Displaying items by tag: Huaxin Cement

Tajikistan: Tajikistan's parliament has formed an agreement with China's Huaxin Cement for the construction of two new cement plants, including a 1Mt/yr plant in Bobojon Ghafurov District and a 1.2Mt/yr plant in the Dangara Free Economic Zone. According to local media, Tajikistan will possess a 30% stake in the Bobojon Ghafurov plant and a 45% stake in the Dangara plant.

Tajikistan's Ministry of Industry and New Technologies said in January 2015 that that six new cement plants would be established within the next two years. By increasing the country's cement sector, which currently comprises ten plants, Tajikistan expects to become a net cement exporter.

Startling news from Hebei, China this week. The northerly province intends to move out its excess capacity in heavy industries, including cement, to other countries by 2023. 5Mt of cement production capacity is planned for transfer by 2017 and 30Mt is planned for transfer by 2023. The larger figure is about the same as the cement production capacity of France or Germany!

Hebei isn't the biggest cement-producing province in China but it has received attention as the authorities have cut down on 'out-dated' production capacity. The region was targeted in a programme to cut emissions from heavy industry due to its proximity to Beijing and that city's smog issues.

The Ministry of Industry and Information Technology (MIIT) set a target of 60Mt/yr in cement production capacity to be cut by 2017. The region was also the site of massive cement plant demolitions in late 2013 and early 2014. 18 cement plants were demolished in December 2013 followed by 17 cement plants in February 2014 alongside the destruction of connected grinding and storage capacity. Overall an incredible 74 cement plants in the area surrounding Shijiazhuang alone were targeted for demolition by March 2014.

Following this massive spate of capacity elimination, the public announcement to actively move abroad marks a stark change to China's general cement industry strategy so far. The country's equipment suppliers like Sinoma have been taking business from European rivals like FLSmidth or KHD for some time now especially in developing markets.

In 2013, FLSmidth reported a cement market order intake of US$575m and KHD reported an order intake of US$216m. In comparison Sinoma's cement equipment and engineering services reported order intake of US$5.59bn. In its annual report for 2013 FLSmidth estimated that the global market for new kiln capacity was 50Mt. At a capacity construction price of US$150/t this suggests that Sinoma took orders for nearly three quarters of the world's required capacity for new cement kilns in 2013. Order intake covers more than just building cement plants, so this quick calculation presents only a rough impression of what's going on.

More recently Chinese cement producers have started building their own cement plants or funding them outside of China. In October 2014 State Development and Investment Corp and Anhui Conch Cement Company announced plans to fund a plant in Indonesia. In September 2014 ground breaking was held for a Chinese-funded plant in Kyrgyzstan. In June 2014, Huaxin Cement invested in Cambodia Cement. This was its second overseas investment following a project in Tajikistan in 2011.

With China's government still attempting to avoid a hard economic landing as its growth slows, moving industrial overcapacity overseas makes sense. International and national players must be worried about the potential scale of this transition. On the plus side, however, those notorious inscrutable Chinese production figures in the cement industry will be far easier to analyse in plants outside of China facing international competition. Today Hebei, tomorrow the world!

China: Huaxin Cement Co Ltd has announced that it anticipates its net profit for the first quarter of 2014 to grow by 350-400% year-on-year, compared to a profit of US$4.14m in the corresponding period of 2013. The Hubei Province-based company attributes its forecasted profit growth to increasing cement product sales and prices.