Cao Jianglin: Cement Industry Faces "Three High and Two Heavy" Challenges During the 14th Five-Year Plan Period

At the "2021 China Cement Industry Summit" held on April 20, Cao Jianglin, Executive Chairman of China Cement Association, General Manager of China Building Materials Group and Chairman of China Building Materials Co., Ltd., delivered a speech.

Today I would like to share two aspects: the development of the cement industry during the 13th Five-Year Plan period." And the views of China Building Materials Group on the cement industry during the "14th Five-Year Plan" period. During

the "13th Five-Year Plan" period, our cement industry has done relatively well in China's major raw material industries. It is the leader of structural adjustment, the active practitioner of supply-side structural reform, the active promoter of construction of ecological civilization, and the leader of the whole raw material industry.

The "13th Five-Year Plan" is worthy of our pride and pride. The total profit of the cement industry is 186.7 billion yuan in 2019 and 183.3 billion yuan in 2020. To sum up, the fundamental reason behind such good benefits is the self-reliance and initiative of cement practitioners, including engineering units, environmental protection units and the media.

In the past "13th Five-Year Plan" period, our industry has undergone four major adjustments :

1. Technical structure adjustment. At present, the proportion of new dry process cement production lines in China is close to 100%. In this technical restructuring, the former State Bureau of Building Materials and

2. Adjustment of organizational structure. At the end of 2004, I just entered the cement industry. At that time, our industry was highly dispersed, with more than 6000 cement enterprises. However, by the end of last year, the concentration of clinker production capacity in the industry reached 57. Although such concentration is still relatively high compared with domestic steel and other industries, it is still far from the internationally accepted level that the concentration of production capacity of the top three enterprises in a single industry has reached more than 70%.

In this profound organizational restructuring, China Building Materials has actively cooperated with Conch Cement. Southern Cement , Northern Cement and one after another. It is also difficult for our industry to achieve more than 180 billion benefits.

3. Adjustment of market structure. The symbol of market structure adjustment is the proposal of "peak staggering production". Unlike other consumer goods, vicious competition and crazy production of cement can not bring good industry benefits. The proposal and implementation of "peak staggering production" shows the maturity and wisdom of our industry. Today's achievements in market restructuring are the result of the joint efforts of all present, among which Conch Cement has played a leading role, followed by China Building Materials. Chairman Gao Dengbang is the leader of the market restructuring, and Song Zhiping, the old chairman of China Building Materials.

4. Adjustment of management structure. To this day, many people's impression of the cement industry is still "dirty and messy", but in fact, most cement factories today are cleaner than food factories, which is the embodiment of our cement industry being good at learning and innovation, and the result of our empowerment of traditional industries by means of automation, intelligence and information technology.

Over the past 20 or 30 years, the cement industry has been self-reliant and self-strengthening, and has made in-depth adjustments in the above four aspects. The industry efficiency has been continuously improved, not only most of the main manufacturing enterprises in the cement industry can make money, but also benefit the upstream and downstream industries.

, double plateau.". From the demand side, at least in the first three years of the 14th Five-Year Plan, according to the national economic situation, the output of cement clinker will remain above 1.5 billion tons, and the sales volume of cement will remain above 2.2 billion tons. From the supply side, because of the constraints of a number of conditions, the performance is worse than "13th Five-Year" is a small probability event. Therefore, supply and demand will be in a double platform period and will not decline substantially, which is our opportunity.

2. The challenges of the cement industry in the 14th Five-Year Plan are much more than those in the 13th Five-Year Plan. During the "14th Five-Year Plan" period, the development constraints of the cement industry are much more than those of the 13th Five-Year Plan, which can be summed up as "three high and two heavy".

"Three high" refers to:

1. Zhejiang's mine auction cost per ton has reached 30 yuan, and the cost per ton of mines along the Yangtze River and in the central region is also more than 10 yuan, so the cost of resources will be higher and higher.

2. In the later period of the 14th Five-Year Plan, the annual demand for cement will fall below 2 billion tons, and is expected to fall back to 1.5 billion tons, with a reduction of 500 million tons, and cement enterprises will be the main undertakers of the reduction cost.

3. At present, we are advocating "five in one" and vigorously promoting the construction of ecological environmental protection, and every place should accept the central environmental protection supervision. Enterprises should not only calculate the temporary cost, but also the future cost and environmental cost.

"Double" mainly refers to:

1. The country requires carbon peak in 2030 and carbon neutrality in 2060. The cement industry is a major carbon emitter, and the GCCA Global Cement Mixing Organization has called for carbon neutrality by 2050, which is a very heavy task.

2. At present, the cement industry is in a serious state of overcapacity, but there are still enterprises expanding production through technological transformation and replacement, which will aggravate the degree of overcapacity in the cement industry. How does the

cement industry cope with the challenges during the 14th Five-Year Plan period? The achievements of the cement industry during the 13th Five-Year Plan period are mainly due to the structural reform of the supply side, which is still the main line of the 14th Five-Year Plan. A single flower is not spring, so we must build the industry ecology together.

2. Eliminate backwardness and act together. It is also an effort to "reduce". Cancellation 32. In addition, I think small production lines and grinding stations should also be eliminated. The reason why our industry can not completely "run side by side" in the world is that there are still some backward production capacity.

3, green priority, independent emission reduction. It is necessary to respond to the requirements of the national "3060 carbon target". When our industry reaches its peak and when it neutralizes, I think it must be ahead of time, but don't say how long ahead of time. Carbon emission reduction is easy to say but difficult to do. It is a very complex behavior, a change of national strategy and a deep adjustment of economic structure. I call on everyone to carefully understand the requirements of the state, carefully study the situation of the industry, and reasonably set the amount of advance. Moreover, the GCCA Global Cement Mixing Association, which mainly represents the developed countries in Europe and the United States, requires 2050.

4. Innovation-driven, strive to take the lead. Efforts should be made to be "strong". China's major design and engineering companies are first-class in the world, and the emission indicators of cement enterprises are better than those of Europe and the United States, but we have not yet fully advanced in some technologies, especially in equipment technology and engineering refinement.

5. Self-discipline management to solve food and clothing problems. We should work hard on "good". Common development and progress of the whole industry.Our industry has high requirements and goals for itself, but if enterprises and industries do not make money, everything has to start again. Therefore, I think it is the most basic thing for our industry to insist on off-peak production.

(Cao Jianglin, General Manager of China National Building Material Group, left 2. Yu Shui, Secretary of Conch Cement, left 1.

Thank you!