According to the estimate of China Cement Network Cement Big Data Research Institute, the total revenue of China's cement industry in 2023 is about 743 billion yuan, a decrease of about 17% compared with the same period last year. According to the 2023 annual performance report of
Western Cement, the company's revenue in 2023 was 9.021 billion yuan, an increase of 6.3% over the same period last year. This is undoubtedly a good result in an environment where the industry's revenue has fallen sharply year on year. Moreover, in the past month, the share price of Western Cement has risen sharply. Obviously, the market is also very optimistic about the development of cement in the west.
Organizations pointed out that from the current overseas construction capacity of cement enterprises, the western cement currently has the largest number of projects under construction, with a total capacity of 10.54 million tons, and the flexibility of overseas growth is the largest. The growth ability and expectation of cement enterprises overseas have become the focus of attention of the market and industry. According to the performance report of
Western Cement, in 2023, the demand for cement in China continued to decline due to insufficient investment in real estate development, and the average price of cement in Shaanxi, the main domestic market of Western Cement, decreased by about 17.5%. Combined with factors such as slow economic recovery and changes in the international political situation, domestic cement sales and profits are under pressure, and the revenue of Western Cement in China will decrease by nearly 1 billion yuan in 2023. Under the high pressure of the
domestic market, the revenue of Western Cement still achieved growth, thanks to the growth of its overseas business, especially in Africa. The African business revenue of Western Cement increased from 1.13 billion yuan in 2022 to 2.71 billion yuan, a sharp increase of 140% over the same period last year. At present, the overseas business of
Western Cement is mainly concentrated in Mozambique, the Democratic Republic of Congo and Ethiopia in Africa, all of which have achieved growth. Especially in Ethiopia, the sales volume of cement soared from 180,000 tons in 2022 to 1.36 million tons in 2023, with a year-on-year increase of 656%; the local price of cement also rose from 748 yuan/ton to 872 yuan/ton. The overseas business of Western Cement has undoubtedly greatly alleviated the pressure of enterprise operation caused by the downturn of the domestic market.
Through the performance report of Western Cement, we can see why Western Cement has achieved good results in the expansion of overseas markets:
1. Long-term strategic vision: Western Cement accurately grasps the development trend and demand potential of infrastructure construction in Africa and Central Asia. It will focus its business on such areas as new capital construction, airport construction and highway and railway engineering, and advance its layout to ensure that it occupies a favorable position in the subsequent market development.
2. Accurately grasp the market demand: In view of the market demand of Mozambique, the Democratic Republic of the Congo, Ethiopia and other countries, Western Cement has successfully realized the construction of sales channels and brands, and formulated sales strategies according to the characteristics of each region. For example, Mozambique will focus on developing the central and northern markets and export to overseas markets, and the Great Lakes plant in the Democratic Republic of the Congo will be used to meet the demand for clinker and cement in neighboring countries.
3. Government support and preferential policies: In a number of overseas investment projects, Western Cement has received strong support from the local government, including tax incentives, land priority and mining resources, which has created a good policy environment for the smooth progress of the project. The successful cases of
western cement can be used as an important reference for China's cement enterprises to go to sea. At present, the inflection point of domestic cement demand is now, the pressure of overcapacity continues to increase, and the profit center continues to move down, forcing the leading enterprises with expansion strength to speed up the pace of going to sea. In addition to the western cement, other domestic cement enterprises have also "marched" overseas. On March 9,
2024, Liu Shengyou, Deputy Secretary of the Party Committee, Vice Chairman and General Manager of Beibu Gulf Port Group, went to Yufeng Group to investigate the production and operation of the enterprise and make work arrangements, emphasizing that Yufeng should give full play to the advantages of special cement, rely on the convenience of the group company and actively explore overseas markets. On January 14,
2024, the second phase project of Huaxin Cement Plant invested by Huaxin Cement Tanzania Maveni Company was officially ignited and put into operation. The construction content includes a new dry process cement clinker production line with a daily output of 4000 tons. After completion, Huaxin Cement Plant has become the largest cement enterprise in Tanzania. On August 23,
2023, Hongshi Group Indonesia Dongjia Hongshi Cement Co., Ltd. Phase I clinker cement production line with a daily output of 10000 tons was successfully ignited and put into operation. The project is located in Dongkutai County, East Kalimantan Province, Indonesia, 260 kilometers away from the new capital of Indonesia. The plant area and mine area are 12600 mu, and the mine reserves are 1 billion tons. Supporting 50,000-ton seaport wharf.
……
From the perspective of the main direction of going to sea, China's cement enterprises focus on the layout of Southeast Asia, Central Asia and other countries along the Belt and Road; from the perspective of the route of going to sea, most enterprises mainly build their own production lines. The degree of overcapacity
in China has further intensified, and cement enterprises are actively transforming to find new ways out. At present, there is still a large market demand in the "Belt and Road" countries. In addition to extending the upstream and downstream industrial chains and entering the secondary industry, it is also a feasible way to actively expand overseas markets, which is worth pondering by the industry.
On March 28-29, China Cement Network will hold the "13th China Cement Industry Summit and TOP100 Award Ceremony" in Hangzhou, during which awards will be given to top 100 cement and supplier enterprises, and experts and scholars will be invited. China Railway and other construction units jointly discuss the new development trend of the cement industry in the future, and work together to create the future!
