China Resources records sales jump

China Resources records sales jump
Published: 11 January 2005

China Resources Cement Holdings saw sales increase at least 20 per cent last year despite anti-inflation measures by the mainland government, according to vice-chairman and general manager Shi Shanbo.   Based in southern China, the cement maker sold 3.45Mt of cement last year, a 20 per cent rise from 2003, whereas sales of concrete jumped 27 per cent to 1.47 million cubic metres.  

Fuelling the demand for the building materials was an estimated 24 per cent increase in fixed asset investments last year and 9.4 per cent economic growth, Mr Shi said.   "Measures to cool inflation also cooled the demand for cement and raised financing costs of smaller cement manufacturers," Mr Shi said after the company’s extraordinary general meeting yesterday.   "However, bigger players are more resilient to the measures and benefited from them to some extent."  

He added that demand for cement and concrete would remain strong this year due to the country’s forecast of 15.1 per cent growth in fixed asset investment and 8 per cent expansion in its gross domestic product.  However, the biggest challenges to cement manufacturers this year would be management of coal and electricity costs as shortages of the energy sources continued to affect operating costs and margins, he said.  
To capitalise on the demand growth, China Resources Cement will see its cement output lifted 57.6 per cent to 5.2Mt this year after minority shareholders yesterday approved a motion to acquire a 73.5 per cent stake in a plant in Pingnan, Guangdong province.  The stake, held by its unlisted parent, China Resources (Holdings), is valued at about $151m.   The purchase will be funded by an $800m convertible bond issue.  (Abstracted from South China Morning Post).