Displaying items by tag: Anhui Conch

China: The net profit of Anhui Conch Cement in the first half of 2019 was US$2.15bn, up 17.9% from US$2.11bn at the close of the first half of 2018. Anhui Conch’s interim report stated that the gross profit margin increased in the eastern and central regions by 2.67% and 0.51% respectively in response to steadily increasing market demand, and remained flat year-on-year in the southern region in spite of adverse weather precipitating a decline in the local market.

China: Anhui Conch Cement has ordered four new Polab laboratory automation systems from Germany’s ThyssenKrupp Industrial Solutions. The systems will be installed at some of the world’s largest integrated cement plants at Wuhu and Tongling respectively in Anhui province. No value for the order has been disclosed.

Myanmar: Four local activists have been sentenced to 14 months hard labour for protesting in May 2018 against a new cement plant being built at Patheingyi Township in Mandalay Region. The residents of Aungthabyae, Patheingyi were charged and convicted of Roads and Bridges Law offenses for blocking a road to prevent access by vehicles, according to Radio Free Asia. The activists allege that they were not allowed to testify in court describing the process as ‘totally unfair.’

Around 20 people were injured in 2018 when police fired rubber bullets and tear gas into a crowd protesting against the construction of the Alpha Cement Plant, a joint venture between China’s Anhui Conch and a local company. During the protest, activists blocked factory vehicles and demanded compensation for land they claim they lost when a road was built to support the plant. Police said that over US$40,000 worth of damage was caused at the site. The cement plant is scheduled to be commissioned in 2021.

China: Cosco Shipping Bulk, part of Cosco Group, has signed a strategic deal with Conch Logistics, the logistics subsidiary of Anhui Conch. The agreement will see the two companies jointly develop in the cement logistics sector, according to Asia Shipping Media. In December 2018 Anhui Conch ordered four 12,500DWT bulk carriers from the Jiangdong Shipyard with delivery scheduled in 2020. Cosco Shipping Bulk operates the largest bulker fleet in the world with total capacity of over 33MDWT.

Myanmar: Police say that protestors rioting about the Alpha Cement plant at Patheingyi, Kyaukse district in the Mandalay region in mid-May 2019 caused over US$40,000 worth of damage to the site. Residents armed with slings and rocks entered the site and set fire to buildings and vehicles, according to the Myanmar Times newspaper. A petrol bomb was also thrown at a building. The police are still looking for several people in relation to the incident.

Local residents were complaining about compensation related to the project as well as the use of Chinese nationals at the site. The plant, previously known as Myanmar Conch Cement, is a joint venture between Myanmar's Myint Investment Group and China's Anhui Conch. The unit is currently being upgraded to a production capacity of 5000t/day. Construction work started in late 2017. The unit is expected to be operational in 2021.

Myanmar: 17 residents have been injured in a protest against the Alpha Cement Plant at Patheingyi in the Kyaukse district or the Mandalay region. Police fired rubber bullets and tear gas at the protestors, according to Radio Free Asia. The local residents were complaining about compensation for a road that is being built as part of the project. Concerns have also been raised over the use of Chinese nationals at the site.

The Alpha Cement Plant, previously known as Myanmar Conch Cement, is a joint venture between Myanmar's Myint Investment Group and China's Anhui Conch. The unit is currently being upgraded to a production capacity of 5000t/day. Construction work started in late 2017.

Uzbekistan: Qarshi Conch Cement, a subsidiary of China’s Anhui Conch Cement, plans to commission its new 1.2Mt/yr plant at Qarshi in December 2020. The project had an investment of US$150m, according to Kun. Anhui Conch said that preliminary work had started on the plant in early 2019.

China: Anhui Conch’s revenue grew by 63% year-on-year to US$4.53bn in the first quarter of 2019 from US$2.79bn in the same period in 2018. Its net profit rose by 27% to US$903m from US$710m.

Cement price rises by the major Chinese cement producers boosted sales revenue and profits in 2018. This is quite a trick, given that overall cement sales in the country have fallen by 11% year-on-year to 2.17Bnt in 2018 from a high of 2.45Bnt in 2014.

Graph 1: Cement sales in China, 2009 – 2018. Source: National Bureau of Statistics China.

On the corporate side most of the major Chinese producers issued positive profit alerts towards the end of 2018 and this has been followed up by (mostly) glowing financial reports. Data from the National Development and Reform Commission in February 2019 showed that the profits of local cement companies more than doubled to US$64bn in 2018 compared to 2017. As mentioned above, this has been fueled by price rises. In December 2018 the average price of cement was 10.6% higher than in December 2017.

This has translated into a 19% year-on-year rise in sales revenue at China National Building Material Company (CNBM) to US$32.6bn in 2018 from US$27.4bn in 2017 and its profit grew by 44% to US$2.09bn from US$1.46bn. Anhui Conch’s performance was even better. Its revenue grew by 70.5% to US$19.1bn from US$11.2bn. However, differences emerge between the two companies in terms of cement sales volumes. CNBM’s sales volumes fell by 2.4% to 323Mt. However, Anhui Conch’s sales volumes increased by 25% to 368Mt. This may not be in line with the government’s plans to scale down production but it does fit the industry consolidation model, as the company acquired Guangdong Qingyuan Cement in 2018. The results from other producers such as China Shanshui Cement, West China Cement, Tianrui Cement and China Resources Cement all tell similar tales.

If the figures from the National Bureau of Statistics China (NBS) above are accurate then this is a drop of over 300Mt of cement sales over four years. This is more than the cement sales of every other country except India. Indeed, it’s more cement than some continents make! It marks the deceleration of the Chinese industry since 2014 and represents a major achievement. However, whether it is enough remains to be seen. After all, sales of over 1500kg/capita are still way above the consumption curve for developed Western-style economies. Yet, imports of cement to China from Vietnam rose in 2018, suggesting that the price rises are being driven by shortages of cement!

China is undoubtedly an exceptional case, as its economic star has blossomed in the last few decades and it has literally built itself into history. Yet one might expect its consumption to be around 1Bnt/yr, a per-capita level more similar to Spain and Italy prior to the financial crash. In other words, even if the recently observed 5% year-on-year contraction is maintained, the Chinese industry would only reach this (still very high) level by the mid 2030s. However, continued national development, mega-infrastructure projects, a shift to more exports and China’s unique market could hold the consumption per capita figure higher.

Meanwhile, Chinese producers are commissioning more and more projects outside of China. Notably, CNBM saw its cement sales everywhere except for the Middle East and China. Success abroad is not guaranteed. The story in the years to come will be the balance between projects at home and those abroad.

China: Anhui Conch’s revenue grew by 70.5% year-on-year to US$19.1bn in 2018 from US$11.2bn in 2017. Its sales volumes of cement rose by 25% to 368Mt. Its net profit increased by 88% to US$4.44bn from US$2.36bn. The cement producer attributed this to ‘significant’ growth in its prices.

During the reporting year the group commissioned four cement grinding units for its Yueqing Conch Cement and Jiande Conch subsidiaries. It also acquired Guangdong Qingyuan Cement, increasing its production capacity of clinker and cement by 2.7Mt and 4Mt respectively.

Outside of China, the group completed and commissioned two clinker production lines and four cement grinding units at Battambang Conch Cement in Cambodia and PT Conch North Sulawesi Cement in Indonesia. Its Luangprabang Conch Cement project in Laos has moved to the equipment installation phase and construction of Myanmar Conch Cement (Mandalay) in Myanmar has begun. Preliminary work has also started for the Vientiane Conch Cement project in Laos and the Qarshi Conch Cement project in Uzbekistan.

At the end of 2018 the group has a clinker and cement production capacities of 252Mt/yr and 353Mt/yr respectively.