The pace of M&A is speeding up in cement industry
After the strict control by the state of new cement productivity, M&A have become the main theme of the cement industry. From 2009, a new phenomenon was come into being, besides in the cement industry, mergers and reconstructions of the upstream and downstream enterprises have become a prominent new phenomenon. Merger and reconstruction are already and will be the top word in cement industry. On Mar 22nd, the“2010 INTERNATIONAL CEMENT SUMMIT”which was hosted by China Cement Net provided an opportunity for entrepreneurs from cement industries to communicate with each other about the possible risks and problems, please stay tuned.
Preliminary statistics, in 2009 the cement industry consolidation through M&A involving nearly 80 million tons of cement productivity. The M&A and consolidation of cement industry can be divided into 3 forms: acquisition, internal integration, foreign equity participation. Acquisitions mainly related to 10 major cement groups while internal integration involving five and foreign equity participation involving two. The domestic market structure is becoming more and more stable through competition and united reconstruction.
In 2009, large cement groups have been achieved significant progress in M&A. Typical ones are: China National Materials buyout Qilianshan Cement Co., Ltd. which completed the master northwest market strategy; China Building Materials buyout Liaoyuan Jingang, Jiamusi Hongji to set up northern cement; Wulan cement had been incorporated into China United Cement which completed the first goal of cement productivity during the period controlled by China Building Materials Co., Ltd.; Jidong Cement controlled Qinling Cement and mastered Shanxi cement market; Huaxin cement combined with 4 enterprises in Tibet to set up a company to finish the consolidation of cement market; Yatai Cement with CRH invested 2.1 billion yuan of funds credited into account, purchased gold round of Jilin, Tonghua Teshui, new age and set up Huichun cement; Jinyu Cement control Tianjin Zhengxing Cement to integrate the markets of Beijing, Tianjin and Tangshan; Huarun Cement buyout Guotou Hainan and Guangdong Spring Bay to consolidate the waterway strategy. Taiwan Cement invested 3.8 billion HKD to takeover all the 16 million tons of cement productivity which was invested inland by Changxing, and completed the “Rooted in South China” strategy; Landscape buyout Lineng Cement to ensure Shandong first and strive to Liaoning, Shanxi first. Red lion buyout Jiangxi Huachang Cement to carry out the inter-provincial strategy……
According to the statistics of Quantitative Economics and Audit Society of China Building Materials, in 2009, there are 65 cement enterprises with annual productivity of more than 5 million tons, and the clinker productivity can up to 673 million tons which account for 48.53% of total production; 560 million tons of cement clinker production accounts for 51.91% of total production. Among the 65 enterprises, there are 20 with more than 10 million tons of cement per year. 482 million tons of cement clinker production accounts for 34.76% of total, and 419 million tons of cement clinker production accounts for 38.82% of total production.
The new highlight of merger and reconstruction in cement industry is that the development strategy of an extension of cement industry chain will enter the big enterprises. Some new industries including investment and acquisitions of cement concrete mixing plant, cement machinery, urban garbage disposal etc. have taken a new step.