Huaxin Cement Co. Ltd (HCC) - a leading Chinese cement producer and Holcim's strategic partner in China - has completed a capital increase through a private placement to Holcim. Holcim has acquired 75.2 million newly issued A-shares for CNY 26.95 per share. Furthermore, the Group has been exempted from making a tender offer to the other shareholders. Holcim's shareholding in HCC thus increases from 26.1 percent to 39.9 percent and the Group becomes the company's single biggest shareholder. The transaction corresponds to an investment of USD 282 million and is entirely financed through internal resources and existing credit facilities.
HCC will use the proceeds of the private placement to finance further growth. With an annual cement capacity of 32 million tonnes HCC is one of China's most progressive cement groups. The company disposes of only modern production facilities. In the first nine months of 2007, HCC achieved sales of USD 423 million with a staff of some 7,000.
In recent years, HCC has followed a strategy of expansion, in line with the dynamic development of the Chinese building materials market. The company has many expansion projects in cement, aggregates and ready-mix concrete under construction or being planned.
HCC's home market is along the Yangtze river in the central Chinese province of Hubei. In addition, the company is present in the provinces of Henan, Hunan, Yunnan, Jiangsu and Shanghai. Wuhan, the capital of Hubei, connects the advanced coastal provinces around Shanghai with the central and western part of the country. The cement market of central China is more than 350 million tonnes which corresponds to almost 25 percent of China's cement consumption.
China is the world's largest cement market consuming almost half of the world's cement production. This dynamic growth market coupled with the on-going technological transformation and restructuring of the Chinese cement industry opens up attractive growth opportunities for HCC. HCC with Holcim's support will continue to strengthen and extend its leading role as a modern cement producer in China.
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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as further activities such as ready-mix concrete and asphalt including services. The Group holds majority and minority interests in more than 70 countries on all continents.
Huaxin Cement Co. Ltd. is a leading cement enterprise in China with one hundred years' history, and is one of the nation-wide cement manufacturing groups receiving strong support from the government.
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