2023, the net profit of China's cement industry was roughly estimated to be about 31 billion, down more than 50% from the same period last year. Obviously, China's cement industry is facing severe challenges.
Data source: Cement Big Data Research Institute
Recently, Gao Dengbang, president of China Cement Association, pointed out that in 2023, the market was chaotic, the production capacity was excessive, the cement price was too low, and the enterprise efficiency was extremely poor. In fact, many enterprises are now on the edge of loss, whether the cement industry has 20 billion profits or 30 billion profits in 2023 after statistics, this figure is largely "decorated" with the profits of aggregates and other businesses. The cement business of the whole industry must lose money. As an important part of concrete and infrastructure construction, the business income of
aggregate has become a life buoy for many cement enterprises in the downturn of the cement market. Cement enterprises with forward-looking and strategic vision have laid out ahead of time and increased investment in the field of aggregates to offset the loss of cement business through the income from the extension of the industrial chain.
As many cement enterprises rely heavily on aggregate business for profits in 2023, it is believed that more and more cement enterprises will join the ranks of expanding aggregate business.
In 2006, Huaxin Cement entered the aggregate industry and was the first cement enterprise in China. At present, Huaxin has 36 aggregate factories in China, and the mature factories and mines are all national, provincial and municipal green mines. Among them, Huangshi Huaxin Green Building Material Industry Co., Ltd., with a total investment of 10 billion yuan, is located in Binjiang Industrial Park, Fuchi Town, Yangxin County, covering an area of more than 1800 mu. In the first half of
2023, the aggregate and concrete sales of Huaxin Cement increased by 103.30% and 82.31% respectively . Affected by this, the company's non-cement business has steadily improved, achieving revenue of 5.836 billion yuan, an increase of 49.19% over the previous year, accounting for about 37% of the company's total revenue, accounting for 56% of the net profit attributable to the parent company, which has become an important contribution to the company's profits and played an important supporting role in its performance.
On January 22, the annual output of 40 million tons of aggregate project of Chizhou China Building Material New Material Company entered the stage of equipment delivery. The successful delivery of this equipment marks that the project has entered the installation stage from the delivery stage, laying a good foundation for the promotion of follow-up projects, and is expected to be put into operation in the first half of this year. It is reported that the total investment of Chizhou China Building Material New Material Company's annual output of 40 million tons of aggregate project is about 10.613 billion yuan, which is the largest and largest single investment project of China Building Material Group.
Chizhou China Building Material New Material Company's annual output of 40 million tons of aggregate project
Tianshan shares have said that sand and gravel aggregate is an extension of the company's cement industry, is the need to strengthen the industrial chain, is a new business growth point . This investment will increase the production capacity of Tianshan cement aggregate, enhance the competitiveness of the regional market, realize the industrial linkage effect of cement, commercial mix and aggregate, and promote the realization of the goal of aggregate business development planning. The investment and construction of the project is conducive to the realization of the company's investment layout along the Yangtze River Economic Zone and the promotion of the construction of the core profit area in the Yangtze River Delta.
Recently, according to the People's Government of Fengkai County, Zhaoqing, Guangdong Province, the Conch Guli Mountain Green Building Material Project with an investment of 10.27 billion yuan has started construction. The resource reserve of the project is about 310 million cubic meters, with an annual output of 3.18 million cubic meters of granite blocks, 20 million tons of aggregate for construction and 2.15 million tons of washed sand. In order to accelerate the development of the whole industry chain
, Conch Cement has been focusing on promoting the construction of aggregate projects and developing large-scale and intensive aggregate bases in recent years. As of the first half of 2023, Conch Cement has an aggregate production capacity of 130 million tons. Conch Cement said that in the future, it will speed up the construction of aggregate stock projects and steadily develop incremental projects around the strategy of "extending the chain to supplement the chain", and give priority to the distribution in the Yangtze River Delta, Pearl River Delta and other markets and areas with low logistics costs, so as to give full play to the advantages of industrial synergy and promote the development of the industry. Maintain the company's competitive advantage in the aggregate industry.
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Just as the cement industry has experienced excessive expansion and overcapacity, with more and more cement enterprises pouring into the aggregate market, the capacity of the aggregate industry is likely to expand rapidly in the short term, resulting in a serious imbalance between supply and demand of the aggregate industry, which is already facing overcapacity. At that time, the aggregate business will also face the same situation of low price competition, declining profitability and even loss as cement. In this way, how long can aggregates "survive" for the cement industry?
Aggregate business is a temporary "life-saving straw" for the cement industry, not a long-term solution. In order to really get out of the predicament, cement enterprises need to maintain the steady development of the main cement industry, at the same time, based on the long-term, to seek a diversified sustainable development model.
On March 28-29, China Cement Network will hold the 13th China Cement Industry Summit and TOP100 Award Ceremony in Hangzhou , which will conduct in-depth analysis and discussion from the perspectives of supply, demand, macro-economy, technological progress and industrial upgrading. Push the cement industry out of the predicament and face the new cycle bravely. During the conference, there will be an analysis report on the market trend of sand and gravel aggregates. Please look forward to it.
