owed more than 40 million project funds to the court.
Recently, Henan Huanshan Environmental Protection Technology Co., Ltd. was sued by Tangshan Dunshi Construction Engineering Co., Ltd., a subsidiary of Jidong Equipment. In October 2022, both parties signed a civil engineering contract for the relocation and technical transformation of the 5,500t/d clinker production line; after the completion of the project, the principal of the project payment of 41.402 million yuan was delayed. In June 2026, Jidong Equipment had to apply to Huixian People's Court of Xinxiang City for filing a case, and at the same time, two guarantors, Sunstone Group Cement and Zhenxin Cement of Xinxiang City, were jointly and severally liable for liquidation.
Take a longer look. After 2023, the domestic cement demand side accelerated contraction, local market prices were upside down, and enterprises in the industry were under great pressure. It usually takes several years for a production line to go from decision-making to production and then to cost recovery. Those projects launched at the end of the industry boom (new lines or technical renovation and expansion projects) are facing a completely different market when it's time to repay.
For upstream contractors and equipment manufacturers, this means that the repayment cycle has been greatly extended. In recent years, arrears disputes in the field of building materials have increased significantly, cement equipment manufacturers, EPC contractors, construction enterprises have appeared a backlog of accounts receivable, the recovery cycle has been extended from half a year to two or three years, and even eventually embarked on the road of litigation. Behind the arrears, it is not necessarily the moral problem of an enterprise, but the general narrowing of cash flow in the whole industry under the downward trend of the market. The lawsuit
of Jidong Equipment also reveals a problem that the industry is not willing to look directly at: equipment manufacturers and construction parties are becoming the implicit buyers of the downward market of the cement industry. These risks are ultimately borne by the upstream of the industrial chain because of unpaid
project funds and arrears of equipment payments. Jidong Equipment is a well-known cement equipment manufacturer in the industry, with 41.4 million receivables, accounting for nearly 10% of its net assets, which is not a small number. More importantly, similar accounts receivable risks may not be the only one-whether other equipment manufacturers and construction enterprises are facing similar situations deserves our attention. In the downturn period of the
industry, the transmission path of capital problems is usually: the profit of cement plants is narrowed → the payment of project funds and goods is delayed → the cash flow of upstream contractors is under pressure → some contractors default → the risk spreads further upstream. Once the chain is formed, it is difficult to break it without loss. There is no sign that the contradiction between supply and demand in the
cement industry will be solved in the short term. Under the pattern of overcapacity, the living space of small and medium-sized cement enterprises will continue to be compressed, and it is only a matter of time before some enterprises'funds sound the alarm, and Jidong Equipment will not be the last equipment company that has to file a lawsuit against customers in arrears.
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