Displaying items by tag: CNBM

China: Analysts expect the profitability of China's leading cement producers to weaken in 2012 due to slowing demand and falling prices.

SWS Research analyst Ye Rong expects the earnings of China's second-biggest cement producer, Anhui Conch Cement, to plummet by half in the first quarter, because the Yangtze River Delta, where most of Anhui Conch's sales are based, has seen cement price drops of 5% to 20% since the Lunar New Year, on 23 January 2012. Citic Securities forecasts the Hong Kong-listed firm's net profit will drop by 40% in the first quarter.

The net profit of Anhui Conch soared by 88.1% to US$1.84bn in 2011, while revenue surged by 41% to US$7.71bn. The state-owned enterprise's results for 2011 were in line with market expectations, wrote Luo Yang in a Nomura report. However, Anhui Conch's profit margin was likely to deteriorate in 2012, due to downward pressure on selling prices, rising costs and decelerating productivity, Luo wrote. "Under severe overcapacity, the company is subject to higher price risk in comparison with most of its peers."

Anhui Conch chairman Guo Wensan said the industry would face unfavourable factors in 2012, such as a slowdown in investment growth, regulation of the real-estate sector and rising energy prices. Anhui Conch plans a capital expenditure of US$1.27bn in 2012 less than the US$1.44bn in 2011.

In an exception to this trend, mainland China's biggest cement producer, China National Building Materials, announced it expected net profit to jump more than 100% from 2011. However, JP Morgan expects prices and profit per tonne for most mainland cement producers in 2012 to be up to 10% lower than 2011, and has trimmed its earning estimates for most listed cement companies. The growth in the mainland's cement consumption would be 5% to 8% in 2012, against 11% in 2011, the China Cement Association said.

The net profit of China National Materials (Sinoma) rose by 32.78% to US$231m in 2011, while turnover grew by 14% to US$8.04bn. The Hong Kong-listed firm's cement sales surged by 40% to US$3.21bn in 2011, while sales of its hi-tech materials increased by 7.7% to US$981m and its cement equipment business dipped by 0.1% to US$3.85bn.

Sinoma's net profit in 2011 was 10% below market consensus and 11% below Nomura's estimate. This was mainly due to much lower top-line growth and a disappointing margin performance. The state-owned firm's biggest business sector, cement equipment, suffered a small drop in 2011, because China's fixed-asset investment in cement fell by 8.3% in 2011, Luo wrote. "We expect it to further decrease by 15% in 2012." Sinoma's cement prices were under significant downward pressure, especially in Xinjiang province, due to worsening overcapacity, Luo warned.

China: China National Building Material Group Corp (CNBM), China's largest building materials manufacturer, invested about USD131m in energy saving and emission reductions in 2010, according to the company's 2010 corporate social responsibility report. The construction industry has long been known for its heavy pollution and high energy use.

The Beijing-based, state-owned company gave top priority to fulfilling its corporate social responsibility (CSR) in terms of energy saving. "The company has dedicated itself to energy conservation by investing in clean technology," said Song Zhiping, chairman of CNBM. According to Liu Baoying, vice-president of CNBM, the cement sector is a major contributor to the company's energy consumption, accounting for more than 90% of the total.

"The company's energy consumption in the cement sector was down by 23% during the period of the country's 11th Five-Year Plan (2006-2010), mainly because of our efforts to eliminate poor production methods and upgrade technology," said Liu. CNBM has disposed of 51 energy-inefficient cement operations with a total capacity of 6.8Mt/yr over the past five years, according to its CSR report.

The country as a whole has also attached great importance to decreasing its carbon footprint with the government targeting reductions in CO₂ emissions for every unit of gross domestic product by between 40-45% by 2020 compared with 2005 levels. In addition, CNBM has made substantial efforts in developing new building materials in a bid to reduce energy consumption.

Beijing New Building Material (Group) Co Ltd (BNBM), a subsidiary of CNBM, mainly focused on manufacturing houses made of new building materials that can save electricity, water and materials during construction. They can also reduce by 60-90% the energy used when the buildings are functional, said Cui Lijun, general manager of BNBM.

China: CNBM was China's biggest cement producer in 2010 followed by Anhui Conch and Jidong according to newly-released data from OneStone Research.

In China the top 10 cement producers comprised 817.4Mt/yr (34%) of a cement capacity of 2.41Bnt/yr. The market leader with a capacity of 200Mt/yr (8.3%) was CNBM, followed by Anhui Conch with 150Mt/yr (6.2%) and Jidong with 89Mt/yr (3.7%). Next places in the ranking were taken by Sinoma Cement, Shanshui, Huaxin, CRC, Tianrui, TCC (China) and Hongshi.

Companies in the top 11 – 20 rankings included BBMG, Jinyu Group, Lafarge, Yatai and Asia Cement, combining about 9.5% of China's cement capacity. In total the top 20 companies comprised 43.5% of the national capacity.

The only foreign producer within the top 10 besides Holcim (which hold a 39.9% participation in Huaxin) was Taiwan Cement Corp. (TCC) Other major foreign cement producers in China include Lafarge, CRH, HeidelbergCement, Asia Cement Corp., Taiheiyo, Italcementi, Cimpor and Cemex.

Indonesia: China National Building Material Co Ltd (CNBM) plans to invest USD 350m in the construction of a 16,000t/day cement plant in the next two years on Indonesia's main Java island. Indonesia is looking to overhaul dilapidated infrastructure and domestic cement firms are also ramping up output to meet growing demand. Indonesia's largest cement maker Semen Gresik aims to boost its output by 50% by 2015.