September 2024
Philippines: According to BusinessWorld, San Miguel Group plans to invest US$2bn to build two cement facilities and a nickel processing plant as part of its diversification efforts into new growth areas.
San Miguel has allocated US$800m for the two 2Mt/yr cement facilities, according to San Miguel president Ramon S Ang. Construction has already begun. One of the facilities is located at Northern Cement's plant in Pangasinan, while the other is being built in Quezon. In 2013, San Miguel paid US$77.5m for a 35% stake in Northern Cement, which is owned by the conglomerate's chairman, Eduardo M Cojuangco, Jr. The facilities, which are expected to be completed in 2017, will be funded by 50% debt and 50% equity.
San Miguel's venture into the cement business comes as it participates in major infrastructure projects. San Miguel-led Optimal Infrastructure Development won the contract for the US$351m second stage of the Ninoy Aquino International Airport Expressway Project. San Miguel is also building the US$591m third stage of the Metro Manila Skyway and the Tarlac- Pangasinan-La Union Expressway, as well as expanding the South Luzon Expressway.
China: According to Reuters, Chinese cement companies, including Huaxin Cement, covered by the carbon market in Hubei Province will likely be forced to spend millions of Chinese Yuan on permits before the compliance deadline on 10 July 2015 after authorities rejected their pleas for leniency.
In June 2015, the companies asked regulators to let them borrow some permits from the 2016 quota, saying that they could not afford to buy permits to cover their obligations for 2014. However, their requests were rejected, easing market concerns that big emitters would be let off the hook.
Huaxin Cement, Hubei's biggest cement producer, has been under particular pressure to buy over the last few trading days as it has a shortfall of 1.15 million permits. "Local officials have talked through the consequences of non-compliance with cement plants, so Huaxin Cement approved a US$6.44m budget to pay for permits," said a trader who did not want to be named as he was not authorised to speak to media.
Trading volumes on the Hubei carbon exchange have surged ahead of the deadline in the absence of any indication that the compliance date, initially set for 31 May 2015, would be pushed back for a second time. As of 9 July 2015, 44 companies, or 32% of the total 138 firms, did not have enough permits to cover their obligations. Of these, 26 were cement producers. A manager with Gezhouba Cement Group, Hubei's second-largest cement producer, said that its permit allocation had been miscalculated.
Companies covered by the Hubei exchange are only obliged to buy a maximum of 200,000 permits, regardless of how much they overshoot their cap. However, Gezhouba has eight subsidiaries in the scheme, bringing its total permit demand to more than a million. "The scheme is punishing big producers, but not inefficient competitors," said the Gezhouba manager. "We pleaded with the government to re-issue permits and narrow the gap, but we have not got any reply. How can we spend tens of millions on carbon?"
Namibia: All Africa has reported that the Development Bank of Namibia (DBN) plans to increase its stake in Ohorongo Cement, Namibia's only cement producer, in July 2015.
Foreign minority shareholders Development Bank of Southern Africa (which owns a 7.3% stake) and IDC of South Africa (which owns 20%) are in the process of selling their shares to Namibian institutional investors such as pension funds.
According to sources who preferred to stay anonymous, since the official announcement will only be made later this month, Germany's Schwenk Zement is the majority shareholder with a stake of around 60%. The official announcement is expected to be made on 29 July 2015 during the ground-breaking of the composite cement production plant and the inauguration of a training centre at Otavi, where the company's operations are based.
Final public exchange offer results published for LafargeHolcim merger, Bernard Fontana steps down as Holcim CEO 10 July 2015
Europe: The Autorité des marchés financiers (AMF) has published the final results of the public exchange offer initiated by Holcim Ltd for the shares of Lafarge SA.
Following the settlement-delivery of the offer expected to occur on 10 July 2015, Holcim Ltd will hold 252,230,673 Lafarge SA shares, representing 87.46% of the share capital and at least 83.94% of the voting rights of Lafarge SA based on the total number of shares outstanding as of 8 July 2015. In accordance with the AMF general regulations, the offer will be re-opened during at least 10 trading days according to a timetable that will be published by the AMF.
Holcim has announced that in connection with the successful public exchange offer and the expected closing of the merger with Lafarge, Bernard Fontana will step down from his position as CEO of Holcim Ltd with the completion of the merger. He will also resign from all mandates in all Holcim Group entities.
"It has been a pleasure and honour to work with remarkable and passionate people throughout the past years at Holcim. I wish the new company LafargeHolcim and the entire team all the very best for the future," said Fontana. The board of directors has thanked Fontana for his leadership and achievements for the group, and in particular for the successful implementation of the Holcim Leadership Journey.
Andreas Leu, currently responsible for the Americas, will also leave Holcim with effect from 1 August 2015. Bernard Terver, currently responsible for Africa and the Middle East as well as South Asia, will assume the position as head of India for LafargeHolcim from the date of the closure of the merger. In this capacity he will continue his mandates in the boards of Ambuja Cements and ACC Limited in India. Holcim's board of directors and the executive committee have thanked Leu for his contributions to the success of the group and wish him all the very best for his future.
Switzerland: According to Splash24/7, Italian ship-owners Giovanni and Vincenzo Romeo have ordered a new 6700t cement carrier with delivery scheduled for 2017. The ship-building contract was signed with Ningbo Xinle shipyard in China and is worth US$10 - 15m.
Originally from Naples, Italy, the Romeo family moved almost all of its shipping activities to Switzerland in 2010, where its Nova Marine Carriers shipping company is now based. Romeo Group historically has very close business relations with steel producers Duferco and cement producer Italcementi, but also regularly does business with other cement producers such as Lafarge, Holcim, Cemex and HeidelbergCement. Romeo's Nova Marine operates a fleet of some 40 bulk carriers, which includes five cement carriers and three self-unloaders.
Singapore/Sri Lanka: The Ceylon Institute of Builders has awarded Tokyo Super Portland Pozzolana Cement (PPC) with a 'Green Mark.'
The Green Mark is a Singaporean product label, accredited internationally by the Building Construction Authority (Singapore), the Green Building Council (Singapore), the Chartered Institute of Builders (UK), as well as locally by the Ceylon Institute of Builders, the Ministry of Environment, the Ministry of Construction and the Central Environmental Authority. Tokyo Super PPC is the only cement brand with a sustainable accreditation and is frequently recommended by sustainable building consultants as, 'The highest quality product, with minimal environmental impact, on the market.'
Tokyo Super PPC was given the green accreditation for the following reasons:
- Its local manufacturing is powered by carbon-neutral biomass energy that is locally-generated with the repurposing of agricultural waste;
- It is a renewable energy project in compliance with United Nations Framework Convention on Climate Change (UNFCCC) standards and is awarded carbon credits annually;
- It uses coal fly ash from Norochcholai power plant, recycling locally-generated waste in a useful manner;
- It minimises the energy required in cement grinding by using fly ash;
- It minimises CO2 emissions by substituting clinker with non-limestone based material, thereby reducing the energy requirement for kilning;
- It has International Certification in Environmental Management Systems (ISO 14001) and Quality Management Systems (ISO 9000) and was the model from which local standards were set (SLS 1427);
Tokyo Super PPC, although less expensive than Ordinary Portland Cement, is not just the greener choice but also the stronger one. It offers as much as 10% higher strength after 98 days.
India: According to Cogencis MoneyWire, the Madras High Court has dismissed ACC's writ petition against a demand notice regarding a 50% royalty due over a mining lease for limestone removal from government-owned lands.
The royalty demand was for US$1.17m for 1988 - 1998. ACC was granted the lease to mine limestone from 140,000m2 of land at Madukkarai Village in Tamil Nadu and was subsequently granted another mining lease. According to local media, initially a lessee has to pay royalty at the rate of 50%, after which it was obligatory on the part of every leaseholder to pay 100% royalty.
India: Accord Fintech has said that Sagar Cements' cement production for June 2015 rose by 0.82% to 1.31Mt compared to 1.29Mt in June 2014. Its cement dispatch for June 2015 rose by 0.66% to 1.31Mt compared to 1.30Mt in June 2014.
Cade ends inquest into Votorantim, Itambe and Cimpor 09 July 2015
Brazil: According to the Esmerk Latin American News, Brazil's economic defence body Cade has ended its administrative inquest against Votorantim Cimentos, Cia de Cimento Itambe and Cimpor Cimentos do Brasil. The investigation was into the alleged breech of economic order through actions such as the refusal to sell certain types of cement to independent firms from 2008 onward. The illicit operations were alleged to have affected companies in Rio Grande do Sul and in the south east and central west regions.
India: The Economic Times has reported that the capacity utilisation in India's cement industry has fallen 70% from 94% in 2007 - 2008 because of a supply and demand mismatch, according to data from the Cement Manufacturers' Association (CMA). As such, the cement industry is staring at a 'dead investment' of US$8.66bn in the near term due to 100Mt/yr of unused capacity.
"Installed capacity stands at 380Mt/yr and utilisation is about 275Mt/yr. This extra capacity of 100 – 105Mt/yr has cost about US$8.66 – 9.45bn of investment," said Shailendra Chouksey, whole time director at JK Lakshmi Cement and vice president of the CMA.
The slump in the real estate industry has not helped matters as it accounts for about 15 - 20% of all cement demand in the country. About 55 - 60% of cement consumption comes from the retail segment, followed by real estate at 15 - 20%, infrastructure at 13 - 15% and the commercial factories segment at 10 - 12%.
The demand by real estate players has fallen by 40% in the last three to four years, according to Chouksey. The slowdown in the sector is coupled with weakness in rural demand and infrastructure development. Faced with the scenario, capacity addition is also expected to take a hit in the next few years. From about 25Mt/yr of capacity added in 2013 - 2014, new capacity additions will come down to 19Mt/yr and 14Mt/yr in 2015 - 2016 and 2016 - 2017, respectively, according to industry estimates.
"The capacity addition will go down as banks are not lending to cement companies as they know they will not get returns in such a scenario," said Anil Kumar Pillai, director and CEO of JSW Cement.
Now the cement industry is looking towards major government infrastructure and housing programmes to boost demand. To bring about major infrastructural development in the country, the government has announced The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for 500 cities and the Smart Cities Mission. It has approved a US$15.7bn spend for the two schemes. It also aims to build 20 million houses by 2022 under the Housing for All initiative. "The cement industry is likely to improve by the second half of the current fiscal year on the back of huge infrastructure push by the government," said Pillai.
However, not all cement manufacturers are optimistic. "These programmes are good, but the question is how and when will they be implemented. There has been no off-take of cement for highway construction so far," said Chouksey. Transport minister Nitin Gadkari said in January 2015 that Indian highways would be constructed using cement instead of bitumen and launched a website in March 2015 for cement procurement and delivery for the purpose.