China ACM Raises Ready-Mix Concrete Prices 25%
15 November 2010 - 11:55PM
Marketwired
China Advanced Construction Materials Group, Inc. (NASDAQ: CADC)
("China ACM"), a leading provider of ready-mix concrete and related
technical services in China, today announced that in response to
increasing raw material costs, it is raising the average price of
its ready-mix concrete (RMC) 25 percent across the range of its
C10-C100 concrete sales products.
The Company noted that, in recent months, its fixed RMC plants
in the Beijing area have experienced 19.8 percent higher costs for
their commodity raw materials including cement and other RMC
components such as sand, gravel, mineral powder, slag powder and
mineral sand amongst others.
China ACM's Concrete Sales contracts are typically from three to
twelve months in duration, averaging four to eight months, and
carry fixed RMC pricing. As those contracts are ending, the Company
is charging new, higher prices reflecting increased raw material
costs. These Concrete Sales contracts contain pass through features
for significant raw material price increases.
China ACM is also gaining stronger pricing power due to ongoing
industry consolidation and attrition of marginal companies in the
Beijing concrete industry. The total number of Beijing area
concrete companies was down to 165 at year-end 2009 and is
decreasing.
Conversely, at China ACM's portable RMC plants servicing HSR
projects, its large contractor clients are responsible for
purchasing the raw materials so China ACM is not affected by
changing raw material costs.
China ACM provides proprietary and patented premium RMC high
performance blends including its patented blend with a 100-year
warranty, or double the industry average. It further distinguishes
itself by providing its clients with a high degree of project
flexibility, responsiveness and unrivalled chemical engineering and
related technical consulting services.
About China ACM China ACM is a leading
producer of advanced, certified eco-friendly ready-mix concrete
(RMC) and related technical services for large scale, high-speed
rail (HSR) and other complex infrastructure projects. Leveraging
its proprietary technology and value-add engineering services
model, the Company has won work on numerous high profile projects
including the 30,000 km China HSR expansion, the Olympic Stadium
Birds' Nest, Beijing South Railway Station, Beijing International
Airport, National Centre for Performing Arts, CCTV Headquarters,
Beijing Yintai Building and U.S. and French embassies.
Founded in 2002, Beijing-based China ACM provides its materials
and services through its network of fixed ready-mix concrete plants
covering the Beijing metropolitan area. It also has technical
services and preferred procurement agreements with other
independently-owned plants across China. Additionally, the Company
owns numerous portable plants deployed in various provinces across
China. More information about the Company is available at
www.china-acm.com.
Forward-Looking Statements This press
release contains statements that are forward-looking in nature,
including statements regarding the Company's competitive position
and product and service offerings. These statements are based on
current expectations on the date of this press release and involve
a number of risks and uncertainties, which may cause actual results
to differ significantly from such estimates. The risks include, but
are not limited to, the degree of market adoption of the Company's
product and service offerings; market competition; dependence on
strategic partners; and the Company's ability to manage its
business effectively in a rapidly evolving market. Certain of these
and other risks are set forth in more detail in "Item 1A. Risk
Factors" in China ACM's Annual Report on Form 10-K for the fiscal
year ended June 30, 2010. China ACM does not assume any obligation
to update or revise any such forward-looking statements, whether as
the result of new developments or otherwise.
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Contact Financial Profiles Tricia Ross (916) 939-7285
tross@finprofiles.com Financial Profiles Moira Conlon Tel: (310)
478-2700 x11 mconlon@finprofiles.com
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