Chinese clear cement plant purchase by CRH

Chinese clear cement plant purchase by CRH
12 February 2007

CRH has been cleared by the Chinese government to complete the purchase of a cement plant in Heilongjiang province, in the northeast of that country.  
Meanwhile, the Dublin-based international building materials group has still to finalise a link-up with listed Chinese cement manufacturer Jilin Yatai Group.  
It signed a Letter of Intent to acquire a 26pc equity interest with an option to acquire further shares after three years up to a maximum of 49 per cent in the group which is listed on the Shanghai Stock Exchange. CRH has not disclosed the consideration being paid for the acquired cement plant or proposed cost of buying into Yatai.  
However, the sole cement plant is estimated to have cost in the order of €27m, while market sources have already speculated that the group will have to commit more than €100m in total for the two ventures. 
The cement plant now acquired will operate as Harbin Sanling Cement Company and is located in Xiaoling Township, approximately 45 kms southeast of Heilongjiang‘s largest city, Harbin, which has a population of 9m. 
Harbin Sanling is a modern plant with two clinker production lines and total cement capacity of 650,000tpa.  
The Yatai operations comprise four integrated cement plants and one grinding station, with total cement capacity of approximately 9m tonnes per annum, located in the provinces of Jilin and Heilongjiang in northeast China.  
Yatai Cement is one of the ten largest cement groups in China.  
Completion of the proposed deal is subject to ongoing negotiation and due diligence, and to Chinese government approval.  
Published under Cement News