Tue, May 14, 2019 - Page 12 News List

Taiwan Cement upbeat in China despite trade row

GOVERNMENT BOOST:Beijing’s infrastructure plans and the Guangdong-Hong Kong-Macau Greater Bay Area project would boost demand in China this year, the firm said

By Kwan Shin-han  /  Staff reporter

Taiwan Cement Corp (台灣水泥) yesterday said it remains upbeat about its business outlook in China, despite the US-China trade dispute.

Cement demand in China is likely to further increase this year on the back of Beijing’s infrastructure projects and the Guangdong-Hong Kong-Macau Greater Bay Area project, while the relaxation of the nation’s one-child policy and household registration system would drive up demand for cement in third and fourth-tier cities, the company said.

As for other markets, the company is confident that OYAK Cimento AS, its 40 percent owned Turkish unit, would become profitable this year, Taiwan Cement president John Li (李鐘培) said, adding that the company is extending its reach to Portugal.

The company has also established its European headquarters in Amsterdam to avoid foreign-exchange losses, he added.

Li made the remarks after the company reported that net income last quarter rose 34.18 percent annually to NT$3.95 billion (US$127.1 million), thanks to rising cement prices and contribution from its coal-fired Ho-Ping Power Plant.

Its cement segment contributed NT$2.91 billion in earnings, up 0.8 percent annually and its energy segment generated earnings of NT$449 million, up 300.5 percent, while other segments, including chemical and shipping businesses, posted combined earnings of NT$596 million, up 109.1 percent, company data showed.

Earnings per share last quarter climbed to a record NT$0.77, up from NT$0.63 a year earlier.

Taiwan Cement produced 54.37 million tonnes of cement last year, making it the sixth-largest producer in the Greater China region, company data showed.

In the first quarter, cement shipments in China decreased 7.02 percent annually to 10.6 million tonnes due to the Lunar New Year holiday, an early rainy season and the halt of work at construction sites during national meetings, Li said.

Gross margin of cement operations in China increased 1.3 percentage points to 35 percent from a year earlier and gross profit per tonne climbed 11.57 percent to NT$509, which Li attributed to climbing prices.

In comparison, Taiwan's cement operations reported gross margin dropped 2.6 percentage points to 7.8 percent due to rising raw material costs, he said.

OYAK posted a net loss of NT$319.89 million in the first quarter, due to Turkey’s external debts and devaluation of the Turkish lira, he said.

The Fair Trade Commission last month fined Taiwan Cement NT$20 million for colluding with four other firms in January to unfairly drive up cement prices.

The company denied any wrongdoing and said the price hikes reflected the rising costs of sand and gravel.

Taiwan Cement shares yesterday closed down 1.18 percent at NT$42 in Taipei.

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