Displaying items by tag: GCW298
India: Ultratech Cement has reported a fall of 11.84% in its net profit to US$107.1m for the quarter ending 31 March 2017, compared to 121.5m in the first quarter of 2016. However its total revenue rose by 4.25% to US1.21bn compared to US$1.16m a year ago.
For the year ending 31 March 2017, the company posted a rise of 10.87% in its net profit, which rose to US$409.1m. Revenue increased marginally by 1.44% to US$4.33bn.
Data from the Peruvian cement association (ASOCEM) presents a potential bounce in the fortunes of the local industry in March 2017. Cement production rose slightly year-on-year to 0.79Mt. This is the first monthly rise since July 2016. The first quarter of 2017 as a whole is down by 4.5% year-on-year to 2.35Mt but any fillip is surely welcome.
Graph 1: Cement production in Peru, 2012 – 2016. Source: ASOCEM.
Graph 1 shows that production peaked in 2014. Although it has fallen since then it is still above the level in 2012. Cementos Pacasmayo blamed the overall fall in 2016 on a strong end to 2015 associated with El Niño prevention investments although, given that its production volumes also fell in 2015, albeit slightly, it may be being optimistic in its analysis. It also blamed the widening fallout from the Brazilian Petrobras corruption scandal for delaying investment by the Peruvian government on an infrastructure drive.
Graph 2: Cement and clinker imports to Peru, 2014 – 2016. Source: ASOCEM/SUNAT.
Another point to examine in ASOCEM’s latest release is the import figures as can be seen in Graph 2. Overall cement and clinker import volumes have hovered around 10 – 15% of local production but the ratios have changed since 2014, with a focus on ground cement. Cementos Pacasmayo provided one possible reason in its fourth quarter report for 2016 with the news that it had started replacing imported clinker with its own clinker as it increased production at its new Piura plant. Most of this cement has been coming from Vietnam through 2015 and 2016. Coincidentally, Vietnam’s General Department of Vietnam Customs has reported this week that local exports of cement and clinker are up by 11% to 4.82Mt for the first quarter of 2017 and that Peru is one of the top destinations. Also of note in February 2017 was a significant cement import of 30,800t from China following no imports from that country in 2016 and most of 2015.
Recent production and import trends aside, the Peruvian cement industry’s industry base hasn’t changed much since last time this column coved it (GCW183, January 2015). The country has three main producers – UNACEM, Cementos Pacasmayo and Grupo Gloria – who operate 49%, 43% and 8% respectively of the local 11.4Mt/yr production capacity. They each operate production units in north-south geographical bands in the country with Pacasmayo in the north, UNACEM in the central coastal region near to Lima and Gloria’s subsidiaries in the south.
As mentioned above, Cementos Pacasmayo has been increasing production at its newer Piura plant since mid-2015. Gloria Group purchased Cementos Otorongo, a project to build a cement plant in the south, from Votorantim in mid-2016 and Cemex was reported as having gained government approval for a grinding plant project in Lima in early 2016. On the financial side, UNACEM’s income fell by 4% to US$573m in 2016. Cementos Pacasmayo’s sales fell slightly to US$381m and its earnings before interest, taxation, depreciation and amortisation (EBITDA) for its cement operations fell by 4.6% to US$118m.
Like lots of African countries the outlook for the construction industry in Peru is good in the medium term with plenty of scope for development and a growing economy despite a contraction of 6% in the construction industry in 2016. The Gross Domestic Product (GDP) growth rate hit a low of 2.4% in 2014 but it has since started to pick up again. Once or if the Kuczynski administration starts spending on infrastructure then all the signs should point to growth in the cement industry. Given the amount of clinker sloshing around the world if any producers actually start opening terminals or grinding plants this would suggest they are confident of a return on investment.
UK: Bunting Magnetics Europe has appointed Tom Higginbottom and Gordon Kerr to its sales team. Higginbottom joins Bunting’s external sales team and has an engineering background, with particular knowledge of hydraulics. Kerr will be responsible for business development in a new internal role. He previously held a sales and marketing position at Anglian Home Improvements before becoming a project manager at Ceramica & Stone.
Bunting Magnetics supplies magnetic separators and metal detectors. The European manufacturing headquarters are based in Berkhamsted, Hertfordshire. In January 2017, the company acquired Master Magnets.
Russia: Soyuzcement, a cement manufacturing union, predicts that cement production could rise by up to 3% to 57Mt in 2017. In the short-term cement production is expected to benefit from infrastructure investment to local government municipalities from the federal budget and from a reduction to the mortgage rate by the banks. In the longer term the union expects that housing development and concrete road construction will drive the industry, according to Interfax. However, cement production fell in the first two months of 2017 and remained stable in March 2017. Soyuzcement has also prepared a negative forecast that stated that production could fall by 4% in 2017.
Algeria: Abdesslem Bouchouareb, the Minister of Industry and Mines, has said that Algeria will report a surplus in cement production later in 2017. The minister said that the country is expecting to produce 30Mt of cement due to newly commissioned plants, according to the Algeria Press Service. He added that a ‘disturbance’ in the cement market had been caused by speculation and that the government was determined protect the local economy. The minister previously announced the commissioning of new plants at Adrar and in Biskra in April 2017.
Ethiopia: The Oromia state government has started negotiations with Ambo Gnemer about building a US$44m cement plant. The company owns land in the state and it intends to develop a site at Ambo, according to the Addis Fortune newspaper. Previous attempts to develop the plant failed due to a lack of capital.
Qatar: France’s Fives has released further information about its work on the 5000t/day cement production line for Qatar National Cement Company. Fives installed the 6.6MW FCB B-mill of the raw meal grinding plant in March 2017. Installation of the raw mill shell was completed on 29 March 2017. The shell weighs 198t, has a length of 17.2m and a diameter of 6.4m. It was moved and erected using a self-propelled modular transporter. This project step followed the commissioning of the two FCB B-mills at the cement grinding plant in January and February 2017, and the signature of the related provisional acceptance in April 2017.
India: A Joint Action Committee (JAC) comprising of Confederation of Real Estate Developers’ Associations of India (CREDAI), Telangana Real Estate Developers’ Association (TREDA), Builders Association of India (BAI), Telangana Builders Federation (TBF), Telangana Developers Association (TDA) and other small and big member groups has reacted angrily against a 60% increase in the price of cement in Telangana. The group has described the rise as ‘unjustified’ and has asked cement producers to rescind the increase, according to the Hindu newspaper. S Ram Reddy, president of CREDAI and chairman of the JAC said that fuel and power costs had not increased for cement producers. He added that the JAC had failed to obtain a response from the Cement Manufacturers Association on the issue. The developers are considering options including importing cement into the state from the international market. They are also planning to meet Prime Minister Modi with a request to constitute a body to regulate the cement industry.
India: Jaiprakash Associates’ (JAL) US$2.58bn sale of cement plants to UltraTech is likely to be completed by May 2017. Manoj Gaur, the executive chairman of JAL, said that the majority of the payment would be used to pay of debts, according to the Times of India. The cement producer is selling integrated cement plants with a production capacity of 17.2Mt/yr and grinding plants with a capacity of 4Mt/yr.
Vietnam: Data from the General Department of Vietnam Customs reports that exports of cement and clinker rose by 11% year-on-year to 4.82Mt in the first quarter of 2016. Its value rose by 6.4% to US$169m. Bangladesh remained the biggest importer of cement and clinker from the country in the three-month period, accounting for 44.8% and 37.7% of Vietnam’s total clinker and cement exports in volume and value, respectively, according to the Viet Nam News newspaper. It was followed by the Philippines, Peru, Mozambique, Malaysia and Taiwan.