Displaying items by tag: GCW212
Brazil: Brazil's antitrust watchdog Cade has ordered six cement makers named in a price-rigging case to pay a combined US$934m in fines within one month in a landmark decision that also orders asset disposals, according to Reuters. Under the terms of the decision announced on 29 July 2015, the watchdog gave the companies a one-year deadline to reduce their installed capacity in the cement and concrete industries through asset sales. The decision was published in the government's official gazette.
According to Cade, which first issued a ruling in the case in May 2014, Votorantim Cimentos, Intercement Brasil, Itabira Agro Industrial, Cia de Cimentos Itambé, Holcim Ltd and Cimpor Cimentos de Portugal colluded on pricing to force rivals out of the market. The ruling, which followed an eight-year inquiry, followed cost overruns that dogged Brazil's preparations for the 2014 FIFA World Cup as well as dozens of road, port and infrastructure projects across the country. The companies control about 75% of the domestic market for cement and concrete.
A series of studies by Cade showed evidence that several takeovers and asset swaps among cement companies during the 1990s and the 2000s were made to prevent rivals from entering the market. The largest players in Brazil's cement industry tend to have strong market control in specific regions, increasing the potential for collusion. The number of cement producers in Brazil shrank to about 10 in 2011 from almost 25 in the early 1990s.
Under terms of the ruling, Votorantim must pay US$450m in fines and Cimpor US$89.2m. Cade fined Intercement Brasil US$72.4m, Itabira US$123m and Holcim US$153m. Itambé must pay US$26.4m. Some of the companies are challenging Cade's ruling in the courts. Cade also imposed sanctions on ABCP, Brazil's Portland cement group and SNIC, which represents local cement plants.
Lafarge Africa's first half pre-tax profit rises 13%
30 July 2015Nigeria: Lafarge Africa has reported that its pre-tax profit rose by 13% year-on-year to US$149m in the first six months of 2015, according to Reuters. Its turnover in the first six months of 2015 increased to US$586m from US$523m in the same period of 2014. Its finance and investment income rose to US$17.6m from US$8.59m in 2014.
Local construction firms cry foul over new PPC plant
30 July 2015Zimbabwe: PPC is under fire from local construction companies that have accused it of sidelining them in the construction of a new cement plant in Ruwa in favour of foreign companies, as reported by All Africa.
According to 'inside sources,' local companies submitted bids, but these were rejected due to a directive from the cement company's head office to sideline local companies and renegotiate a new contract with the main contractor, China's Sinoma International Engineering. The Chinese company was already undertaking construction works at the cement plant. Sources have said that since the beginning of construction, no projects have been awarded to local firms, which claim to have the same technical ability and expertise as the foreign companies.
"PPC is constructing a cement plant in Ruwa and is using only Chinese contractors to build the plant at the expense of local construction companies with the same capacity. Local companies submitted bids and none of them got a contract," said one unnamed source.
Another source said that a Chinese workforce drove the whole construction project being executed by Sinoma, which was against the Zimbabwe Agenda for Sustainable Socio- Economic Transformation Agenda's goal of creating jobs. "A number of local indigenous companies have tendered for various technical expertise, but none of them have been recognised. We believe that in order to empower local companies, there should be joint ventures between the foreign companies and locals to get a win-win scenario," said the source.
PPC managing director Njombo Lekula said that the company had engaged Sinoma on an engineering, procurement and construction management (EPCM) arrangement. He said that the EPCM was a common form of contracting arrangement for very large projects within the infrastructure, mining, resources and energy industries. "We engaged the Chinese in an EPCM arrangement and the contractor is the one that knows how to execute the project. Right now, Sinoma employs 60 locals, which I think is a large number. Due to the arrangement it is obvious that the contractor will provide for all the materials required, but we told them that we need a quarter of local supply as well. The claims are baseless considering that we contracted also JR Goddard construction to do our road and sewer reticulation works for US$700,000. So to say we are sidelining locals is unfounded," said Lekula. He added that the company would continue to empower local companies and suppliers. For example, an indigenous company has been awarded a contract to do all of the rail infrastructure at the plant at a contract value of about US$3m.
PPC expects to complete the construction of its 1Mt/yr capacity cement plant in the first half of 2016 with an investment of about US$86m having been made towards the project so far. The project would cost a total of US$200m after completion, with the investment package set to aid the setting up of another plant in Mashonaland Central. PPC is also building a separate grinding facility in Mozambique's Tete Province.
Vietnam: Yen Binh Cement's revenue grew to US$12.7m in the first half of 2015, thanks to its expanding markets.
In the period, Yen Binh Cement sold 308,000t of cement and exported 480,000t of clinker, fulfilling 40% of its 2015 target. The company produced 400,000t of cement in the six months, meeting demand in Yen Bai Province and the neighbouring Provinces of Ha Giang, Tuyen Quang and Lai Chau. Yen Binh Cement also exported 480,000t of clinker. In 2015 it aims to generate a revenue of US$33.2m, with a net profit of US$962,640.
Nepal: Nepal has endorsed a US$360m Foreign Direct Investment (FDI) proposal made by China's Hongshi Holdings to establish a cement plant in Nepal in partnership with Nepal's Shiva Cement. This is the largest FDI pledge yet from China, according to the government officials.
China's Hongshi Holdings and Nepal's Shiva Cement reached an agreement in March 2015 to set up a cement plant in Nepal. Officials at the IBN said this is the third-largest FDI in cement plants in Nepal. As per the agreement, Hongshi Holdings will invest 70% in the project, while the Shiva Cement will invest the remaining amount.
According to Nepal's Cement Manufacturers' Association, there are more than 40 (mainly mini) cement plants in the country and domestic products only account for 85% of domestic consumption.