China Resources to expand capacity
China Resources Cement Holdings will spend 8 billion yuan (HK$9.8 billion) expanding production capacity over the next three years, including 5 billion yuan this year, said Robert Lau Chung Kwok, chief financial officer of the Chinese state-owned cement producer.
Adding another 1.2 billion yuan to be spent on existing facilities, the Hong Kong-listed firm's capital expenditure this year would total 6.2 billion yuan, Lau said.
In addition, China Resources would invest an unspecified amount of money acquiring cement companies this year, said its chairman Zhou Longshan. 'We will not give up on acquisition opportunities to fulfil our strategy. We will keep up our fast and stable growth.'
Excluding future acquisitions, the firm planned to increase annual production capacity of cement, clinker and concrete from 47.3 million tonnes, 68.7 million tonnes and 32 million cubic metres last year to 66 million tonnes, 89 million tonnes and 53.7 million cubic metres in 2014 respectively, Zhou said.
'We have 9 billion yuan of credit available from banks that has not been used. Our bank-loan agreements require our gearing not to exceed 180 per cent. So we have lots of room for financing,' said Lau.
China Resources Cement's gearing ratio was 91.3 per cent at the end of last year.
This year, China Resources hoped to raise its market share in southern China, namely the provinces of Guangdong, Fujian, Guangxi and Hainan, from 20 per cent to 25 per cent, said Yu Zhongliang, its strategic development controller. The firm is already the biggest cement producer in southern China, and acquired cement producers in Inner Mongolia and Yunnan last year.