West China Cement is set to become the next Chinese company on Aim as it plans to raise up to 20m british Pounds to finance expansion.

It will be the first mainland Chinese company to be brought to the junior market by Insinger de Beaufort, the Anglo-Dutch bank that is nominated adviser and broker.

The non-executive chairman is Robert Robertson, 54, who is due to retire as chief executive of Tarmac, the building materials group that is part of Anglo American. Mr Robertson has spent some time in Shaanxi province inspecting the company's operations.

"It's a very exciting opportunity," he said yesterday. "China's growth story is compelling - but it is more compelling in cement than a lot of other industries."

The company is based in Jersey and owns a Virgin Islands company that in turn owns the Chinese assets. It is expected to have a market capitalisation of about ?66m. Last year, it reported profit of Yn44.4m (3m pounds) after tax on sales of Yn238.2m and, in the first half, profit after tax of Yn 27.6m on sales of Yn138m.

Founded in 1977, the company is producing about 1.5m tonnes of cement a year. However, it has two more production lines under construction, each of which will produce another 1m tonnes a year. The first is expected to open early next year and the second at the end of next year.

Charles Brock, of Insinger, said the Chinese cement industry was highly fragmented and operating a lot of outdated and environmentally unsustainable plant.

The government was encouraging both consolidation of the industry and foreign investment.

Insinger had started working with the company in April, performing extensive due diligence, including a check on the limestone reserves. It was seeking to raise the money - mainly to finance the new production lines - from UK, Hong Kong and Singapore institutions.

The shares should start trading early next month.

China's economy hurts in global crisis

Tuesday October 21, 2008, 7:34 am


The laid-off factory workers and slumping car sales were an early indication that China's normally booming economy wasn't immune to the global financial crisis.

On Monday, the numbers confirmed suspicions: The economy expanded by just 9 per cent in the third quarter, the National Statistics Bureau said, its most sluggish pace in five years.

After years of straining to meet soaring demand for its exports, China is grappling with slowing demand as consumers in the US and Europe cut back on spending in the wake of the mortgage-debt meltdown. That poses an acute challenge for leaders in Beijing who are struggling to keep job-creating growth on an even keel.

China already is seeing protests by workers laid off or missing pay checks from the thousands of factories that have folded under the pressure of rising costs and slowing orders. Affluent city dwellers are feeling the pinch of sinking share prices and a weak housing market - sales of passenger cars fell 6.2 per cent in August from a year earlier, according to the China Association of Automobile Manufacturers.

"The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate," National Statistics Bureau spokesman Li Xiaochao said in a nationally televised news conference.

"All these factors have started to release their negative impact on China's economy," Li said.

Exports have just begun to slow - the trade surplus hit a monthly record $US29.3 billion ($A42.3 billion) in September as costs for imports eased thanks to lower prices for crude oil and other commodities.

A weaker China spells trouble for other Asian countries that have thrived on robust sales of raw materials and other manufacturing inputs to their giant neighbour.

"The problem is that China's economic growth is slowing down when it is most needed," said Huainan Zhao, a banking expert at Cass Business School in London.

The third quarter was China's slowest expansion since the second quarter of 2003, when the outbreak of Severe Acute Respiratory Syndrome, or SARS, cooled growth to 6.7 per cent.

It compares with 10.6 per cent growth in the first quarter of the year, and 10.1 per cent in the second quarter.

Growth for the first nine months of the year was 9.9 per cent, compared to 11.9 per cent for all of 2007. Economists have cut China's forecasts for 2008 to as low as 9 per cent.

Before the data's release, government leaders met to map out a strategy for countering the slowdown. Monday newspapers carried news of planned measures to spur lending and stabilise China's volatile financial markets.

Leaders pledged to boost export rebates and provide more support for the ailing housing sector. They also vowed to spend more on welfare and construction, such as rebuilding the areas devastated by the May earthquake in central China.

Instead of bouncing back after a lull during the Beijing Olympics, China's industrial boom has slowed further, with output growing 11.4 per cent year-on-year in September. That compares with 12.8 per cent in August.

"China's manufacturing sector is not immune from the global economic downturn," said Sherman Chan, an analyst for Moody's Economy.com.

Says it all.

The trouble is as the PMHL update says, business is now slowing down, so whilst WCC have been merrily working with minimal competition, now the other companies experience a slowdown, they will get more aggressive in other provinces, so WCC should come under margin pressure now as others try to break into their market area.

Could be weak going forward.

never liked this company and shall contemplate whether there it merits shorting even at this depressed level ..... probably, is my gut feel