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France's Lafarge to invest further in China's cement market

Updated: 2013-06-06 15:00
( Xinhua)

BEIJING -- Top global cement producer Lafarge said Wednesday that it will continue to invest in China, despite overcapacity issues that have plagued the cement industry for years.

Bruno Lafont, chairman and chief executive officer of Lafarge, said the company will invest in China using a "value-growth" model.

Lafarge is likely to invest more in research, production and creating new partnerships in China, he said.

Lafarge announced several new divestment moves in a financial report issued last month.

The company will prioritize its existing position in southwest China, although it may expand to other parts of the country, Lafont said.

Lafarge has mainly operated in less developed regions in southwest China since 1994, when it entered the Chinese market.

Lafont said China's overcapacity issues have appeared in other growing markets before, adding that inefficient and unsustainable players will eventually be phased out.

Just 69.4 percent of the cement industry's capacity was utilized last year, according to a survey conducted by the China Enterprise Confederation.

Lafarge expects to earn income totaling more than 200 million yuan in China by 2015, said Chen Mei, vice president of Lafarge Shui On Cement.

China is one of the company's biggest markets by volume, Lafont said. Emerging markets, including China, accounted for nearly 60 percent of the company's total sales in 2012, according to the company's financial report.

 
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