Famous experts and experts gathered to express their views from different perspectives. China Cement Network has set up a column entitled "Talking about the Cold and Warm of Cement", interviewing many enterprise leaders and industry experts in the cement industry. Zhang Zhenkun, CEO of Asia Cement (China) Holding Company, was interviewed in this issue.
"In 2023, the cement industry experienced a severe situation of declining demand and low prices, and cement production in 2024 is expected to decline by 3% -4% compared with 2023," said Zhang Zhenkun. From the current downward trend, the price of cement in the first half of 2024 will be difficult to improve, and it may not be improved until the second half of the year.
In the long run, Zhang Zhenkun believes that the cement industry will be in a difficult period in the next ten years, and the demand for cement will drop from 2.04 billion tons to 1.4 billion tons or even less in ten years.
In this context, Zhang Zhenkun put forward several suggestions for the future development of the cement industry:
First, the sooner small and medium-sized cement enterprises withdraw, the better
. The cement industry will have a number of small and medium-sized cement enterprises that lack limestone mines, poor cement quality and shortage of funds to stop production and withdraw from the industry or be merged.
"At present, the operation rate of kilns in the industry can only be maintained at 50% -70%, even less than 40% in some areas, and the demand for cement is less than one year." Zhang Zhenkun revealed that in 2024, some small and medium-sized cement enterprises may take the initiative to shut down or withdraw from the market.
In addition, he also said that for some small and medium-sized enterprises that are still competitive, they should also consider withdrawing from the cement industry in time, otherwise they will only go bankrupt if they suffer serious losses in the end. "Now withdraw from some large cement groups may also consider acquisition, in case the market is worse, many indicators of small old production lines do not meet the national standards of energy consumption per unit product of cement, who would like to spend money to buy?" Zhang Zhenkun spoke bluntly.
At the same time, large enterprises can jointly set up a fund to encourage these small and medium-sized enterprises to withdraw early, the sooner they withdraw, the more they withdraw, the whole cement production can be automatically reduced, and the competition will not be so fierce. Otherwise, in order to grab the market and maintain cash flow, the loss of small and medium-sized enterprises will only be more detrimental to the stability of market prices.
Zhang Zhenkun believes that healthy competition is in line with the principles of market economy. Only when large enterprises hold together to keep warm, communicate and coordinate more, compete and cooperate, can they jointly maintain a healthy industry ecology and reduce losses.
In addition, large enterprises can also use the way of entrusted operation to stabilize the situation of a regional market. For example, Conch is entrusted to manage the production and operation of Fuzhou Taini Cement Co., Ltd. and Fuzhou Taini Yangyu Wharf Co., Ltd. Prior to the Transaction, Taiwan Cement International held 100% equity interest in the Target Company and solely controlled the Target Company; after the Transaction, Zhejiang Conch (through the Entrustment Management Agreement) and Taiwan Cement International (through holding 100% equity interest) jointly controlled the Target Company.
Third, the enterprise itself should take the initiative to reduce production and cost
due to the current cement overcapacity is very serious, and there is no effective way to resolve the overcapacity in the short term, so Zhang Zhenkun expressed his agreement with the current practice of increasing peak production and stopping kilns. In addition to cooperating with off-peak production, he believes that enterprises themselves should also reduce production independently and not overproduce. The so-called reduction of production is to reduce to below the design capacity, which can not only save costs, but also reduce carbon and electricity.
At the same time, Zhang Zhenkun said that cement enterprises should control their own production costs, reduce coal consumption and reduce clinker consumption by optimizing product quality, that is, increasing the proportion of blending ingredients and increasing alternative fuels. Create some profit space for enterprises.
