Anhui Conch eyes expansion

Anhui Conch Cement expects turnover and production to be up by more than 50 per cent this year despite higher coal prices, executive director Guo Jingbin said.  Guo said 2.7 billion yuan (HK$2.54bn) will be injected into boosting cement production capacity from 30Mt to 50Mt, and dry process clinker from 23Mt to 40Mt this year.  Coal accounted for 27 per cent of the company’s total costs in 2003 and Guo expects the price to rise a further 5 per cent in 2004, on top of last year’s 9 per cent rise.  "The rising coal price has had some impact on us but the economy of scale helps to dilute the effects,’’ Guo said.  "But, the supply of coal and electricity in Anhui, where our production base is located, is adequate.’’

Guo said he welcomed the measures imposed by Beijing early this year to curb the growth of overheated industries, including cement, aluminium and steel. The expansion of the small players is under stringent control and the industry will go through a consolidation. But factories with a daily cement production of 4000tpd, like Anhui Conch, will receive encouragement from the government and I believe it’s a healthy development for the sector,’’ he said.