Displaying items by tag: Tangshan Jidong

China: Tangshan Jidong’s net profit in the first half of 2020 was US$140m, down by 33% year-on-year from US$210m to US$246m. Cement sales fell by 14% to US$1.58bn from US$1.83bn, while clinker sales fell by 11% to US$218m from US$246m. The Hebei Province-based group attributed the sales fall to the effects of the coronavirus lockdown in early 2020.

China: Hebei province-based Tangshan Jidong Cement’s net 2019 profit was US$298m, up by 42% year-on-year from US$210m in 2018. Cement and clinker sales remained flat. Tangshan Jidong Cement attributed the growth to increased prices due to a 9.9% year-on-year increase in infrastructure spending to US$1.86tn. Throughout the year, the company said, it completed energy-saving optimisation and upgrades to improve efficiency, implemented strategic marketing and reduced the cost of material procurement.

Many of the Chinese cement producers have released their annual results for 2017 over the last week, giving us plenty to consider. The first takeaway is the stabilisation of cement sales since 2014. As can be seen in Graph 1, National Bureau of Statistics data shows that cement sales grew year-on-year from 2008 to 2014. This trend stopped in 2015 and then government mandated measures to control production overcapacity kicked-in such as a industry consolidation, shutting ‘obsolete’ plants and seasonal closures. Although it’s not shown here, that last measure, also known as peak shifting, cans be seen in quarterly sales data, with an 8% year-on-year fall in cement sales to 578Mt in the fourth quarter of 2017.

Graph 1: Cement sales in China, 2007 – 2017. Source: National Bureau of Statistics.

Looking at the sales revenue from the larger producers in 2017 doesn’t show a great deal except for the massive lead the two largest producers – CNBM and Anhui Conch – hold over their rivals. CNBM reported sales roughly twice as large as Anhui Conch, which in turn reported sales twice as large as China Resources Cement (CRC). With everything set for the merger between CNBM and Sinoma to complete at some point in the second quarter of 2018, that leader’s advantage can only get bigger.

Graph 2: Sales revenue of selected Chinese cement producers. Source: Company reports.

What’s more interesting here is how all of these companies are growing their sales at over 15% in a market where cement sales volumes appear to have fallen by 1.67% to 2.31Bnt in 2017. CNBM explained that its sale growth arose from improving cement prices in the wake of the government’s supply side changes. It added that national cement production fell by 3.1% to 2.34Bnt. CNBM’s annual results also suggested that the cement production capacity utilisation rate was 63% in 2017.

Anhui Conch’s results were notable for its large number of overseas projects as it followed the state’s ‘One Belt, One Road’ overseas industrial expansion strategy. Projects in Indonesia and Cambodia were finished in 2017 with production set for 2018. Further plants are in various states of development in Laos, Russia and Myanmar. The other point of interest was that Anhui Conch is developing a 50,000t CO₂ capture and purification pilot project at its Baimashan cement plant. Given the way the Chinese government has been able to direct the local industry, should it decide to promote CO₂ capture at cement plants in the way it has pushed for waste heat recovery units or co-processing, then the results could be enormous.

CRC reported its continued focus on alternative fuels. Municipal waste co-processing projects in Tianyang County, Guangxi and Midu County, Yunnan are under construction and are expected to be completed in the first half of 2018. Construction of its hazardous waste co-processing project in Changjiang, Hainan was completed in February 2018.

As ever with the Chinese cement industry, the worry is what happens once the production overcapacity kicks in. The state–published figures and state-owned cement companies suggest that the industry is in the early stages of coping with this. In February 2018 Reuters reported that the Ministry of Industry and Information Technology (MIIT) had banned new cement production capacity in 2018. The detail here is that new capacity is allowed but that it has to follow specific rules designed to decrease capacity overall. This followed an announcement by the China Cement Association that it would eliminate 393Mt of capacity and shut down 540 cement grinding companies by 2020. The aim here is to hold capacity utilisation rates at 80% and 70% for clinker and cement respectively and to consolidate clinker and cement production within the top ten producers by 70% and 60%. If the utilisation rate from CNBM is accurate then the industry has a way to go yet.

China: On the back of similar reports from numerous Chinese cement producers, two more companies have announced large drops in their profits in the first half of 2012.

Tangshan Jidong Cement Co Ltd, a Hebei Province-based cement producer, posted US$17m in net profit for the first half of 2012, a year-on-year drop of 85%. The company's operating revenue slid by 10.7% year-on-year to US$1.0bn.

Meanwhile, Jiangxi Wannianqing Cement Co Ltd, a Jiangxi Province-based cement maker has posted a net profit of US$9.1m for the first half of 2012, a year-on-year decrease of 80%. Its operating revenue slid by 22.1% to US$316m.