Anhui Conch Cement Co said Wednesday it is aiming for an increase in cement sales of around 23% this year, despite China’s moves to curb cement production as part of efforts to cool overheated sectors of its economy.
China’s fragmented cement sector has been hurt by overcapacity and overinvestment, leading a need to overhaul the industry. Beijing said earlier this week that as part of its targets for its Five-Year Plan ending in 2010, the number of cement enterprises should be reduced to 3,500 companies from over 5,100 last year.
Anhui Conch, China’s largest cement producer by output, is expected to sell more than 70Mt of cement this year, up from 56.92Mt last year, Executive Director Guo Jingbin told a teleconference.
"New austerity measures would be beneficial to big and quality companies, and speed up the process of wiping out smaller ones," Guo said.
"Demand for cement from the property sector will fall, but it will be offset by rising demand from infrastructure construction due to urbanization."
China’s demand for cement is expected to grow 5% to 10% this year, Guo said. Supply growth will be less than that since capacity expansion has decelerated over the past two years after Beijing introduced macroeconomic measures to cool rapidly growing industries, including the automobile, property and cement sectors, he said.