Outlook on China＇s Building Materials Industry
China International Economic Consultants (CIEC)
April 15 2002
Development and Prospect of China’s Building Materials Industry in 2001
Building materials industry is closely related to the development cycle of the national economy In recent years China has implemented a series of policies such as the proactive fiscal policy and the expansive monetary policy Accordingly the national economic growth has rallied While the world economy generally slid by a wide margin China still managed to achieve a relatively high GDP growth rate of 73 in 2001 Underpinned by the fast national economic growth the economic operation quality of China’s building materials industry continued to improve steadily in 2001 on the basis of a substantial rebound in 2000
According to latest monthly statistics the basic economic operation situation of the building materials industry in 2001 were as follows the yearly industrial added value hit 1023 billion yuan (referring to stateowned industrial enterprises and nonstate owned industrial enterprises with annual sales of over 5 million yuan and the same below) up 1165 over the previous year which was slightly higher than the goal of 910 set at the end of 2000 the yearly sales revenue amounted to 3146 billion yuan up 1107 over the previous year the yearly profits totaled 11891 billion yuan up 2681 over the previous year which was slightly more than the goal of about 11 billion yuan set at the end of 2000 the annual import and export value of building materials and nonmetallic mineral commodities stood at 5672 billion US dollars up 1212 over the previous year of which export accounted for 33 billion US dollars up 1511 the output of cement reached 621 million tons up 65 year on year the production of plate glass hit 204 million weight crates up 1448 year on year
For 2002 the entire building materials industry will maintain steady growth supported by steady national economic growth Numerous favorable factors will prop up overall growth of the building materials industry although some unfavorable factors will restrain its further development Structural adjustment amid control over aggregate output will still be the main tone for development of the country’s building materials industry in 2002 As China has entered the WTO the domestic building materials industry will face fiercer competition and some subsectors will be affected to some extents
This Report will summarize the operating conditions of China’s building materials industry in 2001 analyze and forecast its industrial developments in 2002 and specify the advantages and disadvantages of China’s WTO membership on the building materials industry by employing authoritative data and materials
Content
1 Development of China’s Building Materials Industry in 2001 1
11 Aggregate Control Targets for the Building Materials Industry in 2001 1
12 Overview of Industrial Operation 2
121 Aggregate Control Targets for the Building Materials Industry in First Half Year 2
122 Annual Accomplishment of Main Economic Indicators of the Industry 4
13 Operations of 26 Key Building Materials Enterprises 6
2 Operations of Subsectors in Building Materials Industry in 2001 8
21 Glass and Glass Products Industry 8
22 Construction and Sanitary Ceramics Industry 11
23 Glass Fiber and Products Industry 11
24 Cement Industry 13
3 Influences of WTO Entry on China’s Building Materials Industry and Analysis of Countermeasures 17
31 General Influences on the Building Materials Industry 17
311 Analysis of Advantages and Disadvantages of China’s Building Materials Industry 17
312 Influences of WTO Entry on Building Materials Industry – Analysis of Opportunities and Challenges 18
32 Influences on Main SubindustriesAssociated Industries 19
321 Main Subindustries 19
322 Associated Industries – Ceramic Machinebuilding Industry 21
33 Analysis of Countermeasures 23
4 Analysis and Forecast of the Developments of Building Materials Industry in 2002 26
41 Targets and Main Work of the Building Materials Industry in 2002 26
411 Targets 26
412 Main Work 26
42 Favorable Factors for the Building Materials Industry in 2002 28
43 Unfavorable Factors for the Building Materials Industry in 2002 29
5 Development Plans for Building Materials Industry 30
51 Tenth FiveYear Plan (20012005) for the Industry 30
52 Tenth Fiveyear Plan for Main Subsectors 30
521 Construction and Sanitary Ceramics Industry 30
522 Cement Industry 31
523 Glass Industry 33
6 Analysis of Listed Companies in Building Materials Industry 35
61 New Building Materials Block 35
62 Cement Block 36
63 Glass Block 37
64 Construction and Sanitary Ceramics Block 38
7 Appendixes 39
71 Tenth FiveYear Plan for the Building Materials Industry 39
73 18 Standards for Building Materials Industry 54
74 Output of 106 Cement Enterprises in 2001 55
8 Reference Materials 58
1 Development of China’s Building Materials Industry in 2001
11 Aggregate Control Targets for the Building Materials Industry in 2001
On February 2 2001 the State Economic and Trade Commission issued the Opinions on Implementing Aggregate Control in the Building Materials Industry in 2001 (SETC No 99 [2001]) According to the document the control targets for the building materials industry in 2001 are as follows A total of 1900 small cement kilns will be closed to reduce backward production capacity by 50 million tons of which 35 million tons are involved in uncompleted overhaul drive of the industry and 1520 million tons concern additional closures of small kilns to make room for big projects The national cement output will be controlled within 570 million tons Meanwhile 100 small glass production lines will be closed down to reduce the glass production capacity by 10 million weight crates and control the national plate glass output at 170 million weight crates The profit of the whole industry after offsetting losses will not be less than 85 billion yuan
For details please see the following table with regard to the aggregate cement control targets and the catalogue of capacities to be eliminated in 2001
Table 11 Aggregate cement control targets and catalogue of capacities to be eliminated in 2001 (unit 10000 tons)
Province
Actual output in 2000
Aggregate control target in 2001
Capacity to be eliminated according to Document No 49 [1999] issued by General Office of the State Council
Capacity already eliminated by 2000
Capacity to be eliminated in first half of 2001
Total
58319
57000
10000
6500
3500
Beijing
827
800
96
180
0
Tianjin
268
270
24
*35
0
Hebei
4695
4600
773
*635
138
Shanxi
1193
1200
544
588
0
Inner Mongolia
630
630
171
*53
118
Liaoning
1954
1950
361
247
114
Jilin
759
800
149
*44
105
Heilongjiang
904
950
150
67
83
Shanghai
312
310
3
*3
0
Jiangsu
4599
4600
509
*580
0
Zhejiang
4257
4200
709
709
0
Anhui
1906
2000
810
666
144
Fujian
1514
1600
612
*171
441
Jiangxi
1463
1400
168
112
56
Shandong
6547
6200
1134
884
250
Henan
3723
3500
611
*225
386
Hubei
2461
2400
739
760
0
Hunan
2396
2200
994
*400
594
Guangdong
5872
5600
1283
*265
1018
Guangxi
2198
2000
418
23
395
Hainan
315
300
25
*22
3
Sichuan
2766
2600
752
288
464
Guizhou
784
750
567
*91
476
Yunnan
1512
1500
376
*41
335
Chongqing
1403
1300
315
*108
207
Shaanxi
989
970
350
*332
18
Gansu
724
720
151
*118
33
Qinghai
124
120
32
*16
16
Ningxia
280
260
33
*21
12
Xinjiang
895
900
158
60
98
Note 1) * the figures are up to October 2000
2) The catalogue is sourced from the No 99 [2001] document issued by the State Economic and Trade Commission on February 2 2001
12 Overview of Industrial Operation
121 Aggregate Control Targets for the Building Materials Industry in First Half Year
China’s cement output amounted to 287 million tons in the first half of 2001 up 9 year on year The figure represented 503 of the annual target indicating that the production was basically within the scope of control
A total of 15 provinces municipalities and autonomous regions posted better control than the national average level in cement output in the first half of 2001 They are Inner Mongolia (440) Heilongjiang (450) Liaoning (458) Xinjiang (461) Fujian (463) Hebei (469) Guangxi (470) Beijing (476) Guangdong (477) Jilin (484) Anhui (485) Hubei (489) Hunan (491) Shanxi (493) and Shanghai (497)
The regions whose output exceeded the target also numbered 15 They are Qinghai (628) Henan (566) Shaanxi (553) Chongqing (551) Guizhou (547) Sichuan (540) Gansu (538) Shandong (535) Jiangsu (533) Ningxia (533) Yunnan (528) Hainan (524) Tianjin (523) Zhejiang (514) and Jiangxi (511)
Of special note the production in the nine regions in western China exceeded the national average by 35 percentage points and the growth rate was also higher than that in the same period of 2000 such as Guizhou (403) Qinghai (348) Yunnan (324) and Sichuan (248) This was due mainly to the implementation of the Western China Development Drive which caused greater demand for cement Anyway this also has brought about pressures to the cement industrial restructuring in the western regions The regions should seize the opportunities to develop newtype drymethod cement and discard backward production capacities
See Table 12 on fulfillment of cement output control targets by region in the first half of 2001
Table 12 Fulfillment of cement output control targets by region in the first half of 2001
Region
Cement output control target for 2001 (10000t)
First half year aggregate
Aggregate output (10000t)
yoy increase ()
Percentage of annual target（）
Total
57000
28663
90
503
Central China
15080
7605
90
504
Eastern China
32430
16165
91
498
Western China
9120
4876
208
535
Regions with better output control than national average
1
Qinghai
120
75
348
628
2
Henan
3500
1982
93
566
3
Shaanxi
970
536
99
553
4
Chongqing
1300
716
89
551
5
Guizhou
750
410
403
547
6
Sichuan
2600
1404
248
540
7
Gansu
720
388
142
539
8
Shandong
6200
3314
86
535
9
Jiangsu
4600
2451
215
533
10
Ningxia
260
139
147
533
11
Yunnan
1500
792
324
528
12
Hainan
300
157
01
524
13
Tianjin
270
141
294
523
14
Zhejiang
4200
2195
162
514
15
Jiangxi
1400
716
180
511
Regions with output higher than national average level
1
Shanghai
310
154
146
497
2
Shanxi
1200
592
85
493
3
Hunan
2200
1080
44
491
4
Hubei
2400
1173
119
489
5
Anhui
2000
970
46
485
6
Jilin
800
387
80
484
7
Guangdong
5600
2673
09
477
8
Beijing
800
381
50
476
9
Guangxi
2000
941
75
470
10
Hebei
4600
2159
104
469
11
Fujian
1600
741
126
463
12
Xinjiang
900
415
154
461
13
Liaoning
1950
894
62
458
14
Heilongjiang
950
427
67
450
15
Inner Mongolia
630
279
160
442
(Source Economic Operation Bureau of State Economic and Trade Commission)
122 Annual Accomplishment of Main Economic Indicators of the Industry
According to the latest monthly report the building materials industry realized its anticipated targets for 2001 Various economic indicators of the industry were as follows (Source from Yu Xiaolan Information Department of China Association of Building Materials Industry No 2 2002 of China Building Materials Journal)
(1) Industrial Added Value
The building materials industry accomplished an industrial added value of 1023 billion yuan in 2001 (covering stateowned industrial enterprises and nonstateowned industrial enterprises with annual sales of over 5 million yuan and the same below) up 1165 over the previous year The growth rate was higher than the 910 forecast at the end of 2000
(2) Sales Revenue
The sales revenue of the building materials industry in 2001 amounted to 3146 billion yuan up 1107 over the previous year Of this the five provinces of Guangdong Shandong Jiangsu Zhejiang and Henan each posted sales of over 20 billion yuan and their combined sales accounted for 52 of the industry’s total
(3) Profit
The profit of the building materials industry totaled 11891 billion yuan in 2001 up 2681 over the previous year It was slightly higher than the 11 billion yuan predicted at the end of 2000 Of this the five provinces of Shandong Zhejiang Jiangsu Hebei and Henan each generated profit of over 900 million yuan and their combined profit accounted for 60 of the industry’s total The five provinces of Shanxi Hainan Yunnan Liaoning and Guangxi posted net loss after offsetting by profit with combined net loss of 390 million yuan Among the 32 sectors in the building materials industry three sectors namely cement construction and sanitary ceramics and cement products industries each yielded profit of over one billion yuan After offsetting by profit the other mineral fiber and products industry and the building material and other nonmetallic mineral products equipment manufacturing industry were still in the red in 2001
(4) Import and Export
China’s import and export value of building materials and nonmetallic mineral commodities reached 5672 billion US dollars in 2001 up 1212 over the previous year Of this exports accounted for 33 billion US dollars up 1511 The surplus in import and export trade of building materials and nonmetallic mineral commodities amounted to 933 million US dollars up 3743 over the previous year The regions with an export value of over 100 million US dollars in 2001 included Guangdong Fujian Shandong Shanghai Liaoning Zhejiang and Jiangsu with their combined exports accounting for 8417 of the country’s total export of building materials Among them Guangdong and Fujian contributed to 5221 of the country’s total building materials export in 2001 The export markets each with a value of over 100 million US dollars included Japan Hong Kong the United States Belgium and the Republic of Korea with the combined exports to these markets accounting for 7569 of the country’s total building materials export They were followed by the Netherlands and Taiwan each with an export value of over 50 million US dollars The main export commodities were slab granite diamond cement and cement clinker glass fiber and products plate glass fluorite and sandwiched glass The combined exports of these seven kinds of commodities accounted for 6063 of China’s total building materials export in 2001
(5) Output
In 2001 China produced 621 million tons of cement of which six provinces namely Shandong Guangdong Jiangsu Hebei Zhejiang and Henan each posted an output of over 40 million tons and combinedly contributed to 51 of the nation’s total production An increase of over 20 was registered for the cement production in Tianjin Jiangsu Gansu and Shanghai
See Table 13 on the cement production of the top six provinces and their weight in the national output
Table 13 Cement Output and Weight of Six Provinces
Province
Output (100 million tons)
Weight ()
Shandong
06831
11
Guangdong
05589
9
Jiangsu
04968
8
Hebei
04968
8
Zhejiang
04968
8
Henan
04347
7
Others
30429
49
Total
621
100
In 2001 China’s plate glass output stood at 204 million weight crates up 1448 over the previous year A growth rate of over 20 was registered for the six provinces and regions of Sichuan Zhejiang Shanxi Jiangsu Inner Mongolia and Shandong the provinces each with an output of over 10 million weight crates were Henan Hebei Jiangsu Shandong Liaoning and Zhejiang which combinedly generated 57 of the nation’s total plate glass production
See Table 14 on the top six provinces in terms of plate glass production and their weight in the nation’s total
Table 14 Distribution of Plate Glass Production in 2001
Province
Output (100 million weight crates)
Weight ()
Henan
02856
14
Hebei
02244
11
Jiangsu
02244
11
Shandong
01836
9
Liaoning
01632
8
Zhejiang
0102
5
Others
08568
42
Total
204
100
See Table 15 on a summary of main economic indicators for the building materials industry in 2001
Table 15 Summary of Main Economic Indicators for Building Materials Industry
Indicator
2000
2001
Growth
Industrial added value (100 million yuan)
91626
102300
1165
Sales (100 million yuan)
283245
314600
1107
Total profit (100 million yuan)
9377
11891
2681
Total import and export value (100 million US dollars)
5059
5672
1212
Import (100 million US dollars)
2192
2372
821
Export (100 million US dollars)
2867
3300
1511
Cement output (100 million tons)
583
621
652
Plate glass output (100 million weight crates)
182
204
1209
(6) Reasons for Industrial Profit Growth
As Zou Chuansheng vicechairman of the China Association of Building Materials Industry holds the good economic efficiency of China’s building materials industry in 2001 was attributed mainly to three reasons First associated industries grew fast which had a marked pulling role on the market demand for building materials Second measures in the building materials industry such as aggregate output control and elimination of backward capacities centering on structural adjustment began to pay off Third a number of large enterprise groups with strong competitiveness were set up in the building materials industry and they played an important role in structural adjustment and industrial upgrading The recovery of efficiency in cement and stone materials industries led the growth of the whole industry
13 Operations of 26 Key Building Materials Enterprises
In order to carry forward the strategy of centering efforts on big ones and supporting small ones and giving priority to excellent and strong ones pushing forward strategic transformation of stateowned enterprises foster large enterprises and enterprise groups with powerful capacity and sharp competitiveness and also in line with the principle of dynamic management the State Economic and Trade Commission selected 512 key stateowned and nonstateowned enterprises with big capacity good efficiency and bright development prospects These 512 enterprises are distributed in 26 industries and 29 provinces municipalities and autonomous regions of which 27 ones are in the building materials industry See Table 16 a directory of these enterprises
Table 16 Directory of Key Building Materials Enterprises
1
Beixin Building Materials (Group) Co Ltd
2
China New Building Materials (Group) Co
3
Beijing Building Materials Group Co Ltd
4
Hebei Jidong Cement Group Co Ltd
5
Qinhuangdao North Glass Group Co Ltd
6
China Yaohua Glass Group Company
7
Shenyang Xingguang Group Building Materials Co Ltd
8
Mudanjiang Cement Group Co Ltd
9
Shanghai Building Materials Group Corp
10
Zhejiang Orient Group Company
11
Zhejiang ThreeLions Cement Co Ltd
12
Anhui Conch (Group) Company
13
Fujian Cement Co Ltd
14
Jiangxi Cement Factory
15
Luoyang Float Glass Group Co Ltd
16
Huaxin Cement Co Ltd
17
Hunan Shaofeng Cement Group Co Ltd
18
Liuzhou Yufeng Cement Group Co Ltd
19
Sichuan Guodong Construction Co Ltd
20
Sichuan Kangda Building Materials Industry (Group) Co
21
Sichuan Jinsha Cement Co Ltd
22
Golden Summit (Group) Co Ltd
23
Sichuan Guang’an Building Materials Group Co
24
Shuangma Cement (Group) Co Ltd
25
Kunming Cement Co Ltd
26
Gansu Qilianshan Group
27
Weifang Xinlike Group Co
The main operational indicators for the 26 key building materials enterprises in 2001 are shown in Table 17 (Note All indicators do not cover the Weifang Xinlike Group Company)
Table 17 Summary of Financial and Economic Indicators for 26 Key Building Materials Enterprises in 2001 (in 100 million yuan)
Indicator
2001
2000
Growth rate ()
1
Number of enterprises
2600
2600
2
Total assets
78174
73906
577
3
Total liabilities
38274
34914
962
4
Product sales
21917
19685
1133
5
Total profits
968
1204
1956
6
Gross industrial output
(current price)
24004
20987
1437
7
Gross industrial output
(constant price)
18244
1762
93552
8
Average number of employees (10000s)
1934
3553
4557
(Source Development Research Center of the State Council)
2 Operations of Subsectors in Building Materials Industry in 2001
21 Glass and Glass Products Industry
(1) Plate glass output continued to increase at high speed but profits fell further
A boom of float glass production line construction took place again in various localities of China starting from the second half of 1999 as the market for plate glass turned for the better and prices rebounded Since 1999 a total of 39 float glass production lines have been put into production put under construction or prepared for construction across the country which are to form a total production capacity of 8788 million weight crates By the end of 2001 23 lines had been built up forming a total production capacity of 5073 million weight crates The other 16 lines are still under construction and will be constructed which are to form a capacity of 3715 million weight crates The actual new production capacity will amount to 68 million weight crates equal to 32 of the glass production capacity in 2000 (216 million weight crates)
As quite a few float glass production lines came on stream China’s plate glass production expanded by a big margin in 2001 According to preliminary statistics the worldwide plate glass output stood at 3310 million tons (662 million weight crates) in 2001 of which 204 million weight crates were produced in China up 121 over the previous year and ranking first in the world In comparison the construction use glass products industry produced 182 million weight crates of glass in 2000 up 82 over the previous year
The monthly output of plate glass in 2001 and the changes are shown in Table 21 and Chart 21
Table 21 China’s Plate Glass Production in 2001
Month
Aggregate output up to the month (100 million weight crates)
Growth year on year ()
Feb
032
1784
Mar
049
169
Apr
065
168
May
081
1702
June
097
1587
July
114
1526
Aug
130
1340
Sept
148
1355
Oct
166
1332
Nov
184
1376
Dec
204
1448
(Source Development Research Center of the State Council)
Table 22 Worldwide Plate Glass Output by Region in 2001
Region
Output (10000 tons)
Proportion ()
West Europe
894
270
East Europe
165
50
North America
761
230
China
1020
308
Japan
364
110
Others
106
32
Total
3310
1000
While glass production expanded substantially there was serious oversupply as the market demand grew at a far lower pace Some serious problems took place in the economic operation of the glass industry
First inventories increased and salesproduction ratio dropped Statistics show that the plate glass inventories of large and mediumsized enterprises at the end of 2001 were as high as 1511 million weight crates up 46 over a year before The salesproduction ratio in 2001 stood at 952 lower than the level in the previous year
Second product prices slid By December 2001 the average factory price of white ordinary plate glass with a thickness of 2mm 3mm and 4mm had declined by about 12 yuan 76 yuan and 9 yuan per weight crate respectively from the beginning of the year and that of float glass with a thickness of 4mm and 5mm had fallen by some 11 yuan and 13 yuan respectively The trend of plate glass price and the specific data are shown in Chart 23 and Table 23
Table 23 Average factory price of float glass in 2001 (yuan)
Month
3mm float
4mm float
5mm float
6mm float
8mm float
10mm float
12mm float
1
5983
6584
7112
7879
7529
759
7996
2
6682
6791
7319
7779
7476
7548
7963
3
7434
6648
7034
7704
7626
7542
793
4
7101
6408
7037
739
7106
725
7587
5
7207
6156
6667
7326
6991
7203
7425
6
6919
6367
6829
7184
6881
6934
7337
7
6789
6177
6743
7377
6772
7059
7297
8
6939
6412
6852
7129
7043
694
7642
9
6695
6336
6821
7423
6918
709
7654
10
6591
6107
6508
7099
6598
7009
6411
11
6296
5778
6164
725
6461
676
7004
12
5982
5499
5809
6972
6389
6605
7146
(Source Development Research Center of the State Council)
Third economic efficiency slid The construction use glass products industry generated a profit of 169 billion yuan in 2000 topping all subsectors in the building materials industry By 2001 however its profit was only 712 million yuan a plunge of 980 million yuan or 58 from the previous year
(2) The mix of glass products was irrational Though the domestic glass output in 2001 increased substantially over 2000 the country still imported 2447 million sq m of plate glass in the year With the rapid development of associated industries such as construction automobiles and electronic information the demand for highgrade float glass has been on the rise In the domestic glass production in 2001 however high quality float glass accounted for only 12 far from satisfying the market demand Statistics show that in 2001 the imports of hollow glass for highgrade buildings and sandwich reinforced glass for vehicle use increased by 49 and 150 respectively over the previous year This implies that highgrade and deeply processed glass is still undersupplied in China Medium and lowgrade ordinary float glass meanwhile has been seriously oversupplied
22 Construction and Sanitary Ceramics Industry
In 2000 China’s stateowned enterprises and nonstate enterprises with annual sales of over 5 million yuan produced 18 billion sq m of construction ceramic tiles and 435000 tons of sanitary ceramics The varieties of construction ceramics topped 2000 and those of sanitary ceramics topped 300
Due to haphazard capacity expansion and construction repetition the whole construction ceramics industry was in a state of excessive competition in 2001 and the efficiency of listed companies in the construction ceramics industry slid sharply In view of the current market situation medium and lowgrade products are seriously glutted while highgrade products are comparatively undersupplied It is predicted that in the coming few years the market oversupply of medium and lowgrade products will keep at some 30 while the market demand for highgrade products will continue to grow at a fast clip The demand for highgrade sanitary ceramics able to substitute imports and waterefficient sanitary ceramics will increase remarkably
The policy orientation for the construction and sanitary ceramics industry in the future is to develop highgrade construction ceramics for import substitution while of controlling the aggregate output and phasing out outdated processes and products
23 Glass Fiber and Products Industry
(1) Overview of the Industry
At present China’s glass fiber industry has nearly 40 large enterprises each with an annual output of over 1000 tons two specialized research and designing institutes 40odd glass fiber equipment and electric meter manufacturing enterprises and 20odd chemical raw material production enterprises Among the major producers are Zhuhai SEZ Glass Fiber Enterprises Co Ltd Zhejiang Tongxiang Jushi Glass Fiber Co Ltd Shandong Tai’an Taishan Glass Fiber Co Ltd and Chongqing Glass Fiber Co Ltd These factories have become important development bases of China’s glass fiber industry
In 2001 two new glass fiber production lines were put into production They were an alkalifree glass fiber production line with an annual output of 15000 tons at the Shandong Tai’an Taishan Glass Fiber Co Ltd and a glass fiber production line with an annual output of 20000 tons (including 5000 tons of G75 electronic yarn) at the Chongqing Glass Fiber Co Ltd
The glass fiber industry began to post fast growth in the second half of 2000 and the momentum continued in 2001 According to preliminary statistics the sales in 2001 amounted to 48 billion yuan up 4907 over the previous year and the profits totaled 149 million yuan six times as much as in the previous year
(2) Import and Export of the Industry
The imports and exports of the glass fiber and products industry in 2001 are shown in Table 24 and Table 25
Table 24 Imports of China’s Glass Fiber and Products Industry in 2001
Import volume (10000t)
Import value (US10000)
Main import sources
Short staple glass fiber with a length of no more than 50 mm
038
64493
Japan
Low count yarn of glass fiber
259
285875
ROK Taiwan US
Other glass fibers
188
382691
Japan ROK Taiwan US
Total
484
733058
Source Calculated according to data of Development Research Center of the State Council
Table 25 Exports of China’s Glass Fiber and Products Industry in 2001
Export volume (10000t)
Export value (US10000)
Main export destinations
Short staple glass fiber with a length of no more than 50 mm
022
28965
US Japan Hong Kong
Low count yarn of glass fiber
259
282435
Hong Kong Saudi Arabia Germany US
Other glass fibers
361
385974
Japan US Germany Italy
Total
642
697375
Source Calculated according to data of Development Research Center of the State Council
The above tables show that China’s export volume of glass fiber stood at some 64200 tons in 2001 up 484 over the previous year the export value amounted to 697375 million US dollars up 7649 over the 395127 million US dollars in the previous year China’s glass fiber products have successfully penetrated into the international market including the United States Japan Germany and Italy
The imports and exports of China’s glass fiber and products industry in the period from 1996 to 2001 are shown in Table 26
Table 26 Imports & Exports of China’s Glass Fiber and Products Industry in 19962001
Exports
Imports
Volume (10000t)
Value (US10000)
Annual growth rate ()
Volume (10000t)
Value (US10000)
Annual growth rate ()
1996
191
266683
3253
054
135446
10759
1997
167
193924
2728
06
134206
091
1998
166
188045
303
12
230092
7145
1999
215
228422
2147
198
333502
4494
2000
38
395127
7298
325
573308
7191
2001
642
697375
7649
484
733058
2786
Source Calculated according to data of Development Research Center of the State Council
24 Cement Industry
(1) Industrial Operations
In 2001 the cement industry posted a turnaround from loss into profit becoming the number one profit maker in the building materials industry Details are as follows
a) Cement Output and Sales
According to preliminary statistics China’s cement production amounted to 621 million tons in 2001 up 65 over the previous year The growth rate was appropriate
According to a sumup of the 106 large and mediumsized cement enterprises in the country (16 more than the figure for the previous year) their output in 2001 totaled 18111 million tons up 182 over the previous year their sales reached 11968 million tons up 2191 the salesproduction ratio hit 11976 up 1586 percentage points By the end of December their cement inventories stood at 36647 million tons up 12 over a year before (new enterprises are excluded in the year on year comparisons)
b) Cement Price
Average factory price of cement edged up slightly amid stability throughout 2001
Table 27 National Average Prices of Seven Varieties in 2001 (unit yuanton)
Variety
PO425
PO325
PO425R
PO325R
PS425
PS325
PII425
High
36177
31363
3148
31374
31429
2713
32454
Low
31499
27475
27018
26798
275
25117
29538
Average
33828
29903
28539
29022
28893
26007
31107
Source Development Research Center of the State Council the average price in the table refers to arithmetic average price for 12 months
Geographical comparison of the prices for some main cement varieties are shown in Table 28
Table 28 Average Cement Price Nationwide and in Six Regions in 2001 (yuanton)
PO325
PO425
National average
29904
33827
Central and south China
27225
32284
North China
29263
31276
Southwest China
29858
34434
East China
30014
35219
Northwest China
31816
35413
Northeast China
33115
35555
(Source Development Research Center of the State Council)
c) Economic Indicators
Sales and profits of the cement industry in 2001 are shown in Table 29
Table 29 Economic Indicators of Cement Industry in 2001
Number of enterprises
Aggregate sales (100 million yuan)
Yoy increase （）
Aggregate profit (100 million yuan)
Yoy increase ()
JanFeb
4372
13558
064
586
1372
JanMar
4417
22919
845
715
1904
JanApr
4441
33628
78
504
3502
JanMay
4451
44058
783
151
7383
JanJun
4468
55188
716
237
18197
JanJul
4490
65299
678
480
35095
JanAug
4496
76207
793
811
118518
JanSep
4503
87553
854
1225
152974
JanOct
4503
98798
867
1560
59498
JanNov
4518
110423
981
2074
36592
JanDec
4548
125607
904
2975
22461
(Source Development Research Center of the State Council)
The above table shows that China’s cement industry continued to do well across the board in 2001 Its annual sales hit 125607 billion yuan up 904 over the previous year Starting from June 2001 the industry saw a turnaround from loss to profit For JanuaryJune its net profit hit 237 million yuan as compared with 289 million yuan of loss in the same period of the previous year By December 2001 the aggregate profit of the cement industry had reached 2975 billion yuan the biggest profit maker all sectors in the building materials industry
In the meantime stateowned and statecontrolled cement enterprises played an essential role in the whole cement industry As shown in Table 210 there were 1386 stateowned and statecontrolled cement enterprises in 2001 accounting for 3047 of the nation’s total their sales totaled 51483 billion yuan accounting for 4099 of the nation’s total their profits reached 1177 billion yuan accounting for 3955 of the nation’s total
Table 210 Economic Indicators for Different Types of Enterprises in Cement Industry in 2001
Number of enterprises
in total
Sales (100 million yuan)
in total
Profit (100 million yuan)
in total
All enterprises
4548
10000
125607
10000
2975
10000
Stateowned and statecontrolled enterprises
1386
3047
51483
4099
1177
3955
Collective enterprises
1351
2971
26818
2135
525
1763
Foreign and Hong Kong Macao and Taiwan invested firms
156
343
10525
838
275
925
(Source Development Research Center of the State Council)
(2) Analysis of contributors to Turnaround from Loss to Profit
It is indeed not easy for the cement industry to achieve a turnaround from loss to profit in 2001 Thanks to fast rise of state fixed asset investment implementation of the western China development drive and recovery of real estate market the general economic efficiency of the building materials industry as a whole has turned for the better since the beginning of 2001 The cement industry as a pillar of the building materials industry however has remained in the red In JanuaryMarch it incurred a net loss of 715 million yuan The situation began to turn for the better in April when the loss was reduced by 35 as compared with the year earlier It improved further in May when the loss was reduced by 74 and in June when the whole industry began to make a profit
The profit of the cement industry in 2001 was mainly attributed to the following factors
First remarkable achievements were made in controlling the aggregate cement output At the beginning of 2001 the State Economic and Trade Commission issued the cement control target for the whole year which was carried out by all local economic and trade commissions conscientiously As a result many small cement plants were shut down to create a good market environment for large cement makers Meanwhile the new standards for cement were implemented on schedule on April 1 2001 which played a role in accelerating the elimination of backward small cement production capacities
Second further fast increase of fixed asset investment and implementation of the western China development drive which helped expand the scale of infrastructure construction including expressways pulled up the demand for cement
(3) Existing Problems
Although the profit of the cement industry topped all sectors in the building materials industry in 2001 there were yet some problems particularly acute structural contradiction in the industry
As shown in Table 211 cement enterprises each with annual sales of less than 10 million yuan accounted for 4779 of the total number of cement enterprises in the country They incurred a loss as a whole Meanwhile the average industrial sales rate of the cement enterprises each with annual sales of less than 50 million yuan was lower than that of the whole country From this it is seen that there were serious problems in the enterprise structure of the cement industry
Table 211 Economic Indicators for Cement Plants of Various Capacities
By sales
Proportion of enterprises ()
Proportion of sales ()
Total profit (100 million yuan)
Industrial sales rate ()
Total
100
100
2074
9743
Under 5 million yuan
2139
259
142
9150
510 million yuan
2640
879
160
9537
1050 million yuan
4397
4191
298
9669
50100 million yuan
488
1484
396
9791
Over 100 million yuan
336
3186
1682
9911
Source compiled by CIEC according to data of China Building Materials Web the data in the table are aggregate data for JanuaryNovember 2001
3 Influences of WTO Entry on China’s Building Materials Industry and Analysis of Countermeasures
31 General Influences on the Building Materials Industry
311 Analysis of Advantages and Disadvantages of China’s Building Materials Industry
Compared with neighboring developed nations and regions the advantages and disadvantages of China’s building materials industry are as follows
(1) Advantages
Advantage in labor force Building materials industry is largely a laborintensive industry China is rich in labor resources and its labor cost is only onetenth or even less of its main rivals on the international market
Advantage in energy and raw materials Building materials industry has the characteristics of both kiln industry and mining industry Most of its products need to consume not only large quantities of energy but also large quantities of nonmetallic raw minerals Compared with rivals China boasts low price in energy supply The raw materials necessary for building material production are big in reserve volume wide in distribution and cheap in price
Advantage in transportation and marketing The production and marketing of building materials depend heavily on transportation conditions This is particularly obvious in cement marketing At present overseas cement plants are penetrating into some coastal markets of China mainly through oceanshipping It will be difficult to imagine for penetration into the vast hinterland market
At present some staple building materials nonmetallic mineral products and production equipments exported by China are quite competitive in some neighboring countries thanks to low cost
(2) Disadvantages
Many enterprises have not yet established modern enterprise system Their management systems have defects their operating philosophies are outdated and managerial talents and operational mechanisms oriented at international competition are deficient
The general level of production technology is not high Most of the building materials enterprises in China are of medium and small sizes their equipments are backward and their technical forces are weak Accordingly they lag behind their foreign rivals in product quality variety and resource utilization The varieties and properties of products in particular are unable to cater to the need of the development of modern construction industry
The enterprise capacity is comparatively small and the degree of production concentration is low Small production capacity will restrain cost reduction while dispersive in production will inevitably restrain market competitiveness
Distribution is irrational and transportation is not developed Especially the country’s cement enterprises are mainly concentrated in inland areas This as well as poor transportation conditions has led to oversupply of cement in inland areas while relatively tight supply in coastal areas leaving space for imports
Objectively speaking the advantages of Chinese building materials producers are only relative and can maintain only for a period When foreign investors build plants in the country after the WTO accession such advantages will no longer exist The disadvantages of the domestic enterprises however will be unable to be overcome within a short period
312 Influences of WTO Entry on Building Materials Industry – Analysis of Opportunities and Challenges
Building materials industry is a typical resourcebased energyconsuming and laborintensive industry It is already a sunsetting industry in Europe and America but still a rising industry in China It is predicted that great development will yet be seen in the coming 15 years As building material products are bulky in size and low in price a rational transportation channel is needed For this China’s WTO entry is unlikely to trigger big inflow of foreign products On the contrary the oversupply on the domestic market can be eased somewhat through export Today the building materials industry is developing in the direction of green building materials After the WTO entry foreign capital and foreign forces could be utilized to reshuffle and eliminate the enterprises with small capacity serious pollution and high energy consumption This will help restructure the product mix Therefore though the WTO accession will bring both opportunities and challenges to the domestic building materials industry the influences will not be so heavy within a short period for the characteristics of the industry In the long run there will be more opportunities than challenges
(1) Opportunities
First the WTO accession can provide a stable open and fairly competitive international trade environment for the domestic building materials industry It is favorable to expanding foreign trade of building materials introducing in foreign technologies and capital and promoting the development of the domestic building materials industry
Second the WTO accession enables China to enjoy the most favored nation treatment (normal trade relations) of the contracting parties and the GSP treatment of developed nations creating the conditions for diversification of building materials markets and multipolarization of foreign trade and eliminating unfair exchange caused by one single export market Many neighboring countries and regions of China are WTO members and the entry into these countries and regions through normal trade relations will no doubt produce positive influences on China’s building materials industry
Third the WTO accession will help China accelerate the restructuring of its building materials industry The WTO entry means participation in fierce competition in the international market which will force China to organize production and operation according to the requirements of the international market and international practice This will inevitably lead to acceleration in restructuring of the building materials industry which will help change the irrational status in products technology and organizational setup in the domestic building materials industry and establish a product structure and organizational structure that match international division of labor and are competitive
Fourth the WTO entry will help China get more technologies and economic information After China enters the WTO not only trade will be more direct wide and swift but also the exchanges of information will be more timely comprehensive and specific This will be conductive for domestic enterprises in making production and operational strategies to get an upper hand In the meantime mastering of the development direction of the building materials industry abroad and the cooperation in technology equipment capital and management will strengthen the development impetus of the domestic building materials industry
(2) Challenges
First the WTO accession will force the Chinese building materials industry to face a wider scope of competition more competitors and fiercer competition Some domestic enterprises that are backward in management technology process and equipment will face the threat of bankruptcy
Second after entering the WTO China will substantially lower its general tariff level As a relatively mature trade the building materials industry will not enjoy protection granted to fledgling industries On the contrary the tariff rates for the industry may be intentionally lowered so as to balance the highly protective tariff rates for fledgling industries such as information technology and automobiles
Third at present the prices for most raw materials and fuels used in China’s building materials industry as well as the transportation price are all lower than those on the international market After the WTO accession the cost for building materials production in China will rise as the domestic market is integrated with the international market thus lowering the profitability Meanwhile the international cost in building materials production will decline and the profitability will rise In this sense the WTO accession will weaken the international competitiveness of Chinese building materials
Finally due to the restraints of such factors as capital it has been difficult for China to develop large building material projects After the WTO entry high quality but cheap foreign building materials will flow into the Chinese market In some joint venture projects it will be common for the foreign side to demand for use of imported building materials In the meantime some domestically made building materials production equipments involve many problems in use and are unable to rival imported equipments This market may thus be occupied by foreign products
32 Influences on Main SubindustriesAssociated Industries
321 Main Subindustries
(1) Plate Glass
In the long run the WTO accession will provide China’s plate glass industry with an open and fairly competitive international trade environment and the MFN and GSP trade treatment It will create conditions for diversification of domestic plate glass varieties and foreign trade In the meantime the WTO accession will help widen the channels for use of foreign capital and financing Also sharing of knowledge information and management resources will help China get more technologies and market information and enhance the competitiveness of domestic products
On the other hand the adjustment of tariff rates after the WTO accession will affect China’s international trade of plate glass
According to the WTO agreements China made the following commitments on reduction of tariffs on glass within four years after the WTO entry the tariff rate for plate glass (crude) will be lowered from 18 to 175 the average tariff rate for deeply processed glass such as reinforced glass for motor vehicle use sandwich glass for motor vehicle use and hollow glass will be cut from 214 to 138 with the rate for reinforced glass for motor vehicle use reduced by 545 from 22 to 10 For this foreign products will in the future occupy a greater share on the Chinese market of plate glass products with high quality high technology and high added value such as superthin glass used in TFT superthick float glass and lowradiation glass made through the float process For ordinary float glass products massive inflow of foreign products is unlikely because of China’s advantages in resource and labor force and on the contrary the export may increase But it should also be noted that the advantages of Chinese plate glass enterprises in resource and labor prices are not unchangeable After the WTO accession the energy and resource prices will gradually be pegged to those on the international market and the labor price will also rise Accordingly the price advantage of Chinese enterprises will gradually weaken In a dynamic and development viewpoint China will be able to maintain growth in export of plate glass products only through raising the technological level improving the product quality and constantly developing new products
(2) Construction and Sanitary Ceramics
The tariff rates for construction and sanitary ceramics are high at 45 for sanitary ceramics and 25 for construction ceramics After China’s WTO accession the reduction of tariff rates will have substantial influences At present imports have a big share in the domestic market of highgrade construction and sanitary ceramics If tariff rates are cut substantially the imports will increase further which will pose a substantial threat to the related domestic enterprises
Entering the new century China’s entry into the WTO has become a hot topic Industrial analysts predict that China’s WTO accession will bring both development opportunities and severe challenges to China’s construction and sanitary ceramics industry
Favorable influences
Favorable for domestic construction and sanitary ceramic enterprises to expand foreign trade According to the WTO principles China will be able to enjoy multilateral unconditioned MFN treatment after its entry into the WTO This will further improve the export environment for Chinamade construction and sanitary ceramics create greater space for market cooperation provide the industry with new market opportunities and in turn promote the development of the domestic construction and sanitary ceramics industry
Favorable to attracting foreign capital Construction and sanitary ceramics are traditional products of China and belong to labor intensive industries China boasts rich resources and cheap labor cost for production of construction and sanitary ceramics As the production cost is lower than that abroad Chinese construction and sanitary ceramics are quite competitive on the international market After China’s entry into the WTO the foreign discriminations limits and pressures on Chinese products will be eliminated which will expand the fields to attract foreign capital
Favorable to introducing in foreign new technologies new equipments and advanced management skills After the WTO entry China will be able to conduct trade exchanges with related members more directly and more widely Also it will be able to promptly get related information and materials This will be very favorable for China to timely opt foreign new technologies new equipments and management skills and prevent repetition of construction in importing latest technologies and equipments
Unfavorable influences
After the entry into the WTO the market competition will become fiercer and there will be more rivals on the domestic market With greater inflow of foreign capital foreignfunded plants will emerge in the country and foreign construction and sanitary ceramic products will flow into the domestic market massively This will make competition increasingly fiercer in such aspects as quality price and variety of products and the domestic industry will thus face the threat of survival
The production of enterprises will be more difficult After its entry into the WTO China will cancel its tariff and nontariff protection measures for construction and sanitary ceramics industry Due to poor product quality and high production cost caused by small production capacity poor technological basis shortage of capital and under capacity operation some domestic enterprises will be unable to rival foreign giants and face the threat of elimination or closure
The enterprise management needs to be improved After China’s entry into the WTO international exchanges will increase Domestic entrepreneurs will have to raise their management level and foster high quality managers to cater to the need of international trade and rival against experienced foreign business people This is an urgent problem to be solved at present
322 Associated Industries – Ceramic Machinebuilding Industry
(1) Current Situation of China’s Ceramic Machinebuilding Industry
Over the past two decades China’s ceramics industry has developed rapidly According to incomplete statistics China has spent some 5 billion US dollars to import ceramic production technologies and equipments from such countries as Italy Germany Britain and Japan since 1978 This created good conditions for China’s ceramic industry to achieve a quick boom which in turn promoted the development of the domestic ceramic machinery manufacturing industry Compared with world leading ceramic machinery manufacturers in Italy Germany Britain and Japan however Chinese ceramic machinery makers still lag far behind as shown mainly in the aspects below
a) The number of ceramic machinery manufacturers is big
According to incomplete statistics China now has more than 300 ceramic machinery manufacturers of different sizes
b) The staff quality is widely low
c) The products mostly out of singleunit small lot production are of poor quality and the general performance is poor
d) Resources are seriously wasted the utilization rate of materials is low and the production cost is high
e) The labor productivity is low belonging to labor intensive industry
f) The degree of intensiveness is low the product varieties are few and of poor supportive capacity the outlook is poor and the export volume is small
At present the exports of ceramic machinery products account for only about 05 of the total domestic production a sharp contrast to as high as some 40 in Italy Germany Britain and Japan
(2) Opportunities for China’s ceramic machinery manufacturing industry after the WTO entry
a) Favorable to introducing in foreign advanced technologies equipments and management skills
After the WTO entry China will be able to conduct trade exchanges with related members more directly and more widely Also it will be able to quickly get related information and materials In the meantime the import tariff rates for bearings transmission belts hydraulic parts pneumatic components electrical components metallic materials and nonmetallic engineering materials will decline This will be very favorable for ceramic machinery products that use highfunctional basic parts in development and whose technological contents are high
b) Favorable to attracting foreign investment
China’s ceramic machinery manufacturing industry is currently a labor intensive industry with a low degree of automation featuring singleunit small lot production As labor cost is substantially lower than that on foreign markets China’s ceramic machinery products are very competitive on the international market Besides after China’s entry into the WTO foreign discriminations limits and pressures on Chinese products will be eliminated which will be favorable for the domestic ceramic machinery manufacturing industry to attract foreign capital
c) Favorable to expanding foreign trade
After the entry into the WTO China will be able to enjoy multilateral unconditioned MFN treatment which will further improve the environment for the export of China’s ceramic machinery products Over the past two decades the quality of China’s ceramic machinery products has improved greatly their functions are superior to those of some developing nations and approaching those of developed nations while their prices are much cheaper than those of developed nations For this after Chinese ceramic machinery products penetrate into the international market China may set up abroad enterprises producing ceramic machinery products and fittings as well as maintenance and other technical service enterprises
d) Favorable to promoting the development of domestic ceramic machinery manufacturing industry
After the WTO entry foreign advanced ceramic machinery products will flow into the Chinese market large quantities This will force domestic ceramic machine building industry to further reduce production cost raise quality readjust product mix and timely develop marketable highquality products to narrow the gap with the world’s advanced level
(3) Challenges to China’s ceramic machinery manufacturing industry after the WTO entry
a) Market competition will become fiercer and the rivals on the domestic market will increase
As more solely foreignfunded and Sinoforeign joint venture ceramic machinery plants are established and foreign ceramic machinery products flow into the Chinese market in large quantities after China’s WTO entry the competition in the domestic market will become increasingly acute in such aspects as quality price variety and delivery time This will pose a threat of survival for domestic ceramic machinery producers
b) The production of enterprises will face more difficulty After its entry into the WTO China will cancel its tariff and nontariff protection measures for ceramic machinery products Due to small development capacity poor product quality and high production cost caused by small production capacity poor technological basis shortage of capital few product varieties poor supportive capacity and long delivery period some domestic ceramic machinery manufacturing enterprises will be difficult to rival foreign ceramic machinery manufacturing giants and thus face the threat of elimination or closure
c) The staff quality and enterprise management level need to be raised further
Increases in international exchanges will require staff members to raise their cultural quality and management so as to cater to the need in international trade
In a word after the entry into the WTO China will further open its domestic market lift the market access limits and fields and lower the threshold for foreign ceramic machinery manufacturing enterprises to enter the Chinese market The cut of tariff rates for basic components such as bearings transmission belts hydraulic parts pneumatic components electrical components metallic materials and nonmetallic materials will surely prompt foreign ceramic manufacturing enterprises to increase investments in China This will pose great impact and pressures on domestic ceramic machinery manufacturers in such aspects as market price labor cost quality and delivery period
33 Analysis of Countermeasures
As China’s WTO accession has both favorable and unfavorable influences on China’s building materials industry industrial experts hold that the following countermeasures should be taken to sharpen the general competitiveness of China’s building materials industry after the WTO entry (Source Deputy Director Lei Qianzhi of the State Bureau of Building Materials Industry China Building Materials Journal Issue No 4 of 2001)
(1) Changing the ideology to adapt to the unified grand market at home and abroad
The WTO entry means all contracting parties will open their markets to China and vice versa This will require China’s stateowned enterprises to be exportoriented and master the skills for operation in the international grand market In the meantime they should foster the concepts of selfdependence fair competition respecting intellectual property following international practice winning through quality doing business according to law respecting talents and being aware of risks in speculation
(2) Speeding up reform of stateowned enterprises to sharpen their market competitiveness
Efforts must be made to speed up the reform of stateowned enterprises and separate the functions of the government from those of enterprises Due consideration should be given to specific conditions in selecting the form of enterprise transformation While the state enterprises are transformed into companies and establish a modern enterprise system they should at the same time strengthen management lower cost promote technical innovation raise product quality and constantly develop new products
(3) Strengthening construction of a technological innovation system in the building materials industry
After entry into the WTO the domestic market will be integrated into the international market However the technological innovation capacity of the domestic building materials enterprises is now weak technological contents of their products are low and the pace of upgrading is slow Especially there are few deeply processed products with strong international competitiveness As a consequence the domestic building materials enterprises have to compete with foreign rivals by means of producing low grade and low priced products To give a fundamental solution to this problem the building materials enterprises will have to strengthen construction of a technological innovation system A technological innovation system and operating mechanism that take enterprises as the mainstay and match the socialist market economic system and industrial development should be built up in the building materials industry
a) Establishing an enterprise technology development system as quickly as possible
Key enterprises in the building materials industry should be supported to set up technology development centers Such technology development centers should let in research forces of domestic and international partners and research and develop flagship products of independent intellectual property The building materials enterprises should be encouraged to increase inputs in technology development centers train talents for the centers and make the work of technology development centers standardized and systematic
b) Strengthening cooperation among manufacturers schools and research institutes to promote commercialization of scientific and technological achievements Building materials enterprises should be guided to conduct technological exchanges and jointly set up technology development entities with higher learning institutes and research institutes so as to accelerate technological progress and help the enterprises solve technological problems
c) Establishing intermediary service organizations to promote technological innovation
The productive force promotion center of the building materials industry should set up specialized subsidiaries and establish a building materials technology information network that links up the technology development centers of big building materials enterprises industrial technology centers and organizations providing services to small enterprises so as to provide services in such aspects as technology talents information finance management marketing and law for technology progress and industrial upgrading of enterprises
(4) Rationally using foreign investment and opening wider to the outside world
After China entered the WTO the domestic investment environment will improve further The inflow of international capital will bring about development opportunities for the domestic building materials industry In recent years famous foreign building materials groups have come to China to look for development opportunities China should thus seize this favorable opportunity to open itself wider to the outside world It should introduce in more foreign investments to facilitate its strategy of eliminating small cement and glass production capacities and restructuring industrial structure so as to maintain sustained fast and healthy growth of the building materials industry
First making good planning for utilization of foreign capital and striving to use more foreign capital The key sectors regions and quantities for utilization of foreign investment in the building materials industry should be studied in combination with the compilation of the Tenth FiveYear Plan for the development of the industry on the basis of a careful analysis of various important factors of post China’s entry of WTO
Second strengthening policy guidance to raise the quality and level of using foreign investment in the building materials industry Industrial policies and the Directory for Foreign Investment in the Building Materials Industry should be made to attract the investment of multinational building materials groups and guide and encourage the flow of foreign investment to cement glass fiber and new building materials industries that involve heavy tasks for restructuring and badly need to raise technological and equipment level and to central and western regions This is aimed to improve the mix of export products and enhance the general competitiveness of the industry
(5) Attaching importance to training economic and trade professionals and raising personnel quality
In the near stage key efforts should be laid on training leaders of governments local departments in charge of building materials industry and large building material enterprises (enterprise groups) The training should focus on WTO knowledge and rules so as to raise the capacity and level of self protection through employing special protection clauses and antidumping measures of the WTO
Secondly enterprise managers should be trained to help them become pioneering professionals in international trade finance marketing management and law
Thirdly talents import and training abroad should be strengthened Plans for training abroad should be made according to the actual conditions of the industry and enterprises Enterprises should organize training of senior managers abroad and at the same time import foreign talents in management and technology from the world market
4 Analysis and Forecast of the Developments of Building Materials Industry in 2002
41 Targets and Main Work of the Building Materials Industry in 2002
411 Targets
(1) Cement
The output of cement in 2002 will reach 590 million tons of which newtype drymethod cement will account for 80 million tons
The export of cement and clinker will reach 18646 million US dollars in 2002
(2) Glass
The output of plate glass will reach 190 million weight crates The market prospects will be good for highquality float glass and superthin glass
(3) Glass fiber
The domestic and overseas market capacity for Chinamade glass fiber will expand further in 2002 The glass fiber output will top 300000 tons At present more than ten tank furnace glass fiber projects are being constructed or to be constructed The output of tank furnace products will account for 50 of the total glass fiber output
(4) Glassreinforced plastics
In 2001 the technological contents of China’s glass reinforced plastic products rose somewhat and the output exceeded 07 million tons (including FRSP CCL and FRTP)
It is predicted that the annual output of heat cured glass reinforced plastics in 2002 will increase 10 over 2001 and that of thermoplastic glass reinforced plastics will increase by 5
(5) Stone products
It is predicted that the national stone products production will increase slightly on the basis of the 130 million sq m in 2001 The export of stone products is expected to reach 860 million US dollars
412 Main Work
According to the requirements set at the national conference on economic and trade work the building materials industry will mainly do the following work in 2002
(1) Further closing down small cement plants and small glass plants so as to consolidate the achievements in rectification More efforts will be laid on rectifying the two kinds of small plants Those enterprises in the list for closure will be shut down and their main equipments will be dismantled The quality of work in this aspect will be improved to consolidate the achievements in rectification To prevent from a comeback of closed plants strict examinations will be made and effective measures will be taken
(2) Firmly stopping construction repetition and further eliminating outdated production capacities In order to implement related provisions of the State Council the glass industry will prevent irrational construction repetition For the cement industry except for newtype drymethod cement new construction and expansion of production lines of other processes will be banned including expansion of projects in the name of technical transformation Greater efforts will be made to examine the implementation of the new cement standards No production license will be granted to any enterprise that fails to reach the standards For the enterprises with production lines that should be eliminated as ordered by the state production licenses will be granted only after the said production lines are dismantled
(3) Accelerating adjustment of industrial structure to promote industrial optimization and upgrading The experiences of Anhui Conch Xinjiang Tianshan and Shanghai Yaohua Pilkington will be summarized and popularized so as to encourage large backbone enterprises to be market oriented and take advantage of the capital market and develop themselves into large enterprise groups through mergers acquisitions and reshuffles This is aimed to raise the concentration and market share of large enterprises in the cement and glass industries Preferential policies such as interest discounts for technical transformation projects and comprehensive utilization of resources will particularly favor new drymethod cement projects and importsubstitutive highgrade float glass projects of large enterprise groups The building materials industry will strive to speed up changing itself into a strong industry from a large industry and sharpening its market competitiveness through optimizing technological structure product structure and enterprise organizational structure of the cement glass wall materials and glass fiber sectors The construction of newtype dry method cement production lines in all localities should be undertaken synchronously with the elimination of backward production capacities While advanced productive forces are developed backward production capacities should be weakened
(4) Strengthening market rectification and promotion to foster new growth engines To support the rectification of the construction market order arranged by the construction department substandard building materials should be prevented from entering key projects of the state and building materials products harmful to human health should be prevented from use in decoration Meanwhile formulation of rules and regulations and measures to promote export of building materials such as the Rules on Management of Standard Sand for Testing Cement Strength and the Rules on Building Energy Efficiency and Production and Use of Safe Glass should be accelerated to expand the markets and fields of application for highquality building material products Building material enterprises should adopt new technologies and new processes to transform traditional products by centering on quality variety and efficiency They should develop green building materials that add efficiency save energy and soil and make use of wastes to satisfy the need of urban and rural construction and the Olympic projects Related enterprises will be backed to try logistics projects for distribution of building materials so as to establish a building material circulation system that matches the modern enterprise system
(5) Strengthening economic operation monitoring analysis and comprehensive coordination work in the building materials industry Stable information channels will be set up and a system of contacting key enterprises will be established so as to timely learn the production and operational conditions particularly the new situations in import and export of building materials after China’s WTO entry of building materials enterprises In response to the current tight situation in coal resources and railway transportation help will be given to key cement plants to improve their external conditions for production so as to achieve better efficiency in 2002
42 Favorable Factors for the Building Materials Industry in 2002
(1) Expansive Fiscal Policy and Increase of Fixed Asset Investment
Fixed asset investments and housing construction will become the main market sources According to related research materials in the Tenth FiveYear Plan period (200105) China’s annual economic growth will maintain at about 7 the growth of fixed asset investment will keep at some 10 and the total investment scale is expected to increase by 60 over that in the Ninth FiveYear Plan period (19962000) Reform of the housing system in particular will make residential house construction become an important hot spot of investment in the domestic economy It is predicted that in the coming few years the country will annually build more than 300 million sq m of new residential houses in urban areas and 700 million sq m of new houses in rural areas Thanks to rapid growth of the domestic economy China will also speed up urban construction and rebuilding of old urban areas By 2010 the country will have built 1200 cities and 2500030000 towns which will need the construction of 200 million sq m of public and productive buildings every year In total China will add 12 billion to 14 billion sq m of new buildings every year in the coming years Besides backed by the proactive fiscal policy and monetary policy the country will make greater efforts on construction of roads bridges dams airports and other infrastructure facilities in the coming years Some 30 of the total investment in these aspects will be used to procure various construction materials which will bring a big market space for the building materials industry
(2) Western China Development Drive
The central government has decided to make the development of western China a major strategy for social and economic development in the new century As the basis in the western China development strategy infrastructure will no doubt be given priority in construction The government has decided to carry out ten major new projects in western China starting from 2000 Moreover a landmark project in the western China development drive – the project of gas transmission from the west to the east which has a total length of 4200 km running through eight provinces and one municipality and involves a total investment of 120 billion yuan was kicked off in 2001 and will be completed in 2003 capable of supplying 12 billion cu m of gas a year The above projects will consume large quantities of steel cement and other construction materials and their positive impact on the building materials industry in related regions will be unprecedented
(3) The Policies to Readjust Industrial Structure and Rectify Market Order
The state policies to readjust the structure of the building materials industry and rectify the order on the building materials market in some sense have opened a market space for some building materials products The State Economic and Trade Commission announced implementation of new standards for the cement industry on April 1 2001 and on August 8 it announced the names of small enterprises to be shut down which included 4226 small cement plants and 362 small glass factories The industrial restructuring and rectification to phase out backward production processes and poor quality small glass and cement production capacities will lead to marked rise of market demands for building materials products from large production capacity advanced production processes and good quality
(4) Improvement of Peoples Living Conditions and Change of Ideology
As the living conditions improve people are paying more and more attention to comfort and beauty of their residential environment This is reflected directly on the demand for building materials On the one hand the application fields of high quality traditional building materials such as cement glass and stone materials will expand constantly and their market demand will increase accordingly On the other hand new building materials with unique and good functions such as plastic doors and windows board and new wall materials will be accepted by more and more people and their market capacity will expand all the way
43 Unfavorable Factors for the Building Materials Industry in 2002
(1) Heavy Reliance on Energy Price
Building materials industry is a typical energyconsuming industry for which the fluctuation of energy price has direct impact on the profitability and efficiency of all subsectors and enterprises In the cost for cement production coal and electricity consumption respectively make up 3040 of the cost in cement clinker production in the cost for glass production heavy oil takes 30 and in the cost for ceramics production the fuel cost composed of coal gasnatural gas also accounts for some 30 Primary energies such as coal and fuel oil are the main fuels for the building materials industry dominated by cement glass and ceramics Constant rise of energy price will finally affect the profitability and economic efficiency of building material enterprises
(2) In view of the economic development trend there are still quite a few factors restraining economic growth
Slower growth of the world economy particular the economies of such developed nations as the United States and Japan has some negative influence on the Chinese economy especially on its export The pulling effect of fixed asset investment will decline and nongovernmental investment is unlikely to see remarkable increases Accordingly inadequacy of investment will be increasingly visible All these will put the building materials industry under a severer macro environment
5 Development Plans for Building Materials Industry
51 Tenth FiveYear Plan (20012005) for the Industry
The Tenth FiveYear Plan for the building materials industry (see the appendix for details) has put forward the general guidelines for the building materials industry ie controlling the aggregate output adjusting the structure raising the technological level energy conservation and environmental protection and improving product quality
(1) Products to be developed with priority
By 2005 the output of newtype drymethod cement will reach 120130 million tons accounting for 20 of the total and the proportion of bulk cement will hit 30 The output of float glass will reach 160 million weight crates accounting for over 80 of the total of which highquality float glass output will stand at 5060 million weight crates accounting for over 30 of the total float glass production The proportion of glass deep processing will hit 30 The output of new wall materials will amount to 300 billion standard bricks accounting for 40 of the total output of wall materials The output of tank furnace drawing glass fiber will reach 023 million tons accounting for 60 of the total glass fiber output The mechanical formation rate of glass reinforced fiber will top 40
(2) Technological targets for the building materials industry
The technological level of new production capacities will reach internationally advanced level To be specific superlarge cement production lines with a daily output capacity of over 8000 tons will be developed with great efforts and a research development and manufacturing system for technologies and equipments will be built up the Luoyang float glass technology will be upgraded on a full scale glass processing technology and product quality will rise to internationally advanced level electronicclass tank furnace drawing glass fiber technology with an annual capacity of 2000030000 tons and electronicclass glass fiber fabrics production technology will be developed and imported localization will be basically realized in technology and equipment for newtype wall materials
52 Tenth Fiveyear Plan for Main Subsectors
521 Construction and Sanitary Ceramics Industry
According to the plan the construction and sanitary ceramics industry will accomplish the following targets by the end of the Tenth FiveYear Plan
(1) Targets for structural adjustment
The proportion of highgrade construction ceramics bricks in total output higher than 25
The proportion of lowgrade construction and sanitary ceramic products in total output higher than 30
Fullmember physical labor productivity in construction ceramics sector 8000 sqpersonyear
Fullmember physical labor productivity in sanitary ceramics 13 tonspersonyear
Export of construction ceramics 125 million sq m
Export of sanitary ceramics 6 million pieces
(2) Targets for energy consumption (average level)
Energy consumption in baking of construction ceramics 4186 kilo jouleskg
Energy consumption in secondary baking of glazed tile for inner wall 5860 kilo jouleskg
Energy consumption in baking of sanitary ceramics 8372 kilo jouleskg (tunnel kiln)
(3) Targets for water saving
Single time water usage of sanitary ceramic stool 69 liters (with sixliter stool to account for 50)
(4) Targets for eliminating backward production capacities
Eliminating coalfueled inverseflame kilns and furnaces and openflame kilns and furnaces
Eliminating backward processes and equipments such as hypodrying indigenous method powder making manual friction press formation
Eliminating construction and sanitary ceramic production lines that fail to reach state standards and cause serious pollution
522 Cement Industry
(1) Main Development Lines
During the Tenth FiveYear Plan period the development of cement industry will follow four main lines First developing predecomposing kiln cement to add a new capacity of 60 million tons and double the output over that at the end of the Ninth FiveYear Plan period (19962000) Lowlevel construction repetition will be checked Except for newtype drymethod predecomposing kiln production lines construction and expansion of cement production lines of other processes will be strictly banned Second transforming a number of enterprises The wetmethod kiln and mechanical vertical kiln enterprises not listed in the elimination plan will undergo technological transformation according to the requirements of the industrial policies and technology policies The focus of transformation is to improve product quality raise labor productivity lower energy consumption and reduce industrial pollution Third eliminating some backward production capacities In the principles of equal volume elimination or excessive volume elimination and developing newtype drymethod predecomposing kiln production lines the industry will further eliminate a backward cement production capacity of 60 million tons whose product quality is unstable and that fail to meet the standards for environmental protection Fourth taking an important step forward in exploitation of wastes for environmental protection While pursuing clean production the cement industry should play a greater role in exploiting industrial wastes such as coal ash urban rubbish and dangerous wastes and such renewable energies as waste oil and waste tire
(2) Development Targets
a) Output target
Annual output of clinker 450 million tons
Annual output of cement 600 million tons of which the output of predecomposing kilns will account for 120130 million tons
b) Targets for structural adjustment
The proportion of predecomposing kiln cement 20
The proportion of special cement 3
The proportion of bulk cement 30
Average capacity of enterprises 250000 tons
Production concentration the production concentration of the top ten cement enterprises (group) will rise from 5 to 17
c) Targets for technological innovation and technological advancement
The predecomposing kiln production lines with a daily capacity of 2000 tons will accomplish localization and high capacity operation rate at low cost The predecomposing kiln production lines with a daily output of 4000 tons will reach the internationally advanced level of the 1990s and the equipment localization rate will top 90 Large predecomposing kiln technologies and equipment with a daily output capacity of 500010000 tons will be developed to form series of predecomposing kiln technologies and equipments with own intellectual property rights The use of mixed materials will be increased to develop highfunctional and high durability cement varieties and production technologies The technologies for utilization of lowgrade raw materials and fuels and industrial wastes will be developed Also to be developed will be technologies for exploitation of renewable energies
d) Main economic and technological indicators
Standard coal consumption for per ton clinker production in predecomposing kilns 110 kg
Standard coal consumption for per ton clinker production in mechanical vertical kilns 130 kg
Comprehensive electricity consumption for cement production in predecomposing kilns 105 kwh
Comprehensive electricity consumption for cement production in mechanical vertical kilns 90 kwh
Fullmember labor productivity in predecomposing kilns 2000 tonspersonyear
Fullmember labor productivity in mechanical vertical kilns 400 tonspersonyear
e) Targets for environmental protection
All cement producers shall meet environmental protection requirements
f) Cement export target
Annual export of cement is to reach 10 million tons
g) Targets for elimination of backward capacities
An additional production capacity of 60 million tons will be eliminated on the basis of the 100 million tons of small cement capacities eliminated in the Ninth FiveYear Plan period If the above target is achieved the technological and product structures of the cement industry and the organizational and capacity structures of enterprises will be effectively adjusted and the industrial competitiveness will rise This will not only ease the inadequacy of highquality rotary kiln cement but also save energy equivalent to 33 million tons of standard coal and reduce the dust discharge by 17 million tons every year
523 Glass Industry
As planned the glass industry will strive to accomplish the following targets by the end of the Tenth FiveYear Plan period
(1) Output target
Annual output of plate glass 190 million weight crates
(2) Targets for structural adjustment
a) Product structure
The proportion of float glass production capacity in total plate glass production capacity will exceed 80
The output of highquality float glass will reach 60 million weight crates
The secondary processing rate of crude plate glass will reach 30
b) Technology and equipment
To eliminate all drawing processes of less than four machines and microplating process eliminate part of the drawing processes of six and nine machines and Gprocess with small capacity and poor efficiency and if conditions are available transform six or ninemachine drawing process and Gprocess production lines into float glass production lines The Luoyang float technology should reach internationally advanced level of the 1990s Its technical indicators are steady making of 1925 mm thick glass online steady production and cutting of crude glass of all sizes with the maximum size of finished glass to top 4m x 6m online steady making of glass with heat reflection and low radiation functions physical quality of products to reach internationally advanced level heat consumption of float glass melting furnace not to exceed 6900 kilo jouleskg liquid glass automation process control and equipment to reach internationally advanced level of the 1990s the main technology and equipment for glass processing and the quality and functions of products to reach internationally advanced level
c) Organizational structure of enterprises
The degree of intensive production should be raised greatly to put an end to the glass enterprise pattern of being small scattered and disorderly The average capacity of plate glass manufacturers should top 3 million weight crates and their average labor productivity should top 2000 weight cratesperson a year Two or three transnational transregional and intertrade large enterprise groups integrating scientific research with industry and trade will be established These enterprise groups will basically realize fullfloat production the proportion of highquality float glass will exceed 50 the scale of enterprise and production line will reach rational level in economy of scale there will be supportive serialized and scaled glass processing and production bases and there will be own research and development centers and there are transregional and transnational companies and businesses In the meantime three to five regional enterprise groups with competitiveness will be formed and three to five glass processing and production bases that boast serial and supportive products economy of scale and internationally advanced level will be established
(3) Export targets
The export of plate glass will reach 13 million weight crates valued at 180 million US dollars the export of processed glass will reach 7 million sq m valued at 140 million US dollars
(4) Targets for environment protection and energy efficiency
All productive enterprises should meet the state pollution discharge standards for industrial kilns and furnaces The average heat consumption of float furnaces in producing every kilogram of liquid glass should not exceed 7500 kilo joules
6 Analysis of Listed Companies in Building Materials Industry
Against the background of steady growth in the entire building materials industry the performance of the listed companies in the building materials industry was also quite good in 2001 Among the 40 listed companies only three (Sichuan Golden Summit Tangshan Ceramics and Dayuan) incurred loss while 21 or over 50 of the total posted growth in net profit The companies posting a growth of over 50 in net profit included Conch Cement (78) Siwei Ceramics (118) Conch Profiles (235) and Kaile Technology (56) those reporting a decline of over 50 in net profit included Sichuan Golden Summit Luoyang Glass Zhejiang Dongri Dayuan China Chemical Building Materials and Tangshan Ceramics The average earnings per share of the listed companies in the building materials industry was 018 yuan higher than the weighted average earnings per share of 0136 yuan for all the 1173 companies listed on the Shanghai and Shenzhen stock exchanges but lower than the average earnings per share in the building materials industry for 2000 of 022 yuan In the four subsectors the new building materials block posted the highest average earnings per share of 031 yuan and the cement block posted the lowest average earnings per share of 014 yuan (Source Xingye Securities Research & Development Center)
61 New Building Materials Block
In 2001 the average earnings per share of the 10 listed companies in the new building materials industry was 031 yuan the highest among the four subsectors in the building materials industry and also being the sole block to post growth However the situation was very different among different listed companies In the 10 listed companies eight registered increases in main operating turnover in 2001 of which Conch Profiles Beixin Building Materials and North International posted a rise of over 50 Five recorded increases in net profit of which only one posted a rise of over 50 Among the five posting negative net profit growth Zhejiang Dongri and China Chemical Building Materials incurred a plunge of 84 and 97 respectively
Table 61 2001 Performance of the New Building Materials Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after nonoperating gains
2001
2000
2001
2000
2001
Growth ()
2001
Growth ()
Shenzhen Fangda
012
023
351
678
40696
6
3618
48
3628
North Int’l
017
019
52
67138
109
1723
14
1664
Conch Profiles
126
037
4876
2498
107775
95
18844
93
18978
Beixin Building Materials
03
024
715
588
88653
59
8687
73
8024
Guofeng Plastics
022
021
706
65
61439
29
5280
666
4917
Zhejiang Dongri
002
013
069
424
6666
34
243
84
272
Dayuan
061
003
319
147
153113
15
12176
11147
Baoshuo
018
023
905
1408
111341
57
7207
13
7191
China Chemical Building Materials
0007
02
0031
947
53132
43
147
97
2886
Kaile Tech
051
033
1104
758
43084
41
9051
34
8632
Source Xingye Securities Research & Development Center
Note Dayuan was transformed from a petrochemical enterprise to a new building materials enterprise in the second half of 2001
62 Cement Block
The cement industry turned for the better across the board in 2001 thanks to the implementation of the state’s macro economic policies and increases in fixed assets investment which pulled up the demand for cement the implementation of the new cement standards the elimination of small cement capacities and the control over aggregate output Remarkable turnaround was recorded for the economic efficiency of the industry in particular After putting an end to loss in June the industry’s profits rose sharply in July August and September making the sector the largest profit maker in the building materials industry contributing nearly 15 of the total For the whole year the cement output stood at 620 million tons up 66 over the previous year
Among the 18 listed companies in the cement block 14 registered increases in main operating turnover with four namely Jidong Cement Tianshan Cement Conch Cement and Sichuan Golden Summit posting an over 50 surge seven posted rises in net profit with substantial increases registered for Conch Cement (78) Tianshan (39) and Swan (38)
Table 62 2001 Performance of the Cement Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after non operating gains
2001
2000
2001
2000
2001
Growth ()
2001
Growth ()
Jidong Cement
013
011
739
61
100249
53
11494
23
11494
Datong Cement
0085
0123
508
777
15700
23
1474
47
2192
Jiangxi Cement
009
012
425
647
37428
29
3034
38
3095
Tianshan
054
047
1279
1013
70762
75
9409
39
9702
Sichuan Shuangma
016
032
979
1178
42686
4
5121
12
5181
Tianshui
01
019
378
722
37788
17
2258
46
1871
Mudanjiang
017
016
618
622
38882
6
3786
35
3499
Qinling
015
03
866
934
44054
11
5969
4
6055
Sishui
016
02
472
995
22726
43
2558
21
2807
Caodong
016
017
523
1519
55516
31
3126
12
2412
Shitou
016
02
472
1472
29477
19
3723
21
3433
Conch Cement
021
012
917
56
205835
66
20273
78
Jianfeng Group
015
013
863
751
105453
12
4390
13
4684
Sichuan Golden Summit
034
0024
3165
166
42881
101
7984
5254
Qilianshan
015
025
95
1043
26683
3
5206
5
3982
Huaxin Cement
007
005
313
232
69188
16
2262
37
1926
Fujian Cement
0007
034
03
136
58265
7
210
96
95
Swan
033
047
882
1354
52112
08
4421
38
2368
Source Xingye Securities Research & Development Center
63 Glass Block
The glass industry that had been in the red for four consecutive years had a turnaround in 2001 It made a total profit of 169 billion yuan in the year However resurge of irrational repetition in construction held back further improvement of the industry’s economic operation quality In 2001 the industry added a new capacity of more than 68 million weight crates equal to 32 of the total glass production capacity in 2000 The yearly plate glass output amounted to 204 million weight crates up 145 over the previous year The expansion in capacity and output directly led to apparent oversupply on the domestic plate glass market The consequences were the inventory increased while the salesproduction ratio dropped the product prices slid with that for 2mm white glass falling from 63 yuan per weight crate at the beginning of the year to 57 yuan that for 3mm glass falling from 60 yuan per weight crate at the year beginning to 56 yuan that for 5mm glass falling from 65 yuan per weight crate at the year beginning to 60 yuan and the national average factory price of plate glass basically staying at the average level in 1999 the economic efficiency slid with the yearly profit plunging 58 from the previous year to 712 million yuan
The 2001 performance of the seven listed companies in the glass industry basically reflected the general trend of the glass industry Among the seven listed companies only two reported moderate rises in net profit while one remained at the level in 2000 and four incurred negative growth Luoyang Glass reported the biggest drop of 85
Table 63 2001 Performance of the Glass Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after nonoperating gains
2001
2000
2001
2000
2001
Growth rate ()
2001
Growth rate ()
Southern Glass Holdings
022
027
819
1038
10411
7
15130
7
15241
Sanxia New Materials
015
021
448
627
26017
35
3221
26
1695
Guodong Construction
035
058
589
4266
34104
29
6190
3
5999
Fuyao Glass
037
059
316
325
93829
24
15215
14
16942
Yaohua Glass
01
009
628
572
42534
35
3247
0
3196
Yaohua Pilkington Glass
033
032
976
961
104492
21
16238
5
16122
Luoyang Glass
0014
0094
063
425
81728
9
987
85
987
Source Xingye Securities Research & Development Center
64 Construction and Sanitary Ceramics Block
There were originally 10 listed companies in the construction and sanitary ceramics industry As the whole industry was sluggish some companies underwent capital reshuffles and moved to other industries For example Fuling Construction Ceramics formerly a listed company engaged mainly in wall and floor bricks was renamed Chaohua Technology and moved to the IT industry Fujian Hawson became a real estate company after a series of asset swaps and Fujian Double Rhomb was reshuffled into a road and public facilities company Besides some other companies such as Huaguang Ceramics Jiangxuan Industry and Guoguang Ceramics all have developed a second main business line aside from construction ceramics and the profit from the second main business line is approaching that from construction ceramics industry
Among the five companies in the construction and sanitary ceramics block two posted negative growth in main operating turnover while three incurred negative growth in net profit
Table 64 Performance of the Construction and Sanitary Ceramics Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after nonoperating gains
2001
2000
2001
2000
2001
Growth rate ()
2001
Growth rate ()
Huaguang Ceramics
02
019
654
644
30029
8
2483
61
1873
Tangshan Ceramics
014
02
482
654
40258
14
2434
1337
Siwei Ceramics
032
026
1897
1066
30988
56
7860
118
8096
Jiangquan Ceramics
035
036
841
945
83537
45
7579
13
7988
Guoguang Ceramics
029
027
842
843
35926
445
2793
2
2809
Source Xingye Securities Research & Development Center
7 Appendixes
71 Tenth FiveYear Plan for the Building Materials Industry
Building materials industry is an important materials industry in China Building materials products include construction materials and products nonmetallic minerals and products and inorganic nonmetallic new materials They are widely applied in the fields of construction military industry environmental protection new and hightech industries and people’s life
Since reform and openingup China’s building materials industry has developed rapidly A complete industrial system integrating research development geological prospecting equipment manufacturing production processing sales service and international trade has been built up The output of cement glass construction ceramics and sanitary ceramics has ranked first in the world for many years The quality and grades of products have risen to various degrees basically meeting the need of the national economic and social development With the deepening of economic restructuring the macro economic environment and market supplydemand relations have undergone profound changes Increasing economic globalization China’s entry into the WTO and increasing call for environmental protection and rational utilization of resources have posed higher requirements on development of the building materials industry The building materials industry must further impose control on aggregate output readjust structure further change the mode of economic growth speed up the transition from quantitative growth mode to quality and efficiency mode and realize a historical leap from big to strong and getting strong through innovation
I Achievements made in the Ninth FiveYear Plan period and existing main problems
A Achievements
After the development in the Ninth FiveYear Plan period the economic operation quality of the building materials industry has improved remarkably the pace of technological advancement has accelerated progress has been made in structural adjustment preliminary achievements have been made in reform of the stateowned enterprises and the main tasks set in the Ninth FiveYear Plan have basically been completed
1 Preliminary achievements were made in controlling the aggregate output and adjusting the structure
Centering on the two changes the building material industry appropriately handled the relations between development and elimination between technological advancement and economic efficiency and between product development and market application in the Ninth FiveYear Plan period While speeding up the transformation of traditional industries with advanced technology the industry put forward phased control targets for the aggregate output of key products which helped eliminate 3069 small cement kilns with a total outdated production capacity of 6335 million tons and 187 small glass production lines with a total outdated production capacity of 2592 million weight crates In 2000 the rotary kiln cement output stood at 151 million tons accounting for 253 of the total cement output the proportion of bulk cement hit 191 and the output of bulk cement doubled that in 1995 the output of new wall materials amounted to 210 billion standard bricks accounting for 28 of the total output of wall materials the output of plate glass reached 182 million weight crates of which float glass production accounted for 70 the output of tank furnace drawing glass fiber stood at 48000 tons accounting for 27 of the total up from 15 at the end of the Eighth FiveYear Plan (19861990) the rate for mechanized formation in glass reinforced fiber production rose to about 20 up from 5
2 Remarkable progress was made in technological advancement
Thanks to great efforts made on optimization of design low investment and localization of newtype drymethod predecomposing kiln cement production lines the newtype drymethod technology has reached internationally advanced level In particular implementation of the project proprietor responsibility system and the bidding system helped reduce the investment in newtype drymethod cement production lines from over 1000 yuanton to 400500 yuanton Accordingly the enterprises adopting the newtype drymethod cement process have apparent competitive edges in such aspects as product quality economy of scale and environmental protection Through the construction of demonstrative production lines the process and technology of the Luoyang Float glass improved further The country independently developed the tank furnace drawing technology and equipment with an annual capacity of 7500 tons and constructed tank furnace drawing production lines with an annual capacity of over 10000 tons laying a basis for domestic tank furnace drawing technology to catch up with the advanced international level Meanwhile a number of competitive newtype wall materials production lines were built raising the equipment level remarkably and scoring marked achievements in product development and application As for nonmetallic minerals great progress was made in super fining purification modifying and application and the deep processing technology rose constantly Also the development and application of many new inorganic metallic materials represented by electronicclass glass fiber fabrics highgrade superhard materials and special industrial ceramics promoted the development of new and hightech industries
3 Marked improvement was made in organizational structure
Compared with the end of the Eighth FiveYear Plan period the average scale of the cement enterprises expanded from 70000 tons to 100000 tons and the output concentration of the top ten makers rose from 29 to 5 the average scale of the glass enterprises expanded from 031 million weight crates to 081 million weight crates and the production concentration of the top ten makers rose from 28 to 33 the average scale of the glass fiber enterprises rose to about 1500 tons and the weight of the top four enterprises in the total hit 36
4 Reform of the stateowned enterprises accelerated
Following the requirements for establishment of a modern enterprise system a number of big companies and enterprise groups with considerable strength were set up through reshuffle transformation merger and acquisition Thanks to this the economic operation quality and efficiency of the building materials industry improved substantially and the goal of bailing out difficulty in three years set for the stateowned enterprises was basically realized The entire industry put end to a twoconsecutiveyear loss in 1999 and further posted a better performance in 2000 In 2000 the industry generated a total profit of 94 billion yuan and earned 287 billion US dollars from export of building materials and nonmetallic minerals The number of listed companies in the building materials industry exceeded 40 raising a total capital of over 10 billion yuan
B Main Existing Problems
There are still some big problems in the development of the building materials industry reflected mainly in irrational organizational structure technological structure and product structure Such phenomena as small enterprise capacity big number of enterprises backward technology and equipment in most enterprises poor product quality pollution and waste of resources are still rampant
1 Small enterprise capacity and low degree of production concentration
Stateowned enterprises and nonstateowned enterprises with annual sales of over 5 million yuan account for only 108 of all enterprises in the building materials industry Compared with big enterprises abroad the capacity and strength of the large backbone enterprises in China lag far behind Among the 7000odd cement producers the top ten have a production concentration of only 5 For glass enterprises the top ten have a production concentration of 33 There are more than 20 float glass production enterprises in China while the number is only six in the United States the second largest plate glass producer in the world Compared with the United States the average scale of the glass reinforced fiber enterprises in China is 25 times smaller and that of the glass fiber enterprises is more than 200 times smaller Moreover the production concentration is also low in such sectors as ceramics bricks and cement products
2 The product structure is unable to match market demand
Construction repetition has led to serious oversupply of traditional building material products involving backward technology Due to excessive competition the industrial efficiency has been low Advanced production capacity has expanded slowly and some highgrade products are undersupplied The output value of new building materials accounts for only 20 of the total of the building materials industry The country’s total cement production capacity stands at 710 million tons of which newtype drymethod cement accounts for only about 10 while vertical kiln cement with unstable quality waste of resources and environmental pollution still accounts for about 75 Also the country still depends on imports for such products as highquality float glass and processed glass highgrade construction and sanitary ceramics glass fibers and products and some deeply processed nonmetallic mineral products
3 Slow pace in industrialization of new and high technologies
The hightech venture capital investment mechanism and incentive mechanism for technology innovation are still imperfect the input of scientific and technological development funds is inadequate and the technology innovation capacity of enterprises is weak The situation of separation between technological development and production has not yet been changed fundamentally affecting the formation and development of hightech industries in the building materials sector
4 Acute problems in utilization of resources and environmental protection
The energy consumption in the production of the building materials industry accounts for about 9 of the nation’s total energy consumption and about 13 of the national industrial energy consumption The energy consumption for 10000 yuan of output value averages nearly 5 tons of standard coal In the production of building materials industry mainly based on kiln and furnace the coal consumption accounts for more than 70 of the total energy consumption The whole industry discharges some 14 of the nation’s total sulfur dioxide discharge and some 55 of the nation’s total dust and smoke discharges Every year the industry makes nearly 600 billion solid clay bricks costing about 44000 hectares of land and over 50 million tons of coal The average heat consumption for production of cement clinker is 146 kg of standard coalton over 30 higher than the internationally advanced level
II Analysis of Development Environment and Market Demand
A Analysis of Development Environment
The Tenth FiveYear Plan period is a crucial period to readjust and optimize the product structure technology structure organizational structure and geographical structure of the building materials industry during which the external environment will have substantial influences on technological advancement and structural adjustment of the industry
1 Main development trend of the international building materials industry
Development trends of technologies and products in the international building materials industry 1) Product production and environmental protection go hand in hand emphasizing on economic and social sustainable development 2) The production equipments tend to be large production process tends to develop in the direction of automation and intelligence and attach importance to economy of scale and energy saving 3) Raise product quality improve the functions of buildings such as temperature preservation and sound insulation and give importance will be paid to developing materials with functions favorable to people’s health such as antibiosis mould proof pesticide and air purification 4) While main building materials enterprises realize global expansion with advanced technology management and powerful capital capacity their marketing and services will gradually develop in the direction of network and informationization
2 Opportunities and challenges after the entry into the WTO
The entry into the WTO is conducive for Chinese building materials enterprises to change concepts catch up with the development trend of the world building material industry absorb foreign advanced technologies and management skills give play to comparative advantages and take part in international competition on a full scale In the meantime it will also pose great challenges Compared with foreign advanced level the domestic enterprises lag far behind in technology and equipment level research and development capacity and energy and resource utilization efficiency The reduction of tariff rates for some commodities may lead to increases of imports and globalization of the domestic market Taking the advantages in capital technology and management multinational companies will increase investment in China’s building material industry and thus the domestic building materials enterprises will face fiercer competition
3 Implementation of the Western China Development Drive is favorable to giving play to comparative regional advantages
The Western China Development Drive will help speed up water conservancy communication telecommunication power and urban infrastructure construction which in turn will pull up the demand for building material products In comparison the building materials industry in eastern China has apparent advantages in technology capital management and talents while western China has unique superiorities in resource energy and labor forces Implementation of the Western China Development Drive will offer an opportunity for mutual supplement of the advantages in western and eastern China facilitate regional cooperation and promote coordinated development between eastern and western China
4 Sustainable development raises higher requirements on building materials industry
For a long period of time the coalbased energy consumption structure of the building materials industry is unlikely to change drastically It will be increasingly urgent to treat the discharges of carbon dioxide sulfur dioxide nitrogen oxide and smoke Such problems as resource shortage and reduction of cultivated land will become increasingly acute The building materials industry must put an end to the mode of development at the cost of resource waste and environmental pollution It should speed up popularization of clean production and develop in the direction of high quality energy efficiency land saving water saving waste utilization and environmental protection
B Demand Forecast and Analysis
1 Analysis of market demand trend
Given that the GDP keeps an average annual growth of 7 in the Tenth FiveYear Plan period the average annual social fixed assets investment will stand at some 4000 billion yuan The demand of the national economic and social development on building materials products will maintain a momentum of steady increase The main factors to pull up the demand for building material products include the pace of urbanization will accelerate and the investment scale for construction of small and midsize cities and towns will increase by great margins industrialization of residential housing improvement of people’s livelihood and improvement of farmers’ housing conditions will substantially increase the demand for highquality multifunctional green building material products and factoryintegrated residential housing products greater efforts will be made on infrastructure construction projects such as the Three Gorges project on the Yangtze River the Xiaolangdi project on the Yellow River a number of large reservoirs the project of water diversion from south to north the hydropower stations of Longtan Xiaowan Shuibuya Goupitan Gongboxia and Sanbanxi the QinghaiTibet railway the BeijingShanghai express railway the exit railways in southwest and northwest China and the five northsouth and seven eastwest highways with a total length of 200000 km related industries such as military industry automobiles information and petrochemicals will further demand more building material products
2 Analysis of demand for main products
For traditional building materials the total demand will keep relatively stable while their product quality will be improved In 2000 the cement output stood at 597 million tons and that of plate glass 182 million weight crates As new standards for cement are implemented and the grades for concrete are raised the demand mix for cement will undergo major changes As highstrength concrete and highfunctional concrete are able to save cement by more than 30 the total cement demand is expected to remain at the current level by 2005 while the demand for cement able to make highstrength concrete and highfunctional concrete will be rise greatly The total demand for plate glass will relatively stable though big rises will be seen in the demand for highquality float glass that is able to substitute imports and satisfy the requirements of processing glass As to the trend of demand for construction and sanitary ceramics the market for lowgrade products will contract all the way while that for medium and highgrade products will increase moderately with remarkable increases expected in the demand for highgrade sanitary ceramics that are water efficient and able to substitute imports
Substantial increases will be registered for the demand newtype building materials inorganic nonmetallic new materials and nonmetallic mineral products With the development of military industry automobiles information petrochemicals and other related industries the application fields of new building materials inorganic nonmetallic new materials and deeply processed nonmetallic mineral products will expand constantly and the demand will increase substantially accordingly Fast rises will be recorded particularly in the demand for new wall materials new heat insulation materials and new water proof materials in the new building materials glass fibers and products compound materials and glass reinforced fiber in the inorganic nonmetallic new materials and superfine and modified functional materials in the deeply processed nonmetallic mineral products
Faster growth will also be seen in the demand for retrofitting materials for house decoration and improvement of housing functions As residential houses are sold to individuals housing decoration has been increasingly popular in China boosting the demand for decoration materials Fast increases will be seen in the demand for outer wall coatings highgrade outer wall decoration boards safe and environment friendly inner coatings highgrade metalware highquality plasticsteel doors and windows and plastic tubes and parts
3 Forecast of domestic demand for main building material products
Product
Unit
Demand by 2005
Sanitary ceramics
10000 pieces
5500
Construction ceramics
100 million sq m
15
Glass fiber
10000 tons
38
Of which tank furnace drawing glass fiber
10000 tons
23
Cement
100 million tons
6
Of which high quality cement
100 million tons
2
Plate glass
100 million weight crates
18～19
Of which high quality float glass
100 million weight crates
06～065
Wall materials
100 million standard bricks
7500
Of which new wall materials
100 million standard bricks
3000
III Development Guidelines and Main Targets
A Guidelines for Development
Taking market as the orientation enterprises as the main players structural adjustment as the main line technological innovation and system innovation as the engine and enterprise technical transformation product quality improvement energy saving land saving water saving waste utilization and environmental protection as the focus actively developing new and high technologies and products controlling the aggregate output making greater efforts to eliminate backward technologies and products pushing forward asset reshuffle of enterprises paying key importance to fostering big companies and enterprise groups with independent intellectual property rights giving prominence to main business strong core capacity and international competitiveness invigorating small and mediumsized enterprises and promoting sustained steady and healthy development of the building materials industry
B Main Targets
The added value of the building materials is predicted to grow 78 annually on average
1 Targets for adjustment of product mix
By 2005 the output of new drymethod cement will reach 120130 million tons to account for 20 of the total cement output special cement will account for 3 of the total cement output and the proportion of bulk cement will reach 30 the output of float glass will reach 160 million weight crates to account for over 80 of the total glass output of which the output of high quality float glass will reach 5060 million weight crates to account for over 30 of the total float glass output and the deep glass processing rate will hit 30 the output of new wall materials will reach 300 billion standard bricks to account for 40 of the total wall material output the output of tank furnace drawing glass fiber will reach 023 million tons to account for 60 of the total glass fiber output the mechanical formation rate in glass reinforced fiber production will top 40
2 Targets for adjustment of technological structure
Remarkable progress will be made in R&D of common technologies key technologies and equipments for the industry with the technology and equipment level of newly added production capacity generally to reach internationally advanced level The technology and equipment for newtype drymethod cement production lines with a daily capacity of 20005000 tons will reach internationally advanced level of the 1990s Efforts will be made to develop superlarge cement production lines with a daily capacity of over 8000 tons and build up related technology and equipment research development and manufacturing systems The Luoyang float glass technology will be upgraded to realize major breakthrough in the production technology and management of high quality float glass and raise the product quality to internationally advanced level The glass processing technology and equipment and product quality will also reach internationally advanced level For the glass fiber industry electronicclass tank furnace drawing glass fiber technology and equipment with an annual capacity of 2000030000 tons and the production technology for electronicglass glass fiber fabrics will be developed and imported to upgrade the technological level of the industry to internationally advanced level For new wall materials technology and equipment will be basically localized
3 Targets for adjustment of organizational structure
By the end of the Tenth FiveYear Plan period the average annual capacity of each cement production enterprises will be expanded from the current 100000 tons to 250000 tons and the production concentration of the top ten cement enterprises (groups) will be raised from the current 5 to 17 For glass enterprises the average annual production capacity will be expanded to over 3 million weight crates each and the production concentration of the top ten glass enterprises will reach 50 For glass fiber enterprises the production concentration of the top four will top 60
4 Targets for energy utilization and environmental protection
Clean production will be popularized on a full scale to reach the standards for environmental protection By 2005 the average energy consumption of main building material products will be reduced by 20 High quality energy will be used mainly in the production of plate glass construction and sanitary ceramics and tank furnace drawing glass fiber In the production of cement and wall materials efforts will be made actively to research and develop multiple channels for utilization of energy and resources The whole industry will annually save 19 million tons of standard coal and reduce dust discharges by 21 million tons
IV Focus of Development and Structural Adjustment
A Step up effort in Developing Newtype DryMethod Cement
The principle of developmentled adjustment will be adhered so as to greatly spur development of newtype drymethod cement eliminate backward processes optimize the distribution of productive forces promote enterprise transformation and support the development of large companies and enterprise groups Construction of cement production lines other than newtype drymethod ones will be banned Vertical kilns will be strictly banned from expansion through transformation Resources and energy will be saved and used rationally and greater attention will be paid to environmental protection Following the principle of equal volume elimination or excessive volume elimination newtype drymethod cement will be developed in the Tenth FiveYear Plan period to add a new production capacity of 60 million tons or double the current capacity
1 Supporting the development of large enterprise groups and optimizing distribution of productive forces in the cement industry
Support will mainly be given to 810 large companies and enterprise groups in launching newtype drymethod cement production lines with a daily capacity of over 4000 tons and developing cement technology and equipment with a daily capacity of 800010000 tons In east and south China and the areas along rivers and coasts and neighboring large cities the advantages of developed communications and economy should be exploited to speed up adjustment of the cement industrial structure according to local conditions In large clinker bases with rich limestone resources small cement enterprises close to markets and with necessary conditions will be transformed into modern cement powder grinding enterprises Meanwhile great efforts will be made to develop bulk cement and commodity concrete mixing stations spread superfine grinding of mineral leftovers and fly ash and prepare dry cement pulp and highfunctional concrete according to market demand The distribution of the cement industry should comply with the requirements of the entry into the WTO and the Western China Development Drive Cement enterprises in eastern and central China will be encouraged to invest in western China The development of cement industry in western China should match the construction of state key projects and the current structure of the cement industry should be adjusted by transforming the existing enterprises with good conditions
2 Transforming a number of key enterprises to facilitate restructuring and technological upgrading of the whole cement industry
Key cement enterprises of the provincial level will be encouraged to undergo technological renovation In the principle of equal volume elimination or excessive volume elimination a number of newtype drymethod cement production lines with a daily capacity of over 2000 tons will be constructed through transforming backward processes In remote areas and areas with inconvenient communications and underdeveloped economy expect for special cement projects no new drymethod cement production lines with a daily capacity of less than 1000 tons will be launched in principle Mechanical vertical kiln enterprises will be guided to undergo technical transformation and eliminate vertical kiln processes and replaced by new drymethod technology according to the principle of sustainable development
3 Attaching importance to and strengthening environmental protection
Cement enterprises should take pollution treatment and environmental protection as a essential condition for existence and development While striving for clean production they should exploit industrial wastes such as coal gangue mineral leftovers fly ash ardealite and desulfurized gypsum and research and develop new courses for utilization of urban construction rubbish living rubbish waste oil and waste tires New technologies and new processes for application of inferior energy and industrial wastes in cement production should be further studied and developed Under the precondition of ensuring the quality of cement products cement production should gradually develop in the direction of energy efficiency waste utilization and environmental protection becoming a sustainable green industry
B Developing New Building Materials to Promote Harmonious Development between Economy and Resource and Environment
Substantial progress should be made in production and application of newtype building materials by following the requirements of environmental protection ecological construction and raising people’s living quality focusing on improving quality saving energy and land and utilizing wastes taking policies and regulations as the guide taking technological innovation as engine and developing and improving application technologies By 2005 newtype wall materials will account for 40 of the total wall materials about 200000 mu (15 mu equal to one hectare) of land will be saved 20 million tons of carbon dioxide discharges will be reduced and 90 million tons of coal gangue and 45 million tons of fly ash will be comprehensively utilized
1 Boosting fast development of newtype wall materials
To meet the requirements in the development of building structure system energy efficiency of construction and improvement of building functions newtype wall materials will be developed with great efforts Aside from banning the use of solid clay bricks in 170 large and mediumsized cities within a transitional period of three years other areas will be urged to replace solid clay bricks by newtype wall materials Focus of development will be laid on nonclay hollow products concrete blocks various light panels and compound panels Great efforts will be made to popularize the production technologies and equipments of newtype wall materials using industrial wastes such as fly ash and coal gangue and river silt as raw materials A number of largescale highlevel production lines will be built to promote the growth of enterprises with advantages and foster two or three large companies and enterprise groups with considerable capacity and market influence
2 Developing flagship products according to local conditions
Various localities should foster flagship products according to local conditions and the characteristics of their local building structures so that they will play the exemplary role to bring up the development of various newtype wall materials The development focus will be laid on concrete block production lines with a single shift capacity of more than 50000 sq m The complete sets of equipment will be localized and efforts will be made to solve the construction application technology of concrete blocks develop aerated concrete panels and aerated concrete block production lines with an annual capacity of 100000200000 sq m develop large cutting machines and improve the foaming formation technology In line with market demand key efforts will be made to spread the application of paperface gypsum plates develop light plates using crop stocks as raw materials develop complete sets of technology and equipment and raise product functions and decoration functions Efforts will also be made to develop sintering hollow brick production lines with an annual capacity of over 60 million blocks and spread new processes using wastes and coal gangues
3 Increasing varieties improving product quality and expanding supporting capacity
New building materials such as inner and outer wall decoration materials plastic doors and windows and plastic tubes and parts will be developed actively Key efforts will be made on research development production and supply of outer wall coatings and the application of heat insulation materials for energy saving in construction The focus for development of plastic doors and windows is to develop high quality products do well with the production and supply of supporting hardware and raise the general quality of products The focus for development of plastic tubes and materials is to develop and spread indoor water pipes gas pipes hot water pipes and drainage pipes A number of enterprises with complete product varieties and specifications and annual output of over 30000 tons will be established so as to enhance international competitiveness
C Raising the Luoyang Float Technology on a Full Scale
The main tasks for the plate glass industry is to adjust structure and realize industrial upgrading The focus is to develop highquality float glass raising the technological level of Luoyang Float glass achieve a breakthrough in float production technology and management and upgrade the quality of plate glass products to internationally advanced level In the Tenth FiveYear Plan period construction and expansion of crude plate glass will be strictly controlled to prevent low level construction repetition eliminate micro plating and other outdated technologies and actively develop deeply processed glass products
1 Raising technological level and developing highquality float glass
Luoyang float glass technology is a flagship technology of China in glass production and upgrading of general technological level for the glass industry hinges on the advancement the Luoyang float glass technology To solve to existing problems of Luoyang float production process in raw material treatment melting formation technology and production management and narrow gaps with the internationally advanced level in surface flatness tin content and micro bubble key efforts will be made on construction of silicate raw material bases to raise the product quality of refractory materials strengthen supportive work and raise the technological level of melting furnaces in control automation tin slot sealing and coldend online testing Besides breakthrough will be made in production line control technology and management software to extend furnace service life to 810 years and upgrade product quality energy consumption and environmental protection targets to internationally advanced level On the basis of upgraded general technological level of Luoyang float glass particularly when product quality comes up to internationally advanced level several float glass production lines will be transformed in combination with cold overhaul
2 Developing new products to increase varieties
Taking advantage of the rapidly expanding market for multifunctional and deeply processed glass localization and modernization level of general equipment for glass deep processing should be raised remarkably through introducing in processing equipment and selfdevelopment Importance will be given to the study of technologies for glass application striving to develop superthin superthick and bigspecification products various color glass products heat reflection glass low radiation glass and online coated and mirror making products The proportion of deeply processed glass in all glass products will be raised to satisfy the demands of both domestic and foreign markets Meanwhile deeply processed glass products will be guided to develop in the direction of serialization
3 Optimizing organizational structure and enhancing production concentration
Plate glass enterprises will be encouraged to optimize their organizational structure and establish modern enterprise system through asset reshuffles Support will be given to the development of large enterprises and enterprise groups Two or three large companies and enterprise groups with international competitiveness and complete line from research to industry and trade will be established These big firms and enterprise groups will basically realize fullfloat production with the proportion of highquality float glass to top 50 They will have their own R&D centers and internationally advanced glass processing and production bases with serial products supporting parts and economies of scale All drawing and microplating processes with less than four machines part of drawing processes with six or nine machines and small capacity Gmethod processes will be eliminated The average annual capacity of enterprises will top 3 million weight crates
D Speeding up Industrialization of Inorganic NonMetallic New Materials
Inorganic nonmetallic new materials are important materials indispensable in national defense construction new and hightech industries and related industries Support will be given to key enterprises key technologies and key products Greater efforts will be made on technological development and technological innovation of enterprises so as to accelerate industrialization and make inorganic nonmetallic new materials a new economic growth engine for the building materials industry
1 Developing tank furnace drawing glass fibers and achieving a major breakthrough in production technology and equipment
Aiming at internationally advanced level today efforts will be made mainly to develop tank furnace drawing glass fiber production lines with a capacity of over 10000 tons so as to push forward technological advancement in the whole industry Highquality raw material bases will be constructed Advanced tank furnace drawing process will be further adopted to transform and replace outdated production processes so that the weight of tank furnace drawing production capacity will be lifted from the current 27 to over 60 and the production technology will reach internationally advanced level of the 1990s Also series of technologies and equipments with own intellectual property rights will be formed Besides clay melting pot production will be eliminated and its products will be banned from entering the market Key support will be given to foster three to five big companies and enterprise groups with an annual capacity of over 50000 tons and with competitive edge on the international market
2 Developing new products and accelerating industrialization of new and high technologies
In line with market demand support will be granted to the development of electronicclass copper clad yarn and fabrics and high quality enhanced glass fiber untwisted coarse yarn shortstaple fibers and felts By 2005 the annual export of these products will be increased to about 90000 tons while the annual import will be cut from the current 45000 tons to 20000 tons Greater efforts will be made on development and market promotion of new technologies and new products related to electronicclass glass fiber fabrics and compound materialsglass reinforced fibers with focus on development of SMC lowpressure formation technology GMT slice equipment Agrade surface treatment technology and overall optimized designing and mechanical formation of glass reinforced fiber fishing boats and fans for wind power generating units Support will also be given to the development of hightech products such as special fiber special glass quartz glass special ceramics highquality artificial diamond and special optoelectronic crystals and commercialization of their technologies so as to make them new economic growth engines and industries for export
E Developing Deeply Processed NonMetallic Mineral Products and Expanding Export
Enterprises will be urged to undergo technological transformation to raise their technological level develop deeply processed products and expand export
1 Backbone enterprises will be supported to conduct technological renovation to raise the technological contents of products
In line with the needs of construction petrochemical automobile electromechanical and environmental protection industries support will be given to the development of superfine powder making fine extracting surface modifying superfining and microhole technologies research and development of nanometer technologies and products and development of highfunctional friction materials insulation materials sealing materials functional fillings for engineering plastics electronic engineering materials and environmental protection mineral materials so as to raise the technological contents and industrialization level of products The existing backbone enterprises will be backed to use new and high technologies for technical transformation so as to narrow their gaps with internationally advanced level in technological level product quality and product specifications Enterprises will be encouraged to uplift production concentration through reshuffles in various forms
2 Actively exploring international markets and increasing export of nonmetallic mineral products
Deep processing of minerals with advantages will be developed so as to realize standardization serialization and whole range production of products Active efforts will be made to explore international markets While consolidating and raising the market shares in Southeast Asia efforts will be made to expand exports to Europe North America and South America Large nonmetallic mineral enterprises and groups will be encouraged to take part in international market competition The mix of export commodities will be adjusted in which the export of primary products will be controlled and gradually reduced while that of products with high added value will be increased to ensure steady growth of export earnings
F Optimizing the structure of construction and sanitary ceramic products
The construction and sanitary ceramic industry should develop highgrade products increase mediumgrade products and reduce lowgrade products Newtype decoration technologies should be used to upgrade product quality and grades In the meantime environmental friendly and water efficient products should be developed to meet the market demands at home and abroad
1 Developing new processes and technologies and increasing varieties of construction and sanitary ceramic products
The development of construction ceramics should focus on automatic hydraulic brick presses new decoration technologies and roller kilns using clean fuels as the focus and eliminate manual brick presses and coalburning kilns Great efforts will be made to spread such new processes and decoration technologies as secondary distributing dream distributing patterning color large grain drymethod glazing shining watercut patterning multiple decoration and multiple baking so as to increase product varieties and upgrade product quality and grades Also environment friendly dirt resistant bacteria resistant and other multifunctional products will be developed and industrial wastes and ore tailings will be comprehensively utilized
2 Upgrading sanitary ceramics centering on water saving
Subject to attainment of raising quality grade and supportive capacity the sanitary ceramics industry will greatly spread water saving technology so as to satisfy the social demand for waterefficient sanitary ceramic products In the meantime it should raise water saving standards for sanitary ceramic products to make them reach internationally advanced level and enhance the international competitiveness of domestic products
V Measures and Policies
A Measures
1 Speeding up formulation and revision of industrial rules and norms and technical rules and standards to match the accession to the WTO Supervision over product quality should be strengthened and strict product application rules should be made to standardize the acts of enterprises and create a good economic order and a market environment of fair competition In line with industrial developments the government should timely revise industrial policies and promulgate directories of products and technologies to be encouraged restricted and eliminated in the building materials industry so as to guide healthy development of enterprises
2 Strengthening cooperation between industry and research fields so as to speed up commercialization of technological achievements and raise the general level of the whole industry National laboratories or technology development centers will be established to collectively study new materials new technologies new processes and new equipments that are of strategic significance and badly needed in national defense military industry information technology and other hightech fields For major research and development projects concerning industrial development and projects concerning industrialization of new and high technologies more financial support will be given to the research and development so as to ensure development of related industries and state security Greater efforts will be made on technological innovation and development of equipments and develop key technology and equipment of independent intellectual property rights in the important fields Big companies and enterprise groups should become the main players in technological innovation They should raise the proportion of technological development funds in sales revenue and combine breakthrough in key technologies and industrialization of new and high technologies with their development strategies Support will be given to the export of China’s mature technologies and complete plant for newtype drymethod cement float glass and sanitary ceramics through engineering contracting
3 Probing into new mode for development of the building materials industry so as to match strategic adjustment of the national economy A number of large companies and enterprise groups with independent intellectual property rights outstanding main business and strong core capacity will be fostered so as to enhance the influence of state economy on the industry In the meantime diversification of enterprise capital will be promoted through policy guidance and acceleration of reform so that small and mediumsized enterprises will be invigorated Following the principle of active support rational planning classified guidance and management according to law the service system for small and mediumsized enterprises will be developed and improved Small and mediumsized building material enterprises in various localities will be encouraged and supported to develop in the directions of special quality unique and innovative in accordance with local economic development characteristics
4 Giving play to the role of industrial associations as a bridge to link up the government with enterprises The industrial associations should intensify industrial supervision to urge enterprises to abide by state laws regulations and policies coordinate member enterprises and safeguard market order in the industry
5 Transforming traditional industries with new and high technologies and promoting information technology application in the building material industry CIMS CAM and DCS will be popularized to raise production automation level and expand new product development capacity Enterprises should set up computer monitoring and dispatching systems in production so as to realize modernization in production dispatching Application of information technology in enterprise management should be expanded constantly including popularization of such modern management technologies as ERP and CRM Also Ecommerce should be developed in building materials industry so as to realize online information disclosure classified inquiry business negotiations and transaction settlement
6 The building materials industry in western China should rationally set development focus Western China regions should draw on the experiences of eastern regions in developing the building materials industry strengthen macro regulation make scientific planning give play to local comparative advantages and avoid identity of industrial structure They should rationally distribute resources absorb talents capital and advanced technologies and complement with each other their respective advantages Eliminated technologies and equipments should be prevented from being transferred to western China In line with the general plan for western China development and the market development level development focuses should be set rationally so as to avoid blind expansion of capacity and prevent lowlevel construction repetition
B Policies
1 Among the policies (interest discount and bonds) encouraging investment major technological transformation projects such as newtype drymethod cement newtype wall materials and inorganic nonmetallic new materials will continue to be listed in the catalogue enjoying key state support
2 Protective mining will be imposed on nonmetallic mineral resources of strategic value so as to guarantee state control over large highquality mines and mineral resources and strategic resources with international competitive edges
3 Backbone enterprises with advantages will be supported to enter the capital market to use the financing functions of the capital market and solve the problem of inadequate construction funds
4 Enterprises will be encouraged to make comprehensive utilization of various resources Enterprises that use industrial wastes ore tailings waste liquids and urban rubbish as raw materials and fuels in production will be granted tax exemptions and reductions
5 Product standards energyconsumption standards and pollution discharge standards will be revised in time to restrict the development of products that involve high energy consumption high pollution and low rate of resource utilization and accelerate the elimination of backward production processes
6 Seller’s credit support will be granted to the export of large complete sets of equipment
Note the plan is provided by the Industrial Planning Department of the State Economic and Trade Commission
72 Catalogue of New Wall Materials Enjoying Preferential Taxation Treatment
1 Nonclay bricks (adopting mechanical formation production process single line capacity not less than 30 million standard bricksyear)
(1) Nonclay sintered porous bricks and hollow bricks with a porous rate of over 25
(2) Concrete hollow bricks and hollow blocks
(3) Sintered shale bricks
2 Construction blocks (adopting mechanical formation production process single line capacity not less than 50000 cu myear)
(1) Concrete small hollow blocks
(2) Light aggregate concrete small hollow blocks
(3) Autoclave aerated concrete blocks
(4) Gypsum blocks
3 Construction panels (adopting mechanical production process single line capacity not less than 150000 sq myear)
(1) GRC panels
(2) Fiber cement panels
(3) Autoclave aerated concrete panels
(4) Light aggregate concrete panels
(5) Steel wire frame sandwich panels
(6) Gypsum wall boards (including papersurface gypsum boards gypsum fiber boards and gypsum hollow boards)
(7) Metalsurface sandwich boards (including metalsurface polystyrene sandwich boards metalsurface hard polyurethane sandwich boards and metalsurface rock wool and slag wool sandwich boards)
(8) Compound light sandwich partition wall boards and slats
Note The catalogue is issued jointly by the Ministry of Finance and the State Taxation Administration Source Economic Daily
73 18 Standards for Building Materials Industry
Codes and Names of 18 Standards for Building Materials Industry
Standards
Code
Substitutive code
I Compulsory standards (7 items)
1Soft tube for sanitary equipment
JC8862001
2Epoxy adhesive for handling stone curtain
JC8872001
3Pretensioned prestressing concrete thin wall pipe pile
JC888200l
4Steel fiber concrete examination well cap
JC8892001
5Masonry mortar and floated mortar for autoclave aerated concrete
JC8902001
6Fused cast zirconiaaluminum refractory products used for glass melters
JC4932001
JC4931992(1996)
7Glass for highpressure liquid level meters
JC8912001
II Recommended Standards (11 items)
1Natural marble building boards
JCT792001
JCT791992(1996)
2Crude natural granite
JCT2042001
JCT2041992(1996)
3Crude natural marble
JCT2022001
JCT2021992(1996)
4Moltenrock casting products moltenrock casting powder
JCT51432001
JCT51431993(1996)
5Milky quartz glass tube for infrared heaters
JCT8922001
6Inner heat preservation board for GRC outer wall
JCT8932001
7Polymer cement waterproof coating
JCT8942001
8Single basalt moltenrock casting products
JCT515200l
JCT5151993(1996)
9Wear resistance property test in testing functions of moltenrock casting products
JCT2602001
JCT2601993(1996)
10Plastic seats and caps for stools
JCT7642001
JCT7641987(1996)GB82851987(1996)
11Foam ceramic filters
JCT8952001
74 Output of 106 Cement Enterprises in 2001
Enterprise
Trademark
Aggregate output (10000t)
Yoy increase ()
Total
11811
182
1
Anhui Conch Group
Conch
1236
544
2
Huaxin Cement Factory
Baolei
50369
1563
3
Beijing Jinyu Group
Great Wall
3055
08
4
Zhejiang Three Lion Group
Three Lion
28857
205
5
Chongqing Tenghui Cement Group
TenghuiDiwei
27417
997
6
Tangshan Jidong Cement
Dunshi
27041
21
7
Meizhou Tapai Group
Tapai
27014
256
8
Xinjiang Tianshan
Tianshan
25849
51
9
Jingyang Cement Co
Jingyang Jiaxin
23919
581
10
330 Cement Factory
Sanxia
23747
367
11
Suzhou Jinmao
Jinmao
22771
16
12
Chaodong Cement
ChaohuDongguan
21664
102
13
Fujian Cement
Jianfu
21595
104
14
Shandong Cement Factory
Dongyue
20337
249
15
Yizhou Cement Group
Yizhou
20156
69
16
Taihang Cement
Taihangshan
20009
3
17
Qinling Cement
Qinling
1726
09
18
Jilin Yatai Cement
Dinglu
1672
137
19
Sichuan Golden Summit Group
E’meishan
16023
315
20
Mudanjiang Cement Group
Mudanjiang
15646
27
21
Sichuan Shuangma Group
Shuangma
15603
05
22
Hunan Shaofeng
Shaofeng
15492
91
23
Liuzhou Yufeng Group
Yufeng
15018
191
24
Jiangsu Julong
Julong
1453
172
25
Zhejiang Jianfeng Group
Jianfeng
14447
91
26
Zhujiang Cement Factory
Yuexiu
14373
176
27
Jiangxi Cement Factory
Wannianqing
14084
538
28
Harbin Cement Factory
Swan
14033
14
29
JiangnanOnoda
Shuangfeng
13901
267
30
Jiangshan Cement Factory
Hushan
13123
364
31
DalianOnoda
Huari
1242
4
32
Yungang Cement Group
Yungang
12194
55
33
Taiyuan Shitou Group
Shitou
1218
165
34
Jidong Jilin Co
Jiangcheng
109
459
35
Lunan Cement Factory
Luhong
10819
49
36
Qinhuangdao Qianye
Qianye
10664
18
37
Bohai Cement Group
Bohai
1027
87
38
Tianjin Cement Factory
Camel
10224
197
39
Shandong Aluminum Co
Shanlu
10043
37
40
Gongyuan Cement Factory
Gongyuan
1002
109
41
Yongfeng Cement Factory
Qilianshan
9975
381
42
Xishui Venture Co Ltd
Caoyuan
9638
38
43
Dalian Cement Group
Seagull
9535
889
44
Benxi Cement Factory
Changbaishan
915
31
45
Sichuan Guang’an Building Materials
TwinGun
8686
25
46
China Cement Factory
Shicheng
8644
86
47
Shanghai United Cement
Taili
846
227
48
Ningbo Shengjiang
Shengjiang
8422
508
49
Tanshan Qixin Co
Mapai
8398
138
50
Guangzhou Cement Factory
Jinyang
8382
37
51
Guangdong Nanhua Cement
Nanhua
809
38
52
Xingfeng Group Co
Xingfeng
7818
15
53
Tianjin Zhenxing
Zhengtong
7814
157
54
Kunming Cement Factory
Shilin
7736
10
55
Guizhou Cement Factory
Wujiang
7517
181
56
Beijing Xingfa
Lafarge
7179
24
57
Hangzhou Qianchao
Qianchao
702
153
58
Xiaotun Cement Factory
Qianshan
6851
47
59
Luoyang Cement Factory
Yellow River
6778
133
60
Shuicheng Cement Factory
Wumengshan
6445
1
61
Wushan Cement Factory
Yuanyang
6442
155
62
Guangxi Hongshuihe
Hongshuihe
6338
11
63
Hunan Jinlei
Jinlei
617
04
64
Jiaozuo Solid Cement
Solid
615
256
65
Great Wall Aluminum Co
Construction
5847
35
66
Kaiyuan Cement Factory
Honghe
5825
443
67
Fushun Cement Factory
Hunhe
581
04
68
Qiligang Cement Factory
Huisheng
5505
85
69
Haolianghe Cement Factory
Haolianghe
5503
68
70
Nanping Cement Factory
Wuyi
5423
51
71
Shanghai Haibao
Haibao
537
99
72
Shanghai Wan’an Co
Wan’an
5263
57
73
Angang Cement Factory
Gangdu
512
38
74
Shanghai Cement Factory
Elephant
5106
61
75
Jiangnan Cement Co
Zhongshan
5001
47
76
Chongqing Cement Factory
Chuanpai
4856
172
77
Ningxia Saima
Saima
4821
4
78
Tianjin Feiyan
Feiyan
452
347
79
Guanghua Cement Factory
Baoshi
423
244
80
Chaohu Tiedao Cement Factory
Tiepeng
4115
335
81
Duyun Cement Factory
Jianjiang
4103
49
82
Jiuzhou Qilin
Qilin
4046
69
83
Hunan Xuefeng
Xuefeng
4044
74
84
Gaoya Cement Factory
Jincheng
3904
374
85
Pudong Cement Factory
Fuli
3753
92
86
Datian Cement Factory
Yancheng
3743
01
87
Hunan Shaoyang
Baoqing
372
317
88
Xiaoxiang Group
Wuxi
3601
134
89
Zhejiang Fuyang Dengcheng
Dengcheng
3582
104
90
Sichuan Jinsha Cement
Panzhihua
3512
20
91
Qinghai Cement Factory
Kunlun
3414
76
92
Miaoling Cement Factory
Miaoling
333
36
93
Queshan Cement Factory
Yunan
3202
75
94
Huanggang Cement Factory
Jinta
30
153
95
Zunyi Denghui Cement
Huagang
2948
302
96
Guiyang Cement Factory
Jingang
2719
8
97
Xinsheng Cement Factory
Xinsheng
269
43
98
Yiye Cement Factory
Gangtie
255
17
99
Zhongshan Cement Factory
Tiecheng
2426
73
100
Jiaotong Cement Factory
Hongqiao
22
38
101
Yiyuan Lantian
Lushan
211
16
102
Qinchuan Cement Co
Kuangshan
2101
17
103
Sanming Cement Factory
192
274
104
Xinchuan Cement Factory
Xinchuan
1865
98
105
Hunan Jiuyi
Jiuyi
14
369
106
Guanghua Cement Factory
Baixiong
383
35
8 Reference Materials
F 2002 China Economic Prospects (Industry Volume) compiled by State Information Center China Planning Publishing House December 2001
F 2000 Chinese Large Enterprise Groups compiled by National Bureau of Statistics China Statistics Publishing House September 2001
F Report on Development of Chinese Large Enterprises (Groups) 20012002 compiled by China Enterprise Appraisal Association China Personnel Affairs Publishing House February 2002
F China Statistics Yearbook (19962001) China Statistics Publishing House
F Circular of the General Office of State Council on Onissuing Opinions of the State Economic and Trade Commission on Rectifying Small Glass Factories and Small Cement Factories Guoban Document No 44 [1999]
F Opinions on Implementing Aggregate Control in Building Materials Industry in 2001 SETC Document No 99 [2001]
F Codes and Names of 18 Standards for Building Materials Industry Document No 32 2001 of the State Economic and Trade Commission of the People’s Republic of China
F Circular on Issuing Some Opinions on Controlling Aggregate Volume and Adjusting Structure in Building Materials Industry’ SETC Document No 572 1998
F Catalogue of Backward Production Capacities Processes and Products to Be Eliminated SETC Order No 6 and No 16
F Accelerating Restructuring and Structural Optimization and Upgrading of China’s Industry – speech of Minister of State Economic and Trade Commission Li Rongrong at the National Work Conference on Industrial Restructuring in the Tenth FiveYear Plan Period (abstract)
F Circular of the State Economic and Trade Commission and the State Development Planning Commission on Issuing the Opinions on Developing NewType Building Materials’ SETC Document No 962 2000
F Developments of World Plate Glass Industry by Yuan Xinmin senior engineer with Technology & Information Institute of the State Bureau of Building Materials Industry
F Summary of 2001 Annual Reports of Companies in Building Materials Industry Pan Jianping with Xingye Securities Research & Development Center
F China’s Building Materials Industry Realizes Anticipated Targets in 2001 by Yu Xiaolan with Information Dept of China Association of Building Materials Industry and China Economic Supervision Society of Building Materials Quantity China Building Materials Journal Feb 7 2002
*
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China International Economic Consultants (CIEC)
April 15 2002
Development and Prospect of China’s Building Materials Industry in 2001
Building materials industry is closely related to the development cycle of the national economy In recent years China has implemented a series of policies such as the proactive fiscal policy and the expansive monetary policy Accordingly the national economic growth has rallied While the world economy generally slid by a wide margin China still managed to achieve a relatively high GDP growth rate of 73 in 2001 Underpinned by the fast national economic growth the economic operation quality of China’s building materials industry continued to improve steadily in 2001 on the basis of a substantial rebound in 2000
According to latest monthly statistics the basic economic operation situation of the building materials industry in 2001 were as follows the yearly industrial added value hit 1023 billion yuan (referring to stateowned industrial enterprises and nonstate owned industrial enterprises with annual sales of over 5 million yuan and the same below) up 1165 over the previous year which was slightly higher than the goal of 910 set at the end of 2000 the yearly sales revenue amounted to 3146 billion yuan up 1107 over the previous year the yearly profits totaled 11891 billion yuan up 2681 over the previous year which was slightly more than the goal of about 11 billion yuan set at the end of 2000 the annual import and export value of building materials and nonmetallic mineral commodities stood at 5672 billion US dollars up 1212 over the previous year of which export accounted for 33 billion US dollars up 1511 the output of cement reached 621 million tons up 65 year on year the production of plate glass hit 204 million weight crates up 1448 year on year
For 2002 the entire building materials industry will maintain steady growth supported by steady national economic growth Numerous favorable factors will prop up overall growth of the building materials industry although some unfavorable factors will restrain its further development Structural adjustment amid control over aggregate output will still be the main tone for development of the country’s building materials industry in 2002 As China has entered the WTO the domestic building materials industry will face fiercer competition and some subsectors will be affected to some extents
This Report will summarize the operating conditions of China’s building materials industry in 2001 analyze and forecast its industrial developments in 2002 and specify the advantages and disadvantages of China’s WTO membership on the building materials industry by employing authoritative data and materials
Content
1 Development of China’s Building Materials Industry in 2001 1
11 Aggregate Control Targets for the Building Materials Industry in 2001 1
12 Overview of Industrial Operation 2
121 Aggregate Control Targets for the Building Materials Industry in First Half Year 2
122 Annual Accomplishment of Main Economic Indicators of the Industry 4
13 Operations of 26 Key Building Materials Enterprises 6
2 Operations of Subsectors in Building Materials Industry in 2001 8
21 Glass and Glass Products Industry 8
22 Construction and Sanitary Ceramics Industry 11
23 Glass Fiber and Products Industry 11
24 Cement Industry 13
3 Influences of WTO Entry on China’s Building Materials Industry and Analysis of Countermeasures 17
31 General Influences on the Building Materials Industry 17
311 Analysis of Advantages and Disadvantages of China’s Building Materials Industry 17
312 Influences of WTO Entry on Building Materials Industry – Analysis of Opportunities and Challenges 18
32 Influences on Main SubindustriesAssociated Industries 19
321 Main Subindustries 19
322 Associated Industries – Ceramic Machinebuilding Industry 21
33 Analysis of Countermeasures 23
4 Analysis and Forecast of the Developments of Building Materials Industry in 2002 26
41 Targets and Main Work of the Building Materials Industry in 2002 26
411 Targets 26
412 Main Work 26
42 Favorable Factors for the Building Materials Industry in 2002 28
43 Unfavorable Factors for the Building Materials Industry in 2002 29
5 Development Plans for Building Materials Industry 30
51 Tenth FiveYear Plan (20012005) for the Industry 30
52 Tenth Fiveyear Plan for Main Subsectors 30
521 Construction and Sanitary Ceramics Industry 30
522 Cement Industry 31
523 Glass Industry 33
6 Analysis of Listed Companies in Building Materials Industry 35
61 New Building Materials Block 35
62 Cement Block 36
63 Glass Block 37
64 Construction and Sanitary Ceramics Block 38
7 Appendixes 39
71 Tenth FiveYear Plan for the Building Materials Industry 39
73 18 Standards for Building Materials Industry 54
74 Output of 106 Cement Enterprises in 2001 55
8 Reference Materials 58
1 Development of China’s Building Materials Industry in 2001
11 Aggregate Control Targets for the Building Materials Industry in 2001
On February 2 2001 the State Economic and Trade Commission issued the Opinions on Implementing Aggregate Control in the Building Materials Industry in 2001 (SETC No 99 [2001]) According to the document the control targets for the building materials industry in 2001 are as follows A total of 1900 small cement kilns will be closed to reduce backward production capacity by 50 million tons of which 35 million tons are involved in uncompleted overhaul drive of the industry and 1520 million tons concern additional closures of small kilns to make room for big projects The national cement output will be controlled within 570 million tons Meanwhile 100 small glass production lines will be closed down to reduce the glass production capacity by 10 million weight crates and control the national plate glass output at 170 million weight crates The profit of the whole industry after offsetting losses will not be less than 85 billion yuan
For details please see the following table with regard to the aggregate cement control targets and the catalogue of capacities to be eliminated in 2001
Table 11 Aggregate cement control targets and catalogue of capacities to be eliminated in 2001 (unit 10000 tons)
Province
Actual output in 2000
Aggregate control target in 2001
Capacity to be eliminated according to Document No 49 [1999] issued by General Office of the State Council
Capacity already eliminated by 2000
Capacity to be eliminated in first half of 2001
Total
58319
57000
10000
6500
3500
Beijing
827
800
96
180
0
Tianjin
268
270
24
*35
0
Hebei
4695
4600
773
*635
138
Shanxi
1193
1200
544
588
0
Inner Mongolia
630
630
171
*53
118
Liaoning
1954
1950
361
247
114
Jilin
759
800
149
*44
105
Heilongjiang
904
950
150
67
83
Shanghai
312
310
3
*3
0
Jiangsu
4599
4600
509
*580
0
Zhejiang
4257
4200
709
709
0
Anhui
1906
2000
810
666
144
Fujian
1514
1600
612
*171
441
Jiangxi
1463
1400
168
112
56
Shandong
6547
6200
1134
884
250
Henan
3723
3500
611
*225
386
Hubei
2461
2400
739
760
0
Hunan
2396
2200
994
*400
594
Guangdong
5872
5600
1283
*265
1018
Guangxi
2198
2000
418
23
395
Hainan
315
300
25
*22
3
Sichuan
2766
2600
752
288
464
Guizhou
784
750
567
*91
476
Yunnan
1512
1500
376
*41
335
Chongqing
1403
1300
315
*108
207
Shaanxi
989
970
350
*332
18
Gansu
724
720
151
*118
33
Qinghai
124
120
32
*16
16
Ningxia
280
260
33
*21
12
Xinjiang
895
900
158
60
98
Note 1) * the figures are up to October 2000
2) The catalogue is sourced from the No 99 [2001] document issued by the State Economic and Trade Commission on February 2 2001
12 Overview of Industrial Operation
121 Aggregate Control Targets for the Building Materials Industry in First Half Year
China’s cement output amounted to 287 million tons in the first half of 2001 up 9 year on year The figure represented 503 of the annual target indicating that the production was basically within the scope of control
A total of 15 provinces municipalities and autonomous regions posted better control than the national average level in cement output in the first half of 2001 They are Inner Mongolia (440) Heilongjiang (450) Liaoning (458) Xinjiang (461) Fujian (463) Hebei (469) Guangxi (470) Beijing (476) Guangdong (477) Jilin (484) Anhui (485) Hubei (489) Hunan (491) Shanxi (493) and Shanghai (497)
The regions whose output exceeded the target also numbered 15 They are Qinghai (628) Henan (566) Shaanxi (553) Chongqing (551) Guizhou (547) Sichuan (540) Gansu (538) Shandong (535) Jiangsu (533) Ningxia (533) Yunnan (528) Hainan (524) Tianjin (523) Zhejiang (514) and Jiangxi (511)
Of special note the production in the nine regions in western China exceeded the national average by 35 percentage points and the growth rate was also higher than that in the same period of 2000 such as Guizhou (403) Qinghai (348) Yunnan (324) and Sichuan (248) This was due mainly to the implementation of the Western China Development Drive which caused greater demand for cement Anyway this also has brought about pressures to the cement industrial restructuring in the western regions The regions should seize the opportunities to develop newtype drymethod cement and discard backward production capacities
See Table 12 on fulfillment of cement output control targets by region in the first half of 2001
Table 12 Fulfillment of cement output control targets by region in the first half of 2001
Region
Cement output control target for 2001 (10000t)
First half year aggregate
Aggregate output (10000t)
yoy increase ()
Percentage of annual target（）
Total
57000
28663
90
503
Central China
15080
7605
90
504
Eastern China
32430
16165
91
498
Western China
9120
4876
208
535
Regions with better output control than national average
1
Qinghai
120
75
348
628
2
Henan
3500
1982
93
566
3
Shaanxi
970
536
99
553
4
Chongqing
1300
716
89
551
5
Guizhou
750
410
403
547
6
Sichuan
2600
1404
248
540
7
Gansu
720
388
142
539
8
Shandong
6200
3314
86
535
9
Jiangsu
4600
2451
215
533
10
Ningxia
260
139
147
533
11
Yunnan
1500
792
324
528
12
Hainan
300
157
01
524
13
Tianjin
270
141
294
523
14
Zhejiang
4200
2195
162
514
15
Jiangxi
1400
716
180
511
Regions with output higher than national average level
1
Shanghai
310
154
146
497
2
Shanxi
1200
592
85
493
3
Hunan
2200
1080
44
491
4
Hubei
2400
1173
119
489
5
Anhui
2000
970
46
485
6
Jilin
800
387
80
484
7
Guangdong
5600
2673
09
477
8
Beijing
800
381
50
476
9
Guangxi
2000
941
75
470
10
Hebei
4600
2159
104
469
11
Fujian
1600
741
126
463
12
Xinjiang
900
415
154
461
13
Liaoning
1950
894
62
458
14
Heilongjiang
950
427
67
450
15
Inner Mongolia
630
279
160
442
(Source Economic Operation Bureau of State Economic and Trade Commission)
122 Annual Accomplishment of Main Economic Indicators of the Industry
According to the latest monthly report the building materials industry realized its anticipated targets for 2001 Various economic indicators of the industry were as follows (Source from Yu Xiaolan Information Department of China Association of Building Materials Industry No 2 2002 of China Building Materials Journal)
(1) Industrial Added Value
The building materials industry accomplished an industrial added value of 1023 billion yuan in 2001 (covering stateowned industrial enterprises and nonstateowned industrial enterprises with annual sales of over 5 million yuan and the same below) up 1165 over the previous year The growth rate was higher than the 910 forecast at the end of 2000
(2) Sales Revenue
The sales revenue of the building materials industry in 2001 amounted to 3146 billion yuan up 1107 over the previous year Of this the five provinces of Guangdong Shandong Jiangsu Zhejiang and Henan each posted sales of over 20 billion yuan and their combined sales accounted for 52 of the industry’s total
(3) Profit
The profit of the building materials industry totaled 11891 billion yuan in 2001 up 2681 over the previous year It was slightly higher than the 11 billion yuan predicted at the end of 2000 Of this the five provinces of Shandong Zhejiang Jiangsu Hebei and Henan each generated profit of over 900 million yuan and their combined profit accounted for 60 of the industry’s total The five provinces of Shanxi Hainan Yunnan Liaoning and Guangxi posted net loss after offsetting by profit with combined net loss of 390 million yuan Among the 32 sectors in the building materials industry three sectors namely cement construction and sanitary ceramics and cement products industries each yielded profit of over one billion yuan After offsetting by profit the other mineral fiber and products industry and the building material and other nonmetallic mineral products equipment manufacturing industry were still in the red in 2001
(4) Import and Export
China’s import and export value of building materials and nonmetallic mineral commodities reached 5672 billion US dollars in 2001 up 1212 over the previous year Of this exports accounted for 33 billion US dollars up 1511 The surplus in import and export trade of building materials and nonmetallic mineral commodities amounted to 933 million US dollars up 3743 over the previous year The regions with an export value of over 100 million US dollars in 2001 included Guangdong Fujian Shandong Shanghai Liaoning Zhejiang and Jiangsu with their combined exports accounting for 8417 of the country’s total export of building materials Among them Guangdong and Fujian contributed to 5221 of the country’s total building materials export in 2001 The export markets each with a value of over 100 million US dollars included Japan Hong Kong the United States Belgium and the Republic of Korea with the combined exports to these markets accounting for 7569 of the country’s total building materials export They were followed by the Netherlands and Taiwan each with an export value of over 50 million US dollars The main export commodities were slab granite diamond cement and cement clinker glass fiber and products plate glass fluorite and sandwiched glass The combined exports of these seven kinds of commodities accounted for 6063 of China’s total building materials export in 2001
(5) Output
In 2001 China produced 621 million tons of cement of which six provinces namely Shandong Guangdong Jiangsu Hebei Zhejiang and Henan each posted an output of over 40 million tons and combinedly contributed to 51 of the nation’s total production An increase of over 20 was registered for the cement production in Tianjin Jiangsu Gansu and Shanghai
See Table 13 on the cement production of the top six provinces and their weight in the national output
Table 13 Cement Output and Weight of Six Provinces
Province
Output (100 million tons)
Weight ()
Shandong
06831
11
Guangdong
05589
9
Jiangsu
04968
8
Hebei
04968
8
Zhejiang
04968
8
Henan
04347
7
Others
30429
49
Total
621
100
In 2001 China’s plate glass output stood at 204 million weight crates up 1448 over the previous year A growth rate of over 20 was registered for the six provinces and regions of Sichuan Zhejiang Shanxi Jiangsu Inner Mongolia and Shandong the provinces each with an output of over 10 million weight crates were Henan Hebei Jiangsu Shandong Liaoning and Zhejiang which combinedly generated 57 of the nation’s total plate glass production
See Table 14 on the top six provinces in terms of plate glass production and their weight in the nation’s total
Table 14 Distribution of Plate Glass Production in 2001
Province
Output (100 million weight crates)
Weight ()
Henan
02856
14
Hebei
02244
11
Jiangsu
02244
11
Shandong
01836
9
Liaoning
01632
8
Zhejiang
0102
5
Others
08568
42
Total
204
100
See Table 15 on a summary of main economic indicators for the building materials industry in 2001
Table 15 Summary of Main Economic Indicators for Building Materials Industry
Indicator
2000
2001
Growth
Industrial added value (100 million yuan)
91626
102300
1165
Sales (100 million yuan)
283245
314600
1107
Total profit (100 million yuan)
9377
11891
2681
Total import and export value (100 million US dollars)
5059
5672
1212
Import (100 million US dollars)
2192
2372
821
Export (100 million US dollars)
2867
3300
1511
Cement output (100 million tons)
583
621
652
Plate glass output (100 million weight crates)
182
204
1209
(6) Reasons for Industrial Profit Growth
As Zou Chuansheng vicechairman of the China Association of Building Materials Industry holds the good economic efficiency of China’s building materials industry in 2001 was attributed mainly to three reasons First associated industries grew fast which had a marked pulling role on the market demand for building materials Second measures in the building materials industry such as aggregate output control and elimination of backward capacities centering on structural adjustment began to pay off Third a number of large enterprise groups with strong competitiveness were set up in the building materials industry and they played an important role in structural adjustment and industrial upgrading The recovery of efficiency in cement and stone materials industries led the growth of the whole industry
13 Operations of 26 Key Building Materials Enterprises
In order to carry forward the strategy of centering efforts on big ones and supporting small ones and giving priority to excellent and strong ones pushing forward strategic transformation of stateowned enterprises foster large enterprises and enterprise groups with powerful capacity and sharp competitiveness and also in line with the principle of dynamic management the State Economic and Trade Commission selected 512 key stateowned and nonstateowned enterprises with big capacity good efficiency and bright development prospects These 512 enterprises are distributed in 26 industries and 29 provinces municipalities and autonomous regions of which 27 ones are in the building materials industry See Table 16 a directory of these enterprises
Table 16 Directory of Key Building Materials Enterprises
1
Beixin Building Materials (Group) Co Ltd
2
China New Building Materials (Group) Co
3
Beijing Building Materials Group Co Ltd
4
Hebei Jidong Cement Group Co Ltd
5
Qinhuangdao North Glass Group Co Ltd
6
China Yaohua Glass Group Company
7
Shenyang Xingguang Group Building Materials Co Ltd
8
Mudanjiang Cement Group Co Ltd
9
Shanghai Building Materials Group Corp
10
Zhejiang Orient Group Company
11
Zhejiang ThreeLions Cement Co Ltd
12
Anhui Conch (Group) Company
13
Fujian Cement Co Ltd
14
Jiangxi Cement Factory
15
Luoyang Float Glass Group Co Ltd
16
Huaxin Cement Co Ltd
17
Hunan Shaofeng Cement Group Co Ltd
18
Liuzhou Yufeng Cement Group Co Ltd
19
Sichuan Guodong Construction Co Ltd
20
Sichuan Kangda Building Materials Industry (Group) Co
21
Sichuan Jinsha Cement Co Ltd
22
Golden Summit (Group) Co Ltd
23
Sichuan Guang’an Building Materials Group Co
24
Shuangma Cement (Group) Co Ltd
25
Kunming Cement Co Ltd
26
Gansu Qilianshan Group
27
Weifang Xinlike Group Co
The main operational indicators for the 26 key building materials enterprises in 2001 are shown in Table 17 (Note All indicators do not cover the Weifang Xinlike Group Company)
Table 17 Summary of Financial and Economic Indicators for 26 Key Building Materials Enterprises in 2001 (in 100 million yuan)
Indicator
2001
2000
Growth rate ()
1
Number of enterprises
2600
2600
2
Total assets
78174
73906
577
3
Total liabilities
38274
34914
962
4
Product sales
21917
19685
1133
5
Total profits
968
1204
1956
6
Gross industrial output
(current price)
24004
20987
1437
7
Gross industrial output
(constant price)
18244
1762
93552
8
Average number of employees (10000s)
1934
3553
4557
(Source Development Research Center of the State Council)
2 Operations of Subsectors in Building Materials Industry in 2001
21 Glass and Glass Products Industry
(1) Plate glass output continued to increase at high speed but profits fell further
A boom of float glass production line construction took place again in various localities of China starting from the second half of 1999 as the market for plate glass turned for the better and prices rebounded Since 1999 a total of 39 float glass production lines have been put into production put under construction or prepared for construction across the country which are to form a total production capacity of 8788 million weight crates By the end of 2001 23 lines had been built up forming a total production capacity of 5073 million weight crates The other 16 lines are still under construction and will be constructed which are to form a capacity of 3715 million weight crates The actual new production capacity will amount to 68 million weight crates equal to 32 of the glass production capacity in 2000 (216 million weight crates)
As quite a few float glass production lines came on stream China’s plate glass production expanded by a big margin in 2001 According to preliminary statistics the worldwide plate glass output stood at 3310 million tons (662 million weight crates) in 2001 of which 204 million weight crates were produced in China up 121 over the previous year and ranking first in the world In comparison the construction use glass products industry produced 182 million weight crates of glass in 2000 up 82 over the previous year
The monthly output of plate glass in 2001 and the changes are shown in Table 21 and Chart 21
Table 21 China’s Plate Glass Production in 2001
Month
Aggregate output up to the month (100 million weight crates)
Growth year on year ()
Feb
032
1784
Mar
049
169
Apr
065
168
May
081
1702
June
097
1587
July
114
1526
Aug
130
1340
Sept
148
1355
Oct
166
1332
Nov
184
1376
Dec
204
1448
(Source Development Research Center of the State Council)
Table 22 Worldwide Plate Glass Output by Region in 2001
Region
Output (10000 tons)
Proportion ()
West Europe
894
270
East Europe
165
50
North America
761
230
China
1020
308
Japan
364
110
Others
106
32
Total
3310
1000
While glass production expanded substantially there was serious oversupply as the market demand grew at a far lower pace Some serious problems took place in the economic operation of the glass industry
First inventories increased and salesproduction ratio dropped Statistics show that the plate glass inventories of large and mediumsized enterprises at the end of 2001 were as high as 1511 million weight crates up 46 over a year before The salesproduction ratio in 2001 stood at 952 lower than the level in the previous year
Second product prices slid By December 2001 the average factory price of white ordinary plate glass with a thickness of 2mm 3mm and 4mm had declined by about 12 yuan 76 yuan and 9 yuan per weight crate respectively from the beginning of the year and that of float glass with a thickness of 4mm and 5mm had fallen by some 11 yuan and 13 yuan respectively The trend of plate glass price and the specific data are shown in Chart 23 and Table 23
Table 23 Average factory price of float glass in 2001 (yuan)
Month
3mm float
4mm float
5mm float
6mm float
8mm float
10mm float
12mm float
1
5983
6584
7112
7879
7529
759
7996
2
6682
6791
7319
7779
7476
7548
7963
3
7434
6648
7034
7704
7626
7542
793
4
7101
6408
7037
739
7106
725
7587
5
7207
6156
6667
7326
6991
7203
7425
6
6919
6367
6829
7184
6881
6934
7337
7
6789
6177
6743
7377
6772
7059
7297
8
6939
6412
6852
7129
7043
694
7642
9
6695
6336
6821
7423
6918
709
7654
10
6591
6107
6508
7099
6598
7009
6411
11
6296
5778
6164
725
6461
676
7004
12
5982
5499
5809
6972
6389
6605
7146
(Source Development Research Center of the State Council)
Third economic efficiency slid The construction use glass products industry generated a profit of 169 billion yuan in 2000 topping all subsectors in the building materials industry By 2001 however its profit was only 712 million yuan a plunge of 980 million yuan or 58 from the previous year
(2) The mix of glass products was irrational Though the domestic glass output in 2001 increased substantially over 2000 the country still imported 2447 million sq m of plate glass in the year With the rapid development of associated industries such as construction automobiles and electronic information the demand for highgrade float glass has been on the rise In the domestic glass production in 2001 however high quality float glass accounted for only 12 far from satisfying the market demand Statistics show that in 2001 the imports of hollow glass for highgrade buildings and sandwich reinforced glass for vehicle use increased by 49 and 150 respectively over the previous year This implies that highgrade and deeply processed glass is still undersupplied in China Medium and lowgrade ordinary float glass meanwhile has been seriously oversupplied
22 Construction and Sanitary Ceramics Industry
In 2000 China’s stateowned enterprises and nonstate enterprises with annual sales of over 5 million yuan produced 18 billion sq m of construction ceramic tiles and 435000 tons of sanitary ceramics The varieties of construction ceramics topped 2000 and those of sanitary ceramics topped 300
Due to haphazard capacity expansion and construction repetition the whole construction ceramics industry was in a state of excessive competition in 2001 and the efficiency of listed companies in the construction ceramics industry slid sharply In view of the current market situation medium and lowgrade products are seriously glutted while highgrade products are comparatively undersupplied It is predicted that in the coming few years the market oversupply of medium and lowgrade products will keep at some 30 while the market demand for highgrade products will continue to grow at a fast clip The demand for highgrade sanitary ceramics able to substitute imports and waterefficient sanitary ceramics will increase remarkably
The policy orientation for the construction and sanitary ceramics industry in the future is to develop highgrade construction ceramics for import substitution while of controlling the aggregate output and phasing out outdated processes and products
23 Glass Fiber and Products Industry
(1) Overview of the Industry
At present China’s glass fiber industry has nearly 40 large enterprises each with an annual output of over 1000 tons two specialized research and designing institutes 40odd glass fiber equipment and electric meter manufacturing enterprises and 20odd chemical raw material production enterprises Among the major producers are Zhuhai SEZ Glass Fiber Enterprises Co Ltd Zhejiang Tongxiang Jushi Glass Fiber Co Ltd Shandong Tai’an Taishan Glass Fiber Co Ltd and Chongqing Glass Fiber Co Ltd These factories have become important development bases of China’s glass fiber industry
In 2001 two new glass fiber production lines were put into production They were an alkalifree glass fiber production line with an annual output of 15000 tons at the Shandong Tai’an Taishan Glass Fiber Co Ltd and a glass fiber production line with an annual output of 20000 tons (including 5000 tons of G75 electronic yarn) at the Chongqing Glass Fiber Co Ltd
The glass fiber industry began to post fast growth in the second half of 2000 and the momentum continued in 2001 According to preliminary statistics the sales in 2001 amounted to 48 billion yuan up 4907 over the previous year and the profits totaled 149 million yuan six times as much as in the previous year
(2) Import and Export of the Industry
The imports and exports of the glass fiber and products industry in 2001 are shown in Table 24 and Table 25
Table 24 Imports of China’s Glass Fiber and Products Industry in 2001
Import volume (10000t)
Import value (US10000)
Main import sources
Short staple glass fiber with a length of no more than 50 mm
038
64493
Japan
Low count yarn of glass fiber
259
285875
ROK Taiwan US
Other glass fibers
188
382691
Japan ROK Taiwan US
Total
484
733058
Source Calculated according to data of Development Research Center of the State Council
Table 25 Exports of China’s Glass Fiber and Products Industry in 2001
Export volume (10000t)
Export value (US10000)
Main export destinations
Short staple glass fiber with a length of no more than 50 mm
022
28965
US Japan Hong Kong
Low count yarn of glass fiber
259
282435
Hong Kong Saudi Arabia Germany US
Other glass fibers
361
385974
Japan US Germany Italy
Total
642
697375
Source Calculated according to data of Development Research Center of the State Council
The above tables show that China’s export volume of glass fiber stood at some 64200 tons in 2001 up 484 over the previous year the export value amounted to 697375 million US dollars up 7649 over the 395127 million US dollars in the previous year China’s glass fiber products have successfully penetrated into the international market including the United States Japan Germany and Italy
The imports and exports of China’s glass fiber and products industry in the period from 1996 to 2001 are shown in Table 26
Table 26 Imports & Exports of China’s Glass Fiber and Products Industry in 19962001
Exports
Imports
Volume (10000t)
Value (US10000)
Annual growth rate ()
Volume (10000t)
Value (US10000)
Annual growth rate ()
1996
191
266683
3253
054
135446
10759
1997
167
193924
2728
06
134206
091
1998
166
188045
303
12
230092
7145
1999
215
228422
2147
198
333502
4494
2000
38
395127
7298
325
573308
7191
2001
642
697375
7649
484
733058
2786
Source Calculated according to data of Development Research Center of the State Council
24 Cement Industry
(1) Industrial Operations
In 2001 the cement industry posted a turnaround from loss into profit becoming the number one profit maker in the building materials industry Details are as follows
a) Cement Output and Sales
According to preliminary statistics China’s cement production amounted to 621 million tons in 2001 up 65 over the previous year The growth rate was appropriate
According to a sumup of the 106 large and mediumsized cement enterprises in the country (16 more than the figure for the previous year) their output in 2001 totaled 18111 million tons up 182 over the previous year their sales reached 11968 million tons up 2191 the salesproduction ratio hit 11976 up 1586 percentage points By the end of December their cement inventories stood at 36647 million tons up 12 over a year before (new enterprises are excluded in the year on year comparisons)
b) Cement Price
Average factory price of cement edged up slightly amid stability throughout 2001
Table 27 National Average Prices of Seven Varieties in 2001 (unit yuanton)
Variety
PO425
PO325
PO425R
PO325R
PS425
PS325
PII425
High
36177
31363
3148
31374
31429
2713
32454
Low
31499
27475
27018
26798
275
25117
29538
Average
33828
29903
28539
29022
28893
26007
31107
Source Development Research Center of the State Council the average price in the table refers to arithmetic average price for 12 months
Geographical comparison of the prices for some main cement varieties are shown in Table 28
Table 28 Average Cement Price Nationwide and in Six Regions in 2001 (yuanton)
PO325
PO425
National average
29904
33827
Central and south China
27225
32284
North China
29263
31276
Southwest China
29858
34434
East China
30014
35219
Northwest China
31816
35413
Northeast China
33115
35555
(Source Development Research Center of the State Council)
c) Economic Indicators
Sales and profits of the cement industry in 2001 are shown in Table 29
Table 29 Economic Indicators of Cement Industry in 2001
Number of enterprises
Aggregate sales (100 million yuan)
Yoy increase （）
Aggregate profit (100 million yuan)
Yoy increase ()
JanFeb
4372
13558
064
586
1372
JanMar
4417
22919
845
715
1904
JanApr
4441
33628
78
504
3502
JanMay
4451
44058
783
151
7383
JanJun
4468
55188
716
237
18197
JanJul
4490
65299
678
480
35095
JanAug
4496
76207
793
811
118518
JanSep
4503
87553
854
1225
152974
JanOct
4503
98798
867
1560
59498
JanNov
4518
110423
981
2074
36592
JanDec
4548
125607
904
2975
22461
(Source Development Research Center of the State Council)
The above table shows that China’s cement industry continued to do well across the board in 2001 Its annual sales hit 125607 billion yuan up 904 over the previous year Starting from June 2001 the industry saw a turnaround from loss to profit For JanuaryJune its net profit hit 237 million yuan as compared with 289 million yuan of loss in the same period of the previous year By December 2001 the aggregate profit of the cement industry had reached 2975 billion yuan the biggest profit maker all sectors in the building materials industry
In the meantime stateowned and statecontrolled cement enterprises played an essential role in the whole cement industry As shown in Table 210 there were 1386 stateowned and statecontrolled cement enterprises in 2001 accounting for 3047 of the nation’s total their sales totaled 51483 billion yuan accounting for 4099 of the nation’s total their profits reached 1177 billion yuan accounting for 3955 of the nation’s total
Table 210 Economic Indicators for Different Types of Enterprises in Cement Industry in 2001
Number of enterprises
in total
Sales (100 million yuan)
in total
Profit (100 million yuan)
in total
All enterprises
4548
10000
125607
10000
2975
10000
Stateowned and statecontrolled enterprises
1386
3047
51483
4099
1177
3955
Collective enterprises
1351
2971
26818
2135
525
1763
Foreign and Hong Kong Macao and Taiwan invested firms
156
343
10525
838
275
925
(Source Development Research Center of the State Council)
(2) Analysis of contributors to Turnaround from Loss to Profit
It is indeed not easy for the cement industry to achieve a turnaround from loss to profit in 2001 Thanks to fast rise of state fixed asset investment implementation of the western China development drive and recovery of real estate market the general economic efficiency of the building materials industry as a whole has turned for the better since the beginning of 2001 The cement industry as a pillar of the building materials industry however has remained in the red In JanuaryMarch it incurred a net loss of 715 million yuan The situation began to turn for the better in April when the loss was reduced by 35 as compared with the year earlier It improved further in May when the loss was reduced by 74 and in June when the whole industry began to make a profit
The profit of the cement industry in 2001 was mainly attributed to the following factors
First remarkable achievements were made in controlling the aggregate cement output At the beginning of 2001 the State Economic and Trade Commission issued the cement control target for the whole year which was carried out by all local economic and trade commissions conscientiously As a result many small cement plants were shut down to create a good market environment for large cement makers Meanwhile the new standards for cement were implemented on schedule on April 1 2001 which played a role in accelerating the elimination of backward small cement production capacities
Second further fast increase of fixed asset investment and implementation of the western China development drive which helped expand the scale of infrastructure construction including expressways pulled up the demand for cement
(3) Existing Problems
Although the profit of the cement industry topped all sectors in the building materials industry in 2001 there were yet some problems particularly acute structural contradiction in the industry
As shown in Table 211 cement enterprises each with annual sales of less than 10 million yuan accounted for 4779 of the total number of cement enterprises in the country They incurred a loss as a whole Meanwhile the average industrial sales rate of the cement enterprises each with annual sales of less than 50 million yuan was lower than that of the whole country From this it is seen that there were serious problems in the enterprise structure of the cement industry
Table 211 Economic Indicators for Cement Plants of Various Capacities
By sales
Proportion of enterprises ()
Proportion of sales ()
Total profit (100 million yuan)
Industrial sales rate ()
Total
100
100
2074
9743
Under 5 million yuan
2139
259
142
9150
510 million yuan
2640
879
160
9537
1050 million yuan
4397
4191
298
9669
50100 million yuan
488
1484
396
9791
Over 100 million yuan
336
3186
1682
9911
Source compiled by CIEC according to data of China Building Materials Web the data in the table are aggregate data for JanuaryNovember 2001
3 Influences of WTO Entry on China’s Building Materials Industry and Analysis of Countermeasures
31 General Influences on the Building Materials Industry
311 Analysis of Advantages and Disadvantages of China’s Building Materials Industry
Compared with neighboring developed nations and regions the advantages and disadvantages of China’s building materials industry are as follows
(1) Advantages
Advantage in labor force Building materials industry is largely a laborintensive industry China is rich in labor resources and its labor cost is only onetenth or even less of its main rivals on the international market
Advantage in energy and raw materials Building materials industry has the characteristics of both kiln industry and mining industry Most of its products need to consume not only large quantities of energy but also large quantities of nonmetallic raw minerals Compared with rivals China boasts low price in energy supply The raw materials necessary for building material production are big in reserve volume wide in distribution and cheap in price
Advantage in transportation and marketing The production and marketing of building materials depend heavily on transportation conditions This is particularly obvious in cement marketing At present overseas cement plants are penetrating into some coastal markets of China mainly through oceanshipping It will be difficult to imagine for penetration into the vast hinterland market
At present some staple building materials nonmetallic mineral products and production equipments exported by China are quite competitive in some neighboring countries thanks to low cost
(2) Disadvantages
Many enterprises have not yet established modern enterprise system Their management systems have defects their operating philosophies are outdated and managerial talents and operational mechanisms oriented at international competition are deficient
The general level of production technology is not high Most of the building materials enterprises in China are of medium and small sizes their equipments are backward and their technical forces are weak Accordingly they lag behind their foreign rivals in product quality variety and resource utilization The varieties and properties of products in particular are unable to cater to the need of the development of modern construction industry
The enterprise capacity is comparatively small and the degree of production concentration is low Small production capacity will restrain cost reduction while dispersive in production will inevitably restrain market competitiveness
Distribution is irrational and transportation is not developed Especially the country’s cement enterprises are mainly concentrated in inland areas This as well as poor transportation conditions has led to oversupply of cement in inland areas while relatively tight supply in coastal areas leaving space for imports
Objectively speaking the advantages of Chinese building materials producers are only relative and can maintain only for a period When foreign investors build plants in the country after the WTO accession such advantages will no longer exist The disadvantages of the domestic enterprises however will be unable to be overcome within a short period
312 Influences of WTO Entry on Building Materials Industry – Analysis of Opportunities and Challenges
Building materials industry is a typical resourcebased energyconsuming and laborintensive industry It is already a sunsetting industry in Europe and America but still a rising industry in China It is predicted that great development will yet be seen in the coming 15 years As building material products are bulky in size and low in price a rational transportation channel is needed For this China’s WTO entry is unlikely to trigger big inflow of foreign products On the contrary the oversupply on the domestic market can be eased somewhat through export Today the building materials industry is developing in the direction of green building materials After the WTO entry foreign capital and foreign forces could be utilized to reshuffle and eliminate the enterprises with small capacity serious pollution and high energy consumption This will help restructure the product mix Therefore though the WTO accession will bring both opportunities and challenges to the domestic building materials industry the influences will not be so heavy within a short period for the characteristics of the industry In the long run there will be more opportunities than challenges
(1) Opportunities
First the WTO accession can provide a stable open and fairly competitive international trade environment for the domestic building materials industry It is favorable to expanding foreign trade of building materials introducing in foreign technologies and capital and promoting the development of the domestic building materials industry
Second the WTO accession enables China to enjoy the most favored nation treatment (normal trade relations) of the contracting parties and the GSP treatment of developed nations creating the conditions for diversification of building materials markets and multipolarization of foreign trade and eliminating unfair exchange caused by one single export market Many neighboring countries and regions of China are WTO members and the entry into these countries and regions through normal trade relations will no doubt produce positive influences on China’s building materials industry
Third the WTO accession will help China accelerate the restructuring of its building materials industry The WTO entry means participation in fierce competition in the international market which will force China to organize production and operation according to the requirements of the international market and international practice This will inevitably lead to acceleration in restructuring of the building materials industry which will help change the irrational status in products technology and organizational setup in the domestic building materials industry and establish a product structure and organizational structure that match international division of labor and are competitive
Fourth the WTO entry will help China get more technologies and economic information After China enters the WTO not only trade will be more direct wide and swift but also the exchanges of information will be more timely comprehensive and specific This will be conductive for domestic enterprises in making production and operational strategies to get an upper hand In the meantime mastering of the development direction of the building materials industry abroad and the cooperation in technology equipment capital and management will strengthen the development impetus of the domestic building materials industry
(2) Challenges
First the WTO accession will force the Chinese building materials industry to face a wider scope of competition more competitors and fiercer competition Some domestic enterprises that are backward in management technology process and equipment will face the threat of bankruptcy
Second after entering the WTO China will substantially lower its general tariff level As a relatively mature trade the building materials industry will not enjoy protection granted to fledgling industries On the contrary the tariff rates for the industry may be intentionally lowered so as to balance the highly protective tariff rates for fledgling industries such as information technology and automobiles
Third at present the prices for most raw materials and fuels used in China’s building materials industry as well as the transportation price are all lower than those on the international market After the WTO accession the cost for building materials production in China will rise as the domestic market is integrated with the international market thus lowering the profitability Meanwhile the international cost in building materials production will decline and the profitability will rise In this sense the WTO accession will weaken the international competitiveness of Chinese building materials
Finally due to the restraints of such factors as capital it has been difficult for China to develop large building material projects After the WTO entry high quality but cheap foreign building materials will flow into the Chinese market In some joint venture projects it will be common for the foreign side to demand for use of imported building materials In the meantime some domestically made building materials production equipments involve many problems in use and are unable to rival imported equipments This market may thus be occupied by foreign products
32 Influences on Main SubindustriesAssociated Industries
321 Main Subindustries
(1) Plate Glass
In the long run the WTO accession will provide China’s plate glass industry with an open and fairly competitive international trade environment and the MFN and GSP trade treatment It will create conditions for diversification of domestic plate glass varieties and foreign trade In the meantime the WTO accession will help widen the channels for use of foreign capital and financing Also sharing of knowledge information and management resources will help China get more technologies and market information and enhance the competitiveness of domestic products
On the other hand the adjustment of tariff rates after the WTO accession will affect China’s international trade of plate glass
According to the WTO agreements China made the following commitments on reduction of tariffs on glass within four years after the WTO entry the tariff rate for plate glass (crude) will be lowered from 18 to 175 the average tariff rate for deeply processed glass such as reinforced glass for motor vehicle use sandwich glass for motor vehicle use and hollow glass will be cut from 214 to 138 with the rate for reinforced glass for motor vehicle use reduced by 545 from 22 to 10 For this foreign products will in the future occupy a greater share on the Chinese market of plate glass products with high quality high technology and high added value such as superthin glass used in TFT superthick float glass and lowradiation glass made through the float process For ordinary float glass products massive inflow of foreign products is unlikely because of China’s advantages in resource and labor force and on the contrary the export may increase But it should also be noted that the advantages of Chinese plate glass enterprises in resource and labor prices are not unchangeable After the WTO accession the energy and resource prices will gradually be pegged to those on the international market and the labor price will also rise Accordingly the price advantage of Chinese enterprises will gradually weaken In a dynamic and development viewpoint China will be able to maintain growth in export of plate glass products only through raising the technological level improving the product quality and constantly developing new products
(2) Construction and Sanitary Ceramics
The tariff rates for construction and sanitary ceramics are high at 45 for sanitary ceramics and 25 for construction ceramics After China’s WTO accession the reduction of tariff rates will have substantial influences At present imports have a big share in the domestic market of highgrade construction and sanitary ceramics If tariff rates are cut substantially the imports will increase further which will pose a substantial threat to the related domestic enterprises
Entering the new century China’s entry into the WTO has become a hot topic Industrial analysts predict that China’s WTO accession will bring both development opportunities and severe challenges to China’s construction and sanitary ceramics industry
Favorable influences
Favorable for domestic construction and sanitary ceramic enterprises to expand foreign trade According to the WTO principles China will be able to enjoy multilateral unconditioned MFN treatment after its entry into the WTO This will further improve the export environment for Chinamade construction and sanitary ceramics create greater space for market cooperation provide the industry with new market opportunities and in turn promote the development of the domestic construction and sanitary ceramics industry
Favorable to attracting foreign capital Construction and sanitary ceramics are traditional products of China and belong to labor intensive industries China boasts rich resources and cheap labor cost for production of construction and sanitary ceramics As the production cost is lower than that abroad Chinese construction and sanitary ceramics are quite competitive on the international market After China’s entry into the WTO the foreign discriminations limits and pressures on Chinese products will be eliminated which will expand the fields to attract foreign capital
Favorable to introducing in foreign new technologies new equipments and advanced management skills After the WTO entry China will be able to conduct trade exchanges with related members more directly and more widely Also it will be able to promptly get related information and materials This will be very favorable for China to timely opt foreign new technologies new equipments and management skills and prevent repetition of construction in importing latest technologies and equipments
Unfavorable influences
After the entry into the WTO the market competition will become fiercer and there will be more rivals on the domestic market With greater inflow of foreign capital foreignfunded plants will emerge in the country and foreign construction and sanitary ceramic products will flow into the domestic market massively This will make competition increasingly fiercer in such aspects as quality price and variety of products and the domestic industry will thus face the threat of survival
The production of enterprises will be more difficult After its entry into the WTO China will cancel its tariff and nontariff protection measures for construction and sanitary ceramics industry Due to poor product quality and high production cost caused by small production capacity poor technological basis shortage of capital and under capacity operation some domestic enterprises will be unable to rival foreign giants and face the threat of elimination or closure
The enterprise management needs to be improved After China’s entry into the WTO international exchanges will increase Domestic entrepreneurs will have to raise their management level and foster high quality managers to cater to the need of international trade and rival against experienced foreign business people This is an urgent problem to be solved at present
322 Associated Industries – Ceramic Machinebuilding Industry
(1) Current Situation of China’s Ceramic Machinebuilding Industry
Over the past two decades China’s ceramics industry has developed rapidly According to incomplete statistics China has spent some 5 billion US dollars to import ceramic production technologies and equipments from such countries as Italy Germany Britain and Japan since 1978 This created good conditions for China’s ceramic industry to achieve a quick boom which in turn promoted the development of the domestic ceramic machinery manufacturing industry Compared with world leading ceramic machinery manufacturers in Italy Germany Britain and Japan however Chinese ceramic machinery makers still lag far behind as shown mainly in the aspects below
a) The number of ceramic machinery manufacturers is big
According to incomplete statistics China now has more than 300 ceramic machinery manufacturers of different sizes
b) The staff quality is widely low
c) The products mostly out of singleunit small lot production are of poor quality and the general performance is poor
d) Resources are seriously wasted the utilization rate of materials is low and the production cost is high
e) The labor productivity is low belonging to labor intensive industry
f) The degree of intensiveness is low the product varieties are few and of poor supportive capacity the outlook is poor and the export volume is small
At present the exports of ceramic machinery products account for only about 05 of the total domestic production a sharp contrast to as high as some 40 in Italy Germany Britain and Japan
(2) Opportunities for China’s ceramic machinery manufacturing industry after the WTO entry
a) Favorable to introducing in foreign advanced technologies equipments and management skills
After the WTO entry China will be able to conduct trade exchanges with related members more directly and more widely Also it will be able to quickly get related information and materials In the meantime the import tariff rates for bearings transmission belts hydraulic parts pneumatic components electrical components metallic materials and nonmetallic engineering materials will decline This will be very favorable for ceramic machinery products that use highfunctional basic parts in development and whose technological contents are high
b) Favorable to attracting foreign investment
China’s ceramic machinery manufacturing industry is currently a labor intensive industry with a low degree of automation featuring singleunit small lot production As labor cost is substantially lower than that on foreign markets China’s ceramic machinery products are very competitive on the international market Besides after China’s entry into the WTO foreign discriminations limits and pressures on Chinese products will be eliminated which will be favorable for the domestic ceramic machinery manufacturing industry to attract foreign capital
c) Favorable to expanding foreign trade
After the entry into the WTO China will be able to enjoy multilateral unconditioned MFN treatment which will further improve the environment for the export of China’s ceramic machinery products Over the past two decades the quality of China’s ceramic machinery products has improved greatly their functions are superior to those of some developing nations and approaching those of developed nations while their prices are much cheaper than those of developed nations For this after Chinese ceramic machinery products penetrate into the international market China may set up abroad enterprises producing ceramic machinery products and fittings as well as maintenance and other technical service enterprises
d) Favorable to promoting the development of domestic ceramic machinery manufacturing industry
After the WTO entry foreign advanced ceramic machinery products will flow into the Chinese market large quantities This will force domestic ceramic machine building industry to further reduce production cost raise quality readjust product mix and timely develop marketable highquality products to narrow the gap with the world’s advanced level
(3) Challenges to China’s ceramic machinery manufacturing industry after the WTO entry
a) Market competition will become fiercer and the rivals on the domestic market will increase
As more solely foreignfunded and Sinoforeign joint venture ceramic machinery plants are established and foreign ceramic machinery products flow into the Chinese market in large quantities after China’s WTO entry the competition in the domestic market will become increasingly acute in such aspects as quality price variety and delivery time This will pose a threat of survival for domestic ceramic machinery producers
b) The production of enterprises will face more difficulty After its entry into the WTO China will cancel its tariff and nontariff protection measures for ceramic machinery products Due to small development capacity poor product quality and high production cost caused by small production capacity poor technological basis shortage of capital few product varieties poor supportive capacity and long delivery period some domestic ceramic machinery manufacturing enterprises will be difficult to rival foreign ceramic machinery manufacturing giants and thus face the threat of elimination or closure
c) The staff quality and enterprise management level need to be raised further
Increases in international exchanges will require staff members to raise their cultural quality and management so as to cater to the need in international trade
In a word after the entry into the WTO China will further open its domestic market lift the market access limits and fields and lower the threshold for foreign ceramic machinery manufacturing enterprises to enter the Chinese market The cut of tariff rates for basic components such as bearings transmission belts hydraulic parts pneumatic components electrical components metallic materials and nonmetallic materials will surely prompt foreign ceramic manufacturing enterprises to increase investments in China This will pose great impact and pressures on domestic ceramic machinery manufacturers in such aspects as market price labor cost quality and delivery period
33 Analysis of Countermeasures
As China’s WTO accession has both favorable and unfavorable influences on China’s building materials industry industrial experts hold that the following countermeasures should be taken to sharpen the general competitiveness of China’s building materials industry after the WTO entry (Source Deputy Director Lei Qianzhi of the State Bureau of Building Materials Industry China Building Materials Journal Issue No 4 of 2001)
(1) Changing the ideology to adapt to the unified grand market at home and abroad
The WTO entry means all contracting parties will open their markets to China and vice versa This will require China’s stateowned enterprises to be exportoriented and master the skills for operation in the international grand market In the meantime they should foster the concepts of selfdependence fair competition respecting intellectual property following international practice winning through quality doing business according to law respecting talents and being aware of risks in speculation
(2) Speeding up reform of stateowned enterprises to sharpen their market competitiveness
Efforts must be made to speed up the reform of stateowned enterprises and separate the functions of the government from those of enterprises Due consideration should be given to specific conditions in selecting the form of enterprise transformation While the state enterprises are transformed into companies and establish a modern enterprise system they should at the same time strengthen management lower cost promote technical innovation raise product quality and constantly develop new products
(3) Strengthening construction of a technological innovation system in the building materials industry
After entry into the WTO the domestic market will be integrated into the international market However the technological innovation capacity of the domestic building materials enterprises is now weak technological contents of their products are low and the pace of upgrading is slow Especially there are few deeply processed products with strong international competitiveness As a consequence the domestic building materials enterprises have to compete with foreign rivals by means of producing low grade and low priced products To give a fundamental solution to this problem the building materials enterprises will have to strengthen construction of a technological innovation system A technological innovation system and operating mechanism that take enterprises as the mainstay and match the socialist market economic system and industrial development should be built up in the building materials industry
a) Establishing an enterprise technology development system as quickly as possible
Key enterprises in the building materials industry should be supported to set up technology development centers Such technology development centers should let in research forces of domestic and international partners and research and develop flagship products of independent intellectual property The building materials enterprises should be encouraged to increase inputs in technology development centers train talents for the centers and make the work of technology development centers standardized and systematic
b) Strengthening cooperation among manufacturers schools and research institutes to promote commercialization of scientific and technological achievements Building materials enterprises should be guided to conduct technological exchanges and jointly set up technology development entities with higher learning institutes and research institutes so as to accelerate technological progress and help the enterprises solve technological problems
c) Establishing intermediary service organizations to promote technological innovation
The productive force promotion center of the building materials industry should set up specialized subsidiaries and establish a building materials technology information network that links up the technology development centers of big building materials enterprises industrial technology centers and organizations providing services to small enterprises so as to provide services in such aspects as technology talents information finance management marketing and law for technology progress and industrial upgrading of enterprises
(4) Rationally using foreign investment and opening wider to the outside world
After China entered the WTO the domestic investment environment will improve further The inflow of international capital will bring about development opportunities for the domestic building materials industry In recent years famous foreign building materials groups have come to China to look for development opportunities China should thus seize this favorable opportunity to open itself wider to the outside world It should introduce in more foreign investments to facilitate its strategy of eliminating small cement and glass production capacities and restructuring industrial structure so as to maintain sustained fast and healthy growth of the building materials industry
First making good planning for utilization of foreign capital and striving to use more foreign capital The key sectors regions and quantities for utilization of foreign investment in the building materials industry should be studied in combination with the compilation of the Tenth FiveYear Plan for the development of the industry on the basis of a careful analysis of various important factors of post China’s entry of WTO
Second strengthening policy guidance to raise the quality and level of using foreign investment in the building materials industry Industrial policies and the Directory for Foreign Investment in the Building Materials Industry should be made to attract the investment of multinational building materials groups and guide and encourage the flow of foreign investment to cement glass fiber and new building materials industries that involve heavy tasks for restructuring and badly need to raise technological and equipment level and to central and western regions This is aimed to improve the mix of export products and enhance the general competitiveness of the industry
(5) Attaching importance to training economic and trade professionals and raising personnel quality
In the near stage key efforts should be laid on training leaders of governments local departments in charge of building materials industry and large building material enterprises (enterprise groups) The training should focus on WTO knowledge and rules so as to raise the capacity and level of self protection through employing special protection clauses and antidumping measures of the WTO
Secondly enterprise managers should be trained to help them become pioneering professionals in international trade finance marketing management and law
Thirdly talents import and training abroad should be strengthened Plans for training abroad should be made according to the actual conditions of the industry and enterprises Enterprises should organize training of senior managers abroad and at the same time import foreign talents in management and technology from the world market
4 Analysis and Forecast of the Developments of Building Materials Industry in 2002
41 Targets and Main Work of the Building Materials Industry in 2002
411 Targets
(1) Cement
The output of cement in 2002 will reach 590 million tons of which newtype drymethod cement will account for 80 million tons
The export of cement and clinker will reach 18646 million US dollars in 2002
(2) Glass
The output of plate glass will reach 190 million weight crates The market prospects will be good for highquality float glass and superthin glass
(3) Glass fiber
The domestic and overseas market capacity for Chinamade glass fiber will expand further in 2002 The glass fiber output will top 300000 tons At present more than ten tank furnace glass fiber projects are being constructed or to be constructed The output of tank furnace products will account for 50 of the total glass fiber output
(4) Glassreinforced plastics
In 2001 the technological contents of China’s glass reinforced plastic products rose somewhat and the output exceeded 07 million tons (including FRSP CCL and FRTP)
It is predicted that the annual output of heat cured glass reinforced plastics in 2002 will increase 10 over 2001 and that of thermoplastic glass reinforced plastics will increase by 5
(5) Stone products
It is predicted that the national stone products production will increase slightly on the basis of the 130 million sq m in 2001 The export of stone products is expected to reach 860 million US dollars
412 Main Work
According to the requirements set at the national conference on economic and trade work the building materials industry will mainly do the following work in 2002
(1) Further closing down small cement plants and small glass plants so as to consolidate the achievements in rectification More efforts will be laid on rectifying the two kinds of small plants Those enterprises in the list for closure will be shut down and their main equipments will be dismantled The quality of work in this aspect will be improved to consolidate the achievements in rectification To prevent from a comeback of closed plants strict examinations will be made and effective measures will be taken
(2) Firmly stopping construction repetition and further eliminating outdated production capacities In order to implement related provisions of the State Council the glass industry will prevent irrational construction repetition For the cement industry except for newtype drymethod cement new construction and expansion of production lines of other processes will be banned including expansion of projects in the name of technical transformation Greater efforts will be made to examine the implementation of the new cement standards No production license will be granted to any enterprise that fails to reach the standards For the enterprises with production lines that should be eliminated as ordered by the state production licenses will be granted only after the said production lines are dismantled
(3) Accelerating adjustment of industrial structure to promote industrial optimization and upgrading The experiences of Anhui Conch Xinjiang Tianshan and Shanghai Yaohua Pilkington will be summarized and popularized so as to encourage large backbone enterprises to be market oriented and take advantage of the capital market and develop themselves into large enterprise groups through mergers acquisitions and reshuffles This is aimed to raise the concentration and market share of large enterprises in the cement and glass industries Preferential policies such as interest discounts for technical transformation projects and comprehensive utilization of resources will particularly favor new drymethod cement projects and importsubstitutive highgrade float glass projects of large enterprise groups The building materials industry will strive to speed up changing itself into a strong industry from a large industry and sharpening its market competitiveness through optimizing technological structure product structure and enterprise organizational structure of the cement glass wall materials and glass fiber sectors The construction of newtype dry method cement production lines in all localities should be undertaken synchronously with the elimination of backward production capacities While advanced productive forces are developed backward production capacities should be weakened
(4) Strengthening market rectification and promotion to foster new growth engines To support the rectification of the construction market order arranged by the construction department substandard building materials should be prevented from entering key projects of the state and building materials products harmful to human health should be prevented from use in decoration Meanwhile formulation of rules and regulations and measures to promote export of building materials such as the Rules on Management of Standard Sand for Testing Cement Strength and the Rules on Building Energy Efficiency and Production and Use of Safe Glass should be accelerated to expand the markets and fields of application for highquality building material products Building material enterprises should adopt new technologies and new processes to transform traditional products by centering on quality variety and efficiency They should develop green building materials that add efficiency save energy and soil and make use of wastes to satisfy the need of urban and rural construction and the Olympic projects Related enterprises will be backed to try logistics projects for distribution of building materials so as to establish a building material circulation system that matches the modern enterprise system
(5) Strengthening economic operation monitoring analysis and comprehensive coordination work in the building materials industry Stable information channels will be set up and a system of contacting key enterprises will be established so as to timely learn the production and operational conditions particularly the new situations in import and export of building materials after China’s WTO entry of building materials enterprises In response to the current tight situation in coal resources and railway transportation help will be given to key cement plants to improve their external conditions for production so as to achieve better efficiency in 2002
42 Favorable Factors for the Building Materials Industry in 2002
(1) Expansive Fiscal Policy and Increase of Fixed Asset Investment
Fixed asset investments and housing construction will become the main market sources According to related research materials in the Tenth FiveYear Plan period (200105) China’s annual economic growth will maintain at about 7 the growth of fixed asset investment will keep at some 10 and the total investment scale is expected to increase by 60 over that in the Ninth FiveYear Plan period (19962000) Reform of the housing system in particular will make residential house construction become an important hot spot of investment in the domestic economy It is predicted that in the coming few years the country will annually build more than 300 million sq m of new residential houses in urban areas and 700 million sq m of new houses in rural areas Thanks to rapid growth of the domestic economy China will also speed up urban construction and rebuilding of old urban areas By 2010 the country will have built 1200 cities and 2500030000 towns which will need the construction of 200 million sq m of public and productive buildings every year In total China will add 12 billion to 14 billion sq m of new buildings every year in the coming years Besides backed by the proactive fiscal policy and monetary policy the country will make greater efforts on construction of roads bridges dams airports and other infrastructure facilities in the coming years Some 30 of the total investment in these aspects will be used to procure various construction materials which will bring a big market space for the building materials industry
(2) Western China Development Drive
The central government has decided to make the development of western China a major strategy for social and economic development in the new century As the basis in the western China development strategy infrastructure will no doubt be given priority in construction The government has decided to carry out ten major new projects in western China starting from 2000 Moreover a landmark project in the western China development drive – the project of gas transmission from the west to the east which has a total length of 4200 km running through eight provinces and one municipality and involves a total investment of 120 billion yuan was kicked off in 2001 and will be completed in 2003 capable of supplying 12 billion cu m of gas a year The above projects will consume large quantities of steel cement and other construction materials and their positive impact on the building materials industry in related regions will be unprecedented
(3) The Policies to Readjust Industrial Structure and Rectify Market Order
The state policies to readjust the structure of the building materials industry and rectify the order on the building materials market in some sense have opened a market space for some building materials products The State Economic and Trade Commission announced implementation of new standards for the cement industry on April 1 2001 and on August 8 it announced the names of small enterprises to be shut down which included 4226 small cement plants and 362 small glass factories The industrial restructuring and rectification to phase out backward production processes and poor quality small glass and cement production capacities will lead to marked rise of market demands for building materials products from large production capacity advanced production processes and good quality
(4) Improvement of Peoples Living Conditions and Change of Ideology
As the living conditions improve people are paying more and more attention to comfort and beauty of their residential environment This is reflected directly on the demand for building materials On the one hand the application fields of high quality traditional building materials such as cement glass and stone materials will expand constantly and their market demand will increase accordingly On the other hand new building materials with unique and good functions such as plastic doors and windows board and new wall materials will be accepted by more and more people and their market capacity will expand all the way
43 Unfavorable Factors for the Building Materials Industry in 2002
(1) Heavy Reliance on Energy Price
Building materials industry is a typical energyconsuming industry for which the fluctuation of energy price has direct impact on the profitability and efficiency of all subsectors and enterprises In the cost for cement production coal and electricity consumption respectively make up 3040 of the cost in cement clinker production in the cost for glass production heavy oil takes 30 and in the cost for ceramics production the fuel cost composed of coal gasnatural gas also accounts for some 30 Primary energies such as coal and fuel oil are the main fuels for the building materials industry dominated by cement glass and ceramics Constant rise of energy price will finally affect the profitability and economic efficiency of building material enterprises
(2) In view of the economic development trend there are still quite a few factors restraining economic growth
Slower growth of the world economy particular the economies of such developed nations as the United States and Japan has some negative influence on the Chinese economy especially on its export The pulling effect of fixed asset investment will decline and nongovernmental investment is unlikely to see remarkable increases Accordingly inadequacy of investment will be increasingly visible All these will put the building materials industry under a severer macro environment
5 Development Plans for Building Materials Industry
51 Tenth FiveYear Plan (20012005) for the Industry
The Tenth FiveYear Plan for the building materials industry (see the appendix for details) has put forward the general guidelines for the building materials industry ie controlling the aggregate output adjusting the structure raising the technological level energy conservation and environmental protection and improving product quality
(1) Products to be developed with priority
By 2005 the output of newtype drymethod cement will reach 120130 million tons accounting for 20 of the total and the proportion of bulk cement will hit 30 The output of float glass will reach 160 million weight crates accounting for over 80 of the total of which highquality float glass output will stand at 5060 million weight crates accounting for over 30 of the total float glass production The proportion of glass deep processing will hit 30 The output of new wall materials will amount to 300 billion standard bricks accounting for 40 of the total output of wall materials The output of tank furnace drawing glass fiber will reach 023 million tons accounting for 60 of the total glass fiber output The mechanical formation rate of glass reinforced fiber will top 40
(2) Technological targets for the building materials industry
The technological level of new production capacities will reach internationally advanced level To be specific superlarge cement production lines with a daily output capacity of over 8000 tons will be developed with great efforts and a research development and manufacturing system for technologies and equipments will be built up the Luoyang float glass technology will be upgraded on a full scale glass processing technology and product quality will rise to internationally advanced level electronicclass tank furnace drawing glass fiber technology with an annual capacity of 2000030000 tons and electronicclass glass fiber fabrics production technology will be developed and imported localization will be basically realized in technology and equipment for newtype wall materials
52 Tenth Fiveyear Plan for Main Subsectors
521 Construction and Sanitary Ceramics Industry
According to the plan the construction and sanitary ceramics industry will accomplish the following targets by the end of the Tenth FiveYear Plan
(1) Targets for structural adjustment
The proportion of highgrade construction ceramics bricks in total output higher than 25
The proportion of lowgrade construction and sanitary ceramic products in total output higher than 30
Fullmember physical labor productivity in construction ceramics sector 8000 sqpersonyear
Fullmember physical labor productivity in sanitary ceramics 13 tonspersonyear
Export of construction ceramics 125 million sq m
Export of sanitary ceramics 6 million pieces
(2) Targets for energy consumption (average level)
Energy consumption in baking of construction ceramics 4186 kilo jouleskg
Energy consumption in secondary baking of glazed tile for inner wall 5860 kilo jouleskg
Energy consumption in baking of sanitary ceramics 8372 kilo jouleskg (tunnel kiln)
(3) Targets for water saving
Single time water usage of sanitary ceramic stool 69 liters (with sixliter stool to account for 50)
(4) Targets for eliminating backward production capacities
Eliminating coalfueled inverseflame kilns and furnaces and openflame kilns and furnaces
Eliminating backward processes and equipments such as hypodrying indigenous method powder making manual friction press formation
Eliminating construction and sanitary ceramic production lines that fail to reach state standards and cause serious pollution
522 Cement Industry
(1) Main Development Lines
During the Tenth FiveYear Plan period the development of cement industry will follow four main lines First developing predecomposing kiln cement to add a new capacity of 60 million tons and double the output over that at the end of the Ninth FiveYear Plan period (19962000) Lowlevel construction repetition will be checked Except for newtype drymethod predecomposing kiln production lines construction and expansion of cement production lines of other processes will be strictly banned Second transforming a number of enterprises The wetmethod kiln and mechanical vertical kiln enterprises not listed in the elimination plan will undergo technological transformation according to the requirements of the industrial policies and technology policies The focus of transformation is to improve product quality raise labor productivity lower energy consumption and reduce industrial pollution Third eliminating some backward production capacities In the principles of equal volume elimination or excessive volume elimination and developing newtype drymethod predecomposing kiln production lines the industry will further eliminate a backward cement production capacity of 60 million tons whose product quality is unstable and that fail to meet the standards for environmental protection Fourth taking an important step forward in exploitation of wastes for environmental protection While pursuing clean production the cement industry should play a greater role in exploiting industrial wastes such as coal ash urban rubbish and dangerous wastes and such renewable energies as waste oil and waste tire
(2) Development Targets
a) Output target
Annual output of clinker 450 million tons
Annual output of cement 600 million tons of which the output of predecomposing kilns will account for 120130 million tons
b) Targets for structural adjustment
The proportion of predecomposing kiln cement 20
The proportion of special cement 3
The proportion of bulk cement 30
Average capacity of enterprises 250000 tons
Production concentration the production concentration of the top ten cement enterprises (group) will rise from 5 to 17
c) Targets for technological innovation and technological advancement
The predecomposing kiln production lines with a daily capacity of 2000 tons will accomplish localization and high capacity operation rate at low cost The predecomposing kiln production lines with a daily output of 4000 tons will reach the internationally advanced level of the 1990s and the equipment localization rate will top 90 Large predecomposing kiln technologies and equipment with a daily output capacity of 500010000 tons will be developed to form series of predecomposing kiln technologies and equipments with own intellectual property rights The use of mixed materials will be increased to develop highfunctional and high durability cement varieties and production technologies The technologies for utilization of lowgrade raw materials and fuels and industrial wastes will be developed Also to be developed will be technologies for exploitation of renewable energies
d) Main economic and technological indicators
Standard coal consumption for per ton clinker production in predecomposing kilns 110 kg
Standard coal consumption for per ton clinker production in mechanical vertical kilns 130 kg
Comprehensive electricity consumption for cement production in predecomposing kilns 105 kwh
Comprehensive electricity consumption for cement production in mechanical vertical kilns 90 kwh
Fullmember labor productivity in predecomposing kilns 2000 tonspersonyear
Fullmember labor productivity in mechanical vertical kilns 400 tonspersonyear
e) Targets for environmental protection
All cement producers shall meet environmental protection requirements
f) Cement export target
Annual export of cement is to reach 10 million tons
g) Targets for elimination of backward capacities
An additional production capacity of 60 million tons will be eliminated on the basis of the 100 million tons of small cement capacities eliminated in the Ninth FiveYear Plan period If the above target is achieved the technological and product structures of the cement industry and the organizational and capacity structures of enterprises will be effectively adjusted and the industrial competitiveness will rise This will not only ease the inadequacy of highquality rotary kiln cement but also save energy equivalent to 33 million tons of standard coal and reduce the dust discharge by 17 million tons every year
523 Glass Industry
As planned the glass industry will strive to accomplish the following targets by the end of the Tenth FiveYear Plan period
(1) Output target
Annual output of plate glass 190 million weight crates
(2) Targets for structural adjustment
a) Product structure
The proportion of float glass production capacity in total plate glass production capacity will exceed 80
The output of highquality float glass will reach 60 million weight crates
The secondary processing rate of crude plate glass will reach 30
b) Technology and equipment
To eliminate all drawing processes of less than four machines and microplating process eliminate part of the drawing processes of six and nine machines and Gprocess with small capacity and poor efficiency and if conditions are available transform six or ninemachine drawing process and Gprocess production lines into float glass production lines The Luoyang float technology should reach internationally advanced level of the 1990s Its technical indicators are steady making of 1925 mm thick glass online steady production and cutting of crude glass of all sizes with the maximum size of finished glass to top 4m x 6m online steady making of glass with heat reflection and low radiation functions physical quality of products to reach internationally advanced level heat consumption of float glass melting furnace not to exceed 6900 kilo jouleskg liquid glass automation process control and equipment to reach internationally advanced level of the 1990s the main technology and equipment for glass processing and the quality and functions of products to reach internationally advanced level
c) Organizational structure of enterprises
The degree of intensive production should be raised greatly to put an end to the glass enterprise pattern of being small scattered and disorderly The average capacity of plate glass manufacturers should top 3 million weight crates and their average labor productivity should top 2000 weight cratesperson a year Two or three transnational transregional and intertrade large enterprise groups integrating scientific research with industry and trade will be established These enterprise groups will basically realize fullfloat production the proportion of highquality float glass will exceed 50 the scale of enterprise and production line will reach rational level in economy of scale there will be supportive serialized and scaled glass processing and production bases and there will be own research and development centers and there are transregional and transnational companies and businesses In the meantime three to five regional enterprise groups with competitiveness will be formed and three to five glass processing and production bases that boast serial and supportive products economy of scale and internationally advanced level will be established
(3) Export targets
The export of plate glass will reach 13 million weight crates valued at 180 million US dollars the export of processed glass will reach 7 million sq m valued at 140 million US dollars
(4) Targets for environment protection and energy efficiency
All productive enterprises should meet the state pollution discharge standards for industrial kilns and furnaces The average heat consumption of float furnaces in producing every kilogram of liquid glass should not exceed 7500 kilo joules
6 Analysis of Listed Companies in Building Materials Industry
Against the background of steady growth in the entire building materials industry the performance of the listed companies in the building materials industry was also quite good in 2001 Among the 40 listed companies only three (Sichuan Golden Summit Tangshan Ceramics and Dayuan) incurred loss while 21 or over 50 of the total posted growth in net profit The companies posting a growth of over 50 in net profit included Conch Cement (78) Siwei Ceramics (118) Conch Profiles (235) and Kaile Technology (56) those reporting a decline of over 50 in net profit included Sichuan Golden Summit Luoyang Glass Zhejiang Dongri Dayuan China Chemical Building Materials and Tangshan Ceramics The average earnings per share of the listed companies in the building materials industry was 018 yuan higher than the weighted average earnings per share of 0136 yuan for all the 1173 companies listed on the Shanghai and Shenzhen stock exchanges but lower than the average earnings per share in the building materials industry for 2000 of 022 yuan In the four subsectors the new building materials block posted the highest average earnings per share of 031 yuan and the cement block posted the lowest average earnings per share of 014 yuan (Source Xingye Securities Research & Development Center)
61 New Building Materials Block
In 2001 the average earnings per share of the 10 listed companies in the new building materials industry was 031 yuan the highest among the four subsectors in the building materials industry and also being the sole block to post growth However the situation was very different among different listed companies In the 10 listed companies eight registered increases in main operating turnover in 2001 of which Conch Profiles Beixin Building Materials and North International posted a rise of over 50 Five recorded increases in net profit of which only one posted a rise of over 50 Among the five posting negative net profit growth Zhejiang Dongri and China Chemical Building Materials incurred a plunge of 84 and 97 respectively
Table 61 2001 Performance of the New Building Materials Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after nonoperating gains
2001
2000
2001
2000
2001
Growth ()
2001
Growth ()
Shenzhen Fangda
012
023
351
678
40696
6
3618
48
3628
North Int’l
017
019
52
67138
109
1723
14
1664
Conch Profiles
126
037
4876
2498
107775
95
18844
93
18978
Beixin Building Materials
03
024
715
588
88653
59
8687
73
8024
Guofeng Plastics
022
021
706
65
61439
29
5280
666
4917
Zhejiang Dongri
002
013
069
424
6666
34
243
84
272
Dayuan
061
003
319
147
153113
15
12176
11147
Baoshuo
018
023
905
1408
111341
57
7207
13
7191
China Chemical Building Materials
0007
02
0031
947
53132
43
147
97
2886
Kaile Tech
051
033
1104
758
43084
41
9051
34
8632
Source Xingye Securities Research & Development Center
Note Dayuan was transformed from a petrochemical enterprise to a new building materials enterprise in the second half of 2001
62 Cement Block
The cement industry turned for the better across the board in 2001 thanks to the implementation of the state’s macro economic policies and increases in fixed assets investment which pulled up the demand for cement the implementation of the new cement standards the elimination of small cement capacities and the control over aggregate output Remarkable turnaround was recorded for the economic efficiency of the industry in particular After putting an end to loss in June the industry’s profits rose sharply in July August and September making the sector the largest profit maker in the building materials industry contributing nearly 15 of the total For the whole year the cement output stood at 620 million tons up 66 over the previous year
Among the 18 listed companies in the cement block 14 registered increases in main operating turnover with four namely Jidong Cement Tianshan Cement Conch Cement and Sichuan Golden Summit posting an over 50 surge seven posted rises in net profit with substantial increases registered for Conch Cement (78) Tianshan (39) and Swan (38)
Table 62 2001 Performance of the Cement Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after non operating gains
2001
2000
2001
2000
2001
Growth ()
2001
Growth ()
Jidong Cement
013
011
739
61
100249
53
11494
23
11494
Datong Cement
0085
0123
508
777
15700
23
1474
47
2192
Jiangxi Cement
009
012
425
647
37428
29
3034
38
3095
Tianshan
054
047
1279
1013
70762
75
9409
39
9702
Sichuan Shuangma
016
032
979
1178
42686
4
5121
12
5181
Tianshui
01
019
378
722
37788
17
2258
46
1871
Mudanjiang
017
016
618
622
38882
6
3786
35
3499
Qinling
015
03
866
934
44054
11
5969
4
6055
Sishui
016
02
472
995
22726
43
2558
21
2807
Caodong
016
017
523
1519
55516
31
3126
12
2412
Shitou
016
02
472
1472
29477
19
3723
21
3433
Conch Cement
021
012
917
56
205835
66
20273
78
Jianfeng Group
015
013
863
751
105453
12
4390
13
4684
Sichuan Golden Summit
034
0024
3165
166
42881
101
7984
5254
Qilianshan
015
025
95
1043
26683
3
5206
5
3982
Huaxin Cement
007
005
313
232
69188
16
2262
37
1926
Fujian Cement
0007
034
03
136
58265
7
210
96
95
Swan
033
047
882
1354
52112
08
4421
38
2368
Source Xingye Securities Research & Development Center
63 Glass Block
The glass industry that had been in the red for four consecutive years had a turnaround in 2001 It made a total profit of 169 billion yuan in the year However resurge of irrational repetition in construction held back further improvement of the industry’s economic operation quality In 2001 the industry added a new capacity of more than 68 million weight crates equal to 32 of the total glass production capacity in 2000 The yearly plate glass output amounted to 204 million weight crates up 145 over the previous year The expansion in capacity and output directly led to apparent oversupply on the domestic plate glass market The consequences were the inventory increased while the salesproduction ratio dropped the product prices slid with that for 2mm white glass falling from 63 yuan per weight crate at the beginning of the year to 57 yuan that for 3mm glass falling from 60 yuan per weight crate at the year beginning to 56 yuan that for 5mm glass falling from 65 yuan per weight crate at the year beginning to 60 yuan and the national average factory price of plate glass basically staying at the average level in 1999 the economic efficiency slid with the yearly profit plunging 58 from the previous year to 712 million yuan
The 2001 performance of the seven listed companies in the glass industry basically reflected the general trend of the glass industry Among the seven listed companies only two reported moderate rises in net profit while one remained at the level in 2000 and four incurred negative growth Luoyang Glass reported the biggest drop of 85
Table 63 2001 Performance of the Glass Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after nonoperating gains
2001
2000
2001
2000
2001
Growth rate ()
2001
Growth rate ()
Southern Glass Holdings
022
027
819
1038
10411
7
15130
7
15241
Sanxia New Materials
015
021
448
627
26017
35
3221
26
1695
Guodong Construction
035
058
589
4266
34104
29
6190
3
5999
Fuyao Glass
037
059
316
325
93829
24
15215
14
16942
Yaohua Glass
01
009
628
572
42534
35
3247
0
3196
Yaohua Pilkington Glass
033
032
976
961
104492
21
16238
5
16122
Luoyang Glass
0014
0094
063
425
81728
9
987
85
987
Source Xingye Securities Research & Development Center
64 Construction and Sanitary Ceramics Block
There were originally 10 listed companies in the construction and sanitary ceramics industry As the whole industry was sluggish some companies underwent capital reshuffles and moved to other industries For example Fuling Construction Ceramics formerly a listed company engaged mainly in wall and floor bricks was renamed Chaohua Technology and moved to the IT industry Fujian Hawson became a real estate company after a series of asset swaps and Fujian Double Rhomb was reshuffled into a road and public facilities company Besides some other companies such as Huaguang Ceramics Jiangxuan Industry and Guoguang Ceramics all have developed a second main business line aside from construction ceramics and the profit from the second main business line is approaching that from construction ceramics industry
Among the five companies in the construction and sanitary ceramics block two posted negative growth in main operating turnover while three incurred negative growth in net profit
Table 64 Performance of the Construction and Sanitary Ceramics Block
Stock abbrev
Earnings per share (yuan)
Return on net assets ()
Main operating turnover (10000 yuan)
Net profit (10000 yuan)
Net profit after nonoperating gains
2001
2000
2001
2000
2001
Growth rate ()
2001
Growth rate ()
Huaguang Ceramics
02
019
654
644
30029
8
2483
61
1873
Tangshan Ceramics
014
02
482
654
40258
14
2434
1337
Siwei Ceramics
032
026
1897
1066
30988
56
7860
118
8096
Jiangquan Ceramics
035
036
841
945
83537
45
7579
13
7988
Guoguang Ceramics
029
027
842
843
35926
445
2793
2
2809
Source Xingye Securities Research & Development Center
7 Appendixes
71 Tenth FiveYear Plan for the Building Materials Industry
Building materials industry is an important materials industry in China Building materials products include construction materials and products nonmetallic minerals and products and inorganic nonmetallic new materials They are widely applied in the fields of construction military industry environmental protection new and hightech industries and people’s life
Since reform and openingup China’s building materials industry has developed rapidly A complete industrial system integrating research development geological prospecting equipment manufacturing production processing sales service and international trade has been built up The output of cement glass construction ceramics and sanitary ceramics has ranked first in the world for many years The quality and grades of products have risen to various degrees basically meeting the need of the national economic and social development With the deepening of economic restructuring the macro economic environment and market supplydemand relations have undergone profound changes Increasing economic globalization China’s entry into the WTO and increasing call for environmental protection and rational utilization of resources have posed higher requirements on development of the building materials industry The building materials industry must further impose control on aggregate output readjust structure further change the mode of economic growth speed up the transition from quantitative growth mode to quality and efficiency mode and realize a historical leap from big to strong and getting strong through innovation
I Achievements made in the Ninth FiveYear Plan period and existing main problems
A Achievements
After the development in the Ninth FiveYear Plan period the economic operation quality of the building materials industry has improved remarkably the pace of technological advancement has accelerated progress has been made in structural adjustment preliminary achievements have been made in reform of the stateowned enterprises and the main tasks set in the Ninth FiveYear Plan have basically been completed
1 Preliminary achievements were made in controlling the aggregate output and adjusting the structure
Centering on the two changes the building material industry appropriately handled the relations between development and elimination between technological advancement and economic efficiency and between product development and market application in the Ninth FiveYear Plan period While speeding up the transformation of traditional industries with advanced technology the industry put forward phased control targets for the aggregate output of key products which helped eliminate 3069 small cement kilns with a total outdated production capacity of 6335 million tons and 187 small glass production lines with a total outdated production capacity of 2592 million weight crates In 2000 the rotary kiln cement output stood at 151 million tons accounting for 253 of the total cement output the proportion of bulk cement hit 191 and the output of bulk cement doubled that in 1995 the output of new wall materials amounted to 210 billion standard bricks accounting for 28 of the total output of wall materials the output of plate glass reached 182 million weight crates of which float glass production accounted for 70 the output of tank furnace drawing glass fiber stood at 48000 tons accounting for 27 of the total up from 15 at the end of the Eighth FiveYear Plan (19861990) the rate for mechanized formation in glass reinforced fiber production rose to about 20 up from 5
2 Remarkable progress was made in technological advancement
Thanks to great efforts made on optimization of design low investment and localization of newtype drymethod predecomposing kiln cement production lines the newtype drymethod technology has reached internationally advanced level In particular implementation of the project proprietor responsibility system and the bidding system helped reduce the investment in newtype drymethod cement production lines from over 1000 yuanton to 400500 yuanton Accordingly the enterprises adopting the newtype drymethod cement process have apparent competitive edges in such aspects as product quality economy of scale and environmental protection Through the construction of demonstrative production lines the process and technology of the Luoyang Float glass improved further The country independently developed the tank furnace drawing technology and equipment with an annual capacity of 7500 tons and constructed tank furnace drawing production lines with an annual capacity of over 10000 tons laying a basis for domestic tank furnace drawing technology to catch up with the advanced international level Meanwhile a number of competitive newtype wall materials production lines were built raising the equipment level remarkably and scoring marked achievements in product development and application As for nonmetallic minerals great progress was made in super fining purification modifying and application and the deep processing technology rose constantly Also the development and application of many new inorganic metallic materials represented by electronicclass glass fiber fabrics highgrade superhard materials and special industrial ceramics promoted the development of new and hightech industries
3 Marked improvement was made in organizational structure
Compared with the end of the Eighth FiveYear Plan period the average scale of the cement enterprises expanded from 70000 tons to 100000 tons and the output concentration of the top ten makers rose from 29 to 5 the average scale of the glass enterprises expanded from 031 million weight crates to 081 million weight crates and the production concentration of the top ten makers rose from 28 to 33 the average scale of the glass fiber enterprises rose to about 1500 tons and the weight of the top four enterprises in the total hit 36
4 Reform of the stateowned enterprises accelerated
Following the requirements for establishment of a modern enterprise system a number of big companies and enterprise groups with considerable strength were set up through reshuffle transformation merger and acquisition Thanks to this the economic operation quality and efficiency of the building materials industry improved substantially and the goal of bailing out difficulty in three years set for the stateowned enterprises was basically realized The entire industry put end to a twoconsecutiveyear loss in 1999 and further posted a better performance in 2000 In 2000 the industry generated a total profit of 94 billion yuan and earned 287 billion US dollars from export of building materials and nonmetallic minerals The number of listed companies in the building materials industry exceeded 40 raising a total capital of over 10 billion yuan
B Main Existing Problems
There are still some big problems in the development of the building materials industry reflected mainly in irrational organizational structure technological structure and product structure Such phenomena as small enterprise capacity big number of enterprises backward technology and equipment in most enterprises poor product quality pollution and waste of resources are still rampant
1 Small enterprise capacity and low degree of production concentration
Stateowned enterprises and nonstateowned enterprises with annual sales of over 5 million yuan account for only 108 of all enterprises in the building materials industry Compared with big enterprises abroad the capacity and strength of the large backbone enterprises in China lag far behind Among the 7000odd cement producers the top ten have a production concentration of only 5 For glass enterprises the top ten have a production concentration of 33 There are more than 20 float glass production enterprises in China while the number is only six in the United States the second largest plate glass producer in the world Compared with the United States the average scale of the glass reinforced fiber enterprises in China is 25 times smaller and that of the glass fiber enterprises is more than 200 times smaller Moreover the production concentration is also low in such sectors as ceramics bricks and cement products
2 The product structure is unable to match market demand
Construction repetition has led to serious oversupply of traditional building material products involving backward technology Due to excessive competition the industrial efficiency has been low Advanced production capacity has expanded slowly and some highgrade products are undersupplied The output value of new building materials accounts for only 20 of the total of the building materials industry The country’s total cement production capacity stands at 710 million tons of which newtype drymethod cement accounts for only about 10 while vertical kiln cement with unstable quality waste of resources and environmental pollution still accounts for about 75 Also the country still depends on imports for such products as highquality float glass and processed glass highgrade construction and sanitary ceramics glass fibers and products and some deeply processed nonmetallic mineral products
3 Slow pace in industrialization of new and high technologies
The hightech venture capital investment mechanism and incentive mechanism for technology innovation are still imperfect the input of scientific and technological development funds is inadequate and the technology innovation capacity of enterprises is weak The situation of separation between technological development and production has not yet been changed fundamentally affecting the formation and development of hightech industries in the building materials sector
4 Acute problems in utilization of resources and environmental protection
The energy consumption in the production of the building materials industry accounts for about 9 of the nation’s total energy consumption and about 13 of the national industrial energy consumption The energy consumption for 10000 yuan of output value averages nearly 5 tons of standard coal In the production of building materials industry mainly based on kiln and furnace the coal consumption accounts for more than 70 of the total energy consumption The whole industry discharges some 14 of the nation’s total sulfur dioxide discharge and some 55 of the nation’s total dust and smoke discharges Every year the industry makes nearly 600 billion solid clay bricks costing about 44000 hectares of land and over 50 million tons of coal The average heat consumption for production of cement clinker is 146 kg of standard coalton over 30 higher than the internationally advanced level
II Analysis of Development Environment and Market Demand
A Analysis of Development Environment
The Tenth FiveYear Plan period is a crucial period to readjust and optimize the product structure technology structure organizational structure and geographical structure of the building materials industry during which the external environment will have substantial influences on technological advancement and structural adjustment of the industry
1 Main development trend of the international building materials industry
Development trends of technologies and products in the international building materials industry 1) Product production and environmental protection go hand in hand emphasizing on economic and social sustainable development 2) The production equipments tend to be large production process tends to develop in the direction of automation and intelligence and attach importance to economy of scale and energy saving 3) Raise product quality improve the functions of buildings such as temperature preservation and sound insulation and give importance will be paid to developing materials with functions favorable to people’s health such as antibiosis mould proof pesticide and air purification 4) While main building materials enterprises realize global expansion with advanced technology management and powerful capital capacity their marketing and services will gradually develop in the direction of network and informationization
2 Opportunities and challenges after the entry into the WTO
The entry into the WTO is conducive for Chinese building materials enterprises to change concepts catch up with the development trend of the world building material industry absorb foreign advanced technologies and management skills give play to comparative advantages and take part in international competition on a full scale In the meantime it will also pose great challenges Compared with foreign advanced level the domestic enterprises lag far behind in technology and equipment level research and development capacity and energy and resource utilization efficiency The reduction of tariff rates for some commodities may lead to increases of imports and globalization of the domestic market Taking the advantages in capital technology and management multinational companies will increase investment in China’s building material industry and thus the domestic building materials enterprises will face fiercer competition
3 Implementation of the Western China Development Drive is favorable to giving play to comparative regional advantages
The Western China Development Drive will help speed up water conservancy communication telecommunication power and urban infrastructure construction which in turn will pull up the demand for building material products In comparison the building materials industry in eastern China has apparent advantages in technology capital management and talents while western China has unique superiorities in resource energy and labor forces Implementation of the Western China Development Drive will offer an opportunity for mutual supplement of the advantages in western and eastern China facilitate regional cooperation and promote coordinated development between eastern and western China
4 Sustainable development raises higher requirements on building materials industry
For a long period of time the coalbased energy consumption structure of the building materials industry is unlikely to change drastically It will be increasingly urgent to treat the discharges of carbon dioxide sulfur dioxide nitrogen oxide and smoke Such problems as resource shortage and reduction of cultivated land will become increasingly acute The building materials industry must put an end to the mode of development at the cost of resource waste and environmental pollution It should speed up popularization of clean production and develop in the direction of high quality energy efficiency land saving water saving waste utilization and environmental protection
B Demand Forecast and Analysis
1 Analysis of market demand trend
Given that the GDP keeps an average annual growth of 7 in the Tenth FiveYear Plan period the average annual social fixed assets investment will stand at some 4000 billion yuan The demand of the national economic and social development on building materials products will maintain a momentum of steady increase The main factors to pull up the demand for building material products include the pace of urbanization will accelerate and the investment scale for construction of small and midsize cities and towns will increase by great margins industrialization of residential housing improvement of people’s livelihood and improvement of farmers’ housing conditions will substantially increase the demand for highquality multifunctional green building material products and factoryintegrated residential housing products greater efforts will be made on infrastructure construction projects such as the Three Gorges project on the Yangtze River the Xiaolangdi project on the Yellow River a number of large reservoirs the project of water diversion from south to north the hydropower stations of Longtan Xiaowan Shuibuya Goupitan Gongboxia and Sanbanxi the QinghaiTibet railway the BeijingShanghai express railway the exit railways in southwest and northwest China and the five northsouth and seven eastwest highways with a total length of 200000 km related industries such as military industry automobiles information and petrochemicals will further demand more building material products
2 Analysis of demand for main products
For traditional building materials the total demand will keep relatively stable while their product quality will be improved In 2000 the cement output stood at 597 million tons and that of plate glass 182 million weight crates As new standards for cement are implemented and the grades for concrete are raised the demand mix for cement will undergo major changes As highstrength concrete and highfunctional concrete are able to save cement by more than 30 the total cement demand is expected to remain at the current level by 2005 while the demand for cement able to make highstrength concrete and highfunctional concrete will be rise greatly The total demand for plate glass will relatively stable though big rises will be seen in the demand for highquality float glass that is able to substitute imports and satisfy the requirements of processing glass As to the trend of demand for construction and sanitary ceramics the market for lowgrade products will contract all the way while that for medium and highgrade products will increase moderately with remarkable increases expected in the demand for highgrade sanitary ceramics that are water efficient and able to substitute imports
Substantial increases will be registered for the demand newtype building materials inorganic nonmetallic new materials and nonmetallic mineral products With the development of military industry automobiles information petrochemicals and other related industries the application fields of new building materials inorganic nonmetallic new materials and deeply processed nonmetallic mineral products will expand constantly and the demand will increase substantially accordingly Fast rises will be recorded particularly in the demand for new wall materials new heat insulation materials and new water proof materials in the new building materials glass fibers and products compound materials and glass reinforced fiber in the inorganic nonmetallic new materials and superfine and modified functional materials in the deeply processed nonmetallic mineral products
Faster growth will also be seen in the demand for retrofitting materials for house decoration and improvement of housing functions As residential houses are sold to individuals housing decoration has been increasingly popular in China boosting the demand for decoration materials Fast increases will be seen in the demand for outer wall coatings highgrade outer wall decoration boards safe and environment friendly inner coatings highgrade metalware highquality plasticsteel doors and windows and plastic tubes and parts
3 Forecast of domestic demand for main building material products
Product
Unit
Demand by 2005
Sanitary ceramics
10000 pieces
5500
Construction ceramics
100 million sq m
15
Glass fiber
10000 tons
38
Of which tank furnace drawing glass fiber
10000 tons
23
Cement
100 million tons
6
Of which high quality cement
100 million tons
2
Plate glass
100 million weight crates
18～19
Of which high quality float glass
100 million weight crates
06～065
Wall materials
100 million standard bricks
7500
Of which new wall materials
100 million standard bricks
3000
III Development Guidelines and Main Targets
A Guidelines for Development
Taking market as the orientation enterprises as the main players structural adjustment as the main line technological innovation and system innovation as the engine and enterprise technical transformation product quality improvement energy saving land saving water saving waste utilization and environmental protection as the focus actively developing new and high technologies and products controlling the aggregate output making greater efforts to eliminate backward technologies and products pushing forward asset reshuffle of enterprises paying key importance to fostering big companies and enterprise groups with independent intellectual property rights giving prominence to main business strong core capacity and international competitiveness invigorating small and mediumsized enterprises and promoting sustained steady and healthy development of the building materials industry
B Main Targets
The added value of the building materials is predicted to grow 78 annually on average
1 Targets for adjustment of product mix
By 2005 the output of new drymethod cement will reach 120130 million tons to account for 20 of the total cement output special cement will account for 3 of the total cement output and the proportion of bulk cement will reach 30 the output of float glass will reach 160 million weight crates to account for over 80 of the total glass output of which the output of high quality float glass will reach 5060 million weight crates to account for over 30 of the total float glass output and the deep glass processing rate will hit 30 the output of new wall materials will reach 300 billion standard bricks to account for 40 of the total wall material output the output of tank furnace drawing glass fiber will reach 023 million tons to account for 60 of the total glass fiber output the mechanical formation rate in glass reinforced fiber production will top 40
2 Targets for adjustment of technological structure
Remarkable progress will be made in R&D of common technologies key technologies and equipments for the industry with the technology and equipment level of newly added production capacity generally to reach internationally advanced level The technology and equipment for newtype drymethod cement production lines with a daily capacity of 20005000 tons will reach internationally advanced level of the 1990s Efforts will be made to develop superlarge cement production lines with a daily capacity of over 8000 tons and build up related technology and equipment research development and manufacturing systems The Luoyang float glass technology will be upgraded to realize major breakthrough in the production technology and management of high quality float glass and raise the product quality to internationally advanced level The glass processing technology and equipment and product quality will also reach internationally advanced level For the glass fiber industry electronicclass tank furnace drawing glass fiber technology and equipment with an annual capacity of 2000030000 tons and the production technology for electronicglass glass fiber fabrics will be developed and imported to upgrade the technological level of the industry to internationally advanced level For new wall materials technology and equipment will be basically localized
3 Targets for adjustment of organizational structure
By the end of the Tenth FiveYear Plan period the average annual capacity of each cement production enterprises will be expanded from the current 100000 tons to 250000 tons and the production concentration of the top ten cement enterprises (groups) will be raised from the current 5 to 17 For glass enterprises the average annual production capacity will be expanded to over 3 million weight crates each and the production concentration of the top ten glass enterprises will reach 50 For glass fiber enterprises the production concentration of the top four will top 60
4 Targets for energy utilization and environmental protection
Clean production will be popularized on a full scale to reach the standards for environmental protection By 2005 the average energy consumption of main building material products will be reduced by 20 High quality energy will be used mainly in the production of plate glass construction and sanitary ceramics and tank furnace drawing glass fiber In the production of cement and wall materials efforts will be made actively to research and develop multiple channels for utilization of energy and resources The whole industry will annually save 19 million tons of standard coal and reduce dust discharges by 21 million tons
IV Focus of Development and Structural Adjustment
A Step up effort in Developing Newtype DryMethod Cement
The principle of developmentled adjustment will be adhered so as to greatly spur development of newtype drymethod cement eliminate backward processes optimize the distribution of productive forces promote enterprise transformation and support the development of large companies and enterprise groups Construction of cement production lines other than newtype drymethod ones will be banned Vertical kilns will be strictly banned from expansion through transformation Resources and energy will be saved and used rationally and greater attention will be paid to environmental protection Following the principle of equal volume elimination or excessive volume elimination newtype drymethod cement will be developed in the Tenth FiveYear Plan period to add a new production capacity of 60 million tons or double the current capacity
1 Supporting the development of large enterprise groups and optimizing distribution of productive forces in the cement industry
Support will mainly be given to 810 large companies and enterprise groups in launching newtype drymethod cement production lines with a daily capacity of over 4000 tons and developing cement technology and equipment with a daily capacity of 800010000 tons In east and south China and the areas along rivers and coasts and neighboring large cities the advantages of developed communications and economy should be exploited to speed up adjustment of the cement industrial structure according to local conditions In large clinker bases with rich limestone resources small cement enterprises close to markets and with necessary conditions will be transformed into modern cement powder grinding enterprises Meanwhile great efforts will be made to develop bulk cement and commodity concrete mixing stations spread superfine grinding of mineral leftovers and fly ash and prepare dry cement pulp and highfunctional concrete according to market demand The distribution of the cement industry should comply with the requirements of the entry into the WTO and the Western China Development Drive Cement enterprises in eastern and central China will be encouraged to invest in western China The development of cement industry in western China should match the construction of state key projects and the current structure of the cement industry should be adjusted by transforming the existing enterprises with good conditions
2 Transforming a number of key enterprises to facilitate restructuring and technological upgrading of the whole cement industry
Key cement enterprises of the provincial level will be encouraged to undergo technological renovation In the principle of equal volume elimination or excessive volume elimination a number of newtype drymethod cement production lines with a daily capacity of over 2000 tons will be constructed through transforming backward processes In remote areas and areas with inconvenient communications and underdeveloped economy expect for special cement projects no new drymethod cement production lines with a daily capacity of less than 1000 tons will be launched in principle Mechanical vertical kiln enterprises will be guided to undergo technical transformation and eliminate vertical kiln processes and replaced by new drymethod technology according to the principle of sustainable development
3 Attaching importance to and strengthening environmental protection
Cement enterprises should take pollution treatment and environmental protection as a essential condition for existence and development While striving for clean production they should exploit industrial wastes such as coal gangue mineral leftovers fly ash ardealite and desulfurized gypsum and research and develop new courses for utilization of urban construction rubbish living rubbish waste oil and waste tires New technologies and new processes for application of inferior energy and industrial wastes in cement production should be further studied and developed Under the precondition of ensuring the quality of cement products cement production should gradually develop in the direction of energy efficiency waste utilization and environmental protection becoming a sustainable green industry
B Developing New Building Materials to Promote Harmonious Development between Economy and Resource and Environment
Substantial progress should be made in production and application of newtype building materials by following the requirements of environmental protection ecological construction and raising people’s living quality focusing on improving quality saving energy and land and utilizing wastes taking policies and regulations as the guide taking technological innovation as engine and developing and improving application technologies By 2005 newtype wall materials will account for 40 of the total wall materials about 200000 mu (15 mu equal to one hectare) of land will be saved 20 million tons of carbon dioxide discharges will be reduced and 90 million tons of coal gangue and 45 million tons of fly ash will be comprehensively utilized
1 Boosting fast development of newtype wall materials
To meet the requirements in the development of building structure system energy efficiency of construction and improvement of building functions newtype wall materials will be developed with great efforts Aside from banning the use of solid clay bricks in 170 large and mediumsized cities within a transitional period of three years other areas will be urged to replace solid clay bricks by newtype wall materials Focus of development will be laid on nonclay hollow products concrete blocks various light panels and compound panels Great efforts will be made to popularize the production technologies and equipments of newtype wall materials using industrial wastes such as fly ash and coal gangue and river silt as raw materials A number of largescale highlevel production lines will be built to promote the growth of enterprises with advantages and foster two or three large companies and enterprise groups with considerable capacity and market influence
2 Developing flagship products according to local conditions
Various localities should foster flagship products according to local conditions and the characteristics of their local building structures so that they will play the exemplary role to bring up the development of various newtype wall materials The development focus will be laid on concrete block production lines with a single shift capacity of more than 50000 sq m The complete sets of equipment will be localized and efforts will be made to solve the construction application technology of concrete blocks develop aerated concrete panels and aerated concrete block production lines with an annual capacity of 100000200000 sq m develop large cutting machines and improve the foaming formation technology In line with market demand key efforts will be made to spread the application of paperface gypsum plates develop light plates using crop stocks as raw materials develop complete sets of technology and equipment and raise product functions and decoration functions Efforts will also be made to develop sintering hollow brick production lines with an annual capacity of over 60 million blocks and spread new processes using wastes and coal gangues
3 Increasing varieties improving product quality and expanding supporting capacity
New building materials such as inner and outer wall decoration materials plastic doors and windows and plastic tubes and parts will be developed actively Key efforts will be made on research development production and supply of outer wall coatings and the application of heat insulation materials for energy saving in construction The focus for development of plastic doors and windows is to develop high quality products do well with the production and supply of supporting hardware and raise the general quality of products The focus for development of plastic tubes and materials is to develop and spread indoor water pipes gas pipes hot water pipes and drainage pipes A number of enterprises with complete product varieties and specifications and annual output of over 30000 tons will be established so as to enhance international competitiveness
C Raising the Luoyang Float Technology on a Full Scale
The main tasks for the plate glass industry is to adjust structure and realize industrial upgrading The focus is to develop highquality float glass raising the technological level of Luoyang Float glass achieve a breakthrough in float production technology and management and upgrade the quality of plate glass products to internationally advanced level In the Tenth FiveYear Plan period construction and expansion of crude plate glass will be strictly controlled to prevent low level construction repetition eliminate micro plating and other outdated technologies and actively develop deeply processed glass products
1 Raising technological level and developing highquality float glass
Luoyang float glass technology is a flagship technology of China in glass production and upgrading of general technological level for the glass industry hinges on the advancement the Luoyang float glass technology To solve to existing problems of Luoyang float production process in raw material treatment melting formation technology and production management and narrow gaps with the internationally advanced level in surface flatness tin content and micro bubble key efforts will be made on construction of silicate raw material bases to raise the product quality of refractory materials strengthen supportive work and raise the technological level of melting furnaces in control automation tin slot sealing and coldend online testing Besides breakthrough will be made in production line control technology and management software to extend furnace service life to 810 years and upgrade product quality energy consumption and environmental protection targets to internationally advanced level On the basis of upgraded general technological level of Luoyang float glass particularly when product quality comes up to internationally advanced level several float glass production lines will be transformed in combination with cold overhaul
2 Developing new products to increase varieties
Taking advantage of the rapidly expanding market for multifunctional and deeply processed glass localization and modernization level of general equipment for glass deep processing should be raised remarkably through introducing in processing equipment and selfdevelopment Importance will be given to the study of technologies for glass application striving to develop superthin superthick and bigspecification products various color glass products heat reflection glass low radiation glass and online coated and mirror making products The proportion of deeply processed glass in all glass products will be raised to satisfy the demands of both domestic and foreign markets Meanwhile deeply processed glass products will be guided to develop in the direction of serialization
3 Optimizing organizational structure and enhancing production concentration
Plate glass enterprises will be encouraged to optimize their organizational structure and establish modern enterprise system through asset reshuffles Support will be given to the development of large enterprises and enterprise groups Two or three large companies and enterprise groups with international competitiveness and complete line from research to industry and trade will be established These big firms and enterprise groups will basically realize fullfloat production with the proportion of highquality float glass to top 50 They will have their own R&D centers and internationally advanced glass processing and production bases with serial products supporting parts and economies of scale All drawing and microplating processes with less than four machines part of drawing processes with six or nine machines and small capacity Gmethod processes will be eliminated The average annual capacity of enterprises will top 3 million weight crates
D Speeding up Industrialization of Inorganic NonMetallic New Materials
Inorganic nonmetallic new materials are important materials indispensable in national defense construction new and hightech industries and related industries Support will be given to key enterprises key technologies and key products Greater efforts will be made on technological development and technological innovation of enterprises so as to accelerate industrialization and make inorganic nonmetallic new materials a new economic growth engine for the building materials industry
1 Developing tank furnace drawing glass fibers and achieving a major breakthrough in production technology and equipment
Aiming at internationally advanced level today efforts will be made mainly to develop tank furnace drawing glass fiber production lines with a capacity of over 10000 tons so as to push forward technological advancement in the whole industry Highquality raw material bases will be constructed Advanced tank furnace drawing process will be further adopted to transform and replace outdated production processes so that the weight of tank furnace drawing production capacity will be lifted from the current 27 to over 60 and the production technology will reach internationally advanced level of the 1990s Also series of technologies and equipments with own intellectual property rights will be formed Besides clay melting pot production will be eliminated and its products will be banned from entering the market Key support will be given to foster three to five big companies and enterprise groups with an annual capacity of over 50000 tons and with competitive edge on the international market
2 Developing new products and accelerating industrialization of new and high technologies
In line with market demand support will be granted to the development of electronicclass copper clad yarn and fabrics and high quality enhanced glass fiber untwisted coarse yarn shortstaple fibers and felts By 2005 the annual export of these products will be increased to about 90000 tons while the annual import will be cut from the current 45000 tons to 20000 tons Greater efforts will be made on development and market promotion of new technologies and new products related to electronicclass glass fiber fabrics and compound materialsglass reinforced fibers with focus on development of SMC lowpressure formation technology GMT slice equipment Agrade surface treatment technology and overall optimized designing and mechanical formation of glass reinforced fiber fishing boats and fans for wind power generating units Support will also be given to the development of hightech products such as special fiber special glass quartz glass special ceramics highquality artificial diamond and special optoelectronic crystals and commercialization of their technologies so as to make them new economic growth engines and industries for export
E Developing Deeply Processed NonMetallic Mineral Products and Expanding Export
Enterprises will be urged to undergo technological transformation to raise their technological level develop deeply processed products and expand export
1 Backbone enterprises will be supported to conduct technological renovation to raise the technological contents of products
In line with the needs of construction petrochemical automobile electromechanical and environmental protection industries support will be given to the development of superfine powder making fine extracting surface modifying superfining and microhole technologies research and development of nanometer technologies and products and development of highfunctional friction materials insulation materials sealing materials functional fillings for engineering plastics electronic engineering materials and environmental protection mineral materials so as to raise the technological contents and industrialization level of products The existing backbone enterprises will be backed to use new and high technologies for technical transformation so as to narrow their gaps with internationally advanced level in technological level product quality and product specifications Enterprises will be encouraged to uplift production concentration through reshuffles in various forms
2 Actively exploring international markets and increasing export of nonmetallic mineral products
Deep processing of minerals with advantages will be developed so as to realize standardization serialization and whole range production of products Active efforts will be made to explore international markets While consolidating and raising the market shares in Southeast Asia efforts will be made to expand exports to Europe North America and South America Large nonmetallic mineral enterprises and groups will be encouraged to take part in international market competition The mix of export commodities will be adjusted in which the export of primary products will be controlled and gradually reduced while that of products with high added value will be increased to ensure steady growth of export earnings
F Optimizing the structure of construction and sanitary ceramic products
The construction and sanitary ceramic industry should develop highgrade products increase mediumgrade products and reduce lowgrade products Newtype decoration technologies should be used to upgrade product quality and grades In the meantime environmental friendly and water efficient products should be developed to meet the market demands at home and abroad
1 Developing new processes and technologies and increasing varieties of construction and sanitary ceramic products
The development of construction ceramics should focus on automatic hydraulic brick presses new decoration technologies and roller kilns using clean fuels as the focus and eliminate manual brick presses and coalburning kilns Great efforts will be made to spread such new processes and decoration technologies as secondary distributing dream distributing patterning color large grain drymethod glazing shining watercut patterning multiple decoration and multiple baking so as to increase product varieties and upgrade product quality and grades Also environment friendly dirt resistant bacteria resistant and other multifunctional products will be developed and industrial wastes and ore tailings will be comprehensively utilized
2 Upgrading sanitary ceramics centering on water saving
Subject to attainment of raising quality grade and supportive capacity the sanitary ceramics industry will greatly spread water saving technology so as to satisfy the social demand for waterefficient sanitary ceramic products In the meantime it should raise water saving standards for sanitary ceramic products to make them reach internationally advanced level and enhance the international competitiveness of domestic products
V Measures and Policies
A Measures
1 Speeding up formulation and revision of industrial rules and norms and technical rules and standards to match the accession to the WTO Supervision over product quality should be strengthened and strict product application rules should be made to standardize the acts of enterprises and create a good economic order and a market environment of fair competition In line with industrial developments the government should timely revise industrial policies and promulgate directories of products and technologies to be encouraged restricted and eliminated in the building materials industry so as to guide healthy development of enterprises
2 Strengthening cooperation between industry and research fields so as to speed up commercialization of technological achievements and raise the general level of the whole industry National laboratories or technology development centers will be established to collectively study new materials new technologies new processes and new equipments that are of strategic significance and badly needed in national defense military industry information technology and other hightech fields For major research and development projects concerning industrial development and projects concerning industrialization of new and high technologies more financial support will be given to the research and development so as to ensure development of related industries and state security Greater efforts will be made on technological innovation and development of equipments and develop key technology and equipment of independent intellectual property rights in the important fields Big companies and enterprise groups should become the main players in technological innovation They should raise the proportion of technological development funds in sales revenue and combine breakthrough in key technologies and industrialization of new and high technologies with their development strategies Support will be given to the export of China’s mature technologies and complete plant for newtype drymethod cement float glass and sanitary ceramics through engineering contracting
3 Probing into new mode for development of the building materials industry so as to match strategic adjustment of the national economy A number of large companies and enterprise groups with independent intellectual property rights outstanding main business and strong core capacity will be fostered so as to enhance the influence of state economy on the industry In the meantime diversification of enterprise capital will be promoted through policy guidance and acceleration of reform so that small and mediumsized enterprises will be invigorated Following the principle of active support rational planning classified guidance and management according to law the service system for small and mediumsized enterprises will be developed and improved Small and mediumsized building material enterprises in various localities will be encouraged and supported to develop in the directions of special quality unique and innovative in accordance with local economic development characteristics
4 Giving play to the role of industrial associations as a bridge to link up the government with enterprises The industrial associations should intensify industrial supervision to urge enterprises to abide by state laws regulations and policies coordinate member enterprises and safeguard market order in the industry
5 Transforming traditional industries with new and high technologies and promoting information technology application in the building material industry CIMS CAM and DCS will be popularized to raise production automation level and expand new product development capacity Enterprises should set up computer monitoring and dispatching systems in production so as to realize modernization in production dispatching Application of information technology in enterprise management should be expanded constantly including popularization of such modern management technologies as ERP and CRM Also Ecommerce should be developed in building materials industry so as to realize online information disclosure classified inquiry business negotiations and transaction settlement
6 The building materials industry in western China should rationally set development focus Western China regions should draw on the experiences of eastern regions in developing the building materials industry strengthen macro regulation make scientific planning give play to local comparative advantages and avoid identity of industrial structure They should rationally distribute resources absorb talents capital and advanced technologies and complement with each other their respective advantages Eliminated technologies and equipments should be prevented from being transferred to western China In line with the general plan for western China development and the market development level development focuses should be set rationally so as to avoid blind expansion of capacity and prevent lowlevel construction repetition
B Policies
1 Among the policies (interest discount and bonds) encouraging investment major technological transformation projects such as newtype drymethod cement newtype wall materials and inorganic nonmetallic new materials will continue to be listed in the catalogue enjoying key state support
2 Protective mining will be imposed on nonmetallic mineral resources of strategic value so as to guarantee state control over large highquality mines and mineral resources and strategic resources with international competitive edges
3 Backbone enterprises with advantages will be supported to enter the capital market to use the financing functions of the capital market and solve the problem of inadequate construction funds
4 Enterprises will be encouraged to make comprehensive utilization of various resources Enterprises that use industrial wastes ore tailings waste liquids and urban rubbish as raw materials and fuels in production will be granted tax exemptions and reductions
5 Product standards energyconsumption standards and pollution discharge standards will be revised in time to restrict the development of products that involve high energy consumption high pollution and low rate of resource utilization and accelerate the elimination of backward production processes
6 Seller’s credit support will be granted to the export of large complete sets of equipment
Note the plan is provided by the Industrial Planning Department of the State Economic and Trade Commission
72 Catalogue of New Wall Materials Enjoying Preferential Taxation Treatment
1 Nonclay bricks (adopting mechanical formation production process single line capacity not less than 30 million standard bricksyear)
(1) Nonclay sintered porous bricks and hollow bricks with a porous rate of over 25
(2) Concrete hollow bricks and hollow blocks
(3) Sintered shale bricks
2 Construction blocks (adopting mechanical formation production process single line capacity not less than 50000 cu myear)
(1) Concrete small hollow blocks
(2) Light aggregate concrete small hollow blocks
(3) Autoclave aerated concrete blocks
(4) Gypsum blocks
3 Construction panels (adopting mechanical production process single line capacity not less than 150000 sq myear)
(1) GRC panels
(2) Fiber cement panels
(3) Autoclave aerated concrete panels
(4) Light aggregate concrete panels
(5) Steel wire frame sandwich panels
(6) Gypsum wall boards (including papersurface gypsum boards gypsum fiber boards and gypsum hollow boards)
(7) Metalsurface sandwich boards (including metalsurface polystyrene sandwich boards metalsurface hard polyurethane sandwich boards and metalsurface rock wool and slag wool sandwich boards)
(8) Compound light sandwich partition wall boards and slats
Note The catalogue is issued jointly by the Ministry of Finance and the State Taxation Administration Source Economic Daily
73 18 Standards for Building Materials Industry
Codes and Names of 18 Standards for Building Materials Industry
Standards
Code
Substitutive code
I Compulsory standards (7 items)
1Soft tube for sanitary equipment
JC8862001
2Epoxy adhesive for handling stone curtain
JC8872001
3Pretensioned prestressing concrete thin wall pipe pile
JC888200l
4Steel fiber concrete examination well cap
JC8892001
5Masonry mortar and floated mortar for autoclave aerated concrete
JC8902001
6Fused cast zirconiaaluminum refractory products used for glass melters
JC4932001
JC4931992(1996)
7Glass for highpressure liquid level meters
JC8912001
II Recommended Standards (11 items)
1Natural marble building boards
JCT792001
JCT791992(1996)
2Crude natural granite
JCT2042001
JCT2041992(1996)
3Crude natural marble
JCT2022001
JCT2021992(1996)
4Moltenrock casting products moltenrock casting powder
JCT51432001
JCT51431993(1996)
5Milky quartz glass tube for infrared heaters
JCT8922001
6Inner heat preservation board for GRC outer wall
JCT8932001
7Polymer cement waterproof coating
JCT8942001
8Single basalt moltenrock casting products
JCT515200l
JCT5151993(1996)
9Wear resistance property test in testing functions of moltenrock casting products
JCT2602001
JCT2601993(1996)
10Plastic seats and caps for stools
JCT7642001
JCT7641987(1996)GB82851987(1996)
11Foam ceramic filters
JCT8952001
74 Output of 106 Cement Enterprises in 2001
Enterprise
Trademark
Aggregate output (10000t)
Yoy increase ()
Total
11811
182
1
Anhui Conch Group
Conch
1236
544
2
Huaxin Cement Factory
Baolei
50369
1563
3
Beijing Jinyu Group
Great Wall
3055
08
4
Zhejiang Three Lion Group
Three Lion
28857
205
5
Chongqing Tenghui Cement Group
TenghuiDiwei
27417
997
6
Tangshan Jidong Cement
Dunshi
27041
21
7
Meizhou Tapai Group
Tapai
27014
256
8
Xinjiang Tianshan
Tianshan
25849
51
9
Jingyang Cement Co
Jingyang Jiaxin
23919
581
10
330 Cement Factory
Sanxia
23747
367
11
Suzhou Jinmao
Jinmao
22771
16
12
Chaodong Cement
ChaohuDongguan
21664
102
13
Fujian Cement
Jianfu
21595
104
14
Shandong Cement Factory
Dongyue
20337
249
15
Yizhou Cement Group
Yizhou
20156
69
16
Taihang Cement
Taihangshan
20009
3
17
Qinling Cement
Qinling
1726
09
18
Jilin Yatai Cement
Dinglu
1672
137
19
Sichuan Golden Summit Group
E’meishan
16023
315
20
Mudanjiang Cement Group
Mudanjiang
15646
27
21
Sichuan Shuangma Group
Shuangma
15603
05
22
Hunan Shaofeng
Shaofeng
15492
91
23
Liuzhou Yufeng Group
Yufeng
15018
191
24
Jiangsu Julong
Julong
1453
172
25
Zhejiang Jianfeng Group
Jianfeng
14447
91
26
Zhujiang Cement Factory
Yuexiu
14373
176
27
Jiangxi Cement Factory
Wannianqing
14084
538
28
Harbin Cement Factory
Swan
14033
14
29
JiangnanOnoda
Shuangfeng
13901
267
30
Jiangshan Cement Factory
Hushan
13123
364
31
DalianOnoda
Huari
1242
4
32
Yungang Cement Group
Yungang
12194
55
33
Taiyuan Shitou Group
Shitou
1218
165
34
Jidong Jilin Co
Jiangcheng
109
459
35
Lunan Cement Factory
Luhong
10819
49
36
Qinhuangdao Qianye
Qianye
10664
18
37
Bohai Cement Group
Bohai
1027
87
38
Tianjin Cement Factory
Camel
10224
197
39
Shandong Aluminum Co
Shanlu
10043
37
40
Gongyuan Cement Factory
Gongyuan
1002
109
41
Yongfeng Cement Factory
Qilianshan
9975
381
42
Xishui Venture Co Ltd
Caoyuan
9638
38
43
Dalian Cement Group
Seagull
9535
889
44
Benxi Cement Factory
Changbaishan
915
31
45
Sichuan Guang’an Building Materials
TwinGun
8686
25
46
China Cement Factory
Shicheng
8644
86
47
Shanghai United Cement
Taili
846
227
48
Ningbo Shengjiang
Shengjiang
8422
508
49
Tanshan Qixin Co
Mapai
8398
138
50
Guangzhou Cement Factory
Jinyang
8382
37
51
Guangdong Nanhua Cement
Nanhua
809
38
52
Xingfeng Group Co
Xingfeng
7818
15
53
Tianjin Zhenxing
Zhengtong
7814
157
54
Kunming Cement Factory
Shilin
7736
10
55
Guizhou Cement Factory
Wujiang
7517
181
56
Beijing Xingfa
Lafarge
7179
24
57
Hangzhou Qianchao
Qianchao
702
153
58
Xiaotun Cement Factory
Qianshan
6851
47
59
Luoyang Cement Factory
Yellow River
6778
133
60
Shuicheng Cement Factory
Wumengshan
6445
1
61
Wushan Cement Factory
Yuanyang
6442
155
62
Guangxi Hongshuihe
Hongshuihe
6338
11
63
Hunan Jinlei
Jinlei
617
04
64
Jiaozuo Solid Cement
Solid
615
256
65
Great Wall Aluminum Co
Construction
5847
35
66
Kaiyuan Cement Factory
Honghe
5825
443
67
Fushun Cement Factory
Hunhe
581
04
68
Qiligang Cement Factory
Huisheng
5505
85
69
Haolianghe Cement Factory
Haolianghe
5503
68
70
Nanping Cement Factory
Wuyi
5423
51
71
Shanghai Haibao
Haibao
537
99
72
Shanghai Wan’an Co
Wan’an
5263
57
73
Angang Cement Factory
Gangdu
512
38
74
Shanghai Cement Factory
Elephant
5106
61
75
Jiangnan Cement Co
Zhongshan
5001
47
76
Chongqing Cement Factory
Chuanpai
4856
172
77
Ningxia Saima
Saima
4821
4
78
Tianjin Feiyan
Feiyan
452
347
79
Guanghua Cement Factory
Baoshi
423
244
80
Chaohu Tiedao Cement Factory
Tiepeng
4115
335
81
Duyun Cement Factory
Jianjiang
4103
49
82
Jiuzhou Qilin
Qilin
4046
69
83
Hunan Xuefeng
Xuefeng
4044
74
84
Gaoya Cement Factory
Jincheng
3904
374
85
Pudong Cement Factory
Fuli
3753
92
86
Datian Cement Factory
Yancheng
3743
01
87
Hunan Shaoyang
Baoqing
372
317
88
Xiaoxiang Group
Wuxi
3601
134
89
Zhejiang Fuyang Dengcheng
Dengcheng
3582
104
90
Sichuan Jinsha Cement
Panzhihua
3512
20
91
Qinghai Cement Factory
Kunlun
3414
76
92
Miaoling Cement Factory
Miaoling
333
36
93
Queshan Cement Factory
Yunan
3202
75
94
Huanggang Cement Factory
Jinta
30
153
95
Zunyi Denghui Cement
Huagang
2948
302
96
Guiyang Cement Factory
Jingang
2719
8
97
Xinsheng Cement Factory
Xinsheng
269
43
98
Yiye Cement Factory
Gangtie
255
17
99
Zhongshan Cement Factory
Tiecheng
2426
73
100
Jiaotong Cement Factory
Hongqiao
22
38
101
Yiyuan Lantian
Lushan
211
16
102
Qinchuan Cement Co
Kuangshan
2101
17
103
Sanming Cement Factory
192
274
104
Xinchuan Cement Factory
Xinchuan
1865
98
105
Hunan Jiuyi
Jiuyi
14
369
106
Guanghua Cement Factory
Baixiong
383
35
8 Reference Materials
F 2002 China Economic Prospects (Industry Volume) compiled by State Information Center China Planning Publishing House December 2001
F 2000 Chinese Large Enterprise Groups compiled by National Bureau of Statistics China Statistics Publishing House September 2001
F Report on Development of Chinese Large Enterprises (Groups) 20012002 compiled by China Enterprise Appraisal Association China Personnel Affairs Publishing House February 2002
F China Statistics Yearbook (19962001) China Statistics Publishing House
F Circular of the General Office of State Council on Onissuing Opinions of the State Economic and Trade Commission on Rectifying Small Glass Factories and Small Cement Factories Guoban Document No 44 [1999]
F Opinions on Implementing Aggregate Control in Building Materials Industry in 2001 SETC Document No 99 [2001]
F Codes and Names of 18 Standards for Building Materials Industry Document No 32 2001 of the State Economic and Trade Commission of the People’s Republic of China
F Circular on Issuing Some Opinions on Controlling Aggregate Volume and Adjusting Structure in Building Materials Industry’ SETC Document No 572 1998
F Catalogue of Backward Production Capacities Processes and Products to Be Eliminated SETC Order No 6 and No 16
F Accelerating Restructuring and Structural Optimization and Upgrading of China’s Industry – speech of Minister of State Economic and Trade Commission Li Rongrong at the National Work Conference on Industrial Restructuring in the Tenth FiveYear Plan Period (abstract)
F Circular of the State Economic and Trade Commission and the State Development Planning Commission on Issuing the Opinions on Developing NewType Building Materials’ SETC Document No 962 2000
F Developments of World Plate Glass Industry by Yuan Xinmin senior engineer with Technology & Information Institute of the State Bureau of Building Materials Industry
F Summary of 2001 Annual Reports of Companies in Building Materials Industry Pan Jianping with Xingye Securities Research & Development Center
F China’s Building Materials Industry Realizes Anticipated Targets in 2001 by Yu Xiaolan with Information Dept of China Association of Building Materials Industry and China Economic Supervision Society of Building Materials Quantity China Building Materials Journal Feb 7 2002
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