Taiwan’s leading cement producers, including Taiwan Cement Corp. and Asia Cement Corp., are expected to see their gross operating margins increase by two percentage points in tandem with a 5% hike in export prices in 2007.
An institutional investor predicted Taiwan Cement would be able to annually score more than NT$200m (US$6.25m) in additional profits from the rise in export prices in the next few years.
Thanks to the rise in international cement prices, Taiwan Cement saw its gross operating profit margin increase to 15.05% in the first quarter from last year’s 13.52%; Asia Cement saw the ratio climb to 21.31% from 18.37%.
Taiwan Cement said it scored NT$40 million (US$1.25m) in profits from exports last year because of the rise in export prices. As the export price has risen 15% since the beginning of this year, Taiwan Cement posted NT$160 million (US$5m) in profits from exports in the first quarter of 2006. If the cement price continues its upward trend, the company will see growth in profitability and profit margin next year.
Taiwan Cement saw monthly exports reach 400,000t in each month of the first quarter of this year. The company predicted it would be able to export 5.25Mt of cement this year. Asia Cement boasted it would export 1.8Mt of the products this year.