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Major China cement maker eyes JV with SMC’s Ang

By Ayen Infante

10/13/2008

Dong Yang Cement Association of China plans to put up two major factories in the country possibly in partnership with businessmen Ramon Ang, who is also president of Asian food conglomerate San Miguel Corp. (SMC), and former Philippine Chamber of Commerce and Industry chairman emeritus Donald Dee, special envoy on trade and investments to China, Francis Chua said.

The Chinese cement group was one of the five major prospective investors that President Arroyo reportedly convinced to invest in the country during her visit to China in time for the just held Beijing Olympics.

Mrs. Arroyo is scheduled to return to China on Oct. 23 to meet with prospective investors in three major cities including Beijing.

Early this month, company representatives went here to discuss with Trade and Industry Secretary Peter Favila their intention to team up with Ang and Dee to establish two production plants with an estimated combined capacity of three million tons annually.

Chua said that the magnitude of investments could be not less than $200 million for every 1.5 million ton facility or nearly $400 million for both.

The same group of 25-man delegation from 10 companies in Dong Yang City have visited Mrs. Arroyo in Malacañang last August to firm up their business plans in the country including the possible export of part of its capacity to other cities in the region.

Dong Yang was formerly a town and now listed as among the top 100 cities in China. It is a major cement producing city in that country.

Chua said the government has welcomed the proposal of the Chinese cement group to further spur competition in the market amid the increasing costs of cement that have reached more than P200 per bag when two of the major players recently hiked its prices by an average of P12 per bag allegedly due to the rising cost of coal in the world market.

Last September, Holcim Cement and La Farge have imposed a P12 additional increase in every bag of cement that triggered a move from the DTI to push for the temporary removal of tariffs on cement imports to flood the market with cheap imported cement.

At first, the group was proposing to start with trading while plans for the construction of manufacturing plants are still being discussed. Chua said the group even promised to bring in cement products half the price of what is available in the domestic market.

Favila, however, insisted that to be fair with the local cement makers, the group should stick with the proposed manufacturing plants, Chua added.

The first facility which could be in partnership with Dee was proposed to be located near a 200-hectare limestone quarrying site owned and operated by Dee in Montalban Rizal.

Ang, who is also the head of San Miguel Foods Inc. (SMFI), on the other hand, has enticed the group to consider putting up another factory either in Batangas City or Bulacan.

China’s largest nickel mining firm Jinchuan Nickel Group had met with Favila to inform the Philippine government that it has decided to junk its proposed takeover of the Nonoc Mining project due to alleged difficulties in negotiations.