Anhui Government to sell state-owned shares of Conch Group


Updated Wed, 30 Sep 2009 00:00:00 GMT

The provincial government of Anhui is to sell local cement production leader Anhui Conch Cement Group, for the purpose of raising fund to support the infrastructure construction of the province.

According to reports, China National Building Material Group Corporation (CNBM) and China National Materials Group Corporation (SINOMA) as the country's two state-owned enterprises, engaged in the cement production sector and coming directly under the administration of the State Council, the country's cabinet, both have the intention to take over Conch Cement Group. Once either CNBM or SINOMA acquires Conch Cement Group, the layout of China's cement production sector will be changed.

The State-owned Assets Supervision and Administration Commission of Anhui (SASAC of Anhui) estimated that the selling price of Conch Cement Group might be between CNY 10 billion and CNY 20 billion. Still, the SASAC of Anhui will exchange ideas with Conch Cement Group before performs the move.

Based in central China's Anhui Province, Conch Cement currently is the second biggest cement producer of China's Mainland, only following CNBM. The assets of the company have totaled to CNY 51.5 billion by far and the annual production capacity of it exceeds one million tons. Over 2008, the group achieved sales revenues of CNY 54 billion. It is the parent company Shanghai-listed Anhui Conch Cement Co. (600585.SH) and Shenzhen-listed Wuhu Conch Profiles and Science Co. (000619.SZ).

This time, the SASAC of Anhui is likely to sell a 51% stake it takes in Conch Cement Group. This year, Anhui Province has added 383 investment projects with the total investment of CNY 201 billion.

As a Hong Kong-listed company, CNBM has acquired 120 smaller cement producers from 2007 to 2009 and has tripled the production capacity during the two years. In southern and northern China respectively, it runs a branch. Currently, the Beijing-based company has total assets of CNY 91.8 billion.

As for SINOMA, its total assets stood at CNY 50.7 billion as at the end of 2008. Last year, the company realized revenues of CNY 28.7 billion from the main business and total profits of CNY 2 billion.

In terms of the business coverage, Conch Cement Group does business principally in the Yangtze River Delta area; CNBM does businesses in Zhejiang, Hunan and Jiangxi, all in south China; while SINOMA mainly does businesses in central and north China.

(USD 1 = CNY 6.83)