Taiwanese groups: profits rising

Taiwanese groups: profits rising
Published: 06 December 2005

Due to an expected 10 per cent rise in the price of export cement, Taiwan’s cement firms will likely see their average profit margins increase two per cent next year.  An institutional investor predicted that large-cap Taiwan Cement and Asia Cement would see their average profit margins rise two per cent next year from this year’s level.  Taiwan Cement said it would raise production capacity by five per cent to reach 10.75Mt next year, selling 5.5Mt on the domestic market and exporting 5.25Mt, accounting for 60 per cent of Taiwan’s total cement output. Asia Cement should produce 5.7Mt of cement next year, selling 4Mt on the domestic market while exporting the remaining 1.7Mt.

Thanks to the rise in export cement prices and the settled price of domestic cement, Taiwan Cement saw its average profit margin rise to 10.89 per cent in the first three quarters of this year, compared to 9.1 per cent posted in the same period of last year. Asia Cement saw its profit margin rise four percentage points to reach 23.13 per cent in the first three quarters of this year. 

Asia Cement president Lee Kun-yen noted that the price of domestic cement has hovered at the NT$2250 (US$66.96) per metric tonne for almost a year. Lee also said that profits generated from domestic sales have been higher than those from exports. He said his company wouldn’t adjust its production lines to facilitate international sales, despite the 15 per cent rise in the international price of cement over the past two years.