CHINA: Taiwan Cement Augurs Well for 2011 Sales

With annual sales breaking the NT$100 billion mark last year, Taiwan Cement Corp., Taiwan`s leading cement producer, predicted its sales to hit a historic high record with improved earnings in 2011. 

Taiwan Cement chairman Leslie Koo said his company saw conspicuous sales growth in the first two months of this year and the cement industry in China is the most promising ever seen in history. 

Koo noted Taiwan Cement Group will see annual cement production capacity exceed 60 million tons in both Taiwan and China by the end of this year. The group has aimed to rank among China`s top-three cement producers in the medium term. 

As China government has placed energy saving and carbon reduction on the list of industries for rapid development, leading cement producers will go larger as less-efficient cement plants will be forced to shut down. 

At present, Taiwan Cement ranked sixth in China`s cement industry. The group will continually expand production capacity and boost its presence in China by means of mergers and acquisitions. 

The group`s Taiwan Prosperity Chemical Corp. and Hoping Plant are enjoying steady growth in earnings. In addition, another affiliate—China Synthetic Rubber Corp. has extended sales of medicines to adults from children and expand sales to Europe from the U.S. market.

By the end of this year, Taiwan Cement will increase three cement production lines, each in Sichuan province, Chongqing City and Guizhou province. With the additional production from the above-mentioned new production lines, the group will see annual production capacity reach over 47 million tons of cement in China this year. 

The group`s annual production capacity in China is expected to surge further to 52 million tons by the end of 2012 as it has resolved to expand capacity in Guizhou, Sichuan and Liaoning provinces. Plus Taiwan`s annual production capacity of eight million tons, the group`s aggregate production capacity across the Taiwan Strait will exceed 60 million tons by the end of next year. 

Taiwan Cement scored NT$8.1 billion in after-tax earnings, or NT$2.4 per share, last year. As the cement prices are spiraling up, Taiwan Cement predicted its gross profit margin will rise by 10 percentage points this year from last year`s level.