cement

China's cement industry started to recover in 2006 after suffering the difficulty in 2005, and then the new turn of cement demand had come. China cement output reached 1.35 billion tons in 2007, up 13.5% year-on-year; and the sales was RMB 410.4 billion, rising 23.1% year-on-year, the total profit was RMB24 billion, increasing more than 60% year-on-year.
China cement still faces many challenges, e.g. unreasonable structures, too many small companies, and backward production capacity. In 2006, China's central government issued a series of policies to accelerate the adjustment in the cement industry and eliminate backward production capacity. The National Development and Reform Commission confirmed that manufactures with backward output capacity should be entirely eliminated during 2007 to 2010, but the following 12 manufacturers will be strong supported.
To improve the concentration of clusters is the primary objective for the structure adjustment of China cement industry considering the current concentration degree is only 20%. China cement industry is projected to accelerate its structure adjustment for fiscal year 2009. In addition, the major players will enhance the waste heat generation projects, as well as new production line construction. Moreover, the cement industry has a lack of capital as a whole; IPO and refinancing have been proposed as the main ways to solve the capital bottleneck.
With the recovery of China cement industry, along with the challenges in China cement industry, foreign investors have started to pay attention to China cement market, more and more are involved in the activities of merger and acquisitions.