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Cement Sector Faces Reshuffle

The cement sector is expected to undergo a dramatic restructuring in China in the coming decade, when modern production lines will increasingly eliminate technically backward plants, industrial executives and regulators said yesterday.

"Any time when a new suspension preheater (NSP) dry process' cement plant is built, a host of factories churning out lower-grade cement will be forced to phase out of market," said Tan Zhongming, president of the China National Non-Metallic Minerals Industry Co (CNMC).

Tan made the remarks at a press conference, when he announced that the INTERCEM, the leading international conference on the trading, transportation and handling of cement and related products, will be held in Beijing from September 4 to 5.

China has been the world's top cement manufacturer since 1985, when its annual output hit 146 million tons, according to Zeng Xuemin, secretary-general of the China Cement Association.

Last year, the country produced 725 million tons of cement, representing nearly 40 percent of the world's total cement production, said Zeng.

However, only 20 percent of the products are made through the advanced NSP process - which is popular in the world's developed countries, meaning most of the products are of relatively inferior quality, according to Tan.

The scenario also means there is a huge potential for the country to optimize its cement production structure, and there exist many opportunities for cement investors, said Tan.

Technologically, CNMC's sub-company Sinoma International Engineering Co - China's sole contractor for construction of NSP projects - is capable of building NSP plants producing up to 10,000 tons of cement a day, according to Tan.

With China's rapid economic growth and urbanization pace, industrial insiders have envisioned a surge in demands for quality cement in the years ahead.

"The idea of launching more large and medium-sized NSP projects is in line with our industrial and technological policies," said Niu Jianguo, vice-director of the Economic Performance Bureau under the National Development and Reform Commission.

Construction of the new production lines will speed up elimination of outdated production capacity, he said.

(China Daily August 27, 2003)

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