Gain or Loss: Acquisition of Xuzhou Conch Cement----Visiting Conch Group Deputy General Managers Yu Biao and Guo Jingbin (Part II)

Byzjx

Updated Fri, 01 Sep 2006 00:00:00 GMT

Three channels of financing
 
Mr. Shao Jun: in 2005, merger, acquisition and reconstitution emerged in cement sector like a rising wind and scudding clouds. World giants break into China market, and Conch also invited foreign capitals. As the pioneer of acquisition and reconstitution in cement sector, what’s the Conch’s original intention?
 
Mr. Yu Biao: considering the factors of rapid, healthy and sustainable development, Conch invites the foreign capitals. We all know, to comply with the macro control policies, one of which is that no new cement projects in future three years, the potential cement companies face a problem that credit is not available. Therefore, Conch has to apply three channels of financing to support its development. First is domestic banks and financial agencies, second is international banks and financial agencies, and the last one is domestic and international capital market.
 
After the invitation of foreign capitals, Conch gains enough capitals; what’s more, Conch acquires the foreign capital management experience.
 
Chaodong Cement: the story behind merger & acquisition
 
Mr. Shao Jun: at the mention of merger & acquisition, Conch has announced the acquisition of 19.69% shares in Chaodong Cement. So, why did Conch plan to acquire it and what’s the next plan?
 
Mr. Yu Biao: Caodong was ever a refulgent company, however its original advantages blocked its steps of reformation and development, missing many chances to improve. In order to stabilize and develop Chaodong Cement, the Government of Anhui Province determined to find a strategic investor and recombine Chaodong Cement to put the company back on its feet. For the sake of attracting foreign capitals, Conch makes a little joint stock in Chaodong Cement, and now Conch holds 19.69% shares in Chaodong Cement.
 
In the fast development, M&A is a strong suit of Conch. However, it is not so easy now, and there are many conditions for M&A. We will not give up any chance to merge and acquire, but we will not intentionally pursuit the chances either.
 
Regional cooperation and balance
 
Mr. Shao Jun: Conch has invested in many places, while these places have their own local features. Could talk something about how Conch manages and plans these places as a whole, and acclimatizes yourself to local features.
 
Mr. Yu Biao: on the management, we have our own rules which could not be surpassed by any subsidiaries, such as delivery after payment, uniform quality index, and uniform purchase tender, etc. Additionally, we also absorb the experience of large foreign companies. To different regions, we implement the pattern of regional management. For example, everything in the region could be rearranged and balanced under the authorization of Group. In one sentence, we follow the principle that to get the largest benefit.

                                                      to be continued....