China Shuangji Cement, Ltd. (CSGJ.OB) Announces Start of Permitting Process for Massive New Cement Plant in Hainan Province

QualityStocks would like to highlight China Shuangji Cement, Ltd. (OTCBB: CSGJ). The company, through its affiliates and controlled entities, is a leading producer of high-quality Portland cement in Shandong and Hainan Provinces. Its processed cement products are primarily purchased by contractors for the construction of buildings, roads, and other infrastructure projects.

In the company’s news yesterday,

China Shuangji Cement reported the beginning of permitting for the construction of a new state-of-the-art 2M metric ton cement plant on Hainan Island to replace the current Dongfang production line.

The new facility will boost production substantially, effectively quadrupling output capacity compared to the existing plant. Current production of Portland cement by CSGJ totals approximately 2.5M MT per year when the output from all four of its existing plants are combined.

The company has already begun the permitting process requirements, removing the existing vertical kiln in order to obtain the permit to build a new plant and secure the backing of the local Hainan provincial government for new construction.

The Hainan provincial government has submitted approval in writing and CSGJ is merely awaiting approval from the government officials in Dongfang City, confident that such approval is something of a foregone conclusion and should occur shortly.

President and Chairman of CSGJ, Wenji Song, noted that although the vertical kiln has been removed in order to facilitate the permitting process, clinker is still readily obtainable nearby and thus the extant production rate at the site is being maintained.

The move to build the new facility is a shrewd one indeed as projected demand in and around Hainan Province, which has seen amazingly rapid economic growth, is expected to continue to rise. Another factor in the decision was the strong desire of CSGJ to help China meet new targets for reducing emissions and improving environmental standards.

Improved cost efficiency benefits from the new facility are expected to complement CSGJ’s operations on Hainan Island, which include the other 500k MT facility. The overall improvement in the underlying logistical dynamics is very appealing to the Company’s bottom line and CSGJ anticipates that the close proximity to raw materials and water transportation will produce additional downstream profitability incentives as well.

Song concluded his remarks by expressing his supreme confidence that the existing facility will maintain current output levels until such time as the new facility comes online, reaffirming commitments to maintain laser-focus on selling all the cement the company produces and highlighting the existing cement shortage on Hainan, which still has to import from the mainland in order to meet demand.

All of this is very good news for CSGJ shareholders, who stand to reap the rich rewards of the company’s strategic move to fulfill the massive demand from construction and industry for top quality Portland cement.

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