry (CACI) on September 18 in a meeting with a visiting guest of International Financial Corporation. 
 
A batch of small enterprises and even some medium-sized enterprises will gradually quit the market in the coming 10 years, then the disorderly competition situation of the cement industry will be changed, said Lei. 
 
By then, Lei said, China will have 10-odd cement producers each with an annual production capacity of above 30 million tons, accounting for 30% of the total production capacity; and 30-50 producers each an annual production capacity of 5-30 million tons, accounting for 30% of the total. Enterprises each with an annual production capacity of below five million tons will combinedly contribute to about 40% of the total production capacity. 
 
The state is cautious about the participation of foreign investment in the cement industry, Lei noted. 
 
On one hand, China must keep its commitment to the WTO to open the cement market; and on the other hand, it will examine the merger and acquisition by foreign investors for approval. 
 
CACI had put forward a proposal that the foreign investors’ acquisition of cement project involving more than 100 million US dollars must be submitted to the Ministry of Commerce for approval.