Concrete Mixtures Sales
China’s growth is leading the world with an 11.9% GDP target for 2010. Economic growth, urbanization and a growing middle class are driving robust infrastructure spending. China’s construction spend is growing at 9% annually and is expected to reach $1.7 trillion by 2014. This includes an estimated $15 billion on concrete mixing contracts for the High Speed Rail from 2010 to 2020. According to a McKinsey study, China will account for 50% of global building activity by 2015.
The demand for eco-friendly concrete is also on the rise, driven by increased demand for high grade concrete for infrastructure projects and more stringent construction standards. The Ministry of Construction and People’s Congress passed legislation mandating energy-efficiency, pollution prevention, low emissions and recyclable building materials. Additionally, more complex architectural designs are increasing the demand for premium concrete mixtures and more advanced technical services. As a result, the Company’s RMC production has grown at a 27% CAGR since 2001.
Ready-mix is growing as a percentage of the overall market in China. Currently, developed countries are using 80% ready-mix concrete vs. 20% on-site, as compared to China which is using 40% ready-mix concrete vs. 60% on-site. This leaves considerable growth potential.
China ACM produces RMC at four fixed concrete plans in Beijing with a maximum annual capacity of four million cubic meters that are deliverable in a 25 km radius. The Company is a tier 2 contractor which is the highest designation for subcontractors and allows for the production of C-60 to C-100 premium mixtures.