China Runji Cement’s clinker price increases as demand in rural China picks up
China Runji Cement (OTCBB: CRJI), a cement manufacturer in Anhui Province of China, announced that is benefiting from higher cement prices thanks in part to the China’s rural economy stimulus policy in 2010.
The company has witnessed an $1.46 per ton increase in cement
clinker prices since the turn of the new year, and at the company’s
current production capacity of 5,600 tons per day, was generating an
extra $0.246 million in revenues per month.
“In 2010 China vowed to put more investment, subsidies, fiscal
and policy support into rural areas, quoted from the first policy
document jointly issued on January 31, 2010 by the Central Committee of
the Communist Party of China and the State Council,” China Runji Cement
noted, “In particular the policy document stressed budget expenditure
should first support development of the agriculture and rural area, and
fixed-asset investment first be channelled into agricultural-related
infrastructure and projects in relation to rural livelihood. “
This targeted fiscal stimulus resulted in allowances to citizens
from their local provincial government to build new houses, which was
in turn driving demand for cement, China Runji Cement reported.
“In China, there are over 900 million people living in villages.
With the implementation of the policy, it is believed that the village
architectural market demand for cement and other architectural
materials will grow substantially with more and more village people
constructing new houses with government allowance in 2010. “
Due to the increased demand, China Runji Cement has decided to
maintain its production levels through the China New Year, which is
typically the low season for cement demand.
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