Investment In Infrastructure Related Business
With cement, concrete and aggregates businesses, CKI is one of the leading infrastructure materials suppliers in Hong Kong. Significant growth has been recorded for the Group's materials operations during the year.
CKI's materials business achieved a strong performance in 2010, benefiting from increased construction activities and improved market conditions in Hong Kong. Profit contribution increased 75% to HK$256 million during 2010.
In 2010, fueled by a surge in housing and infrastructure activities, a strong performance was recorded by the Group's cement operations through Green Island Cement.
During the year, the company was awarded "Hong Kong Top Brand" by the Hong Kong Brand Development Council.
Pricing and margins were improved, and record sales and production were achieved by the Yunfu cement plant in Mainland China.
An expansion initiative in Mainland China has made good progress. The development of a new flagship cement production facility in Yunfu with a daily production capacity of 4,500 tonnes has commenced and is expected to be commissioned in the second half of 2012. The new facility is expected to further improve the profitability of the Group's cement business.
Overall, the prospects for the Group's cement operations in Hong Kong and Mainland China are positive.
Concrete And Aggregates
The Group carries out its concrete and aggregates businesses through Alliance Construction Materials Limited, a 50/50 joint venture between CKI and HeidelbergCement AG. In 2010, an increase was achieved in both volume and pricing for concrete and aggregates.
Through a separate joint venture, Alliance is also developing a new quarry in Huidong, Guangdong. The construction is progressing well with operations expected to commence in 2011. Upon completion, the new crushing plant aims to produce 2.5 million tonnes per annum at a production capacity of 750 tonnes per hour.
Strategic Investment In Enviro Energy International Holdings Limited
In April 2010, Green Island Cement made a strategic investment in Enviro Energy International via a HK$176 million exchangeable note. Enviro Energy International invests in conventional petroleum production as well as unconventional natural
gas exploration in Mainland China. It focuses on enhanced hydrocarbon extraction potential in its projects, including the utilisation of carbon dioxide.