September 2024
South Africa: PPC has ‘substantially agreed’ the structure and how it intends to implement a new broad-based black economic empowerment (BBBEE) transaction. However, it is waiting for the release of the new mining charter before proceeding, according to the Star newspaper. PPC chief executive Darryll Castle has said that the cement producer’s proposed merger with Afrisam is ‘going on in the background’ and that it would have to assess the impact of the Afrisam transaction on the company's new BBBEE transaction.
Fiji: Pacific Cement has stopped cement production due to a breakdown at its plant. Acting Prime Minister, Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum said that the cement producer stopped production in late May 2017, according to the Pacific News Agency Service. The government intends to allow people to import cement duty free, as long as it meets the AS3972 standard, in order to prevent a cement shortage.
Pacific Cement supplies about 80% of the market in Fiji and it operates the only integrated plant in the territory. The other local supplier in the market is Tengy Cement. Pacific Cement has also agreed to sell 24,000t of surplus clinker to Tengy Cement following government intervention.
Republic of Congo: Nigeria’s Dangote says it will deliver the first batch of 42.5 R grade cement from its new US$350m cement plant at Mfila near Brazzaville in July 2017. The plant was completed in May 2017 and it is currently undergoing test runs, according to the Vanguard newspaper. The 1.5Mt/yr plant will join others run by CIMAF, Sonocc and Forspal in the country.
French Guiana: Colombia’s Cementos Argos plans to supply 21,000t of cement for a launch pad for the Ariane 6 launcher being built by the European Space Agency. Argos is providing three difference types of cement for the project that is scheduled for completion in 2018 and inauguration in 2020. The project has a budget of Euro600m and around 800 personnel are working on the construction site.
Ohorongo Cement preparing to build solar plant 08 June 2017
Namibia: Ohorongo Cement has held a ground breaking ceremony for a 5MW solar plant at its Sargberg cement plant in North Otavi. The site is being developed and built by Germany’s SunEQ and its local partner Hungileni. The US$7.8m project is scheduled to start operation by the end of 2017.
“Electricity is of paramount importance to our operations and constitutes 25% of our production requirements. We are aware of the country’s precarious energy situation and hence took the decision to tap into the renewable energy resource which our country is endowed with,” said Hans-Wilhelm Schutte, Ohorongo Cement’s managing director.
Ohorongo Cement has signed a 15-year power purchase agreement with SunEQ. Construction of the plant will start once SunEQ has obtained a generation license from the Electricity Control Board.
Iraq: China North Industries Corporation (Norinco) has signed a US$445m deal with Jabal Bazian Co for General Trading to build a cement plant. The contract includes the plant's production line design, purchasing, construction management, operational work as well as assorted administration buildings, dormitories, dining halls and other facilities, according to the Global Times newspaper. The plant is scheduled for completion in the second half of 2019.
South Africa: PPC has blamed its poor performance in its financial year to 31 March 2017 on a poor credit rating from S&P Global Ratings. Its chief executive officer Darryll Castle complained about a liquidity crisis caused by the downgrading of PPC’s credit ratings to junk status by S&P Global Ratings in May 2016. He also attributed the result to falling cement prices in South Africa and poor weather in early 2017.
The cement producer’s earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 13% year-on-year to US$160m for its financial year that ended on 31 March 2017 from US$184m in the same period in 2016. Despite this its sales revenue rose by 5% to US$745m from US$711m and its cement sales volumes rose by 1.6% to 5.54Mt from 5.45Mt.
PPC reported that its 1Mt/yr production line at PPC Slurry is on schedule for commissioning in the first half of 2018. Its 1.4Mt/yr plant in Ethiopia started selling cement in May 2017 and sales are expected to rise as the plant ramps up production.
Update on France 07 June 2017
2017 is an anniversary year for the French cement industry as it marks the bicentenary of Louis Vicat’s pioneering work into the creation of ‘artificial’ cement. The company that bears his name, Vicat, is a major force in the global cement industry to this day. However, the French industry has suffered since the global financial crash in 2007, with steadily declining production volumes, despite a bounce in 2011. Lafarge was only able to maintain its international status through a merger with Switzerland’s Holcim in 2015 and the arguments surrounding that ‘merger of equals’ are still playing out now with the resignation of the group’s chief executive officer in April 2017.
Graph 1: Cement consumption in France, 2012 – 2016. Source: Syndicat Français de l’Industrie Cimentière & Vicat.
Thankfully, the industry started to recover in 2016 and the signs are positive that this will continue into 2017 with the presidential elections concluded. Graph 1 shows the situation since 2012.
Sensing the rebound in 2016 the head of the French building federation (FFB) placed growth in construction materials volumes at 1.9% in December 2016 with a forecast of 3.4% in 2017 based on new residential housing. Naturally he used his position to lobby the politicians in the run-up to the election and the FFB have carried on in this vein haranguing the new administration with 112 (!) proposals to ‘rebuild’ France.
The major cement producers broadly agreed with the outlook in 2016 with LafargeHolcim describing the local construction sector as growing ‘slightly’ despite subdued public spending on infrastructure and HeidelbergCement concurring. Vicat was more effusive pointing to its 6% rise in sales volumes to 2.9Mt in the domestic and export markets. It pinned the recovery down to the last quarter of 2015. However, it noted that the rise in volumes had compensated for a fall in prices due in part to the increased exports. On this point, although it’s outside the scope of this column, it would be fascinating to know how much the European Union Emissions Trading Scheme is stoking the French cement indsutry’s recovery through exports (see GCW290).
Investment has been returning to the market though with Ecocem France’s order of a Loesche mill for a slag cement mill it is building Dunkirk, the inauguration of a new tyre recycling unit at Lafarge France’s Martres plant and the start of a gasifier project at Vicat’s Crechy plant in 2016. More recently Lafarge France reported to the French press in May 2017 that it was starting to consider contractors for a new production line at the Martres plant, leading to fears that it might choose a Chinese provider.
So far in 2017 the situation is on a knife-edge with LafargeHolcim, HeidelbergCement and Vicat all reporting slight declines in sale volumes or earnings that they have blamed on the weather. However, LafargeHolcim did mention growing momentum towards the end of the period offering some hope. As seen above the fundamentals for the French cement industry are all ready and present for growth. Now with the pro-business Euro-centric new president installed in office the industry should be about to flower in time for Louis Vicat’s anniversary.
Dominican cement sales rise 7.5% in 2016 07 June 2017
Dominican Republic: Adocem, the association of Portland cement manufacturers in the Dominican Republic, has highlighted the contribution of the local cement industry towards the country's development. According to Rayza Rodriguez, the new president of Adocem, the cement industry recorded a 7.5% rise in sales during 2016 compared to 2015, whereas it grew by 3.5% in the first quarter of 2017.
PPC reports 93% dive in earnings 07 June 2017
South Africa: PPC has reported a 93% decline in full-year earnings due to a liquidity crisis precipitated by the cut in its credit rating to junk status during the first quarter of 2017. PPC, which is still negotiating a possible merger with rival Afrisam, said that headline earnings per share fell to just US$0.005 from US$0.083 in the comparable period of 2016.