Displaying items by tag: China
Wang Shizhong resigns from BBMG Corporation
19 February 2016China: Wang Shizhong has resigned as an executive director and a member of the Strategic Committee of BBMG Corporation with immediate effect. He resigned due to the re-designation of his work. The board of BBMG expressed its appreciation for Wang’s contribution to the company development in a statement.
China Tianrui Group expects net profit to drop by 30% in 2015
18 February 2016China: China Tianrui Group Cement has said that it expects that its 2015 net profit will drop by more than 30% year-on-year in 2015. It has blamed the downturn on China's economic slowdown that has reduced demand for cement and lowered the selling price. The cement producer didn’t release a figure for its expected net profit in 2015 but it reported a net profit of US$86.6m in 2014. It intends to release its full financial results for 2015 at the end of March 2016.
Anhui Conch confirms that production at Shaanxi subsidiary is suspended until mid-march 2016
18 February 2016China: Anhui Conch Cement has confirmed that its subsidiary in Shaanxi province, Liquan Conch Cement, has suspended its production. The decision follows Shaanxi Provincial Government legislation requiring all cement and clinker producers to adopt off-peak production. Most producers are required to stop production from 15 December 2015 until 15 March 2016 with a few exceptions. 25 cement companies, with a total of 37 clinker production lines, are based in the province.
Liquan Conch has a cement production capacity of 4.4Mt/yr, contributing 1.5% to the total production capacity of Anhui Conch. It held audited net assets worth US$96.3m at the end of 2014, representing 0.9% of Anhui Conch’s total. Anhui Conch do not expect the temporary suspension of production at Liquan Conch to adversely affect its operating results. Liquan Conch was built in 2009.
Asia Cement expects loss in 2015
29 January 2016China: Asia Cement expects a loss for 2015 due to lower product selling prices and foreign exchange losses from US Dollar-denominated loans. The producer reported a net profit of US$120m in 2014. Its financial results for 2015 will be released by the end of March 2015.
Shanshui Cement defaults on US$270m bond
25 January 2016China: Shandong Shanshui defaulted on a US$270m three-year bond that matured on 21 January 2016. It is the second default for its owners, China Shanshui Cement, since November 2015. The move places Shanshui Cement at increased risk of bankruptcy and complicates plans by Tianrui Group to purchase the company. The previous debt default triggered multiple lawsuits from creditors that have already seen some of its assets frozen or put into impending auctioning, according to the South China Morning Post.
"The underlying cause of Shandong Shanshui's debt problems is unresolved disputes over shareholders' control, which restricted its fund-raising channels," said Shandong Shanshui in a statement. Since the estimated value of the company's assets far exceeds its debt, it expects court-ordered assets sales to bring in less proceeds than claims made by creditors, it added.
Ghanaian cement producers praise higher Freight on Board value
25 January 2016Ghana: The Ghana Cement Manufacturers Association (GCMA) has praised the Ghana Revenue Authority (GRA) for introducing a Freight on Board (FOB) value of US$60/t for cement, a rise from US$26/t previously. The GRA has been investigating allegations of under-declaration in the cost and freight value for imported bagged cement from China, according to local press.
"We commend the GRA for playing a vital role in this adjustment, and urge its sustenance in order to maximise revenue as well as protect the local cement industry," said George Dawson-Ahmoah, chairman of the GCMA. The GCMA maintains that imported bagged cement into Ghana is unnecessary give the country's surplus of locally manufactured cement. Members of the GCMA include Ghacem Limited, Diamond Cement, Savanna Diamond Cement and Western Diamond Cement.
China: China has decided to implement a tiered electricity pricing system for the cement plants to promote 'structural adjustment' in the cement industry, according to a circular released by the National Development and Reform Commission (NDRC) according to Chinese state news.
The tiered electricity pricing system for the domestic cement industry will be based on comprehensive electricity consumption of clinker (cement) and implemented on an annual basis from 1 January to 31 December. Local governments will also be able to implement the system and raise the electricity prices for cement plants.
Has China’s cement production peaked?
20 January 2016Even the Chinese premier doesn't trust his country's GDP figures. Li Keqiang reportedly told a US ambassador this in 2007. He described Chinese GDP figures as 'man-made' and unreliable. Wikileaks then made the diplomatic report public a few years later. This anecdote has been much reported this week due to the latest gloomy economic figures from China. Its economy officially grew by 6.9% in 2015, its slowest rate in 25 years.
So what can a jittery world trust? Keqiang was reported to focus on three data samples to compensate for an unreliable GDP: electricity consumption, rail cargo volume and bank lending. Global Cement Magazine suggests that he should have followed one more: cement. What can cement tell us about the Chinese economy in recent years?
Chinese cement production fell by 4.9% to 2.35Bt/yr in 2015 according to newly published figures by the National Bureau of Statistics of China (NBSC). This is significant. Firstly, whether it is a true reflection of actual production or not, it is an admission by a Chinese state body that cement production is declining. Secondly, it signals the end of the rapid growth of the country's heavy industries through the 1990s and 2000s.
Figure 1 – Chinese cement production by quarter, 2014 – 2015
Figure 1 shows Chinese cement production by quarter in 2014 and 2015 using NBSC data. Two years are insufficient to pick out any major trends other than seasonal trends throughout each year. However, remove the slow winter months in the first quarter of each year and a steady decrease in production throughout 2014 and 2015 is apparent.
Figure 2 – Chinese cement production by year, 2005 – 2015
Figure 2 offers the context that Figure 1 lacked by comparing cement production from 2005 to 2015. Notable trends to point out are a slow down in growth in 2008, around the time of the global financial crash. Then production peaked in 2014 before falling in 2015. This data comes from the United States Geological Survey and then latterly the NBSC.
Figure 3 – Chinese cement production by year and GDP/capita, 2005 – 2015
Figure 3 shows annual growth in cement production against growth in GDP. The similarity of each line here, or the rate of growth, and where they diverge is what is interesting here. Up until the late 2000s the trend is similar until GDP/capita starts to grow faster than cement production. At this point either the Chinese economy has started to acknowledge that it can build all the infrastructure and housing it needs or perhaps the slowing growth in cement production has started to point to slowing GDP/capita growth.
2015 could be a blip if growth resumes in 2016. Yet the other heavy industry metrics suggest otherwise. Electric power and steel production also fell for the first time in 2015. Coal production dropped for the second year in a row. The Chinese housing market started to slow noticeably in 2014, cement production followed by slowing down and now the country's GDP growth has also slowed. Alongside this the industry's capacity reduction programme officially started in late 2013. Cement consumption per capita for China has long suggested that Chinese growth was due to slow. It is reassuring to finally see the official production figures reflect this. The real question though is what happens next.
China National Building Materials expects a four-fold increase in net profit for 2015
19 January 2016China: China National Building Materials (CNBM) said that it expects a 310 - 360% surge in net profit for 2015 compared with its 2014 net profit of US$22.5m, according to Dow Jones. CNBM said that the rise was due to it having 'cleaned up' asset losses. The exchange rate change between the US Dollar and the Chinese Yuan also contributed to its profit rise.
China Resources Cement expects 2015 net profit to have plunged
14 January 2016China: State-owned China Resources Cement said that it expects its 2015 net profit to have fallen sharply year-on-year due to lower selling prices and exchange losses from foreign loans, following dismal data for the first nine months of 2015.
Its net profit for the nine months of 2015 fell by 60.6% year-on-year to US$165m, as its exchange loss from non-Chinese Yuan net borrowings surged fourfold year-on-year to US$83.8m. Cement and clinker also suffered from narrow gross margins of 24.1% and 11.3% for the nine months that ended on 30 September 2015 compared to 34.6% and 13.9% from 2014.