China in the spotlight

China in the spotlight
Published: 18 June 2004

Taiwan Cement Corp is vying with Chia Hsin Cement Corp for the No.1 position in terms of Taiwanese cement production capacity in mainland China.  Taiwan Cement boasted it would see annual production capacity amount to 5.75Mt in the mainland in the third quarter of this year, surpassing all Taiwanese counterparts there. To keep its crown as the largest Taiwanese producer of cement in the mainland, Chia Hsin said it would strive to boost annual production capacity to exceed 6Mt by the end of this year.

At a shareholders’ meeting recently held in Taipei, Taiwan Cement Chairman Leslie Koo reiterated his ambition to accelerate investment pace in the mainland, targeting to achieve the annual production capacity goal of 20Mt in the next five years.

Founded in 1946, Taiwan Cement is the pioneer of the island’s cement industry and the flagship of the Koo’s Group. Over the past few years, Taiwan Cement has cooperated with the mainland’s largest cement producer Conch Group to set up a cement-grinding plant owned by their joint-venture Anhui Kingbridge Cement Co., which is currently capable of outputting 750,000t of cement a year.

Recently, Taiwan Cement spent US$14.28m to acquire a 47.5% stake in the Xuzhou Conch Cement Co. under the Conch Group through its overseas affiliate Virgin Islands-registered Taiwan Cement International (Jiangsu) Corp. Xuzhou Conch is expected to launch pilot production in the fourth quarter of this year, becoming Taiwan Cement’s first cement manufacturing facility in the mainland.

Xuzhou Conch is designed to produce 10,000t of clinkers per day to accommodate the output of 3.5Mt of cement per year, a scale surpassing that of Taiwan Cement’s Hoping Cement plant in Taiwan’s eastern county of Hualien.  Originally Taiwan Cement projected an annual output at 10Mt in the mainland in 2008. At the beginning of this year, Koo decided to double the annual output goal to 20Mt. To reach that goal, the company has been stepping up production expansion by setting up plants on its own and through cooperation with the Conch Group.  To effectively raise production capacity in the mainland, Taiwan Cement will acquire some outdated plants owned by Conch Group and retooled them into modernized ones. Taiwan Cement estimated it would conduct two more cooperative projects with Conch Group by 2008.

Taiwan Cement boasted it already kicked off construction of the first and second kilns of its 100% owned Yingde Cement plant in Guangdong Province in March this year. The plant will have an annual production capacity of four million metric tons by the end of next year. Plus the annual production capacity of 3.5 million metric tons of the Xuzhou Conch, the company will see mainland annual production scale amount to 11.05 million metric tons next year, outstripping major rivals China Hsin Cement and Asia Cement. The company targets to see annual output reach 20Mt in 2008.

Seeing Taiwan Cement’s ambition to expand output in the mainland, Chia Hsin said it is now expanding Jingyang Cement plant to increase annual production capacity of its first kiln to 3.1Mt by the end of this year. Plus the pilot production of another subsidiary Jiangsu Union Cement Co at the end of this year, Chia Hsin will see annual output reach 6Mt in the mainland by the end of this year.  Chia Hsin said it would boost annual output to reach over 10Mt in the next few years as it is building the second kiln of the Jingyang Cement plant and is planning to build a third kiln in the plant owned by Jiangsu Union Cement.

Asia Cement Corp, Taiwan’s another leading producer of cement, boasted it would set up four cement plants and 10 kilns in the mainland by 2015. The company noted it would see annual output exceed 4.3Mt of cement in the mainland this year.  Another small-cap counterparts, including Universal Cement Corp and Hsing Ta Cement Corp, have also had plans to expand investments in the mainland.  Universal is building a cement plant in Huizhou of Guangdong Province with designed annual production capacity reaching one million metric tons. The plant will launch pilot production by the end of next year.  To speed up integration of upstream and downstream cement products, Universal has recently set up three premixed cement plants in Huizhou and is planning to launch another one in Fenghua of Zhejiang Province.  Recently Hsing Ta has resolved to set aside US$60m to establish an overseas holding company to pave the way for moving into the mainland market. The company is considering setting up a plant in Yunnan Province or other sites of the greater western China region.