Investor conference given some useful insights into TCC's plans within China, which includes strengthening links with Conch
To expand presence in mainland China, Taiwan Cement Corp (TCC), Taiwan's largest cement producer, is planning to enhance its existing cooperation with the Conch Cement Group, the mainland's largest cement producer listed on the Shanghai Stock Exchange. TCC is considering forming a strategic alliance with Conch in an attempt to acquire the operating rights of some of Conch's cement plants. TCC is also mulling acquiring some shares of Conch. At an institutional-investor conference held yesterday in Taipei, TCC said it targets to produce 10Mt of cement in the mainland within the next five years, which will contribute NT$4 billion (US$117.64m) to its annual profits. Chaired by TCC vice president Chiang Cheng-hsiung, the conference attracted 100-some institutional investors and representatives from domestic banks. Many cast concerns on the cement producer's operations in mainland. Chiang said his company has more production advantages in the mainland than rival companies because of adopting less-expensive mainland-sourced production equipment. TCC said it has invested in four cement plants in the mainland, including three grinding plants in Anhui, Fujian, Guangxi provinces, and a cement plant in Yingde, Guanddong Province. With the heavy investments in the mainland, TCC anticipates it would be able to produce 10 million metric tons of cement yearly there by 2008.
TCC said it has a 60 per cent stake in the Anhui-based Juchiachiao cement grinding plant, which began pilot production in August 2000 with annual production capacity of 750,000t. The company's Fuzhou, Fujian-based grinding plant is expected to commence pilot production in the second quarter of next year with an annual production capacity of 1.5Mt of cement. The company holds a 60 per cent stake in the Guangxi grinding plant. The Yingde cement plant, which will begin pilot production in 2005, is TCC's only wholly-owned cement production facility in the mainland. The plant is designed to have an annual production capacity of six million metric tons of cement. TCC said it would be able to recognize NT$2 billion (US$58.82m) in annual earnings from mainland investments in 2005 when its mainland annual output reaches the goal of 5Mt.