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Anhui Conch Cement to take on competitors

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Anhui Conch Cement (ACC), the largest cement producer in China, would invest 10 billion yuan this year to upgrade technology, undertake mergers and acquisitions and reduce emissions. According to the report, the recent growth of China National Building Material Group Corporation in the cement sector through mergers and acquisitions is threatening the market leadership position of ACC. This has led to ACC pursuing mergers and acquisitions. Guo Wensan, Chairman, ACC said that Conch Cement will expand capacity by more than 10 per cent in 2011. At present, the company has annual production capacity of 140 million tonne of cement and has affiliates in about 20 provinces and cities. He added among the major cement producers, ACC has the lowest leverage ratio while having the highest operating cash flows. The cost of mergers and acquisitions may increase due to the rise in cement prices resulting from the restrictions imposed by the government on power usage. "Conch Cement would consider the profitability, geographic location and mine resources of the target companies in its assessment. The price of cement increased 13 per cent in 2010, and is expected to continue to rise in 2011," said Guo Wensan.

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