Shui On to expand cement business by acquisition

Shui On Construction and Materials Ltd. announced its annual results for the year ended 31 March 2005. The net profits of the group reached HK$483m, an increase of 2.27 times. The project of Ruihong New Town and Yangtze Ventures contributed most to the profit of the group. Shui On will continue to focus on property development and venture capital investment in Hong Kong and China. 

Shui On has seen the business of building materials losing HK$97m during the period. Although the prospects for the business of cement is still unclear, the group will invest HK$800m to expand its cement business this year. The rate of return is predicted to be over 10 per cent in this cement investment. The group will purchase some cement enterprises in Yunnan with HK$800m. If Lafarge Group will cooperate with Shui On, the production volume of the group together with its companions in South-west China will be over 15Mt. 

At the same time, Shui On may dispose of its building material business in the Pearl River Delta area and in Hong Kong. The building material business is making a loss of HK$56m during the 2004/05 period. The building material trading business in Hong Kong that made a loss of HK$19m is also cut.