Qilianshan Cement H1 gross profit margin up to 44.9%


Updated Sun, 27 Sep 2009 00:00:00 GMT

Chinese cement manufacturer Gansu Qilianshan Cement Co., Ltd. (SHSE: 600720) witnessed gross profit margin of 44.9% in its cement business in the first half of 2009, surging from 26% in 2006.

Currently, its 42.5-grade ordinary cement sells for CNY 460 to CNY 470 per ton, nearly doubling the past price. The good performance is ascribed to the fast-growing cement demand.

Since 2008, a large number of infrastructure projects, such as railways, highways, airports, and hydropower stations, have broken earth in the northwestern province of Gansu. They have consumed a large amount of cement.

Qilianshan Cement has an actual production capacity of 6.8 million tons, including more than 2 million tons that are out of date, leading to high production cost.

After 2011, the dated capacity will fade out and the company will adopt new-dry processes cement production lines entirely, pulling down cost and sharpening competitive edge.

Notably, China National Materials Co., Ltd. (Sinoma, SEHK: 1893), a leading building materials producer in the country, bought into Qilianshan Cement this year, becoming its second largest shareholder.