Taiwan’s cement producers expect profit improvement

Taiwan’s cement producers expect profit improvement
Published: 19 January 2006

Thanks to the introduction of mainland China’s 11th five-year economic development plan, Taiwan’s cement producers, including Taiwan Cement Corp. (TCC), Asia Cement Corp. and Chia Hsin Cement Corp., will see substantial growth in profitability in the second half of this year.  TCC said it has begun vying for the orders for cement needed to support the construction of the Guangzhou-Wuhan high-speed railway. Asia Cement and Chia Hsin have also made plans to boost production capacity.  
With the inauguration of the 11th five-year economic development plan starting from 2006, mainland China is expected to see demand for cement grow 8.2 per cent year-on-year this year. The five-year plan contains construction of several high-speed rails. Of them, the sixth bid of the 1000km Guangzhou-Wuhan high-speed rail calls for the construction of 142km inside the Guangdong Province territory will need as much as 3Mta of cement.  
 TCC said its Yingde plant in Guangdong Province is capable of rolling out 4.5Mta of cement. The company believed the plant would make great achievements in operations in the second half of this year if it can win the orders for cement for the construction of the high-speed rail.  
 In contrast to TCC’s optimistic view on the prospects for its operations in the second half of the year, Asia Cement and Chia Hsin Cement are more conservative.  Asia Cement and Chia Hsin Cement said mainland authority would introduce an energy-saving policy by ordering inefficient kilns to be shut down, which is expected to help them raise competitiveness.  
Asia Cement also said it would complete the construction of a cogeneration system at its Yadong Cement plant in Jiangxi Province by the end of January. Chia Hsin Cement noted its Jingyang Plant in Jiangsu Province has obtained approval for the operation of a cogeneration system, which will begin running after its No.2 kiln commissions in the near future.