Markets ＆ Sales Analysis

Major Markets

a. Cement and Clinker Business:

The brand name ”Skyscraper” of the Company focuses on the development of its principal operations in cement and clinker mainly for public and private consumption within domestic market of Taiwan, Penghu, Kinmen and Matsu. The Company also targets to export these products for overseas market mainly to Hong Kong, the Eastern Malaysia, Singapore, Macao and Mainland China, etc.  .

b. Ready-Mixed Concrete Business:

Ya Tung Ready-Mixed Concrete Corp., a subsidiary of the Company, which has been operating its owned plants as well as establishing a strategic alliance of sales network throughout so as to provide all the customers with premium services.

Market Share

In 2004, the Company accounted for 28.8 percent of domestic cement sales and shared 26.0 percent of total cement consumption in Taiwan.

The supply/demand, development, and niche of future market

Taiwan’s cement market is going to mature, in which the annual cement consumption is between 15 and 16 million MT. There is not much growth potential in domestic market. If there are no malignant competition among the domestic competitors and dumping from abroad, on the basis of balance between supply and sale, the reasonable profits for domestic cement producers are predictable

Development Advantages in Cement Industry

a. The number of licenses issued for building constructions and the areas of total building flats have been increasing in R.O.C. over the three years, which signifies the growing recovery of construction sector.

b. The Government has mapped out and continually implemented the “Ten New Major Public Construction Projects” such as the Mass Rapid Transit in Taipei and Kaohsiung, the expressway between Bali and Hsindien, the expressway between Suao and Huanlien and #6 national expressway projects, which have consolidated the fundamental demand for cement.

c. The success of anti-dumping case has effectively stopped the foreign cement produces’ intention of dumping. The soaring international cement price and rising shipping rate cause the increasing import cost, which leads domestic importers to reduce the import volume of cement. The domestic market is becoming more steady, and the price of cement is relatively reasonable.

d. The international demand for cement is increasing and the export price is going up. 

Development Disadvantages in Cement Industry and Countermeasures

a. Although the Government has mapped out “Ten New Major Public Construction Projects ”, it remains uncertain whether to be carried out on schedule because of the massive expenditure and the difficulty in fund raising, which would directly affect the progress of construction and indirectly influence the demand for cement.

b. Since the coal for fuel and the additive of gypsums and pyrite used for cement production mainly rely on import, it is inevitable that the soaring price of international raw materials and the rising shipping cost substantially heighten the cost of cement production.

Countermeasures:

The Company shall cut down its expenditure and lower the cost to dominate the market development, strive for the advantageous sales, and strengthen client relationship.

Application of Main Products

a. Portland Cement Type I :

Generally called ordinary cement, for use in all structural projects which do not require expose to sulphuric acid or underground water. Most cement users at the present market belong to this category.

b. Portland Cement Type II :

With moderate heat of hydration compared to Cement Type I as well as alkalies and moderate sulphate resistance, for use in large-size structures; is able to prevent crack and erosion of sea water, salt, and alkali, general purposes are as follows:

- Underground foundation project: Basement of high-rise building, tunnel, and underground passage.

- Mass concrete project: Bridge, dam, reservoir, and valve foundation structure.

- Projects that are subject to erosion by sea water and sea wind: Wharf, mole, sinker, breeding,   site, other harbor project.

- Project that requires moderate sulphate resistance: Polluted water processing plant, chemical engineering.

c. Special Purpose Cement:  Produced by special order of the clients.

Production process:

a. In accordance with the fixed proportion, limestone and clay are mixed and ground into raw meal.

b. Raw meal is poured into the rotary kiln and burned in high temperature until becoming clinker.

c. Clinker is mixed with gypsum and ground into cement.

d. Finally, cement is sold in bulk or packages.     

Supply state of main raw materials

The main raw materials of ACC include lime stone, clay, gypsum, pyrite and raw coal for fuel, etc. The limestone is produced and used by ACC alone. The clay is purchased from the domestic long-term contractors and the gypsum and pyrite are supplied by the domestic and foreign qualified manufacturers. The coal for fuel is supplied from Australia , China , South Africa by way of long-term or short-term contract.