Cement Cold and Warm Big Brother Talk | Zhang Baogui: Tibet Cement Situation Is Good, But Need to Avoid Blind Expansion of Production Capacity

2024-01-23 15:01:20

Zhang Baogui said that the reason why the cement industry in Tibet can still develop well at present is that Tibet can strictly implement the development plan of the cement industry, strictly control the total production capacity of cement clinker, avoid blind expansion, and prevent Tibet from going to the road of serious overcapacity in the region.

Famous experts and experts gathered to express their views from different perspectives. China Cement Network has opened a column entitled "Talking about Cement Cold and Warm", interviewing many enterprise leaders and industry experts in the cement industry. In this issue, Zhang Baogui, general manager of Gaozheng Building Materials in Tibet, was interviewed.

"In 2023, the national cement market was generally depressed, and cement prices in some places once fell below the cost price." Zhang Baogui, general manager of Gaozheng Building Materials in Tibet, said that under the current market situation, the main reason for this situation is the serious overcapacity of cement.

Zhang Baogui said that in 2023, Tibet's fixed assets investment maintained a high growth rate, and Tibet implemented peak staggering production in line with the principle of tightening first, loosening later and adjusting according to market demand (such as increasing peak staggering production in the middle of Tibet with excess capacity, and producing in accordance with design capacity in the eastern Tibet with better market). The cement market in Tibet has made steady progress. It is expected that the cement output in Tibet will exceed 12 million tons in 2023, a record high; the cement market price will be higher than that in 2022. The cement enterprises in the region are basically profitable and can maintain the healthy development of the industry.

"Fixed asset investment in Tibet is expected to increase by about 13% in 2024 compared with 2023, and the market demand is better. We are confident about 2024." Zhang Baogui said that the demand for cement in Tibet in 2024 is expected to exceed 12 million tons, and the preliminary plan is to stagger peak production for 190 days.

"Tibet belongs to some regional overcapacity, especially the high level of fixed assets investment in Tibet, the unique geographical location, the relatively concentrated cement production capacity and so on, the industry self-discipline peak staggering production can be effective, but as far as the whole country is concerned, relying solely on peak staggering production can not save the current cement market." Zhang Baogui said that in many parts of the country, overcapacity is very serious and market compatibility is great, such as along the Yangtze River, it is very difficult to save the cement market by relying solely on infrastructure, market and off-peak production.

Zhang Baogui believes that the main problem in the cement industry is overcapacity, and it is the right way to find ways to control the total capacity and reduce the capacity. De-productivity needs to play an effective role in the market and the government, and be jointly promoted by market-oriented means and relevant policies issued by the government.

In addition, Zhang Baogui said that the reason why the cement industry in Tibet can still develop well at present is that Tibet can strictly implement the development plan of the cement industry, strictly control the total production capacity of cement clinker , avoid blind expansion, and prevent Tibet from going to the road of serious overcapacity in the region.

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On November 21, the Western Construction (002302) issued a prospectus for issuing stocks to specific targets in 2021. The company plans to introduce Conch Cement as a strategic investor through this issue, and Conch Cement will subscribe for 183 million shares, accounting for 12.48% of the total equity after the issue, becoming the second largest shareholder. The purpose of this issue is to optimize the capital structure, supplement liquidity and repay bank loans, which is expected to bring the company an annual increase of 8.85 billion yuan in operating income and a total profit of 708 million yuan, up 38.71% and 78.23% respectively from 2023.