By staff reporter Wang Xiaoling

China's recently revealed 4-trillion yuan stimulus package has the country's cement producers predicting new growth and more profits.

Song Zhiping, president of China National Building Material Company (CNBMC), told Caijing that "we will be the largest beneficiary from the 4-trillion yuan stimulus package."

China's State Council announced November 9 that a total of 4 trillion yuan will be invested in infrastructure and social welfare by the end of 2010, with the goal of boosting domestic consumption and growth amid the worsening global economy.

As China's largest cement and gypsum board producer, CNBMC predicted that the stimulus plan will increase China's cement demand by 600 million tons over the next two years, which will create huge business opportunities for CNBMC.

According to Song, although the recent economic turmoil has had little impact on cement market, the industry has held a conservative outlook since August. "CNBMC's 2009 business plan was made based on zero growth of its cement business," said Song.

Along with the weakening market, cement producers have also faced tightened credit control from banks. In July, CMBMC urged the group’s listing subsidiaries to push forward financing such as issuance of additional shares and corporate bonds, in order to alleviate emerging capital pressures.

But with the credit control easing, Song told Caijing that CMBMC would not seek further financing through the securities market in the short term for fear of market fluctuations. The company now prefers bank loans.

The government's stimulus plan also includes a reform for the value-added tax system, which is slotted to go into effect next year. Cao Jianglin, CEO of CNBMC's listing subsidiary China National Building Material Co. Ltd., said that the tax reform will reduce the value-added tax ratio for the building material industry to 16 percent, down from the current 19 percent. "We have plenty of capital reserve now and the tax reform will help it grow. We were quite worried a month ago, but now we feel very good," said Cao.

According to Song Zhiping, CNBMC currently has a capital reserve of 26 billion yuan. The company's total assets topped 55 billion yuan this year. It controls 19 subsidiary companies and 6 listing firms.