September 2024
Ramco Cements reports 274% rise in Q4 profit 02 June 2015
India: Ramco Cements has reported that its quarterly profits rose by 274% to US$14.6m due to better cost management and stable cement prices. Revenues grew marginally by 1.2% to US$156m. The company sold 1.88Mt of cement during the fourth quarter of 2015, down from 2.25Mt in the same quarter of the previous financial year.
For the fiscal year that ended on 31 March 2015, Ramco Cements achieved a profit of US$37.9m, a rise of 76% and a revenue of US$584m. It sold 7.67Mt of cement compared to 8.59Mt in the previous financial year.
"Our ability to manage costs and stable cement prices helped us in better financial performance," said A V Darmakrishnan, managing director and CEO of Ramco Cements. Forecasting demand for the current fiscal year, he said, "We are cautious and will wait."
Operating costs decreased because of cost reduction initiatives and falling fuel prices. However the reduction in costs was offset by an increase in royalty on limestone from US$0.986/t to US$1.25/t with effect from 1 September 2014.
Ramco Cements installed a new 0.95Mt/yr grinding plant in Gobburpalam Village, Vishakapatnam and commissioned it in March 2015.
LafargeHolcim merger reaches final stage 02 June 2015
Europe: Following the clearance from the Autorité des Marchés Financiers (AMF) on 28 May 2015, Holcim launched the public exchange offer for all Lafarge shares at an exchange ratio of 9 Holcim shares for 10 Lafarge shares on 1 June 2015. Through acceptance of the public exchange offer, Lafarge shareholders will pave the way for the creation of LafargeHolcim.
The public exchange offer will be open for 25 trading days until 3 July 2015. With this public exchange offer, Lafarge and Holcim are implementing the final step of their project to merge the two companies. The merger is expected to close in July 2015.
Three die in cement silo collapse in Brazil 02 June 2015
Brazil: Three workers were killed and three others injured in the collapse of a cement silo on 30 May 2015 at the construction site of the Belo Monte hydroelectric power plant in the Brazilian Amazon. The accident occurred while a truck was delivering cement to the silos in the area where construction materials are stored, according to the Belo Monte Construction Consortium (CCBM).
Three workers at the silo were pulled out and sustained minor injuries. Emergency services personnel searched the silo's rubble for the bodies of the other three workers and found them nearly 15 hours after the operation started. The CCBM's medical personnel treated the injured workers at the scene and then transported them to the city hospital in Altamira. Pará State police are investigating the collapse of the 500t capacity silo. The consortium's management will cooperate with the investigation 'with all the effort possible,' said the CCBM.
Construction of Belo Monte, a controversial power project in the middle of the world's largest rainforest, has been halted several times due to strikes by employees unhappy with working conditions and protests by groups opposed to the hydroelectric plant. Work on Belo Monte, which will be the world's third-largest hydroelectric power plant, started in March 2011 in Altamira, Pará, despite opposition from farmers, fishermen and environmentalists, who fear the project's impact on the Amazon. Between 16,000 and 25,000 people had to be moved to make way for the US$10.6bn project, according to different estimates. Belo Monte is being built on the Xingu River, a tributary of the Amazon and will flood 506km2 of jungle. The hydroelectric power plant will have an average generating capacity of 4571MWhr and will reach peak production of 11,233MW in the periods when the river rises.
Afrisam investor Pembani Group merges with Shanduka 02 June 2015
South Africa: Private equity company Pembani Group, investor in Afrisam and Shanduka, a South African investment group, have passed regulatory filings to the Mineral Resources Department and the competition authorities to combine their interests. Pembani acquired the interests of Shanduka following the departure of deputy president Cyril Ramaphosa, who sold his Shanduka stake after rejoining the government in 2014. The deal will also transform Standard Bank's and Ramaphosa's family trust Jadeite's Shanduka stakes into minority ownership in Pembani.
On 1 June 2015 Pembani, which has a US$730m portfolio after the merger, said that the cement industry has a duty to respond to disruptions caused by the entrance of new players, cheap imports and expanded capacity. "Businesses have a duty to respond to changes," said Pembani CEO Kennedy Bungane. He said that the group would pursue opportunities in the rest of sub-Saharan Africa.
The first substantial move by Pembani is likely to be in the cement industry. Although only a 30.5% investor in Afrisam, Pembani controls it through an agreement with the PIC, which is a 66% shareholder. The PIC is also PPC's single largest investor with a 12% stake. Pembani chairman Phuthuma Nhleko is also Afrisam's chairman. Afrisam wrote to PPC, South Africa's largest cement maker, in December 2014, offering a combination of the entities. After considering the proposal, but without presenting it to a shareholder vote, the PPC board rejected the overture in March 2015, saying that it did not believe there would be enough synergies to justify a merger.
Bungane said that the cement industry had undergone permanent changes. "The cement industry in South Africa has changed radically and permanently," he said. "I do not rule out a response by the market to these disruptions." Though Bungane would not elaborate on Pembani's plans for Afrisam, he said it was important for businesses to respond to changing conditions.
Pembani also owns 63% of Tanzania's Tanga Cement, which Bungane said would be used to enter the rest of east Africa, where a shortage of cement capacity makes for good profit margins.
India: India Cements has benefitted from better realisations during the fourth quarter of 2015, which ended on 31 March 2015, when it reported a net profit compared to a loss in the same quarter in the previous year.
For the fourth quarter of 2015, India Cements reported a net profit of US$5.73m compared to a net loss of US$24.6m in the same quarter of its 2014 financial year. Total income fell to US$163m, down from US$176m in 2014. Total expenses fell to US$132m from US$158m. Power and fuel costs fell to US$42.8m from US$54m. Transportation and handling costs were also lower at US$32.5m, compared to US$42.7m in 2014.
N Srinivasan, India Cements vice chairman and managing director, said that cement prices stabilised during the fourth quarter of 2015 and lower costs of production due to lower fuel prices had contributed to better realisations. However, he said that demand continues to be slow as infrastructure demand is yet to pick up.
With a cement production capacity of about 15 – 16Mt/yr, the company is operating at a capacity utilisation of about 61%. Srinivasan said that even at this level, the company was in profit.
Colombia: Jose Mario Velazquez, president of Cementos Argos, has confirmed the firm's intention to start operations in markets in Chile and Peru. Grupo Argos is already present in the US, Haiti, Honduras, Panama and Puerto Rico.
Dangote Cement begins trial production in Ethiopia 02 June 2015
Ethiopia: Dangote Cement, which entered the cement sector in Ethiopia with an investment of US$600m, began trial cement production at its new 2.5Mt/yr capacity plant in May 2015. The plant, which received its licence from the Ethiopia Investment Commission on 8 September 2008, is located at Muger in Adebern Wereda, Oromia. Dangote has started work with 1000 employees.
Dangote Cement has imported 1.2m packaging bags from Egypt, with more to be imported soon. Twenty-three heavy trucks imported for transport have also arrived at the port in Djibouti, with a duty free privilege provided by the government to the company, said Mesfin Abera, Dangote's sales and marketing manager in Ethiopia. The company will import a total of 600 trucks.
According to data obtained from the Ministry of Industry's Cement & Related Industry Development Institute, cement demand in Ethiopia is expected to reach 10.6Mt/yr in 2017.
Namibia: Namibia's sole cement manufacturer, Ohorongo Cement, has said that 2015 has thus far seen tremendous results compared to all of its previous years. It started production in 2011.
Managing director Hans-Wilhelm Schutte attributed the much-improved performance to an increase in infrastructure projects by both the government and the private sector, as well as export inroads made in neighbouring countries. Schutte admitted that initial sales were 'extremely tough,' but was quick to add that the plant, which cost US$203m, has been running perfectly since comissioning and expects both local and regional sales to grow.
"Since 2011 we have improved significantly. Towards the second half of 2013 things really started picking up and 2014 saw us doing really well in terms of sales," said Schutte. He noted that large infrastructure projects such as NamPort's port expansion and the Neckartal dam have made notable contributions to Ohorongo's performance.
Zimbabwe: Over 600 families in Masvingo are set to be displaced to make room for a new cement plant. The displacement follows the discovery of rich limestone deposits in the area and about 16 villages will be affected. Initially, 200 villagers are expected to be employed at the plant.
Masvingo Rural District Council CEO Martin Mubviro said that they had signed a Memorandum of Understanding with a company that wanted to invest in the venture, Xhing Xhong Cement Company. "I can confirm that we've agreed with an investor who wants to establish a cement plant. We have signed a Memorandum of Understanding with the investor and it is now left to them to start the project. Close to 600 families may be affected, although the exact number of those to be moved will be ascertained after feasibility studies are complete. The land where they should be resettled is yet to be identified," said Mubviro.
He said that major infrastructural improvements around Masvingo would be made once operations begin. "While some villagers will feel aggrieved to be moved from their original homes, there is a bigger picture of employment as many unemployed youths are going to get jobs," said Mubviro. "The plant will also add value to the province's economy through infrastructural development. People in this province will also get their cement for building nearer, so too will businesspeople who deal in building materials. Thus it will have an effect on prices of cement."
Pakistan: The Pakistan government is working on two options to challenge South African anti-dumping duties on Pakistani exports of cement. The first step will be to hold bilateral consultations with the South African government to resolve the anti-dumping duties favourably. Failing that, then the Pakistan government has the option to take the issue to the Geneva-based World Trade Organisation (WTO), according to an official from the Pakistan National Tariff Commission (NTC).
The International Trade Administration Commission of South Africa (ITAC) imposed provisional anti-dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15 May 2015 for six months. The duty was imposed on bagged cement.
According to local media, Lucky Cement, the major supplier to South Africa with a 55% market share, seems to have had sales volumes little affected by the anit-dumping measure due to its low duty. However, Attock Pakistan, the second largest supplier with a 35% market share, has been the worst hit due to its high anti-dumping duty. Pakistani cement exporters are exploring other markets in southern Africa.