CHINA: Clinker sales volumes up 28.9% for China Shanshui Cement Group

China Shanshui Cement Group Ltd has announced its audited results for 2012 ending 31 December. The company, which is the largest cement producer in Shandong and Liaoning Provinces, achieved a revenue of RMB16,161 million, a profit of RMB3,099 million and a gross profit of RMB4,111 million. Cement sales volumes fell by 0.2% y/y to 47.83 million t, impacted by the deceleration of economic growth and fixed assets in the country. However, sales volumes of commercial clinker increased by 28.9% y/y to reach 9.02 million t and concrete sales were also up by 77.3% y/y to 1.66 million m3. While the unit selling price of concrete rose by 8.1%, the price of cement and clinker declined by 5.9% and 21.7%, respectively.

In 2012, the cement manufacturer expanded its cement production capacity by 5.4 million t and its clinker capacity by 1.6 million t. All suitable clinker lines were equipped with residual heat generation facilities with a total installed capacity of 209.5 MW.

Commenting on the results, Shanshui Cement Chairman and General Manager, Mr Zhang Bin, said, “The year 2012 saw a quarterly downward trend of China's economic growth. Dragged by declining exports and weak investment in infrastructure and real estate sectors, the country's industrial production output continued to slow down. Growth rate of real estate development, a sector integrally linked to the cement industry, was also down by 11.9 percentage points.

Hindered by an oversupply in the domestic market, the cement industry in China is expected to record a profit of approximately RMB65.7 billion in 2012, a decrease of 32.8% as compared with 2011. Nevertheless, by adhering to its guidelines of 'standardisation, concentration, penetration and development', the Group managed to achieve better operating results despite the generally weaker demand within China's cement market. While constantly streamlining internal management and lowering the production and operating costs, the Group has attached equal importance to stabilising its selling price and boosting sales volume at the same time. To seize the opportunities created by favourable policies, the Group has continued to optimise its business presence in selected regions, thereby further increasing its market share and dominance in all of its markets.”