Development downturn to hit industry
THE mainland's property market downturn is set to hit Yantai's cement industry, according to a municipal official.
''I think we will feel some pinch this year. Sales won't be as good as last year,'' said Yantai Building Material Industrial Bureau vice-director Yu Xitao.
''Although macroeconomic control was launched last year, there was plenty of real estate construction going on then. But this year, not many new projects have been secured and development has slowed down,'' he said.
Some cement plants in the country had already closed down or owed wages to workers because of the downturn.
''Cement manufacturers are now marketing to more places and expanding their sales network to cope with the situation,'' he said.
While cement prices have been depressed, all production from the city's cement plants has been sold on a 25 to 30 per cent profit margin, compared with 40 per cent in 1992 and the first half of 1993.
Japan's Mitsubishi group is taking a stake in the production of a US$116 million cement plant, Yantai Mitsubishi Cement Co.
A consortium of three Japanese partners, including Mitsubishi Materials Corp, holds a 65 per cent interest in the plant, and International Finance Corp owns a five per cent stake.
Yantai Building Material Industrial Bureau also has equity in it.
Construction of the plant started in April and will be completed next April.
About 70 per cent of output will be for export to Southeast Asia, Japan and the United States.
Mr Yu said there would be considerable competition with South Korea for the export market.