Construction Investment

March 5, 2018

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Recently, cement production share in some eastern countries is rising. Some cone crusher giants are planning to increase investment, as well as some river bridge project. The Asian Development Bank (ADB) has approved a US $26 million technical assistance (TA) grant, financed by the Australian Government, to support the Central Mekong Delta Region Connectivity Project. The gearing ratio, which compares capital to borrowings, may rise to 110 percent at most in the half from the current 103 percent. On Friday, China Resources Cement announced an interim net profit plunge of 68.9 percent to HK$ 635.2 million. The upper limit of the gearing ratio agreed with the lending bank is 180 percent, chief financial officer Robert Lau Chung-kwok said. The project will prepare detailed designs and implementation support for the construction of two cable-stayed bridges and 25 km road connecting the structures. Each bridge will be 2 km long, with six-lane roadway (three lanes in each direction) 40 m above the Mekong River. Anhui Conch Cement fell 3.94 percent to HK$ 20.70 yesterday, while China Resources Cement dropped 5.94 percent to HK$ 3.96. Shares of China National Building Material (3323) closed at HK$ 7.97, down 2.92 percent. The TA is part of the Australian Government s commitment to provide a AU$ 160 million (US $ 171 million) grant to the Government of Viet Nam for the project, as announced by Australia s Prime Minister during her official visit to Viet Nam in October 2010. The company said at the weekend it was widening the distribution outlets by opening more mega depots and signing on new distributors so that the consumers could reap the full benefits of the increased local production. Australia s grant contribution will help finance the engineering, design and construction supervision of the project, as well as provide a major contribution to the cost of building the Cao Lahn Bridge across the Mekong River in Dong Thap province. Dangote Cement, which accounts for over 70 per cent of the cement produced in Nigeria, have continued to invest more in its production capacity by expanding its production lines and establishing new plants. Dangote Cement recently opened a new $1 billion plant and has entrenched itself as lead supplier of cement in West Africa. The sand maker construction of the other bridge, Vam Cong Bridge, is supported by the Government of the Republic of Korea through a $ 200 million loan agreement signed with the Government of Viet Nam. It is a significant co-financing effort on the part of the official development partners to Viet Nam for this flagship project, which has an estimated cost of US $ 750 million. This, the company claims, will ensure the nation produces enough for home consumption and have surplus for export to other countries.