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  • Cement Industry "Closed" Market Integration Will Move True
  • Release date:2019-03-11  Clicks:54  Classification:Industry News
  • Recently, it has been reported that the entry threshold of the cement industry named "serious surplus" in No. 38 has entered the stage of signing and will be announced in the near future.

    At this time, the policy is tightening, so that further integration of the cement market is imminent. Recently, the reporter visited Hainan, Jiangxi and Hunan provinces with the second phase team of China Cement Wanlihang.

    The cement industry is called "closed" by the industry. At present, new projects are almost impossible. Mergers and acquisitions have become the main way for the cement industry to open up new frontiers.

    If the "integration" of cement market is still a trend in 2009, then in 2010, the industry will see a real fight.

    Hainan: Market Closure and Difficult Integration Tide

    Despite the relatively closed market, the wave of mergers and acquisitions has blown into Hainan Island. The mergers and acquisitions of the second largest cement producer in the island by China Resources have complicated the moods of the other two cement producers in the island. At the same time, Hainan's real estate development mystery also makes Hainan's cement market, which is unilaterally rising, increase variables.

    As soon as they arrived in Hainan, the journalists met with China Resources Group, which officially became the host country of China Resources Group, to invest in Hainan. The annual cement production capacity of CITIC Hainan has reached more than 4 million tons, occupying about 25% of the market share of Hainan cement market, and the supply of key projects in the market is more than 60%. Yu Yi, deputy general manager of Guotou Hainan, said that the high-quality limestone resources in Hainan Province are mainly concentrated in Changjiang, and the main production base of Guotou is in Changjiang. Therefore, when CITIC Group had to sell cement business because of its prominent main business, CITIC decided to incorporate CITIC Hainan into its flag. CITIC Hainan was renamed as China Resources Cement (Changjiang) Co., Ltd.

    "At the end of 2009, China Resources submitted a 5-10-year cement and concrete plan to the Hainan provincial government, which has been approved for coordination by relevant departments and bureaus," insiders said. This means that the M&A is only a starting point of China Resources Hainan strategy, and it may further integrate the Hainan market in the future. At the same time, it has also thrown a heavy bomb on Hainan, a relatively closed cement market for a long time.

    After experiencing the trough in the late 1990s, Hainan Province has maintained an upward trend regardless of the changes in the cement market in other provinces and cities. Even in the downturn of 2008, Hainan cement market is still rising, and compared with neighboring Guangdong and Guangxi, prices have remained high.  Hainan cement market is not only stable for a long time, but also affected by geographical conditions. Highway and railway are the main transportation modes. It is difficult for cement enterprises outside the province to enter and exit freely, and the enterprise structure is relatively stable.

    At this moment, two other large-scale cement enterprises in the island, Huashengtianya and Qianhe, are in a complicated mood.

    Huashengtianya, a private enterprise, is the largest cement manufacturer in Hainan Province. Two clinker production lines with a daily output of 5000 tons have been put into operation in Changjiang. The third clinker production line with a daily output of 5000 tons is under construction and will soon be put into production. At that time, the annual production capacity of Huasheng Tianya Cement will reach more than 6 million tons. Through the establishment of clinker production base in Changjiang with abundant resources and the construction of grinding production base in Haikou and Sanya, Huashengtianya has firmly consolidated the supply structure of clinker supply and market share, and occupied two-thirds of Hainan cement market.

    Another company, Qianhe Cement, is currently busy with the second phase of technical renovation project, which will be put into operation in August. Zhang Baohe, general manager of the company, said, "The central and eastern part of Hainan is the most competitive market between Huasheng Tianya and Hainan Guodu. We only focus on the balance of production and marketing, while the western part of Hainan will mainly consolidate and maintain the absolute market advantage at present." According to reports, the company's cement plate capacity planning for 2 million tons, there is no expansion plan, only in the industrial extension of the article. Zhang Baohe also expressed his concern that in the long run, after the completion of the project, cement demand will no longer be as strong as it is today, and the island cement market will be saturated.

    As for the current debate on the trend of real estate in Hainan market, there are two opposite views on the future development trend of Hainan cement market.

    According to statistics, the total demand for cement in Hainan Province is about 13 million tons this year, while the total production capacity of the island cement production enterprises is about 10 million tons, and the gap between supply and demand is about 3 million tons. The huge gap between supply and demand leads to the long-term higher price of cement in the island than in the neighboring Guangdong and Guangxi. In 2009, Hainan Province arranged 105 provincial key construction projects, with an annual planned investment of 48.7 billion yuan. Key projects such as Wenchang Rocket Launch Base, Changjiang Nuclear Power Project and Qionghai Boao Airport Project will stimulate cement demand. The construction of Hainan International Tourism Island will be driven by infrastructure investment. A series of data and plans seem to doom the strong demand of Hainan cement market in the future.

    But in recent days, in order to make Hainan's real estate market soar crazily, the government has issued a series of policies to suppress it. Whether it can make Hainan's real estate market quickly subside remains a variable. After the infrastructure boom fades, the industry is worried about whether Hainan cement market can maintain strong demand.

    Hunan: "Fat and Fat" Fever to Be Treated

    In recent years, the construction of Changsha-Zhuzhou-Tan urban agglomeration has led to the deployment of various cement giants, and the competition of various cement enterprises has led to a serious phenomenon of repeated construction of Changsha-Zhuzhou-Tan cement production capacity. Hunan's cement market, which is a bit "fat", needs to be adjusted urgently. Southern Hunan is expected to become the "terminator" in Hunan.

    Unlike Hainan, Hunan cement market can