Holcim Philippines CEO Ed Sahagun.
The Ministry of Industry and Information Technology (MIIT) in China has put up a list of 527 cement plants to be shutdown. The move is an attempt to cut down overcapacity in the cement industry.
Despite low demands, the Chinese cement industry has grown from 800 million t in 2009 to 2.9 billion t by the end of 2012, with a 75 per cent utilisation rate. Capacity excess has been a chronic problem for the industry and the government has been making efforts to control it since 2003.
Experts opine that the government should allow the market forces to control the market. Ineficient companies will be automatically scrapped out. According to Zhang Qianrong from the Economic Forecast Department of the State Information Center, the market must decide resource allocation, which means preventing local governments wasting money on blind investment projects. 'Letting the market play its role and leaving the government to build and protect market rules will create an environment for fair competition, trim overcapacity and advance the upgrading of the country's industrial infrastructure,' he said.