domestic cement industry continued to shrink, the profits of the industry declined sharply, and enterprises generally faced the dilemma of overcapacity and intensified price war. In this context, Conch Cement , Jidong Cement, Huaxin Cement and other leading enterprises have listed overseas development as the core strategic direction in 2025.
First, can expanding overseas markets help domestic cement enterprises get rid of difficulties?
1. Great
potential for growth in overseas market demand 1.1. Developing countries, especially those jointly building the "the Belt and Road" (such as Southeast Asia, Central Asia and Africa), are in a period of rapid development of infrastructure, and the demand for cement is strong. Overseas demand is expected to grow by 9% to 2.24 billion tons in 2024, while domestic demand is only 1.81 billion tons. For example, demand in the African market grew by 4% due to low per capita cement consumption and increased infrastructure investment. 1.2 The price of
overseas cement is generally higher than that of domestic cement. Taking Ethiopia as an example, the price of cement is as high as 2518 yuan/ton, far exceeding the domestic level of 344 yuan/ton, and overseas production costs (such as labor, raw materials) are more advantageous and more profitable.
2. Domestic enterprises realized profit supplement
through overseas distribution. In 2023, the overseas business revenue of Huaxin Cement increased by nearly 30% year on year, the proportion of overseas revenue of Conch Cement increased to 5.6%, and the profit of Mamba Company of Jidong Cement in South Africa reached a record high in 2024. Far beyond the domestic level. These cases show that overseas markets can become a new profit growth point for enterprises.
3 . However, the overseas market cannot completely replace the domestic demand
. China's cement production accounts for about 50% of the world's total. The domestic market is huge, while the proportion of overseas production capacity is still small (for example, the overseas production capacity of Conch Cement only accounts for 6%). Dr. Ma Weiping pointed out that the limited volume of overseas markets makes it difficult to "save" the overall downward trend of the domestic industry, which is more a supplement than a substitute.
Conclusion: The overseas market can alleviate the profit pressure of domestic enterprises and provide incremental space, but it can not completely offset the impact of domestic market contraction, which needs to be combined with domestic capacity optimization, green transformation and other measures.
2. Problems
that domestic cement enterprises need to pay attention to when developing overseas 1. Market selection and competition risks
: Be alert to homogeneous competition: Chinese enterprises may face an "involution" price war overseas. For example, the centralized distribution of some "the Belt and Road" countries has led to intensified competition among enterprises. Over
capacity risk: Some regions (such as Southeast Asia) have shown signs of overcapacity, and investment targets need to be carefully selected.
2. Localized operation and compliance challenges
Integration into the local market: It is necessary to cooperate with local enterprises to avoid cultural conflicts and policy barriers. For example, Conch Cement has enhanced its environmental image and local recognition through photovoltaic power generation and alternative fuel projects in Indonesia.
Political and economic risks: geopolitical turmoil (such as political instability in some African countries), exchange rate fluctuations and trade frictions may affect the project income.
3. Upgrading
of technology and environmental protection standards As the world pays more attention to green and low-carbon, enterprises need to increase investment in technology research and development, and promote low-carbon production processes (such as alternative fuels, waste heat power generation) to meet international environmental protection requirements.
China's cement industry accounts for 3% of the world's carbon emissions, and overseas expansion needs to take into account emission reduction targets to avoid being limited by environmental protection standards.
4. Insufficient reserve of talents for international capacity building
: The shortage of international management team and technical talents may restrict operational efficiency.
Capital pressure: a large amount of capital is needed for overseas mergers and acquisitions and plant construction, and it is necessary to balance the capital allocation between domestic and overseas businesses.
5. Supply chain and cost control
Overseas projects need to deal with logistics costs (such as long-distance transportation), tariff barriers and other issues. For example, Huaxin Cement shortens the production cycle and reduces the initial investment
through mergers and acquisitions of mature factories (such as Brazilian aggregate factories). 3. The future development direction suggests
differentiated layout: give priority to regions with large demand gap and less competition (such as Africa and Central Asia). Avoid clustering in Southeast Asia.
Industry synergy to go to sea: In combination with the "the Belt and Road" infrastructure projects, promote the synergy output of cement, aggregate, concrete and other industrial chains, and enhance the comprehensive competitiveness.
Green transformation and technology export: introduce domestic mature low-carbon technologies (such as photovoltaic power generation and carbon capture) overseas to create a brand image of sustainable development.
It is concluded that
overseas markets provide important development opportunities for domestic cement enterprises, but they need to systematically deal with challenges such as market competition, policy risks and technological upgrading. Enterprises need to build overseas business into a "second growth curve" through precise layout, localized operation and green innovation, rather than simply transferring production capacity. At the same time, the structural adjustment of the domestic market (such as peak staggering production and industry integration) still needs to be continuously promoted to form a sustainable development model of internal and external linkage.
Overseas development is an important breakthrough point for domestic cement enterprises in the future. On March 13-14, 2025, China Cement Network will hold the 14th China Cement Industry Summit and TOP100 Award Ceremony in Hangzhou. At the same time, the "C50 Market Forum" will be held to bring together experts, scholars and industry leaders to discuss the future development of China's cement industry. Please pay attention.
