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SCMP Reporter

CEMENT - a mixture of crushed limestone and clay burned in a kiln - has played a major part in the growth of modern-day Hong Kong and the region's infrastructure.

  The local demand is one reason why Cemex, the world's fourth-largest cement company, has just opened an office in Hong Kong.

   Between now and the year 2000, nearly 50 per cent of the world's demand for concrete will be in Asia.

 China will account for almost half the total requirement in Asia.

  Cemex is not only Mexico's biggest cement manufacturer, but the largest in the whole of the Americas.

  Randolph Wintgens, the managing director of Cemex Asia Ltd, said: ''[The firm] is moving into Asia because it is an aggressively expansionist company. We cannot afford to sit on the sidelines in respect of Asia.

  ''This is where the really big business opportunities are now, and on into the next century.

  ''In the major growth area of the world there is no substitute for cement as a basic building component.''   Cemex has its headquarters in Monterrey, in the state of Nuevo Leon, and is ideally positioned to capitalise on the combination of low production costs and high quality output.

  An independent review of the Asian cement business, carried out by Baring Securities last year, noted that ''Mexican producers are becoming the most competitive in the world, due to low production costs and efficient, inland transportation facilities''.

  The report also said: ''Despite longer shipment lead times and higher transportation costs for cement sourced from Mexico, Taiwan still imports from Mexico due to its low cost.''   Mexico's production costs averaged US$26 per tonne, compared with an Asian average of US$40 per tonne, said the report.

  Mr Wintgens said Hong Kong was a major importer of Mexican cement and that his primary role was to alert the rest of Asia to Cemex products.

  He said that while Hong Kong used between 3.6 million metric tons (MMT) and four MMT per year, demand in China would be between 293 MMT and 405 MMT per year between now and the year 2000.

  Mr Wintgens said China was the world's largest producer of cement, for domestic consumption.

  The Baring Securities report said China's plant sizes were small and served only local markets. Transportation bottlenecks also hindered the sourcing of both limestone and the coal needed to fire the kilns at the plants.

  The outdated facilities had resulted in high production costs, and the emphasis was on quantity rather than quality.

  Mr Wintgens said Cemex was looking towards investment opportunities with partners throughout Asia.

 ''We believe we can bring [in] our particular expertise,'' he said.

  ''The cement industry is presently going through the same sort of alliance-forming phase as the automobile and airline industries.

  ''It makes sense for us to join up with other major players in the region.''   Mr Wintgens said the options were varied.

  ''We could go into developing wholly new plants or, if the infrastructure is right, we could refurbish and upgrade existing plant to bring it to world standards.

  ''We could also move into partnership with concrete companies - a natural integrated marketing step - or alternatively [move] into the business of managing depots or distribution centres.''   Mr Wintgens' territory covers Japan, South Korea, China, Taiwan, Hong Kong, the Philippines, Thailand, Malaysia, Indonesia and Vietnam.



Firm cements future in Asia