Cement Net Exclusive: From the Non-compliance of Project Production Capacity to the Non-strict Verification of Production Capacity

2024-09-20 10:57:46

In practice, on the contrary, it is often found by the supervision team of ecological environment protection that in some places, the "two high" projects are blindly launched and not strictly controlled, and the production capacity is increased in violation of regulations. What should have been seen by the "expert" in charge was seen by the "layman" in environmental protection. Aren't you ashamed?

Under the serious overcapacity of cement clinker , there are fewer new projects through capacity replacement and fewer projects through cross-provincial capacity replacement. On the contrary, the difference of "approving small and building large" projects has been supplemented to compliance through capacity replacement.

Recently, a project in a province in southeast China was put into operation in May 2021 to supplement 1000 t/d capacity difference. Because the capacity was replaced from other provinces, according to the policy, the provincial competent department of the project construction area should entrust a national industry organization or intermediary agency to hold a hearing before the public announcement. We will resolutely and strictly examine the project capacity replacement plan in accordance with the law and regulations, prevent fraud and eliminate hidden dangers of new capacity. The purpose of holding a hearing

on cross-provincial capacity replacement is to strictly examine the project capacity replacement plan for new projects, prevent fraud and eliminate hidden dangers of new capacity. Now the hearing of the completed project is to rectify the fraud of the fait accompli and take remedial measures to reduce the new capacity of the fait accompli. It's a bit of an afterthought. In July 2017,

the project was approved by the provincial government to announce the capacity replacement plan, and the procedure was flawless. The announcement said that the capacity replacement of the project was carried out in accordance with the requirements of document No.127 of the Ministry of Industry and Information Technology [2015]. Document No.

127 specifies in the chapter of "Determination of Replacement Capacity" that the capacity of construction projects shall be verified in accordance with the cement (clinker) capacity conversion table. When the specification of the new dry process rotary kiln is Φ = 5.2m, the corresponding equipment scale is 6000 tons of clinker/day. In the announced capacity replacement scheme, one Ф5.2 × 60m rotary kiln (5000 t/d) is marked in the column of name, specification, model and quantity of the proposed main equipment (production line). The production capacity of two Ф4 × 60m rotary kilns (2500t/d) has been seamlessly linked up. The new capacity of 1000 t/d has existed since the replacement plan was formulated and the project was completed and put into operation in May 2021. After the completion of the

project, it has been listed in the provincial cement clinker production line list. The 2021 list and the 2022 list are marked as 5000 tons per day in the two columns of record or approved capacity and actual capacity. In the 2023 provincial cement clinker production line list, there is a change. The registered or approved capacity is marked as 5000 tons per day, while the actual capacity is marked as 6000 tons per day.

If the enterprise reports the capacity replacement plan in 2017, the profits of the cement industry, such as sesame blossoms, are rising steadily, reaching new heights year after year. In this situation, investors will leave room for overproduction of production lines, and it is "understandable" to expand the corresponding kiln diameter by 20 centimeters. However, the Replacement Measures require the provincial industrial and information authorities to verify the capacity replacement plan in accordance with the relevant provisions of the Measures, so as to ensure that the eliminated projects are real and the capacity is reasonable!

Moreover, during the construction of the project, in December 2017, the Ministry of Industry and Information Technology issued the Measures for the Implementation of Capacity Replacement in Cement and Glass Industry (Ministry of Industry and Information Technology [2017] 337). The requirements for capacity replacement are more stringent. It is clearly pointed out that for the construction projects that do not implement the capacity replacement plan, the provincial competent authorities are responsible for investigating and dealing with them in accordance with the law and regulations in conjunction with the relevant parties; for the enterprises that fail to implement the capacity replacement plan in place, commit fraud, and "approve small and build large", they shall be notified of their dishonest behavior and promote the implementation of joint punishment. In areas where the verification of capacity replacement schemes is not strictly checked and the implementation of supervision is not in place, rectification within a time limit shall be ordered, and serious cases shall be notified to the whole country, and the relevant responsible persons shall be investigated for their responsibilities in accordance with laws and regulations. In August

2018, the General Office of the Ministry of Industry and Information Technology and the General Office of the National Development and Reform Commission jointly issued the Notice on Serious Capacity Replacement and Strict Prohibition of New Capacity in Cement Flat Glass Industry (Lianyuan [2018] 57). The Notice requires that enterprises that commit fraud, fail to implement the announced capacity replacement plan and violate the regulations on the approval and filing of enterprise investment projects shall be severely punished in accordance with the Regulations on the Approval and Filing of Enterprise Investment Projects, and shall be submitted to the relevant parties for joint punishment. Areas with serious problems such as lax auditing and inadequate supervision and implementation will be notified to the whole country as negative examples. Individuals who have committed dereliction of duty or dereliction of duty in the work of checking and supervising the implementation of the capacity replacement scheme will be submitted to the relevant departments for investigation of relevant responsibilities in accordance with the law and discipline.

In July 2021, the Ministry of Industry and Information Technology issued the "Measures for the Implementation of Capacity Replacement in Cement and Glass Industry (2021 Edition)" (Ministry of Industry and Information Technology No.80), which requires more detailed requirements that the provincia l industrial and information authorities at the project construction site be responsible for supervising the implementation of the new project plan, supervising the organization of inspection and publishing the actual production capacity of the device, and supervising the implementation of the new project plan. If there are such acts as fraud and "approving small projects to build large ones", they shall be punished in accordance with the relevant requirements of the Regulations on the Approval and Filing of Enterprise Investment Projects, and shall not be ignited and put into operation before the rectification is in place. The Ministry of Industry and Information Technology is responsible for organizing spot checks on the implementation of the capacity replacement plan announced by the provincial industry and information technology authorities. In areas where the verification of capacity replacement schemes is not strictly checked and the implementation of supervision is not in place, rectification within a time limit shall be ordered, and relevant personnel shall be held accountable in accordance with laws and regulations. From the announcement of the capacity replacement plan in July 2017 to the ignition and commissioning in May 2021, and to the announcement of the 2023 provincial cement clinker production line list in June 2024, the

project has always been in non-compliance with the project capacity for seven years. The higher authorities continue to tighten their requirements, and the project authorities still go their own way, so they may as well "hear the evidence".

In practice, on the contrary, it is often found by the supervision team of ecological environment protection that in some places, the "two high" projects are blindly launched and not strictly controlled, and the production capacity is increased in violation of regulations. What should have been seen by the "expert" in charge was seen by the "layman" in environmental protection. Aren't you ashamed?

When the list of 2023 provincial cement clinker production lines was released this year, the competent authorities had revised the actual production capacity that did not comply with the regulations, and also prepared to replace the production capacity indicators from other provinces, and implemented 2:1 (top grid) reduction replacement according to the requirements of the current implementation documents. It is believed that in the list of 2024 provincial cement clinker production line released in 2025, the registered or approved capacity and actual capacity of the production line have been marked as 6000 tons per day.

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Correlation

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.