"South Korean Market Very Attractive, Please Introduce Companies Available for Sale"
"China Will Maximize Production Lines in Short Term to Launch Volume Offensive if Necessary"
The Chinese cement industry is actively seeking to enter the Korean market. Along with attempts to increase export volumes, they have also expressed their intention to acquire Korean cement companies. If realized, concerns are spreading that the crisis in the domestic cement industry will become more concrete due to the low-priced volume offensive of Chinese cement.
According to the cement industry on the 17th, a key figure from the Chinese cement industry who visited Korea on the 25th of last month met with cement industry officials and requested, "Please introduce Korean cement companies that might be available for sale."
Several cement industry officials reported, "China is actively seeking overseas expansion to escape the crisis in the cement industry and mentioned that they see the Korean market as a very attractive target."
China has about 800 cement companies owning more than 1,800 kilns, which are cement production facilities. In Korea, there are 9 cement companies with a total of 36 kilns. Compared to the domestic cement industry, the scale of the Chinese cement industry is an astonishing 50 times larger. China produced 2.033 billion tons of cement last year, which accounts for 50.2% of the world's total cement production of 4.051 billion tons, ranking first in the world.
Currently, the Chinese cement industry is on the brink of collapse. Due to the recession in the construction market, the domestic market has sharply declined, leading to fierce price competition to sell the overproduced cement. Unable to endure this, many companies are suspending kiln operations.
In this situation, when the Korean government announced the "Construction Cost Stabilization Plan" on the 2nd, which supports the distribution of Chinese cement, several Chinese cement companies have been exploring entry into the Korean market. A construction industry official said, "There are Chinese cement companies that inquire about the intention to import cement through personal connections or ask whether the Korean government's announcement is true," and analyzed, "It seems that the Chinese cement industry perceives the Korean government's recent policy change regarding cement imports as a positive signal."
Ultimately, the Korean government has stepped in to find a way out for the struggling Chinese cement industry. There are concerns about China's relentless dumping offensive to capture the Korean market, similar to what happened in steel and petrochemicals. For the Chinese cement industry, this is an opportunity. A large cement company owned by a private equity fund is right in front of them as prey, and with the Korean government also showing a conciliatory gesture, there is no reason to hesitate in targeting the Korean market.
A cement industry official expressed concern, saying, "The Chinese cement industry will launch a volume offensive by operating production lines at maximum capacity in a short period if necessary," but also emphasized, "It is regrettable that the government cannot foresee even one step ahead, but since the acceleration of the cement industry's decline is expected now, it is urgent to find a way out for the industrial ecosystem centered on the construction industry."
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