China is entering a pivotal period in 2013 under the new leadership while the economic growth will be the main concern for the new leaders. During the 18th National Congress of the Chinese Communist Party, members of the new Chinese leadership instructed areas of future growth which includes: i) urbanization; ii) agricultural modernization; iii) upgrading industrial technologies and information technology and iv) environmental conservation. To stimulate the economic growth with the urbanization, the Chinese government initiated and approved a large number of urban infrastructure investment projects since September 2012. These investment projects will likely gain momentum in 2013 and also inevitably increase the demand of energy and raw materials, such as coal, steel, cement and electricity.
To achieve its target to build a complete value chain in the coal and coke industry, vertically integrating the operations from mining, manufacturing, transporting to distributing the coke and coal related chemical products, the Company insists in the merger and acquisition of the upstream coal and coke business, as well as the downstream chemical, clean energy and logistics projects, to further improve the production chain and to grasp the opportunities of the new period. The acquisition of 30% equity interest of Shanxi Linxian Taiye Coal Mining Company Limited is proceeding, this mining acquisition marks a key milestone for the Group to achieve its target to become fully integrated coal and coke enterprise in China. The Group will identify suitable projects to capture the opportunities to expand its coal mining business.
In order to sustain long-term healthy growth of the economy, the Shanxi provincial government has launched a policy to consolidate the coking industry, after the successful consolidation program of the coal mining sector, as coal and coking are the two major economic pillars of the province. The policy is set to consolidate the over-capacity coking industry by eliminating coking capacities of less than 2 million tonnes, and players with fall behind technology. To follow the provincial consolidation program on coking plants, Shanxi Loudong, the principal subsidiary of the Company and currently one of the largest coking facilities in the region with approved coking capacity of 1.2 million tonnes/year has entered into a memorandum of understanding with another local partner on 19 March 2013 to form a joint venture to develop a new technology coking plant with annual production capacity of 2.2 million tonnes. Along this direction, the Company is determined to achieve the Group’s goal to become one of the leading integrated coal and coke enterprises in China in the foreseeable future. As such, the Company has been cautiously optimistic about its future development.
On the other hand, although it is a challenging year for the business, it provides a chance for the Company to widen its market share. In economic downturn, weak players in the market will be eliminated. Thus, through the Group’s experienced management, and as one of the top coking enterprises in Shanxi, which is China’s top coal and coke producing province, the Company would convert this challenge into opportunity to sustain its growth.
To achieve its target to build a complete value chain in the coal and coke industry, vertically integrating the operations from mining, manufacturing, transporting to distributing the coke and coal related chemical products, the Company insists in the merger and acquisition of the upstream coal and coke business, as well as the downstream chemical, clean energy and logistics projects, to further improve the production chain and to grasp the opportunities of the new period. The acquisition of 30% equity interest of Shanxi Linxian Taiye Coal Mining Company Limited is proceeding, this mining acquisition marks a key milestone for the Group to achieve its target to become fully integrated coal and coke enterprise in China. The Group will identify suitable projects to capture the opportunities to expand its coal mining business.
In order to sustain long-term healthy growth of the economy, the Shanxi provincial government has launched a policy to consolidate the coking industry, after the successful consolidation program of the coal mining sector, as coal and coking are the two major economic pillars of the province. The policy is set to consolidate the over-capacity coking industry by eliminating coking capacities of less than 2 million tonnes, and players with fall behind technology. To follow the provincial consolidation program on coking plants, Shanxi Loudong, the principal subsidiary of the Company and currently one of the largest coking facilities in the region with approved coking capacity of 1.2 million tonnes/year has entered into a memorandum of understanding with another local partner on 19 March 2013 to form a joint venture to develop a new technology coking plant with annual production capacity of 2.2 million tonnes. Along this direction, the Company is determined to achieve the Group’s goal to become one of the leading integrated coal and coke enterprises in China in the foreseeable future. As such, the Company has been cautiously optimistic about its future development.
On the other hand, although it is a challenging year for the business, it provides a chance for the Company to widen its market share. In economic downturn, weak players in the market will be eliminated. Thus, through the Group’s experienced management, and as one of the top coking enterprises in Shanxi, which is China’s top coal and coke producing province, the Company would convert this challenge into opportunity to sustain its growth.
