Sinoma focuses on cement market
By Liu Baijia (China Daily)
Updated: 2004-08-19 09:40

A major State materials group has decided to go part public by listing three of its subsidiaries on stock markets within two years.

Sinoma, the China National Materials Industry Group Corp, intends to transform itself from a technology-focused company to a market-driven one.

The group specializes in non-metal materials, non-metal engineering and non-metal materials exploration, but it is mainly technology focused and still a relatively small company.

"This year is a year of industrial development," said Sinoma President Tan Zhongming.

New strategies will see the group focusing on cement and prioritizing overseas markets.

Sinoma International Engineering Co Ltd, the flagship business of Sinoma, will be listed on the Shanghai Stock Exchange this year, after being approved from the China Securities Regulatory Commission in June. But Tan refused to reveal details about the listing, but said the proceeds will mainly be used to build cement equipment.

Sinoma International is now focusing on cement plant design and construction, but it aims to take a 40 per cent share of the cement equipment market. The firm expects its revenue from equipment manufacturing will add 550 million yuan (US$66 million) a year, when the expansion of current facilities is finished.

In its core business, cement plant design and construction, the overseas market will attract more and more attention, said Si Guochen, the chairman of Sinoma International, adding that the European, American and Middle East markets will be the main target regions.

The company has already won contracts worth US$110 million this year. About 70 per cent of them are from European customers, Si said.

In the Middle East, where Sinoma International started this year, Si said his firm is likely to ink two contracts this year.

Sinoma will also co-organize an Intercem China conference in Shanghai in September to have more exchanges with global counterparts, after being the Chinese organizer of the Intercem Conference, a gathering of the international cement industry, in Beijing last year.

As well as being a cement plant designer and contractor, the Sinoma Group has moved into the cement production business with aggressive buying.

In February, Hanjiang Building Materials Co Ltd in Northwest China's Shaanxi Province was merged with Sinoma. This allowed Sinoma to take control of its first cement production base, after designing cement plants for years.

Sinoma invested 50 million yuan (US$6 million) into Hanjiang, aiming to develop it into a modern plant with a production capacity of 1 million tons a year.

Tan said Sinoma was very close to finishing a deal to buy one of the listed cement companies in China and when this is achieved, his company will have a production capacity of 10 million tons a year.

"Sinoma is a latecomer into the industry and our goal is to become the most competitive player in the market rather than the biggest," he said.

Tan said his company also plans to list another two subsidiaries Sinoma Science and Technology and Sinoma Advanced Materials on domestic stock exchanges late next year or early 2006.

He said Sinoma Science and Technology, which makes fibreglass, artificial crystal, composite materials and high-tech ceramics, is in talks to form a 50-50 joint venture with a big US company.

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