South Korean Cement Industry Achieves Both External and Internal Growth Last Year

The domestic cement companies in South Korea seem to have successfully balanced their external and internal aspects based on their performance report from last year.

South Korean Cement Industry Achieves Both External and Internal Growth Last Year
Photo by Sava Bobov / Unsplash

With a significant increase in cement prices, coupled with stable prices of coal, a major cost component, and an increase in cement input on construction sites due to safety concerns, the industry saw a boost in performance.

According to industry sources on the 3rd, Hanil Cement recorded consolidated sales of 1.8 trillion 6.6498 billion won and operating profit of 246.785 billion won last year.

Sales increased by 21.0% compared to the previous year, while operating profit more than doubled. Net profit also saw a significant increase of 111.2% compared to the previous year.

Other companies like Hanil Hyundai Cement, Asia Cement, Sungshin Cement, and Ssangyong C&E also reported growth in sales and profits last year.

The increase in sales and profits for South Korean cement companies was influenced by the sharp rise in cement prices while the stable coal prices, which account for 30% of costs, played a significant role.

Cement prices have risen steeply over the past two years while coal prices have stabilized after a sharp increase due to the Russia-Ukraine conflict.

The industry is facing a mixed outlook for this year with potential benefits from stable coal prices but concerns over reduced construction demand and possible electricity price hikes.

Industry experts suggest that last year's performance was directly impacted by the increase in cement prices, stabilization of coal prices, and higher cement input due to safety issues in construction sites. They anticipate maintaining profitability if the expected decrease in demand is less severe this year.

This positive trend in the South Korean cement industry reflects a balance between market dynamics and operational efficiency, setting the stage for potential growth opportunities amidst challenges.