Anhui Conch sees growth in overseas markets
Anhui Conch recently released its FY15 results with an considerable profit fall of 32 per cent. Despite being a leading Chinese cement producer the company has certainly felt the impact of a decline in cement consumption in its domestic heartland. However, the company is already looking overseas in anticipation of better signs from its new outreaches in Indonesia and Myanmar.
While there has been a trend for Chinese turnkey suppliers to expand their reach abroad, it has taken longer for the domestic cement producers to expand internationally. Now there seems an increasing need for Anhui Conch at least to enter new markets as well as acquiring competitors at home.
Market analysts Merrill Lynch reports that Conch plans to add 14.6Mta of clinker and 26Mta of cement capacity in 2016. Development is unlikely to stop there though with analysts predicting that overseas capacity for Conch will rise to 50Mta by 2020.
Indonesia
Indonesia is a growth spot that is expected to deliver PT Conch the favourable kind of surroundings to launch its new 1.5Mta South Kalimantan cement plant later this month. The 3200tpd project will be supported with a 36MW steam power plant and the whole project has taken four years to reach commissioning.
Meanwhile, cement consumption in Indonesia was forecast this week by the Indonesia Cement Association (ASI) to grow by five per cent in 2016 as government infrastructure plans become a reality on the ground - good news for parent company Anhui Conch. Indonesian cement per capita consumption remains low at 200kg and the timing of the PT Conch plant would appear very good. Phase two construction is already set to be completed in June 2016.
Indonesia is also the location for the PT SDIC Papua Cement plant, which is a joint venture in West Papua, as well as the Merak grinding mill and Papua Barat plant.
Regional player
The early steps to becoming a fully-fledged regional player are in full progress for Anhui Conch Group. In February Conch Cement Co presided over the inauguration of its greenfield 5000tpd Kyaukse cement plant in Myanmar. It is one of the largest cement plants in the country and it will be highly efficient compared to the existing local factories.
The markets of Laos and Cambodia may not have quite the same potential as Indonesia or Myanmar, but in Laos the Chinese giant is building two cement plants in the locations of Luang Prabang and Vientiane, while work has also begun on work for a cement plant in Battambang, Cambodia.
