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1. Shui On, Lafarge in venture

2. Swire scraps office tower, opts for mega hotel

3. Plans rejected for upmarket revamp of Hunghom estate

4. Sai Kung Public Pier No.2 to be constructed

5. Approved Cheung Sha Wan Outline Zoning Plan amended

1. Shui On, Lafarge in venture
Danny Chung, The Standard, 12 August 2005

Shui On Construction and Materials, controlled by businessman Vincent Lo, has teamed up with with France's Lafarge, the world's largest building materials provider, to form a cement venture which they said will be the largest in southwest China and one of the top three in the country.

Shui On's chairman Lo, who will also chair the venture, said the new unit's enterprise value, or market value plus debts and preferred shares but minus cash, will be US$650 million (HK$5 billion) excluding the planned purchase in Yunnan province. The value will be about US$880 million with the purchase.

The venture plans to spend US$120 million by the end of 2006 on modernizing plants and new acquisitions in Guizhou and Chongqing that will expand capacity by a further two million tonnes.

Shui On will inject its mainland cement assets and about HK$80 million cash into the joint venture, Lafarge Shui On Cement, for a 45 percent stake. Lafarge will pool its cement assets in Beijing, Chongqing and Sichuan with a total capacity of 4.7 million tonnes for the remaining 55 percent stake.

Shui On's assets will include all its mainland cement plants in Chongqing, Guizhou and Sichuan with a total annual production capacity of 8.2 million tonnes. Shui On will have to book a HK$60 million loss from its troubled Chongqing plant, Lo said.

Planned total combined capacity by the end of 2005 will be 17.4 million tonnes if Shui On's planned acquisition of several Yunnan plants is also included. Both companies will have equal representation at board level while Lafarge will appoint the management staff.

Lafarge chief executive Bernard Kasriel said financing for the joint venture would be through equity and debt but declined to provide further financial details. Kasriel said Shui On is ``an obvious choice'' as a partner in the mainland as the firm is ``the next strongest player'' in southwest China, Kasriel said.

Shui On and Lafarge said they are upbeat about the Chinese market because, with annual consumption of 900 million tonnes, the country accounts for 45 percent of the world cement market by volume and 25 percent by value. Consumption will probably grow by 7-8 percent annually in future, fueled by the mainland's policy of encouraging companies to develop the poorer western region, the government's extensive infrastructure plans and China's rapid economic growth, they said in a statement. Kasriel said southwest China, with a population of 200 million, has an annual market for cement of 100 million tonnes, or about two thirds of the total in United States.

He added that 70 percent of the market was currently supplied by the older vertical kilns that were not efficient or environmentally friendly and which ``will not survive tomorrow.''

By comparison, 80 percent of the joint venture's kilns would be the superior rotary kiln by the end of 2006, which will enable it charge a premium for better quality cement.

Shui On and Lafarge first linked up last year when Lo's firm offered the French company 40 percent of its planned purchase of two cement plants in Yunnan. Shui On's purchase still needs the green light from Beijing.

2. Swire scraps office tower, opts for mega hotel
Raymond Wang, The Standard 12 August

Swire Pacific, a Hong Kong-listed conglomerate, plans to build a mega hotel as part of its Taikoo Shing developments, instead of a proposed office tower, as it announced a 11 percent rise in first-half net profit.

Property analysts estimate construction costs at up to HK$1.5 billion, assuming that the hotel - to be built on the former Mount Parker House site in Cityplaza Two - will provide more than 1,200 rooms.

The company, the biggest office landlord in eastern Hong Kong Island, has submitted a building plan for the hotel development to the government, Swire Properties chairman Keith Kerr said at the firm's briefing for analysts on its interim earnings Thursday.

Swire's underlying profit rose to HK$3.26 billion for the six months ended June 30 from HK$2.93 billion a year ago, largely in line with analysts' forecasts of HK$3.3 billion.

Turnover rose 7 percent to HK$8.99 billion.

The company said it is not in a rush to press ahead with its office project in the extension of Cityplaza One, as it is proceeding with a 1.5 million-square-foot office project at 16 Westlands Road in Quarry Bay, which is close to its Taikoo Shing developments.

The 146,000-square-foot vacant site in Cityplaza Two was originally earmarked for a 34-story office project, with a potential gross floor area of about 610,000 sqft.

Tony Chan, executive director of Vigers Appraisal and Consulting, estimated construction costs for the planned Taikoo Shing hotel at between HK$2,000 and HK$2,500 per square foot.

Swire, which invests in aviation, marine services, beverages and property, owns a 20 percent stake in each of three hotels in Admiralty, which are managed by Marriott International, Conrad Hotels and Shangri-La Asia.

Regarding its earnings, Swire said profit of about HK$2.3 billion on the sale of its 17.62 percent stake in Modern Terminals will be booked in the second half.

Its net profit more than doubled to HK$7.33 billion in the first half from restated HK$3 billion a year ago, as it booked a HK$4.58 billion gain for the increase in values of its properties under the new accounting standards.

3. Plans rejected for upmarket revamp of Hunghom estate
CHLOE LAI, SCMP 12 August 2005

The Hunghom Peninsula estate

Developers' plans to remodel a former subsidised housing estate, that was saved from demolition by a public outcry, have been thrown out.

The Buildings Department said it had rejected proposals by Sun Hung Kai Properties and New World Development to renovate the Hunghom Peninsula estate.

The decision left the developers at a loss as to what to do with the prime waterfront site for which they paid the government a "bargain" price of $2.77 billion.

After scrapping plans to knock down the 2,470 flats - once part of the Home Ownership Scheme (HOS) - before anyone had lived in them, the developers wanted to convert them into luxury units.

But a department spokesman said: "Some of the proposed alteration works do not comply with the Buildings Ordinance."

The proposals, submitted in June, include combining flats into single units, revising internal layout, adding lifts, renovating external walls, and altering car parks and emergency-vehicle access.

The spokesman did not provide details of how the ordinance was violated.

By some estimates, the developers stood to make a profit of about $3 billion by transforming the former public project into luxury flats, many with sea views, that could sell for more than $6,000 per sq ft.

The developers can submit a new proposal. Neither company would comment last night.

It is the latest twist in a saga that first brought accusations of collusion between the government and developers, then outraged environmentalists and politicians when the companies said they wanted to demolish the estate.

The flats were originally built as a joint development by New World and a company that was later acquired by Sun Hung Kai under the now defunct HOS Private Sector Participation Scheme.

They were left vacant when the HOS, under which subsidised flats were built for sale to people who could not afford private units, was abandoned in 2002.

Secretary for Housing, Planning and Lands Michael Suen Ming-yeung was accused of ollusion after the project was sold to First Star Development, a joint venture between Sun Hung Kai and a New World unit, last year.

4. Sai Kung Public Pier No.2 to be constructed
Hong Kong Government, 12 August 2005

The Government intends to construct a new public pier in Sai Kung to resolve the problem of overcrowding on the existing public pier.

The existing Sai Kung Public Pier was built in early 1980s. It is overcrowded with travellers and many vessels have to wait for berthing during peak seasons. Construction of Pier No.2 at a nearby location is therefore proposed.

The construction work will affect about 13,100 square metres of foreshore and sea-bed i Sai King.

The work is scheduled to begin in April, 2006, and to be completed by April, 2007.

A notice describing the extent of area affected is published in the Gazette today (August 12).

The notice and its related plan are posted on the notice boards near the site. The plan is also available for public inspection at the Lands Department’ s Survey and Mapping Office, 23rd Floor, North Point Government Offices, 333 Java Road and at the Sai Kung District Office, 3rd Floor, Sai Kung Government Offices, 34 Chan Man Street.

Any person who considers that he has an interest, right or easement in or over the foreshore and sea-bed involved may submit a written objection to the Director of Lands, 20th Floor, North Point Government Offices, on or before October 12, 2005.

5. Approved Cheung Sha Wan Outline Zoning Plan amended
Hong Kong Government, 12 August 2005

The Town Planning Board today (August 12) announced amendments to the approved Cheung Sha Wan Outline Zoning Plan (OZP).

The amendments mainly involve the rezoning of three religious institutions at the foothill to the north of Ching Cheung Road from "Green Belt" to "Government, Institution or Community (1)", "Government, Institution or Community (2)" and "Government, Institution or Community (3)".

Amendments also include rezoning the sites of existing developments in Cheung Sha Wan, including Po Lai Court, Lai Bo Garden, Prince Centre, Delight Court, Foursquare Mansion, Caritas Jockey Club Lok Yan School, Sheng Kung Hui (SKH) Religious Education Resource Centre, SKH St. Thomas' Church and Ka Ling School of the Precious Blood.

These amendments are to reflect their as-built conditions and the planning intention for these sites as well as to facilitate more effective development control in the area.

Amendments have also been made to the Notes of the OZP in accordance with the refined Revised Master Schedule of Notes to Statutory Plans.

The draft Urban Renewal Authority Lai Chi Kok Road/Kweilin Street and Yee Kuk Street Development Scheme Plan (DSP) No. S/K5/URA1/1 has replaced the approved Cheung Sha Wan OZP No. S/K5/27 relating to the area delineated and described therein from the date that the exhibition of the DSP is first notified in the Gazette on August 12, 2005.

The draft Cheung Sha Wan OZP No. S/K5/28, incorporating the amendments, is now available for public inspection during office hours at the following locations:

* Secretariat of the Town Planning Board, 15/F, North Point Government Offices, 333 Java Road;

* Planning Enquiry Counter, 17/F, North Point Government Offices;

* Planning Enquiry Counter, 14/F, Sha Tin Government Offices, 1 Sheung Wo Che Road;

* Tsuen Wan and West Kowloon District Planning Office, 27/F, Tsuen Wan Government Offices, 38 Sai Lau Kok Road; and

* Sham Shui Po District Office, G/F, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road.

Any person can make written representations in respect of the amendments to the Secretary of the Town Planning Board on or before October 12, 2005. Representations made to the board will be available for public inspection.

Copies of the draft plan are available for sale at the Map Publications Centres in North Point and Yau Ma Tei. The electronic version of the plan can be viewed at the board's website at http://www.info.gov.hk/tpb/.