China Shuangji Cement, Ltd. (OTCBB:CSGJ) ("China Shuangji" or the "Company"), a leading producer of high-quality Portland cement in Shandong and Hainan Provinces in the People’s Republic of China (PRC), said today that it is anticipating that a new round of adjustment in the Chinese cement industry that is expected to be announced by the government will further drive industry growth.
According to a July 28 report in China’s Economic Information Daily, a key publication sponsored by the Xinhua News Agency, the government’s new Cement Industry Development Policy has now been finalized, and industry insiders believe that a new round of measures encouraging larger enterprises to merge and further eliminate backwards production is about to be unveiled. The Chinese government has already taken measures to consolidate the cement industry, eliminating inefficient low-grade cement plants and phasing out smaller producers in order to retire “aged” production facilities. The amended Policy, according to the report, is expected to accelerate industry consolidation in the second half of 2010, quickening the pace of cement industry mergers and acquisitions and benefiting larger cement producers as well as the entire industry. According to the report, the Policy is expected to encourage new methods of dry cement production and to require more stringent equipment standards for cement producers in order to further upgrade and structurally optimize the industry by 2015. By that time, the top ten cement producers are expected to account for 35% of China’s projected cement output of 2.04 billion metric tons, based on preliminary estimates, compared to 22.6% of the country’s 1.63 billion ton output in 2009.
“We expect the PRC Government’s policy to be a boon to the cement industry in China and to increase demand for our cement as smaller, more inefficient producers continue to shut down and government and local customers require more cement for new infrastructure, housing and other projects,” said Mr. Wenji Song, Chairman and President of China Shuangji Cement, Ltd. “This is being supported by the government’s $586 billion economic stimulus package, which has increased projects involving steel, aluminum, and cement, as well as measures to boost rural consumption by subsidizing procurement of building materials.” Concluded Mr. Song, “We are already seeing increased interest from local contractors to buy our cement and have received a 10 year $3.7 million 10% interest loan that will allow us to complete our new modern cement facility in Zhaoyuan City, which is expected to increase our production capacity by 1,000,000 metric tons to an estimated 2,500,000 metric tons per year. This will solidify our position as a major cement player in fast growing Shandong and Hainan Provinces.”