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Asia Cement to spin off China unit

Far Eastern Group (遠東集團), the owner of Taiwan's biggest textile company with holdings in shipping, banking and mobile phones, plans to sell shares of its China cement subsidiary and a retail unit on the Hong Kong exchange next year.

Asia Cement Corp (亞洲水泥), Taiwan's second-biggest cement maker, will spin off its China unit to raise US$300 million in a Hong Kong initial public offering in the first quarter, Far Eastern chairman Douglas Hsu (徐旭東) said in an interview in Taipei yesterday.

Asia Cement rose by the daily limit in Taipei trading.

"It's our group policy that when you grow to a right size you should be listed," Hsu said. "Once you are listed, you can follow the right corporate governance."

Far Eastern will join Hon Hai Precision Industry Co (鴻海精密), Taiwan's biggest technology business group, in listing their China units in Hong Kong to tap a surge in the city's stock market. Hong Kong's benchmark Hang Seng Index has risen 42 percent this year, while Taiwan's benchmark TAIEX has gained 7.9 percent.

Asia Cement rose the daily 7 percent limit to NT$44.20 on the Taiwan Stock Exchange.

China accounts for about 20 percent of Asia Cement's sales. The Taipei-based cement maker is planning to use the proceeds to build new factories in China, Hsu said.

BNP Paribas and ABN Amro Holding NV Bank are arranging the share sale, Hsu said.

Hsu, 65, who ranks 31st in Forbes' list of Greater China's richest individuals, also said he plans to sell shares in the China unit of Far Eastern Department Stores Co (遠東百貨) in Hong Kong later next year.

"We want to list one company a year," Hsu said, declining to provide details about a share sale of the retail operation.

Far Eastern Department Stores, Taiwan's biggest publicly traded department store, plans to open one to two outlets in China a year, Hsu said.

The unit has 42 retail outlets, including 12 hypermarts, in Taiwan and China, he said.
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