Asia Cement to Engage in M&A in Mainland China

Taipei, Aug. 20, 2008 (CENS)--Asia Cement Corp., a cement supplier under the Far Eastern Group, will expand to China by acquiring peers through its mainland subsidiaries.

Seeing the potential market in China generated by increasing demand for cement to rebuild after the disastrous Sichuan quake, Asia Cement will budget US$600 million to double its mainland capacity to 20 million metric tons of cement in two years.

T.H. Chang, chief executive of Asia Cement China, said his company is looking for M&A opportunities in China without having targeted anyone.

At present Asia Cement is capable of rolling out eight million metric tons of cement per year in the mainland. Its operations in the mainland are mainly located in the region along the Yangtze River and Sichuan Province. In May this year, Asia Cement floated shares on the Hong Kong Stock Exchange, which has helped it raise US$238 million in capital

"The market in China is very promising from seeing strong demand for high-end cement in the wake of the devastating Sichuan quake," noted Chang.

With production sites nearby the epicenter, Asia Cement China has geographic advantages over competitors. Increasing rebuild projects in China, both structures and infrastructure, are driving up cement prices there.

Chang said cement supply in China is very tight as the authorities have made a policy to shut down small, older cement plants.