On September 1 , Conch Cement made a statement at the mid-term performance conference in Hong Kong- "Based on the 15th Five-Year Development Plan, we will promote mergers and acquisitions of major domestic industries and extend the industrial chain, seize international development opportunities, and continue to shape industrial advantages in precise investment.". "
When the whole industry shrinks its defense line in the downturn of demand, overcapacity and profit trough, the key word of conch is not defense, but" merger and acquisition ". Leading mergers and acquisitions in the second half of
industry liquidation are a step
to be taken sooner or later. From the perspective of the development process of foreign cement industry, after entering the second half of industry capacity liquidation, mergers and acquisitions led by leading enterprises are the only way . It is tantamount to making a clear judgment to the peers that the industry will enter the integration window.
In fact, Conch has completed the merger from judgment to contract. On July 2, Conch Cement's Hefei Conch and Wulanchabu Conch signed an asset transfer agreement with Wanwei Hi-tech and Mengwei Science and Technology to transfer two cement assets for 619 million yuan: Wanwei Hi-tech's 2 million tons of clinker and 3 million tons of cement production capacity in Chaohu Lake. Mengwei Science and Technology has a production capacity of 1 million tons of clinker and 1 million tons of cement in Wulanchabu. With
millions of tons of production capacity, it will eliminate competition in the same industry, consolidate regional market advantages, and expand the market scope to Inner Mongolia.
The trough period is the integration period, which is the iron law of mergers and acquisitions. When the industry goes down, the asset valuation goes down, the transferor relaxes, the policy is happy to see the concentration increase, and the cost of the leader is the lowest; when the industry recovers, the good target has already been snatched up, and the cost is much more expensive. Conch counter-cyclical show "M & a card", gambling is not to buy cheap at the moment, but when the industry is cleared, they hold the pattern card in their hands.
Cement is a highly homogeneous periodic product, and the ceiling of the main industry is visible to the naked eye. Conch put forward "industrial chain extension" and mergers and acquisitions side by side, and the direction has been very clear: go downstream along the industrial chain, lay out in the direction closer to the terminal, such as commercial concrete, and turn the single-point business of "selling clinker and cement" into a chain business covering more demand scenarios. This is not only a realistic choice to hedge the cyclical fluctuation of a single variety, but also to transform the cost advantage of cement within the transportation radius into the control of the terminal market. The four words
"precision investment" delimit the watershed
between this round of expansion and the past. Conch deliberately adds the prefix "precision" to investment, which is not rhetoric.
In the past era of high growth, the expansion of cement enterprises was a horse race to enclose land and scale for the sake of scale; now the logic of Conch's merger and acquisition has become accounting-regional supply and demand pattern, capacity utilization rate, logistics radius, synergy space, and every investment must be accounted for.
This confirms each other with its overseas posture: overseas projects have been spread to Indonesia, Myanmar, Laos, Cambodia, Uzbekistan and other countries, among which Uzbekistan's Karshi, Tashkent and Andijan factories are connected into a whole, which is the fulcrum of the layout of the whole Central Asia; Even if the local currency depreciates and the exchange rate fluctuates repeatedly, the risk gate is always in hand while expanding. It is not difficult
to expand, but it is difficult to dare to expand and know how to stop. The four words
"precise investment" mark the watershed between this round of leading expansion and the barbaric growth of that year-no longer for scale and scale, but for structure and investment. Whether it can be realized or not will directly determine whether Conch will be the winner of industry consolidation in five years or the burden of taking over at a low ebb. The winter of the
industry is often the spring for leading enterprises to promote integration and "copy the bottom" of high-quality production capacity.
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