Abstract
The cement industry is a periodicity industry. China cement industry started
to recover in 2006 after suffering the difficulty in 2005, and then the new
turn of cement demand had come. China cement output reached 1.35 billion tons
in 2007, up 13.5% year-on-year; and the sales was RMB410.4 billion, rising
23.1% year-on-year, the total profit was RMB24 billion, increasing more than
60% year-on-year.
China cement output reached more than 500 million
tons in the first half of 2008; the figure will break 1.4 billion tons for the
whole year considering the strong demand from post-earthquake reconstruction.
China cement still faces many challenges, like unreasonable structure,
over-number small companies, and backward production capacity. In 2006, China
central government issued a series of policies to accelerate the adjustment in
cement industry and eliminate backward production capacity. The National
Development and Reform Commission confirmed that manufactures with backward
output capacity should be entirely eliminated during 2007 to 2010, but the
following 12 manufacturers will be strong supported.
To improve the concentration degree is the primary objective for the structure
adjustment of China cement industry considering the current concentration
degree is only 20%. China cement industry will continually accelerate its
structure adjustment in 2009, mergers and share participations will become
the hot topics. In addition, the players will enhance the waste heat
generation projects, as well as new production line construction. Moreover,
the cement industry is lack of capital wholly; IPO and refinancing will be the
main ways to solve the capital bottleneck.
With the recovery of China cement industry, along with the challenges in China
cement industry, foreign investors have started to pay attention to China
cement market, more and more are progressing the activities of merger and
acquisitions.
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