Asia Cement to invest NT$20bn in China

Asia Cement Corp, Taiwan’s leading cement producer and a subsidiary of the Far Eastern Group, will spend NT$20 billion (US$607.9m) to set up several cement plants and kilns in Hubei, Jiangxi and Sichuan provinces, mainland China this year.  Far Eastern Group Chairman Douglas Hsu recently said his group will see capital spending reach NT$100 billion (US$3.03 billion) this year. With the spending, Asia Cement will set up two cement plants, each in Hubei and Sichuan provinces and launch establishment of No.3 and No.4 kilns in its present cement in Jiangxi province, this year.

Asia Cement said it has zeroed in on cement and energy as two major business lines to expand the firm’s presence in mainland China this year. The company boasted it would see cement output reach 10 million metric tons in both Taiwan and mainland this year, and the amount will total 20Mt in 2010.  KY Lee, vice president of Asia Cement, noted his company will continue investments in the mainland this year, which include two cement plants in Hubei and Sichuan provinces, two kilns in Jiangxi province, a limestone grinding plant in Nanchang of Jiangxi province, and a premix cement plant, also in Nanchang. All the above-mentioned construction projects will cost the company at least US$350m. After all these projects are completed, the company will see annual cement output increase by 11.3Mt.

Originally, Asia Cement planned to set up a new cement plant in Zhejiang province. But the investment project was scrapped because of the saturation of such plants there and the company has switched the investment money to Jiangxi. The company said the cancellation of the Zhejiang investment project will not affect its deployment in mainland. Hsu stressed his company will make all-out efforts to reach the goal of boosting annual production capacity to 20Mt in the mainland in 2015.

In the foreseeable future, the company will also plan to set up a new cement plant in Fujian province with annual production capacity of 3.2Mt.  K Y Lee said the mainland will become his company’s major profit source in the next few years. The company gained NT$3.321 billion (US$100.6m) in after-tax earnings last year, up 187% from the previous year. Major contributors of the outstanding profits came from mainland investment, and such affiliated firms as U-Ming Marine Corp. and Far Eastern Textile Corp.