CHINA: Taiwan Cement Aims to Become No.5 Cement Producer in China

Taiwan Cement Corp., Taiwan’s leading cement producer, recently budgeted US$130 million to acquire a 97.74% stake of Scitus Cement (China) Holdings Limited, aiming to become China’s No.5 cement producer by the end of this year. 

Thanks to the acquisition of Scitus stake, Taiwan Cement will see total annual production capacity reach over 55 million metric tons this year. 

Scitus is one of China’s medium-sized cement producers with production base in Guizhou Province, southwestern region of China. Scitus currently operates two new dry-process clinker production lines with total annual production capacity of approximately 1.6 million metric tons, as well as three cement grinding lines with total annual production capacity of approximately 2.3 million metric tons. 

Scitus also has two clinker production lines under construction with total annual production capacity of approximately 2. 4million metric tons and four cement grinding lines with total annual production capacity of approximately 3.8 million metric tons, which are expected to be completed for operation in late 2011 or in the first half of 2012. It is expected Scitus will see total annual production capacity reach 6.1 million metric tons by the end of this year. 

Taiwan Cement vice president C.C. Huang said Scitus has its strategic position in China’s southwestern region. Over the past few years, Taiwan Cement has set up cement plants in nearby Chongching of Sichuan province and Gangan of Guizhou province. Of them, the Gangan plant was acquired by Taiwan Cement in April this year. 

Huang noted the acquisition of Scitus stake will help Taiwan Cement become the largest cement maker in Guizhou Province. The acquisition will also help Taiwan Cement reach the goal of recording annual production capacity of 55 million metric tons across the Taiwan Strait by the end of this year, a target set earlier by Taiwan Cement chairman Leslie Koo. 

Koo is very optimistic about his firm’s business operation in China in the second half of this year. With the domestic cement price hike, Taiwan Cement will see after-tax earnings per share grow over 10% annually to reach NT$2.7 this year.