Anhui Conch plans US$4.6bn boost

Anhui Conch plans US$4.6bn boost
Published: 21 October 2003

After a 138 per cent profit gain this year, Anhui Conch will expand its capacity to meet surging demand Anhui Conch Cement, the mainland's largest cement producer, will spend five billion yuan  in capital expenditure over the next two years to increase production capacity as demand soars.  The Hong Kong listred share estimated that rapid economic growth and prolific infrastructure projects would lift consumption of cement 7 per cent this year, with the strong demand catapulting its net profit by 138 per cent to 413.97 million yuan in the first nine months of this year.  The regions with the most demand were the Yangtze River Delta, Zhejiang, Jiangsu and Anhui, with the Pearl River hinterland catching up fast, the company said.  "Construction of infrastructure projects, which were stalled due to the Sars outbreak and flooding, resumed in the third quarter," chairman and general manager Guo Wensan said yesterday.  "This lifted demand for cement and also prices.  And the trend is likely to continue in the current quarter."  He said cement prices shot up 10 per cent between July and September from the second quarter as infrastructure works were resumed following a temporary suspension caused by Sars and a series of flooding disasters.  Despite the planned heavy investment, Anhui Conch was confident it would remain in healthy financial shape and that the company would be able to maintain a payout ratio of about 20 per cent of its annual profit.  The H share's total asset to liabilities ratio stood at 59.51 per cent at the end of last month, rising from 54.75 per cent at the end of last year.