Displaying items by tag: Sinoma

China: Analysts expect the profitability of China's leading cement producers to weaken in 2012 due to slowing demand and falling prices.

SWS Research analyst Ye Rong expects the earnings of China's second-biggest cement producer, Anhui Conch Cement, to plummet by half in the first quarter, because the Yangtze River Delta, where most of Anhui Conch's sales are based, has seen cement price drops of 5% to 20% since the Lunar New Year, on 23 January 2012. Citic Securities forecasts the Hong Kong-listed firm's net profit will drop by 40% in the first quarter.

The net profit of Anhui Conch soared by 88.1% to US$1.84bn in 2011, while revenue surged by 41% to US$7.71bn. The state-owned enterprise's results for 2011 were in line with market expectations, wrote Luo Yang in a Nomura report. However, Anhui Conch's profit margin was likely to deteriorate in 2012, due to downward pressure on selling prices, rising costs and decelerating productivity, Luo wrote. "Under severe overcapacity, the company is subject to higher price risk in comparison with most of its peers."

Anhui Conch chairman Guo Wensan said the industry would face unfavourable factors in 2012, such as a slowdown in investment growth, regulation of the real-estate sector and rising energy prices. Anhui Conch plans a capital expenditure of US$1.27bn in 2012 less than the US$1.44bn in 2011.

In an exception to this trend, mainland China's biggest cement producer, China National Building Materials, announced it expected net profit to jump more than 100% from 2011. However, JP Morgan expects prices and profit per tonne for most mainland cement producers in 2012 to be up to 10% lower than 2011, and has trimmed its earning estimates for most listed cement companies. The growth in the mainland's cement consumption would be 5% to 8% in 2012, against 11% in 2011, the China Cement Association said.

The net profit of China National Materials (Sinoma) rose by 32.78% to US$231m in 2011, while turnover grew by 14% to US$8.04bn. The Hong Kong-listed firm's cement sales surged by 40% to US$3.21bn in 2011, while sales of its hi-tech materials increased by 7.7% to US$981m and its cement equipment business dipped by 0.1% to US$3.85bn.

Sinoma's net profit in 2011 was 10% below market consensus and 11% below Nomura's estimate. This was mainly due to much lower top-line growth and a disappointing margin performance. The state-owned firm's biggest business sector, cement equipment, suffered a small drop in 2011, because China's fixed-asset investment in cement fell by 8.3% in 2011, Luo wrote. "We expect it to further decrease by 15% in 2012." Sinoma's cement prices were under significant downward pressure, especially in Xinjiang province, due to worsening overcapacity, Luo warned.

Azerbaijan: Holcim has announced the completion of its expansion and efficiency improvement project at its OJSC Garadagh Cement plant in Azerbaijan. Garadagh Cement's CEO, Raoul Waldburger said that the USD448m investment was coming to a close. "The new kiln at Garadagh Cement will start clinker production by the end of 2011," he said. Work on the project, which was carried out by the Chinese firm CBMI Construction Company (belonging to Sinoma International Engineering), had been expected be completed by the end of June 2011.

Thanks to the new kiln, the plant will switch from wet to dry cement production technology. At the same time, the capacity of the plant will rise 2600t/day to 4000t/day. The cost of the project was split between (USD251m), the Asian Development Bank (USD27m) and the European Bank for Reconstruction and Development (USD170m).

China: CNBM was China's biggest cement producer in 2010 followed by Anhui Conch and Jidong according to newly-released data from OneStone Research.

In China the top 10 cement producers comprised 817.4Mt/yr (34%) of a cement capacity of 2.41Bnt/yr. The market leader with a capacity of 200Mt/yr (8.3%) was CNBM, followed by Anhui Conch with 150Mt/yr (6.2%) and Jidong with 89Mt/yr (3.7%). Next places in the ranking were taken by Sinoma Cement, Shanshui, Huaxin, CRC, Tianrui, TCC (China) and Hongshi.

Companies in the top 11 – 20 rankings included BBMG, Jinyu Group, Lafarge, Yatai and Asia Cement, combining about 9.5% of China's cement capacity. In total the top 20 companies comprised 43.5% of the national capacity.

The only foreign producer within the top 10 besides Holcim (which hold a 39.9% participation in Huaxin) was Taiwan Cement Corp. (TCC) Other major foreign cement producers in China include Lafarge, CRH, HeidelbergCement, Asia Cement Corp., Taiheiyo, Italcementi, Cimpor and Cemex.