Taiwan Cement to acquire capacities of Prosperity Minerals in China

Byswb

Updated Fri, 11 Dec 2009 00:00:00 GMT

Taiwan Cement, Taiwan's leading cement maker, announced on Monday its acquisition of Prosperity Minerals Holding Limited's capacities in China, reaching 16 million metric tons annually, at HK$4 billion (around NT$16.6 billion, or US$519 million) via its Hong Kong subsidiary TCC International Holdings.

The deal includes four kilns owned by Prosperity in Anhui Conch Cement, China's leading cement maker, and will enable Taiwan Cement to overtake Conch and become the largest cement supplier in southern China.

The deal echoes a recent remark made by Leslie Koo, chairman of Taiwan Cement, that the company will expand its Chinese operation via cooperation with other enterprises, as the Chinese government has banned the construction of new cement kilns.

TCC International has signed a memorandum of understanding on the deal with Prosperity and both sides are slated to sign the final agreement by December 31.

Edward Huang, senior vice president of Taiwan Cement, pointed out that TCC International will buy out all of the existing five kilns owned by Prosperity in China, including four in Yingde of Guangdong (under the auspices of Conch but actually invested by Prosperity via its long-term partnership with Conch) and one in Yunnan, with total capacities amounting to 10 million metric tons a year, as well as three kilns under construction, located in Chongqing, Guiyang, and Liaoning, respectively, with total capacities reaching 6 million metric tons. The deal will enable Taiwan Cement to extend its reach to southwestern, western, and northeast China, breaking its existing confinement to southern China.

The deal will boost Taiwan Cement's total capacities in China to over 40 million metric tons a year, up from 24.5 million now, for over 30% share of the southern Chinese market, higher than Conch, and consolidate its fourth-place ranking in entire China.