Displaying items by tag: market
Uzbekistan: United Cement Group (UCG) subsidiary Kuvasaycement is building a sixth grinding unit at its Quvasoy cement plant in Fergana. Business World Magazine has reported that China-based Sinoma International Engineering will supply the equipment for the expansion, consisting of a roller press and ball mill, equipped with a separator and pre-grinder.
Kuvasaycement general director Denis Nikitin said "In recent years, we have systematically replaced outdated equipment, renewed our car fleet, installed new filters to reduce cement dust emissions and modernised cement mills in accordance with the highest requirements to which UCG adheres. The cement market in Uzbekistan is rather saturated and, in order to increase production competitiveness, we decided to commission one more cement mill to 'cover' the capacity of the existing five mills. It is also connected with additional demand for products for the construction of bridges, roads and airports. This is state-of-the-art equipment with new grinding capabilities that we have been missing."
Pakistan: Cement producers despatched 44.6Mt of cement during the 2023 financial year, down by 16% year-on-year from 52.9Mt in the previous financial year. Exports dropped by 13% to 4.57Mt from 5.26Mt. The Dawn newspaper has reported that cement plants in Northern Pakistan accounted for 33.9Mt (76%) of despatches, while those in Southern Pakistan accounted for 10.7Mt (24%).
The All Pakistan Cement Manufacturers Association urged the government to support export-orientated industries. It said “Boosting exports will play a pivotal role in the revival of our economy. Signing of standby agreement with IMF is only an interim solution and we must use our own resources in order to build a stronger Pakistan.”
India: ICRA says that all-Indian cement production capacity will rise by 6% year-on-year to 610Mt/yr during the 2024 financial year. The ratings agency forecasts that the Indian cement industry will invest US$14.6bn over the four years up to the end of the 2027 financial year to expand its capacity by 26% to 725Mt/yr. The Financial Express newspaper has reported that costs of cement production fell in the second half of the 2023 financial year, which ended on 31 March 2023. The trend is expected to continue throughout the 2024 financial year. Meanwhile, ICRA has forecast domestic demand growth of 7 - 8% year-on-year in the 2024 financial year.
Philippines: Holcim Philippines and Sungshin Cement have signed a memorandum of understanding whereby Holcim Philippines will be priority supplier of cement for use in Sungshin Cement's ready-mix concrete operations in the Philippines, InPR News has reported. South Korea-based Sungshin is anticipating growing demand from infrastructure projects, partly due to a US$3bn development loan agreement between the government of the Philippines and South Korea.
Philippines: Metal and ores producer Global Ferronickel Holdings (FNI) plans to invest in clinker production operations. The company has indicated that it will also begin producing limestone to supply any clinker plants that it builds. The Manila Bulletin newspaper has reported that FNI's plans also include new ventures into value-added processing, including through the establishment of a ferronickel processing plant and nickel matte processing facility.
India: Birla Corporation says that it expects to sell 18.1Mt of cement during the 2024 financial year (1 April 2023 - 31 March 2024), up by 15% year-on-year from 15.7Mt in the 2023 financial year. That financial year, sales grew by 11% year-on-year. Looking ahead, the producer expects its new 3.9Mt/yr Mukutban cement plant in Maharashtra increase its sales. It said that it may also carry out future expansions at its Chanderia cement plant in Rajasthan.
The Hindu BusinessLine newspaper has reported that managing director and CEO Sandip Ghose said "Our strategy is based on prices not going up significantly. Volumes are going to move in a healthy manner unless there are any major dislocations, disruptions or hiccups going forward. I am very bullish on the India growth story." Regarding the company's Gujarat market in Western India, he said "Gujarat had gone through exponential growth in the past year, which boosted certain companies' profitability because of the bullet train, the expressway and other developments." Ghose forecast similar demand growth in Madhya Pradesh and Uttar Pradesh.
Ethiopia: Derba MIDROC Cement is reportedly ready to sign a contract with China National Building Material (CNBM), for the latter to commence construction of Derba MIDROC Cement's 2.74Mt/yr Mughar Valley cement plant in Oromia. The producer said that it expects to invest US$500m in the project, 30% higher than its previous estimate of US$385m. Addis Fortune has reported that Derba MIDROC Cement now believes there to be adequate energy infrastructure to support the plant, following China-based Sinohydro's construction of a new US$12m power line from nearby Chanco.
When commissioned, the plant will double Derba MIDROC Cement's capacity and create 3000 new jobs in Oromia. The producer also hopes to ease the ongoing national cement shortage. The Ministry of Mines recorded domestic production of 7.6Mt in 2022, against demand of 36Mt.
World: Market Research Future has forecast a composite annual growth rate (CAGR) of 5.3% between 2022 and 2030. This would result in a market value of US$505bn in 2030, compared with US$335bn in 2022. The report added that the rate of new construction projects is increasing across all regions.
Update on South Africa, June 2023
21 June 2023Mining and materials company Afrimat said it was buying Lafarge South Africa this week. The assets it is acquiring include aggregate quarries, ready mix concrete (RMX) batching plants, one integrated cement plant, two cement grinding plants, cement terminals and fly-ash sources. The means of purchase is somewhat unusual, as Afrimat is paying around US$6m but it also appears to be taking responsibility for around US$50m of outstanding debt that Lafarge South Africa owes its parent company, Holcim. In a statement Afrimat’s chief executive officer (CEO) Andries van Heerden talked up the benefits for his company in terms of the boost to its aggregates and concrete businesses.
This is quite the change from 2012 when India-based Aditya Birla Group was reportedly looking into buying Lafarge South Africa. At this time the value for the business for a similar mix of assets, including 55 RMX plants and 20 quarries, was said to be to US$900m. Prior to this, Lafarge South Africa spent around US$170m in the late 2000s on increasing the production capacity at its integrated Lichtenburg plant and building its Randfontein grinding plant. Then in 2014, when the merger between Lafarge and Holcim was announced, Lafarge consolidated its Nigeria-based and South Africa-based operations as Lafarge Africa. It later decided to move the South African business to another Holcim subsidiary, Caricement, in 2019 to keep the business in Nigeria more profitable by reducing its debts. This transaction was valued at US$317m. At the time chair Mobolaji Balogun said that Lafarge South Africa’s operations had faced a challenging market in South Africa, with shrinking demand in an aggressively competitive sector. Afrimat is now buying Lafarge South Africa and its subsidiaries from Caricement.
Holcim isn’t alone in making an effort to sell up in South Africa. In April 2023 the Valor Econômico newspaper reported that Brazil-based InterCement was receiving offers for its remaining African-based assets in Mozambique and South Africa with a potential deal valued at around US$300m. InterCement runs Natal Portland Cement in South Africa, which operates one integrated plant and two grinding units. This follows the sale of its Egypt-based assets in January 2023 to an unnamed buyer.
PPC, the country’s largest cement producer, is staying put. However, it issued a mixed trading update this week ahead of the formal release of its annual results to 31 March 2023. Trading conditions in the interior of South Africa and Botswana were described as being ‘difficult,’ with cement sales volumes down by nearly 6% year-on-year and earnings before interest, taxation, depreciation and amortisation (EBITDA) down by 26%. Yet the group says it was able to grow its revenue. PPC’s CEO Roland van Wijnen added, “We therefore remain hopeful that the South African government will roll out its infrastructure development plans and protect the local cement market through the introduction of import tariffs to create a level playing field for domestic producers.” Dangote Cement subsidiary Sephaku Cement was more circumspect in its recent trading update but it too warned that, “deteriorating economic conditions and persistent challenges in the cement industry impacted Sephaku Cement’s financial performance to break-even levels.”
Much of the above makes for gloomy reading. As the local trade association Cement and Concrete South Africa (CCSA) has laid out to local media, the market faces the problem of having 20Mt/yr of production capacity, 12Mt/yr of demand and over 1Mt/yr of imports compounding the problem. Lobbying by local producers against imports has been a feature of the market since the early 2010s and this work continues through the efforts of the CCSA and others. However, the plea by PPC for government infrastructure spending suggests that the market faces more systemic problems. As a consequence some cement producers are trying to leave the market, while others are attempting to tough it out.
US: Heidelberg Materials North America inaugurated its 2.4Mt/yr Mitchell cement plant in Indiana on 14 July 2023. The plant is equipped with a 3600 bag/hr rotary packer, and also boasts a 154,000t-capacity clinker storage dome. It will produce Heidelberg Materials North America's EcoCem Portland limestone cement (PLC), alongside other products. The producer said that the new plant will help to address US cement supply chain constraints amid a planned US$110bn infrastructure overhaul.
Heidelberg Materials North America president and chief executive officer Chris Ward said "The plant will reduce CO2 emissions per tonne of clinker by almost 30%, mainly through operating on natural gas. Our investment in the Mitchell facility helps us lower our carbon footprint, while serving the growing demand for more sustainable products in this key market.”