Allied Cement of China, which made its debut on the main board of Hong Kong’s stock exchange yesterday, said it faces slowing demand growth for its products on the back of the economic slowdown and a credit squeeze in China.
During a ceremony to mark the company’s listing, its managing director Ng Qinghai said demand in the Yangtze River Delta (East China), Allied Cement’s main market, would increase approximately 5-10 per cent this year. This is slower than the 12 per cent registered last year but the market is expected to remain stable. "Eastern China's cement market will continue to maintain stable growth," the South China Morning Post quoted Qinhai as saying.
This year, many new infrastructure projects, including road and rail, would start in Jiangsu province, Ng said. "We are participating in some of these projects," he noted.
However, the mainland's property market, a key consumer of cement, has cooled with tightening measures by the central government. Spending on mainland rail construction, another big cement consumer, will drop to CNY400bn this year from CNY469bn last year, according to Beijing.
"The tight monetary conditions will affect us, but we have ample cash," Ng said.
Allied Cement raised HK$165m from its initial public offering (IPO), of which over 90 per cent will be used to repay debt.