Cement Operations
Anhui Chaodong Cement Company Limited ("ACC")
Background
In June 2006, Prosperity entered into an agreement to acquire a 40 per cent interest in Anhui Chaodong Cement Co. Limited (“ACC”). ACC is a public company listed and traded on the Shanghai Stock Exchange of the PRC under the listing code: 600318.
Under the same share purchase agreement, Anhui Conch Cement Company Limited acquired a 19.7 per cent interest in ACC. Anhui Conch is a public company listed on both the Hong Kong and Shanghai stock exchanges and is Prosperity’s partner in PCC in Guangdong.
On 29 November 2006, Prosperity obtained approval from the State-owned Assets Supervision and Administration Commission of the PRC State Council for the acquisition. Subsequently, approval from the PRC Ministry of Commerce was granted on 28 December 2006. On 13 April 2007, Prosperity obtained a waiver from the China Securities Regulatory Commission, whereby Prosperity is exempted from making a general offer for the entire share capital of ACC.
On 1 June 2007, Prosperity completed the share transfer process to acquire 40 per cent interest in ACC.
Subsequent to the CSRC waiver, the ACC shares, which bear full voting rights and entitlements, have been restructured from non-tradable to tradable. Under the terms of the share purchase agreement, Prosperity has undertaken not to sell the ACC shares it acquires within three years of the date the shares are transferred to Prosperity.
The share reform (or restructure) scheme of ACC was approved at a Special Shareholders’ Meeting on 8 May 2007 whereby the non-tradable shares, of which Prosperity holds 80 million, were approved to be converted to tradable shares. In exchange, the existing tradable shareholders were to be issued with 5.25 additional new shares for every 10 existing tradable shares. As a result of the reform, the shareholding of Prosperity in ACC (being at 80 million shares unchanged after the enlargement of the share capital) was diluted from 40 per cent to 33.06 per cent. The share reform was completed on 16 July 2007.
Capacity
ACC currently has a designed saleable capacity of 3.4 million tonnes / year with expansion plans to increase that to 6.9 million tonnes / year by the end of fiscal 2012.
Performance
For the fiscal year ended 31 March 2009, ACC reported an attributable loss of $3.99 million, largely due to a non-cash provision in December 2008 on old fixed assets, as a result of the closure of some old prodction lines.
Expansion
ACC is investing in new cement and clinker production facilities in Chao Hu, Anhui Province. The expansion project will increase ACC's designed saleable production capacity of cement and clinker to 6.9 million tonnes / year by the end of fiscal 2012.
Construction of the first new 2 million tonne / year clinker production line was completed within budget and on schedule. It was successfully commissioned on 28 December 2008 and has subsequently been running smoothly.
Construction of the new clinker production line and cement grinding facilities at Chau Hu
October 2007 March 2008
March 2008 June 2008
November 2008
Liaoning Changqing Cement Cement Co. Limited ("Liaoning Changqing")
Background
Liaoning Changqing is a new cement and clinker facility located near Dengta City, Liaoning Province, northern PRC. Prosperity sold its 75% interest in Liaoning Changqing to TCC International Holdings Limited as part of the disposal of the majority of its cement assets in a transaction completed on 30 April 2010. On 22 May 2010, Prosperity entered into a conditional sale and purchase agreement to acquire the 25% interest in Liaoning Changqing currently held by its former partner in the project.
Capacity
Trial production at the new 2 million tonnes / year cement and clinker production facilities commenced on 28 April 2010 and normal production is expected to commence by September 2010.
The Cement Manufacturing Process
The Residual Heat Electricity Generation System (RHE)
