Displaying items by tag: Government
Unfair competition in Canada
05 February 2014On 31 January 2014, the Québec government announced that it would invest US$350m in a new US$1bn, 2.2Mt/yr cement plant and port facility, to be operated by McInnis Cement at Port-Daniel. To say that this has prompted outrage in the industry is an understatement. Rival cement producers, including Lafarge and Ciments Québec have been unanimous in condemning the funding, which they see as an unjustified affront to fair competition in the province's cement industry. There was an angry response on the Global Cement LinkedIn Group, with dissatisfaction on a number of levels.
Firstly, established manufacturers highlight that the Québec cement market is in a slump, with 100-150 members of Métallos, the United Steelworkers union, currently on rolling temporary furloughs at any one time. There is over-capacity as it is. How will another cement plant help this situation? One contributor to the Global Cement LinkedIn Group said that the funding was like, "Taking the money I pay as taxes to break my legs." Another said, "Imagine our tax dollars heavily subsidising our direct competitor - totally unacceptable!"
Secondly, the government will have a direct interest in the cement industry, diverting public funds to a sector that (in the West) is traditionally left to its own devices. What does the government have to gain from this move? Well, there are suggestions that the awarding of future government cement and concrete contracts can no longer be fair due to the rather obvious conflict of interest. Could the government effectively award contracts to itself? Arguments from the government and McInnis that its distribution will be outside the areas served by the other plants don't seem to wash with the established producers.
Thirdly, there are fingers pointed at the Gaspasia paper mill project, a failed government-funded installation that was not established in the 1990s at a cost to the taxpayer of US$300m. It is unlikely that any of the parties involved would like to see a repeat at Port-Daniel.
Finally, the Canadian government appears to have turned its back on its own 'Wood First' policy, signed in April 2013, which stated that wood should be preferred in construction over cement and steel due to environmental concerns over embodied CO2. At the time Canadian cement manufacturers were at pains to point out that cement and concrete constructions were actually sustainable in comparison to many other building materials, especially with repect to long-term use and minimisation of energy consumed during a building's lifespan. At worst this seems to be a government U-turn but it could yet get more ugly. Now, with funding for new cement capacity, Québec appears to have 'listened' to the cement producers. How long before some cynics point to this change as evidence that the government wanted McInnis Cement to happen all along?
Whether a gross miscalculation or a deliberate ploy by the government, the McInnis Cement saga will not be going away. Ciments Québec and Lafarge will line up to fight the decision and, in litigation-heavy North America, this story could run and run.
Competition regulator recommends Naikuni removal from East Africa Portland Cement Company
05 February 2014Kenya: The Competition Authority of Kenya (CAK) has recommended that Titus Naikuni stops chairing the Technical Committee of the East Africa Portland Cement Company (EAPCC) board, citing the risk that his position poses to the firm's strategic leadership in light of the fact that he represents Lafarge, which has a controlling stake in the rival Bamburi Cement.
The competition watchdog says that Lafarge's two board seats and control of strategic committees at the EAPCC amounts to anti-competitive behaviour that needs to be reviewed. Naikuni chairs the Technical Committee of the Portland board while lawyer Hamish Keith, another representative of Lafarge, is the chair of the Tender and Procurement Oversight Committee.
The authority has concluded that Lafarge's sizeable shareholding in Kenya's leading cement makers, Bamburi and the EAPCC gives it control of more than half of Kenya's cement market and amounts to monopolistic behaviour and undue concentration of economic power.
"The authority was of the view that this high market share and directorship of Lafarge in key strategic committees (tender and procurement and technical committees) at EAPCC exhibited features of unwarranted concentration of economic power," said the CAK in its 2013 annual report. The regulator made the recommendation in response to Industrialisation principal secretary Wilson Songa's December petition over Lafarge's dominance of Kenya's cement market that is linked to the French firm's multiple ownership of cement makers and its representation on Bamburi and EAPCC boards.
The move follows Songa's previous attempt to investigate directors at the EAPCC following a chaotic annual general meeting in late 2013.
East African Portland Cement Company asks Kenyan government to renew CEO Kephar Tande
02 October 2013Kenya: The East African Portland Cement Company (EAPCC) has asked the Kenyan government to renew the term of its CEO, Kephar Tande, whose current three year term is set to end in October 2013. Tande's re-appointment presents a test to the new Kenyan government, elected in March 2013, which may follow its predecessors and attempt to influence the composition of the cement producer's management board.
"The board is satisfied with Tande's work and we have asked the Cabinet secretary to offer him another term," said the chairman of EAPCC, Mark ole Karbolo, in an interview with Kenyan newspaper Business Daily. He added that the EAPCC will announce a profit of nearly US$12m for the year ending June 2013.
In 2012 the government unsuccessfully attempted to oust eight EAPCC directors including the chief executive, accusing them of poor governance. The directors, including Karbolo, Kenya Airways CEO Titus Naikuni and lawyer Hamish Keith, moved to court to block the move following the state's directive to disband the cement maker's board. The court reinstated them in a legal battle that also saw former President Kibaki's appointment of Karbolo's replacement revoked.
MPA calls for UK government to ‘Cement the Future’
23 September 2013UK: The Mineral Products Association (MPA) today, which promotes the interests of the cement industry in the UK, has today launched a landmark document for the UK cement industry, 'Cementing the Future – Sustaining an Essential British Industry'. The new publication sets out to explain the importance of cement and concrete to the UK economy and society and draws attention to the vulnerability of the industry to overseas competition unless the government acts to create a level playing field in terms of the cost of regulation and unilateral 'green taxes' that overseas competitors do not face.
"Cement is a key constituent in concrete, the most widely used man made substance on the planet , and underpins our economy and everyday life," said Dr Pal Chana, Executive Director of the MPA. "Our shops, factories, offices, homes, schools, hospitals and much more all depend on this critical material yet the industry is struggling to compete in the face of ever increasing costs, some of which are centrally imposed by government. Our strategic significance to the economy cannot be overstated."
"The government's own economic growth plans are predicated on a substantial increase in the construction of infrastructure and housing and cement and concrete are going to be needed for both," continued Chana. "We cannot allow the supply of this essential material to be left to the vagaries of the international trading markets, especially not when we have a deep rooted industry here in the UK with factories in mainly rural locations providing much needed jobs."
'Cementing the Future' calls on the government to: recognise the industry's strategic significance and potential to generate economic growth; acknowledge the industry's role in delivering a low-carbon future for the UK; deliver an economic climate of investment security and reduce regulatory uncertainty in the industry; reduce the cumulative cost burden on the industry and; lift unilateral green taxes. In return, the industry will deliver: a secure supply of quality-assured cement made in the UK; commitment to the UK government's infrastructure and built environment programme; continued investment in the future of a healthy domestic cement industry; sustained employment at our network of UK cement plants and the supporting supply chain and; a planned reduction of 81% in greenhouse gases as detailed in our Carbon Roadmap to 2050.
"The UK cement industry has provided an essential material for the built environment for over 100 years. Working with government, we can continue to make a vital contribution to development and cement the future of an essential British industry", concluded Chana.
President approves creation of Belarusian Cement Corporation
19 August 2013Belarus: President Alyaksandr Lukashenka has approved the creation a new cement company, the Belarusian Cement Corporation. The new holding company is expected to control three cement manufacturers: Belarusian Cement Plant in Kastsyukovichy, Mahilyow region, Krasnaselskbudmateryyaly in Vawkavysk, Hrodna region, and Krychawtsementnashyfer in the Mahilyow region, as well as a transport and logistics company.
The Belarusian Cement Corporation is to be established in 2014 and attract a strategic investor in 2015. The establishment of the corporation is intended to decrease production costs, increase profits and raise exports. After project capacity is achieved in 2015, the company will have a cement production capacity of 9.5Mt/yr.
Ethiopia overestimates cement demand in 2012 - 2013
13 August 2013Ethiopia: Ethiopia has produced 12Mt of cement, double its domestic demand, in the fiscal year that ended on 7 July 2013, according to a report released by Ministry of Industry (MoI). The country's current domestic demand for cement is estimated to be around 5.4Mt/yr.
The government expected a significant rise in cement demand in its Growth & Transformation Plan (GTP) that plans for per capita consumption of cement to increase from 35kg to 300kg. It had predicted that the demand would grow to 27Mt/yr, exceeding the 12Mt/yr cement production capacity of the country's 18 plants in the 2014 – 2015 fiscal year.
Nepal funds better road links to cement plants
31 July 2013Nepal: The Nepalese government has released plans to spend US$4m on building access roads to 14 cement plants. According to the Katmandu Post it is part of a US$12.5m industrial promotion policy to build roads, electricity transmission lines and sub-stations for cement plants across the country.
"Only those cement factories that produce clinker by using local limestone will receive the facility," said Industry Secretary Krishna Gyanwali. The government plans to complete construction of access roads for five cement factories - Ghorahi Cement, Rolpa Cement, United Cement, Shivam Cement and Nigale Cement - within the current fiscal year.
Atmaram Murarka, president of the Cement Manufacturers' Association, commented that previous government infrastructure development upgrades had not occurred. The government originally announced the scheme in the 2008 – 09 fiscal year.
Greece blocks Heracles layoff at Halkida
01 May 2013Greece: Greek authorities have blocked a request made by Heracles Cement to lay-off 229 workers from its plant in Halkis. The move would have shut down the plant. The Supreme Labour Council of the Employment, Social Insurance and Welfare ministry, voted to reject the plan made by the Lafarge subsidiary and recommended to Labour Minister Yiannis Vroutsis not to approve the demand.
Heracles Cement announced in late March 2013 that it had stopped operations at its plant in Halkida, as part of a restructuring program of its production structure. The restructuring programme was aimed at helping the Lafarge subsidiary cope with Greece's recession in its construction sector.
Saudi Arabia: Dr Tawfiq Fawzan Al-Rabea, Minister of Commerce and Industry in Saudi Arabia, has asked cement producers to build a 'strategic' reserve of two months inventory at each plant and to cover any shortage by importing cement.
At a meeting with local cement producers, which was held to ensure that companies are abiding by their commitments to import cement, Al-Rabea said that the ministry is monitoring the imported quantities and that the companies must import the quantity specified for them in line with the local market needs. He added that any delay or disregard of their commitments would be penalised.
Meanwhile, Dr Zamil Al-Muqrin, Chairman of the National Committee for Cement Companies, said that the firms have corresponded with the international companies and the first quantities of imported cement will reach the Kingdom within two weeks.
Nepal seeks US$11.5m loan for Udayapur Cement plant
17 April 2013Nepal: The Nepalese Ministry of Industry intends to petition the Russian government for a US$11.5m grant to upgrade equipment at the Udayapur Cement Factory, the country's largest state-owned cement plant.
"The loan that we are looking for from the Russian government is solely to replace machine equipment parts," said Uma Kanta Jha, secretary of Ministry of Industry. Previously the ministry asked the Russian government for a grant for the Janakpur Cigarette Factory.
Key problems besetting the Udayapur Cement include a lack of raw materials, ageing machinery, overstaffing and mounting debts. The Nepalese government's procurement policy has been blamed for making it difficult to source raw materials from India, such as coal. Currently the factory has 549 permanent staff on its payroll. The plant incurred a loss of US$10.2m in 2010 - 2011 and has a cumulative loss of US$205m. The company last released audited financial results in 2004 - 2005.