Enters Xinjiang's Special Economic Zone and Captures Enormous Opportunities Emerging from the Development of the Western Region
HONG KONG, Oct. 25 /PRNewswire-Asia/ -- China Shanshui Cement Group Limited ("Shanshui Cement" or the "Group"; HKEx: 00691), the largest cement enterprise in Shandong and Liaoning Provinces, China, recently made a strategic move to expand its production capacity in Western region, in light of infrastructure development promoted by the country's Twelfth Five-Year Plan (Year 2011-2015). On 28 August, two clinker lines with daily capacity of 5,000 tonnes and cement grinding lines with annual capacity of 6,000,000 tonnes commenced construction in Kashi, Xinjiang, marking the Group's presence in the Kashi Special Economic Zone. Shanshui Cement grasps benefit from the enormous opportunities arising from the development of the Western region.
The total investment of the Kashi project is RMB 2 billion and the project will be built in two phases. The first phase involves an investment of RMB 1.06 billioncovering four projects. Subsequently, based on market demand, another four projects will be constructed in phase II, representing an investment of RMB 940 million.
In May 2010, the Central Government approved the establishment of the Kashi Special Economic Zone and called for the entire nation to support the development of Xinjiang, which create advantages for the development of Shanshui Cement in Xinjiang, including:
1. Undersupplied market: Kashi consumed 2.2 million tonnes of cement in 2009, but only 1.738 million tonnes of cement were supplied by local producers. According to the scale of fixed assets investment in Kashi, it is expected that the demand for cement will reach 3.2 million tonnes in 2010, which will far exceed local supply. The demand for cement will continue to increase along with further construction in the Kashi Special Economic Zone, creating a huge market for Shanshui Cement.
2. Abundant limestone reserves: Kashi has an abundant reserve of quality limestone. Its quantity and grade are suitable for the production of cement. This allows the Group to save raw material transportation cost as it can obtain materials from local sources.
3. Geographical advantage as the western gateway of China: As the western gateway of China, Kashi is a bridge linking Central, Southern and Western Asia. The Group's investment in the cement projects in Kashi will not only satisfy demand in the region, but also open up a new export channel to nearby countries.
4. The Special Economic Zone's preferential policies: The country has launched a series of policies to support development of the Xinjiang region and accelerate construction of the Kashi Special Economic Zone. These policies include relaxing the entry barrier for the cement industry and granting "two-year exemption and three-year half reduction" tax holidays to investment companies -- all part of efforts to transform Kashi into the pearl of Western China.
Mr. Zhang Caikui, Chairman of Shanshui Cement, said, "We always pay close attention to state policies and stay ahead of the country's economic growth in order to seize first-mover opportunities and achieve long-term sustainable development of the Group. As a large cement enterprise in Shandong and Liaoning Provinces, we actively expand our market coverage to Inner Mongolia, Shanxi and Tianjin by acquiring and establishing production lines, satisfying demand for cement in these regions where infrastructure and new rural construction projects are being constructed. The Kashi project in Xinjiang takes into account the country's focus on developing Xinjiang's infrastructure in its Twelfth Five-Year Plan. The country's leaders have already stated that the scale of fixed assets investment in Xinjiang will double that made during the Eleventh Five-Year Plan. Via the Kashi project in Xinjiang, we will fully capitalize on favorable opportunities resulting from the development of Western China, thus further enhance the Group's influence in the market and gain greater market presence."
About China Shanshui Cement Group Limited
Shanshui Cement is the largest producer of cement in Shandong and Liaoning Province and among the top three cement producers in China. The Group operates production lines and cement grinding lines that adopt the most advanced suspension pre-heater dry process. The Group will continue to expand its business by acquiring successful operations and building new production lines. As of 30 September 2010, the Group's total cement production capacity and total clinker production capacity reached 63.89 million tonnes and 30.15 million tonnes respectively. Its total installed residual heat capacity was 151 MW. So far, the Group was included into the Hang Seng Composite Index, Midcap Index Hang Seng Composite and Real Estate Construction Index.
For more information please visit www.shanshuigroup.com.
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Strategic Financial Relations (China) Limited
Anita Cheung
Tel: +852-2864-4827
Email: anita.cheung@sprg.com.hk
Winnie Kwong
Tel: +852-2864-4839
Email: winnie.kwong@sprg.com.hk
Cathy Zhang
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Email: cathy.zhang@sprg.com.hk
Alice Kwok
Tel: +852-2864-4838
Email: alice.kwok@sprg.com.hk
SOURCE China Shanshui Cement Group Limited
