Taiwan Cement Corp (台灣水泥), the nation’s largest cement maker, said yesterday that its profit would grow by a double-digit percentage this year from NT$10.03 billion (US$330.92 million) last year on the back of the company’s cost reduction measures and China’s efforts to reduce oversupply.
The company — which has a maximum capacity of 55.2 million tonnes of cement a year in China and 10.6 million tonnes in Taiwan — saw its profit grow by 28.8 percent last year from NT$7.78 billion in 2012, chairman Leslie Koo (辜成允) said at an investors’ conference in Taipei.
Koo said he is confident in the company’s outlook because Beijing has decided to let the 20 largest cement makers in China have an 80 percent market share by 2020, higher than the 60 percent it proposed a year ago.
The Chinese government also plans to cut the legal exhaust emissions for cement factories by half in the near future, a move that is expected to cause shutdown of many Chinese factories, he said.
In addition, the company plans to cut its procurement costs for coal for its factories in southwest China this year by ordering large quantities, he added.
Despite the Chinese government’s effort to curb rising house prices, the company is still optimistic about cement demand in the country because of Beijing’s plan to promote urbanization to bolster the country’s economy, Koo said.
For this year, the company said its revenue would expand by a double-digit percentage from last year, when sales grew 2.1 percent to NT$116.1 billion from 2012, according to a company filing to the Taiwan Stock Exchange.
Meanwhile, the company plans to delist its subsidiary TCC International Holdings Ltd (台泥國際集團) from the Hong Kong Stock Exchange, Koo said.
“There is not enough liquidity and the share price is therefore always undervalued,” he said.
The company plans to buy back the shares for HK$3.9 after the subsidiary issues a cash dividend of HK$0.115 per share, Koo said.
Taiwan Cement is maintaining its target to increase its capacity to 100 million tonnes in China by the end of 2016, Koo said.
The company would increase the pace at which it acquires Chinese cement companies this year, Koo added.
Koo said the company previously slowed down its mergers and acquisitions activities because of the uncertainties resulting from the global financial crisis and the eurozone debt crisis, which would ease significantly this year.