Taiwanese cement news – TCC and Asia Cement

Taiwan/China: TCC International, a unit of Taiwan Cement Corporation, has announced that it has entered into a framework agreement to acquire an array of cement and clinker production lines in Chongqing, Jiangxi and Zhejiang in China for a value not exceeding USD250m.

Under the framework agreement, the group will acquire either 100% or not less than 80% of equity interests in a group of companies and assets under Chongqing Kehua Holdings (Group) Limited and Zhejiang Kehua Group Company Limited. The target companies and assets to be acquired possess a total cement grinding capacity of about 8.1Mt/yr and total clinker production capacity of around 6.3Mt/yr.

Meanwhile, another of Taiwan's leading cement producers, Asia Cement, has posted a near 60% increase in net profit for the first half of 2011 compared to 2010 on the back of robust sales in its China operations. It recorded USD204m in net profit, up by 58.8% from a year ago.

Due to production expansion and rising product prices on the mainland market Asia Cement (China), the company's mainland subsidiary, registered USD104m in net profit during the same period, up by 369% compared to the first half of 2010.

However, Asia Cement said that its Taiwan operations suffered product price declines, which resulted from the dumping of low-priced mainland cement onto the island. This was compounded by rising production costs, which included higher fuel prices. With Taiwanese cement firms filing a complaint with the local authorities against the dumping of mainland products, Asia Cement expects domestic cement prices will rise to 'a reasonable level' later in 2011.

Meanwhile, Asia Cement said demand in China is expected to keep rising as the Chinese government carries out its 12th five-year economic development plan, which focuses on infrastucture, rural area development and residential property development. As the Chinese government gears up to phase out outdated cement production facilities, Asia Cement, which largely operates new plants there, is expected to take advantage and receive more sales orders.