Inner Mongolian Government and Major Cement Maker Clash Over Production Rights
Yicai Global
/SOURCE : Yicai
Inner Mongolian Government and Major Cement Maker Clash Over Production Rights

(Yicai Global) July 8 -- The Inner Mongolian government has ordered the Inner Mongolia plant of Tangshan Jidong Cement Co. [SHE:000401] to stop production and is fining it CNY1 million (USD149,500) in order to force the company out of the region and transfer its share of cement production to local businesses.

Tangshan Jidong, the sixth largest cement producer in the world, has counteracted by suing the Inner Mongolia government today, demanding that it withdraw the decision to impose a penalty and a forced halt in production.

Since the introduction of supply-side reforms, which set cement production quotas for each region, local governments have been keen to protect the interests of local businesses.

The ruling is a big blow for Tangshan Jidong which suffered a loss of CNY1.7 billion (USD254 million) last year, its 2015 annual report shows. Its Inner Mongolia cement plant is its biggest factory.

With an annual cement capacity of 125 million tons, the Tangshan-based company is the largest supplier of high-strength cement in north China.

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