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Fri, Jan 14, 2000 - Page 18 News List

Construction boom profits local cement industry

By Sharon Chuang  /  STAFF REPORTER

Demand for reconstruction material following the 921 earthquake, as well as the commencement of several public construction projects, is expected to boost prospects for the cement industry over the next few years, according to industry analysts.

The cement industry had expected to see a revival last year following years in the doldrums, but the earthquake put the upturn on hold, and the industry subsequently suffered its sixth successive year of falling sales.

It has been a tough few years for the industry, which has been battered by the dumping of imported cement from other Asian countries, a sluggish construction industry, and the delay of several public construction projects.

Adding to the woes, last year's bad weather in July and August, followed by the quake in September, put a lot of construction work on hold, said James Chu (朱晏民), a cement analyst at Credit Swiss Investment Consulting (Taiwan). The delays caused a short-term decrease in demand for cement.

Many construction projects were then further suspended because of aftershocks following the quake, said Chu. A large number of ready-mixed concrete plants in Taichung also fell during the quake, making cement production impossible, he said.

Finally, after the false hopes of last year, prospects for the next two years look much rosier, according to Fay Lin (林志成), finance department manager at Asia Cement (亞洲水泥), Taiwan's largest cement producer.

"The reconstruction work following the quake and the start of several public construction projects will give a boost to the cement industry," said Lin. "In addition, Taiwan's recovering economy will also help the industry," she said.

Chu estimated that the cement required for reconstruction following the quake will increase annual demand by approximately 1.7 million metric tons this year and next year, over and above the current demand of around 20 million tons.

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