TAIWAN: Taiwan Billionaire's TCC Buys China State-Owned Cement Supplier

TCC International, a Hong Kong- listed subsidiary of Taiwan Cement of Taipei, said on Friday it has agreed to purchase Sichuan Railway Group Cement Co., a Chinese state-owned cement supplier, for a total consideration of 675.9 million yuan, or $110 million. The figure includes debt owned by Sichuan Railway that would be taken on by TCC.

The acquisition is in line with TCC’s push to expand its cement production in China, particularly in the southwestern region. TCC holds Taiwan Cement’s mainland operations. Sichuan Railway Group Cement lost 121 million yuan, or $19.7 million, in 2013.

TCC’s shares have gained 10% in the past 12 months.

TCC chairman Leslie Koo and his family ranked No. 22 on the 2014 Forbes Taiwan Rich List with wealth of $1.7 billion.

China’s cement industry is facing an extended period of relatively slow growth and consolidation that’s opening opportunities for buyers with access to cash.

CHINA: Taiwan Cement increases product prices

Taiwan Cement Corp (台泥), one of the nation’s leading cement suppliers, on Monday said that it has raised cement prices in China’s Guangdong Province amid rising demand.

The firm said it has increased product prices in the province, its major market in China, by 20 yuan (US$3.26) per tonne. High-end cement now costs 340 yuan per tonne, up from 320 yuan.

The company said demand in the Pearl River Delta area grew sharply late last month as inventories were drawn down for construction projects ahead of China’s Oct. 1 National Day holiday.

Analysts said Taiwan Cement should benefit from the upturn in demand for the rest of the year because the fourth quarter is a peak season in China’s cement market, one that is expected to receive an extra boost from the government’s efforts to push investments in infrastructure.

It was Taiwan Cement’s second price hike in Guangdong since August, when it raised prices by 10 yuan per tonne. The firm said it does not rule out raising cement prices in other provinces, such as Guangxi, Jiangsu and Sichuan, given solid demand.

According to its Web site, Taiwan Cement operates production lines in several Chinese provinces, including Guangdong, Guangxi, Jiangsu, Anhui, Fujian, Yunnan, Sichuan and Guizhou.

In the first half of the year, the firm sold 22.7 million tonnes of cement in China, compared with 3.1 million tonnes in Taiwan.

Taiwan Cement posted a net profit of NT$5.03 billion (US$165.22 million) in the first half, up 25.72 percent from a year earlier. Earnings per share reached a record NT$1.36, compared with NT$1.08 the previous year.

TAIWAN:Taiwan Cement raises product prices in China

Taiwan Cement Corp., one of Taiwan's leading cement suppliers, said Monday that it has raised cement prices in Guangdong province because of rising demand in China's market.

Taiwan Cement said it has hiked product prices in the province, the company's major market in China, by 20 Chinese yuan (US$3.26) per metric ton. High-end cement now carries a price tag of 340 yuan per metric ton, up from 320 yuan.

The cement supplier said demand in the Pearl River Delta area grew significantly in late September as inventories were drawn down for construction projects ahead of the Oct. 1 National Day holiday.

Analysts said Taiwan Cement is expected to benefit from the upturn in demand for the rest of the year because the fourth quarter is a peak season in China's cement market, one that will receive an extra boost from government efforts to push investment in infrastructure.

It was Taiwan Cement's second price hike in Guangdong since August, when it raised cement prices by 10 yuan per ton.

Taiwan Cement said it has not ruled out the possibility of raising cement prices in other provinces, such as Guangxi, Jiangsu and Sichuan, based on solid demand in those areas.

According to its website, Taiwan Cement operates production lines in several provinces, including Guangdong, Guangxi, Jiangsu, Anhui, Fujian, Yunnan, Sichuan and Guizhou.

In the first half of the year, Taiwan Cement sold 22.7 million metric tons of cement in China, compared with only 3.1 million metric tons in Taiwan.

The company posted NT$5.03 billion in net profit in the first half, up 25.72 percent from a year earlier, with earnings per share (EPS) of NT$1.36, a record high for Taiwan Cement in a half year and higher than the NT$1.08 in EPS recorded over the same period the previous year.

Despite the latest product price hike, shares of Taiwan Cement fell 0.66 percent to close at NT$45.00 in trading in Taipei on Monday amid pessimism over the market's prospects after the weighted index on the Taiwan Stock Exchange shed 2.71 percent last week.

TAIWAN: Taiwan Cement is Optimistic About Second-half Operations

Leslie Koo, chairman of Taiwan Cement Co. (TCC), is optimistic about second-half operations as well as for China Synthetic Rubber Co. (CSRC), an affiliate, especially in the cement business, saying that cross-strait sales of cement will grow in the second half, with increasing prices expected after the October holiday in China. 

Koo also announced that Taiwan Cement International Holdings Ltd., a subsidiary of TCC in China, will start to raise cement price by RMB$20 (US$3.15) per tonne in the Pearl River Delta region, the first adjustment since the third quarter of 2011. 

Koo stated that, due to global economy recovery, growing infrastructural projects in China, and Taiwan’s stable economic outlook, TCC expects improving performance in the second half. 

Lower prices in China from the third quarter of 2011 undermined prices in the high season in the second half of last year, to compromise first-half performance of this year with low profits. 

A TCC executive said that, due to anti-dumping taxes, the firm’s plant in Taiwan started to see gross profit margin grow steadily from the third quarter in 2011, which will continue with new orders in the second half of this year. 

TCC saw cement sales in China rise over 10% quarter on quarter (QoQ) in July and August, but prices have been dropping due to unbalanced supply and demand, low market confidence, with Koo predicting prices to rebound by the end of September to peak after China’s October holiday. 

Koo pointed out that the carbon black market in China and India remained oversupplied, but CSRC has performed well due to Taiwan’s stable market and warming market in U.S., with confidence towards second-half operations, production capacity to rise from 65,000 to 85,000 tonnes in India, and from 195,000 to 330,000 tonnes in China.

TAIWAN: Taiwan Cement cautiously optimistic

Taiwan Cement Corp (台泥) expects demand to pick up gradually this year, after earnings declined more than 20 percent in the fourth quarter because of government efforts in Taiwan and China to curb property speculation, top executives said yesterday.

“We are cautiously optimistic about the business outlook [this year] after a below-trend fourth quarter when the unfavorable macroenvironment softened demand and pushed down selling prices,” Leslie Koo (辜成允), chairman of the nation’s largest cement producer, told an investors’ conference.

Political uncertainty over the leadership reshuffle in China is likely to settle by the end of the first half, allowing public construction works to resume, he said, adding that the landscape elsewhere is also expected to become clearer in the second half.

The Taipei-based company, which has been expanding its operations in China, posted NT$2 billion in net income last quarter (US$67.69 million), a fall of 22.2 percent from the third quarter and 24.1 percent year-on-year, the company’s report showed.

For the whole of last year, net profit rose 7.3 percent to NT$8.62 billion, or earnings per share of NT$2.33, as the company expanded its capacity to become the sixth-largest in China, spokesman Edward Huang (黃健強) said.

The company also aims to become the third largest through organic growth and acquisitions, Huang said.

Gross profit margin last quarter fell to 16 percent, from 17.9 percent three months earlier, but annual margin improved to 17.4 percent last year, from 11.2 percent in 2010, Huang said.

“China’s plan to increase social housing will offset the pain of continued efforts to curb property speculation,” he said.

Beijing’s moves to strengthen infrastructure facilities in rural areas should also help boost demand for cement, Huang said.

Overall capacity in China grew rapidly to 60 million tonnes last year, from 40.4 million tonnes in 2010, with plants in the southern provinces of Guangdong and Guangxi contributing 45.5 percent, he said.

“The company is on track to raise the target to 100 million tonnes a year in 2016,” Huang said.

Sales saw concrete improvement this month after emerging from the low season in the first two months, although selling prices remained weak, Koo said.

In Taiwan, the introduction of anti-dumping tariffs has benefited the company’s sales and lifted its gross margin to 9.8 percent, the report showed.

In the export market, the company expects strong demand from emerging economies, given limited supply from main rival countries, such as China, Japan and Thailand, Koo said.

“We have signed [sales] contracts for this year, with selling prices increasing 20 percent from last year,” Koo said.

Taiwan Cement closed up 0.44 percent at NT$34.55 yesterday, while the benchmark TAIEX gained 0.77 percent.

TAIWAN: Taiwan Cement Acquires China-based Tai Chang

Taiwan Cement Corporation, Taiwan’s largest cement producer, recently announced it has offered 700 renminbi, or NT$3.5 billion, to acquire Tai Chang Group which is located in Sichuan province, China. 

Tai Chang is situated in southern part of Chengdu of Sichuan Province, where there are few cement plants but cement demand there is on the rise because of the implementation of several large-sized public works, including hydropower plants and expressways. 

Thanks to the acquisition, Taiwan Cement will see annual production capacity increase by three million metric tons of cement to reach 60.3 million metric tons, becoming one of the top-three cement conglomerates in Sichuan province. 

Taiwan Cement said it will continually launch merger and acquisition cases because cement demand in southwestern China will be on the rise in the wake of increased construction of public works there. 

The company has projected to boost annual production capacity to 100 million metric tons in China in 2016, becoming one of China’s top-three cement producers. Up to date this year, the company has completed four acquisition projects in China. 

Institutional investors believed Taiwan’s leading cement producers, including Taiwan Cement and Asia Cement Corp., will be able to make more profits in 2012 than 2011 because of their expansion in the lucrative China market.

TAIWAN: Taiwan’s Cement, Steel Firms to Benefit from Public Works

Taiwan’s cement, premixed concrete, construction and steel sectors stand to benefit from faster implementation of massive public work projects budgeted at NT$200 billion, which spells relief considering these sectors have suffered relative to last year in the first three quarters due to the tepid global economy. 

The launching of major public work projects beginning the end of this year or in the first half of 2012 will drive sales for the slumping industries of cement, premixed concrete, construction and steel in the next three or four years. 

The Taiwan Steel and Iron Industries Association confirmed that the major public work projects will boost demand for steel rebar, steel plates, steel structure, light steel, hot-dip galvanized steel coil and coated steel. 

The biggest beneficiaries of the public work projects will include first-tier firms as Taiwan Cement Corp., Asia Cement Corp., China Steel Corp., Tung Ho Steel Corp., Feng Hsin Steel Corp., Goldsun Development & Construction Corp., BES Engineering Corp. and KSECO Corp. 

Based on experience, Taiwan Cement said 7% of budgets for major public works will go to procurement of cement and premixed concrete, which will help Taiwan Cement to see 6% annual sales growth in 2012. 

With a 52% year-on-year sales decline in the first 10 months, KSECO has recently bid for major public works projects, believing its earnings potential to be markedly raised in the next three to four years.

TAIWAN: Firms forecast second-half earnings growth

The power rationing policy in China and resulting tightened supply will help Taiwan’s two leading cement producers, including Taiwan Cement Corp. and Asia Cement Corp., to see growing sales and earnings in the second half. 



Both Taiwan Cement and Asia Cement posted solid profits from operations in China in the first half. With weather expected to improve and rising demand, cement prices will rise in the third quarter to continue to benefit Taiwan Cement and Asia Cement, who are expanding production capacity there. 

Institutional investors believe both companies will see earnings continue to grow in the second half, with Taiwan Cement predicting a 20% growth in earnings in the second half from the previous one. 



Asia Cement achieved CNY630m in earnings in China in the first half, with Taiwan Cement expecting over CNY700m from China operations. 

Taiwan Cement said cement prices in the China market, especially in the southern region, will rise in the months to come as production of low-efficiency cement plants will be affected by power rationing.

Taiwan Cement’s subsidiary in China will raise capacity from the third quarter till the end of this year. Taiwan Cement will see monthly shipment reach over 3.5Mt after July, up over 12% from the monthly average of 3.1Mt registered in the first half. 



Rising prices and production capacity will enable Taiwan Cement and Asia Cement to see earnings from China operations hit all-time highs in the second half.

TAIWAN: Taiwan Cement to set up production base in Guangdong

Taipei, June 30 (CNA) Taiwan Cement Corp., one of the island's leading cement providers, said Thursday its subsidiary TCC International Holdings Ltd. is planning to set up a production base in Shaoguan in China's Guangdong province. 

TCC International has signed an agreement with the Shaoguan authorities for the investment which is expected to total 1.85 billion Chinese yuan (NT$8.33 billion), Taiwan Cement said. 

The investment project is pending approval from the Chinese central government. 

Under the agreement, TCC will build four production lines at Shaoguan with an annual production capacity of 10 million metric tons. In the first stage, the production capacity is expected to reach 5 million metric tons. 

China is phasing out its out-of-date cement production facilities and building new ones to meet demand, boost efficiency, and improve the environment under the on-going 12th five-year economic development plan, Taiwan Cement said. 

Taiwan Cement said as Shaoguan is located along the border between Guangdong province and Guangxi Zhuang Autonomous Region, the new investment is expected to help TCC International secure business from southern China. 

In addition to the two provinces, Taiwan Cement said the product from the Shaoguan base will be shipped to southern Yunnan province to meet infrastructure needs. 

Taiwan Cement currently owns a 40 percent stake in TCC International, which has been listed on the Hong Kong Stock Exchange since October 1997. 

Among the large-cap cement stocks that have set up strong footholds in China, Taiwan Cement has been supported significantly by institutional buying on the Taiwan Stock Exchange as cement prices on the mainland are on the rise amid tight supply caused by an electricity shortage.

TAIWAN: Taiwan Cement launches new plant in Guizhou

Taiwan Cement's new factory in Anshun, in southwestern China's Guizhou province, was launched Tuesday.

The Anshun factory will have two production lines and its annual production will be 4 million tons after the construction is fully completed at the end of the year.

Taiwan Cement Chairman Leslie Koo said since the company began to invest in mainland China in 2004, its businesses have expanded to 10 provinces.

"Guizhou, located in southwestern China, has a major role in mainland China's western region development project," he said.

He estimated that the company's cement production capacity could reach 55 million tons by the end of the year. Working with mainland China's 12th five-year plan, he predicted Taiwan Cement's production capacity could reach 100 million tons in five years.

He said that Taiwan Cement used to set up factories in southern mainland provinces such as Guangdong and Guangxi, and this was the first time that it has landed in a southwestern Chinese province.

Guizhou Vice Governor Sun Guoqiang and other Chinese ranking officials

TAIWAN: Taiwan`s Cement Firms Profit from Higher Prices in China in Q1

Thanks to the cement price hike in China, Taiwan`s leading cement producers investing in China, including Taiwan Cement Corp., Asia Cement Corp., Chia Hsin Cement Corp. and Goldsun Development & Construction Co., all reported excellent sales and earnings in the first quarter of this year. 

Taiwan Cement`s subsidiary in China—TCC International Holding Limited is expected to see first-quarter earnings exceed 280 million renminbi or NT$1.28 billion, compared to a loss of 20 million renminbi year-on-year. 

TCC shipped over three million metric tons of cement in March, for a historic high. The largest Taiwanese-invested cement producer in China, the company`s annual capacity is 46 million metric tons. 

Asia Cement`s subsidiary in China—Asia Cement (China) Holdings Corp.—posted 67 million renminbi in after-tax earnings in the first quarter of last year, with its earnings expected to exceed 237 million renminbi in the first quarter of this year. 

Over the past few weeks, cement prices quoted in eastern and southern China have been rising. Taiwan Cement predicts cement prices in China will rise 10% in the second quarter of this year. 

Chia Hsin forecasts cement prices quoted in Jiangsu province will rise between 10 renminbi and 20 renminbi per metric ton by the end of this month. 

Institutional investors estimates Chia Hsin`s subsidiary in China will be able to post 20 million renminbi, or NT$89 million, in earnings in the first quarter of this year. 

Goldsun`s subsidiary in China saw sales of cement and premixed concrete grow 88% and 58% year-on-year in the first quarter of this year. Institutional investors predict the company will very likely see earnings from investments in China exceed NT$700 million this year, for a historic high record.

TAIWAN: Taiwan`s Cement Makers Benefit from Japan`s Post-quake Reconstruction

Thanks to the reconstruction demand of Japan in the wake of devastating earthquake and the implementation of domestic infrastructure and public work, Taiwan`s cement industry is expected to see demand grow 7% up to 10% year-on-year in the first half of this year. 

Particularly, the massive business opportunities released from Japan tremble will boost cement prices internationally, which will push up domestic cement price by at least 10% in the first half of this year. 

Taiwan`s top-tier cement producers, including Taiwan Cement Corp. and Asia Cement Corp., will see a 15% year-on-year growth in both sales and earnings in the first half of this year because they have established production capacities in Taiwan and China. Each of them is expected to boost annual production capacity by five million up to six million tons of cement in China. 

Such second-tier cement producers as Lucky Cement Corp., Hsin Ta Cement Corp. and Universal Cement Corp., will also begin turning profitable in the first half of this year because of the price hike in cement prices. 

As China`s 12th five-year economic development plan calls for enhancing energy-saving method by scraping low-efficiency cement plants, the selling prices for cement in southern, central and eastern China regions have been hiked by 25% year-on-year in the first quarter of this year. 

Both Taiwan Cement and Asia Cement said they have made profits in the first two months of this year, albeit the reduction in working days because of the Chinese New Year holidays. Both companies asserted their production equipment utilization rate has picked up in the first quarter of this year. 

As the spot market prices for cement in the entire Asian region have soared by 5-7% in the first quarter of this year, both Taiwan Cement and Asia Cement believed they would see continued surge in contract prices for cement in the second quarter or even the second half of this year. 

In addition, Taiwan`s cement industry anticipated domestic demand for cement will grow 10% year-on-year this year because of the implementation of public works valued at over NT$500 billion. 

Taiwan Cement and Asia Cement said they have seen a 10% growth in orders from public work. Hsin Ta, Lucky and Universal said they have hiked cement prices by NT$150 up to NT$200 per ton in the first two months of this year. Universal and Lucky saw sales in the first two months grow over 10% year-on-year.

TAIWAN: Taiwan to cap cement exports at 30% of total production

The government will cap cement exports at 30 percent of Taiwan's total production by 2015 to encourage the phasing out of old inefficient plants that are heavy polluters, Economic Affairs Minister Shih Yen-shiang said Tuesday.

Shih said that with domestic demand on the decline, Taiwan's cement producers have raised their export volume in the past few years to about 50 percent of total production to make use of idle capacity.

As limits on cement exports are phased in annually over the next five years, the minister said, local cement producers are expected to cut production to reach a balance between supply and demand by closing down out-of-date facilities.

Eliminating these older production facilities, which generate high levels of pollution, will help Taiwan improve its environment and assist in its transition toward an economy based on energy efficient industries, he said.

According to the Taiwan Cement Manufacturers' Association, Taiwan's cement production in 2009 exceeded 15 million tons, of which half was sold overseas.

At its peak in 1994-1995, Taiwan's domestic demand for cement was 28 million tons a year, but that had fallen to about 10 million tons in 2009, of which over 2 million tons was satisfied by imports.

Shih believes the cement industry should cater primarily to the local market, and he said that by getting companies to shut down old plants and cut production, more of their output will stay in Taiwan to support local construction and infrastructure projects.

Taiwan Cement Expects Sales Growth in Taiwan and China

Taipei --Taiwan Cement Corporation, Taiwan`s leading producer of cement, recently predicted substantial sales growth both in Taiwan and China in the second half of this year. 

After securing a 30% year-on-year growth in sales in the first half, Taiwan Cement vice president C.C. Huang forecast a 30% year-on-year growth in domestic sales in the second half based on rising selling price of imported cement. In addition, the company`s market share will reach over 40% in Guangdong province, China based on being better positioned to fix prices after acquiring Prosperity International Holding Co., one of China`s leading cement producers, with the move to help Taiwan Cement add about 10 million tons yearly in capacity. The company predicts total production capacity will reach 50 million tons per year in China by 2012. 

Huang said consumption of cement in Taiwan surged 10% year-on-year in the first half due to recovering economy and public works projects, with the consumption expected to grow 15% year-on-year in the second half. 

Huang noted the price hike in imported cement will lead domestic cement producers to follow suit for typically locally made cement is priced higher by NT$100 and NT$200 per ton. Taiwan Cement may raise product prices sometime in the fourth quarter depending on sales in the third quarter.