Displaying items by tag: Taiwan Cement Corporation
Update on China, August 2022
31 August 2022The larger cement producers in China have published their half-year financial results and the numbers are looking grim. Starting with data from the National Bureau of Statistics of China, cement output in the country fell by 14.5% year-on-year to 979Mt in the first half of 2022 from 1.14Bnt in the same period in 2021. This is the lowest first half output figure since 2012. The decline on a monthly basis started in May 2021 and has carried on consistently since then. Rolling cumulative annual output hit a low of 2.18Bnt in July 2022, the lowest figure since at least the start of 2019 and well before the coronavirus pandemic started.
Graph 1: Cement output in China, 2018 to 2022. Source: National Bureau of Statistics of China.
The financial figures from the cement producers have mostly followed this trend. Of the companies covered here, Anhui Conch’s drop in sales revenue was the most distinct at 30% year-on-year to US$8.14bn. However, Jidong Cement actually managed to increase its revenue and Huaxin Cement’s decrease was fairly small, possibly due to its growing stable of overseas projects. None of these companies could avoid falling cement and clinkers sales volumes though. Again, Anhui Conch is the outlier here with a larger fall in sales volumes proportionally at nearly 40% compared to around 20% for the rest. Chen Bolin, the deputy secretary-general of China Cement Association (CCA), told the 21st Century Business Herald newspaper that of the 20 or so listed cement companies that have published their half-year reports by the end of August 2022, more than half had reported falling sales revenue and net profit and only one company had managed to increase its net profit.
Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: Cement revenue shown only for CNBM & Taiwan Cement.
Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.
The financial reports from the Chinese cement companies detailed here have been fairly light on the reasons for the current state of the sector. Repeated coronavirus outbreaks, instability in the real estate market, a lack of funding for infrastructure projects, growing energy and raw materials costs, pressure on prices and a generally weak economy have all been blamed for the situation. Media channels outside of China have continued to scan the country’s real estate sector for signs of collapse following Evergrande’s problems in 2021. However Chen Bolin diplomatically held back by describing the real estate market as not yet stabilised and a drag on cement demand. Instead he hoped that large-scale infrastructure projects would offer some form of relief.
One last point to note, that both the CCA has made and could be seen in some of the company reports, is that some of the Chinese cement companies are already starting to diversify their businesses. This is in parallel to what some of the larger western-based multinational cement producers have also been doing in recent years with forays into concrete, light building materials and construction chemicals. CNBM already has large concrete, light building materials and engineering subsidiaries. However, Huaxin Cement and Anhui Conch have also started to branch out recently into aggregates, concrete and new energy generation, in the case of the latter company. Things may get worse before they get better, especially depending when or if the Chinese government decides to act on the real estate market. However, whatever kind of adjustment the cement sector may face, there are some signs present already of what some of the companies may do next.
Taiwan Cement's sales grow in first half of 2022
19 August 2022Taiwan: Taiwan Cement recorded sales of US$1.67bn in the first half of 2022, up by 2.5% year-on-year from US$1.62bn in the first half of 2021. The group's cement segment increased its sales revenues during the half by 8.2% to US$1.42bn from US$1.31bn. Cement thus contributed 86% of revenues during the period. Net income attributable to the company's shareholders during the half totaled US$251m, down by 5.1% US$264m.
An-Ping Chan adds president to duties at Taiwan Cement
17 August 2022Taiwan: An-Ping Chan has become the president of Taiwan Cement in addition to his current roles as the group’s chief executive officer and the company’s chair. The concurrent appointment follows the resignation of previous president Jong-Peir Li due to personal health reasons.
Taiwan: Taiwan Cement has appointed Emerson Chang appointed as its Chief Information Security Officer. Chang became a director of Taiwan Cement in 2020. Prior to this he worked as the Information Technology (IT) Infrastructure Manager for consumer electronics company Compal Communication for over 10 years.
Ta-Ho Maritime to buy new cement carrier
13 April 2022Taiwan: Ta-Ho Maritime has announced its decision to buy a new cement carrier. The subsidiary of Taiwan Cement said that the investment cost would be up to US$50m. The bulk shipping company transports dry bulk commodities around the world, including cement. Its fleet consists mostly of ‘Kamsarmax’ sized ships and cement carriers with a total deadweight upwards of about 700,000t. It operates five dedicated cement carriers, two of which use alternate maritime power (AMP) that are used to reduce pollution.
Taiwan Cement chair pessimistic about Chinese market
22 December 2021Taiwan: Zhang Anping, the chair of Taiwan Cement, has expressed doubts about the strength of the Chinese market in the short term. Whilst being interviewed by the state-owned Central News Agency at a community event, he said that increased raw material and energy prices looked set to remain high until at least mid-2022. The price of coal in China had more than tripled in 2021 before easing somewhat. He also raised the risks of growing global market uncertainty from an anticipated rise in interest rates in the US by the Federal Reserve and the spread of the Omicron variant of Covid-19.
Taiwan: Taiwan Cement plans to build 87.5MWh and 250MWh large-scale energy storage units at its integrated Suao and Hualien plants respectively. Once complete it will become the largest energy storage field in the country. The company will also install a 4MW solar plant at Hualien.
Italy: Taiwan-based Taiwan Cement has successfully acquired a 60% stake in battery and hydrogen power systems supplier Engie EPS for Euro132m. The building materials producer is attempting to become a global supplier in the sector.
Huaxin Cement targets East Africa
16 June 2021The latest piece of China-based Huaxin Cement’s global ambitions slotted into place this week with the news that it is preparing to buy plants in Zambia and Malawi. Its board of directors has approved plans to spend US$150m towards acquiring a 75% stake in Lafarge Zambia and US$10m on a 100% stake in Lafarge Cement Malawi. The move will gain it two integrated plants with a combined production capacity of 1.5Mt/yr in Zambia, and a 0.25Mt/yr grinding plant in Malawi.
This latest proposed acquisition represents the next step for Huaxin Cement in Africa following its purchase of African Tanzanian Maweni Limestone from ARM Cement in mid-2020. The company has also been busy along the more traditional Belt and Road Initiative land routes in Asia. It started up the kiln at its new 2Mt/yr Jizzakh cement plant in mid-2020. Elsewhere in Central Asia it runs two plants in Tajikistan and one plant in Kyrgyzstan via various indirectly-owned subsidiaries. While in South Asia it runs a plant in Nepal and in South-East Asia it runs one in Cambodia. If the plans in Zambia and Malawi pay off then it will give the Chinese producer a growing presence in East Africa, with plants in three countries.
The China Cement Association ranked Huaxin Cement as the country’s fifth largest clinker producer in 2021 with an integrated capacity base of just under 63Mt/yr. Domestically, the company operates 57 cement plants and most of these are based in the Yangtze River Economic Belt region. In 2020 it reported cement and clinker sales of 76Mt, a small decrease from 2019. Its operating income fell by 6.6% year-on-year to US$4.58bn and profit dropped by 12% to US$1.2bn. This performance was blamed on the emergence of Covid-19 at the start of 2020 and then floods later in the year.
Compared to the other larger Chinese cement producers, Huaxin Cement roughly appears to be holding rank with its overseas expansions. The leaders, CNBM and Anhui Conch, hold subsidiaries with plants in South-East and Central Asia and CNBM’s engineering wing, Sinoma, has a far bigger reach, building plants all over the place. Information has been scarce since mid-2020 on the long heralded 7Mt/yr plant in Tanzania due to be built by Sinoma and local subsidiary Hengya Cement. At that time local residents in Mtimbwani, Mkinga District were reportedly being compensated for their land. Other than this, one of the other big players internationally is Taiwan Cement. In 2018 it invested around US$1.1bn for a 40% stake in Turkey-based Oyak Cement. As well as a presence in Turkey this also gave it a share of plants in Portugal in 2019 when Oyak completed its acquisition of Cimpor.
Elsewhere this week, carrying some of the themes above with expansion in Central Asia, two new integrated cement plant projects were announced in Kyrgyzstan and Turkmenistan respectively. Meanwhile, Italcementi said it will invest Euro5.0m to restart clinker production at its Trentino cement plant in Sarche di Madruzzo, Italy. The unit has been operating as a grinding plant since 2015. This might be viewed as an unexpected decision considering the high local CO2 price but it shows some level of confidence in the local market by Italcementi and its parent company, HeidelbergCement. The next step will be when or if a European producer decides to build a brand new integrated plant in Italy or elsewhere.
Taiwan: Taiwan Cement’s revenue rose by 11.3% year-on-year to US$788m in the first quarter of 2021. Its income increased by 11% to US$119m. It attributed this to profit growth in its cement businesses in Taiwan and Europe despite ‘weak’ sales prices in China.
Chairman Nelson Chang said, “To reduce carbon emissions, using alternative fuel and material for cement production, adopting renewable energy, and expanding energy storage usage are crucial and Taiwan Cement aims to play our role in helping society achieving the goal of a low carbon environment.” In 2020 the group processed over 9Mt of alternative fuels in its Greater China business.