September 2024
Cement manufacturing cost to increase by US$0.11 – 0.16/bag 27 February 2015
India: The manufacturing cost for cement is likely to go up by US$0.11 – 0.16/bag due to the proposed freight hike on various inputs and the cement itself. "The cost of production will go up in the range between US$0.11 – 0.16/bag," said a cement company spokesperson. He added that cement producers would most likely pass on the costs to their customers.
The Railway Budget proposals plan to increase freight rates of coal and slag, used in the manufacturing of cement, by US$0.74/t and by US$0.34/t respectively. A hike in cement freight rates of US$0.34/t has also been proposed, however, a reduced freight on limestone, by US$0.04/t, is also in the proposal.
"The freight rate hike is likely to increase our cost of production in the range between US$0.03 – 0.06/t. However, price is determined by demand and supply," said Mahendra Singhi, whole-time director of Dalmia Bharat Cement. Jaypee Cement's whole-time director Shiva Dixit said that although the freight rate hike would have an impact on input prices, they would wait for the main Budget to see the cost implication.
Ireland: CRH expects to receive regulatory decisions on a Euro6.5bn purchase Holcim and Lafarge operations as soon as March 2015. CRH chief executive Albert Manifold said that the acquired facilities would help CRH to expand in both North America and Europe, where it sees opportunities to expand its business.
"There are significant building needs and funding going to countries like Poland, Slovakia and Romania," said Manifold. He added that construction growth in those countries could be as high as 4%/yr over the next 10 years. Manifold said that CRH had already begun discussions with regulators in the various markets and expected decisions in March and April 2015. The acquisitions require the approval of CRH shareholders and an extraordinary shareholders meeting has been scheduled for 19 March 2015 for this purpose. Manifold said that CRH would continue to trim its portfolio and make further acquisitions.
Suez Cement reports 11.5% gain in EBITDA for quarter four of 2014 27 February 2015
Egypt: For the fourth quarter of 2014, Suez Cement reported a 2.5% year-on-year increase in revenues and 11.5% year-on-year growth in earnings before interest, tax and depreciation (EBITDA). Its net profit after non-controlling interests increased by 15.2% during the quarter.
For the entirety of 2014, Suez Cement's sales increased by 22%, while recurring EBITDA improved by 8.8% compared to 2013. However, higher corporate income taxes coupled with an absence of foreign exchange gains were responsible for an 8.4% drop in net profit after non-controlling interests. EBITDA gains were also driven by Suez Cement's downstream activities in transportation and ready-mix cements, as well as its paper bags subsidiary, which saw an EBITA increase of 26.5%. Cement activities accounted for a gain of 6.3%.
The strong revenue performance was largely due to cement price increases due to an unprecedented surge in production costs and product shortages. Overall, clinker production decreased as a result of severe energy supply issues that impacted each of Suez Cement's plants and subsidiaries differently. The Tourah plant felt the greatest pressure from expensive clinker imports that were necessary to satisfy Egypt's growing demand.
Suez Cement was also negatively affected by energy costs (gas, mazut and electricity) that rose by 25 - 35% in 2014. It did not let the economic pressures, including a 40% drop in industrial production capacity, impact its employment rates or benefits packages. This was partially due to Suez Cement's commitment to the implementation of energy-efficient processes throughout the five plants, as well as further emphasis and utilisation of alternative fuels, which helped mitigate the drop in production as well as limit the impact from growing clinker imports. Suez Cement will go ahead with the deployment of coal power at all five plants over the next two years, a factor that is also expected to put a stop to some importing activities.
Suez Cement believes that the construction industry's recovery will continue to attract new investment. This is in addition to positive economic growth thanks to Egypt's new-found government stability and the future implementation of several large national projects. However, power cuts and fuel shortages are likely to remain major issues for cement producers. Fuel and energy shortages will also prolong challenges to meeting cement production targets.
The recent closure of the Tourah I plant is one example of Suez Cement's continued commitment to reducing its environmental impact. The company remains focused on investing in energy-efficient initiatives and environmentally-sound programs. This includes developing alternative fuel strategies that incorporate waste-derived fuels and coal, which will shift the company's energy mix and improve its production capabilities by reducing dependence on natural gas and mazut.
Australia: Adelaide Brighton boss Martin Brydon said that he would pursue funding from the Abbott Government's US$2.55bn Emissions Reduction Fund (ERF) as Adelaide Brighton accelerates its alternative fuel use to head off its rising gas bill. The ERF is the centre-piece of the government's direct action climate policy and the first auction for funding starts on 15 April 2015.
Adelaide Brighton has a total energy bill of around US$130m/yr. Brydon said that the group will save US$6m/yr from the repeal of the carbon tax. "We are energy-intensive and capital-intensive. Anything that happens that can reduce the cost of energy is critical," said Brydon.
Adelaide Brighton's Birkenhead cement plant in south Australia, which recently expanded its cement production capacity to 750,000t/yr, generates 15% of its energy from waste wood used in construction. Brydon said that he plans to take that number to 30% and that he 'will certainly' be bidding for grants from the ERF. "The cost of that waste wood energy is significantly below the cost of natural gas," said Brydon.
In 2014, Adelaide Brighton reported a 14.3% rise in net profit to US$136m and a 9% rise in revenue to US$1.06bn. The profit and revenue numbers were both records for the company, although after stripping out one-off items the underlying profit was US$132m. Strong residential housing activity in NSW and Queensland, work on the Pacific Highway upgrade and ongoing demand from resource projects in western Australia and the northern regions buoyed sales. Adelaide Brighton said that it expects price increases in 2015 across all of its products.
In August 2014 the company acquired two concrete businesses and a quarry. Brydon said that he is looking for other businesses to buy, but opportunities for quality long-term assets were 'few and far between.'
Cementos Argos’ net profit up 58.8% in 2014 26 February 2015
Colombia: Cementos Argos' net profit rose by 58.8% in 2014 compared to 2013 due to an increase in domestic sales and sales in the US, which are expected to continue in 2015. Profit was up to US$145m compared to US$73.7m in 2013.
"In our opinion, 2015 will be a year when construction and demand for cement will maintain their positive dynamic," said CEO Jose Alberto Velez. He highlighted Colombian government spending on public housing and highways. "We project that volumes will grow by a high rate in infrastructure and a medium rate in housing."
For its US division, Cementos Argos is 'very optimistic' and anticipates doubling 2014's US$68m in earnings before interest, taxes, depreciation and amortisation (EBITDA). Velez said the company estimates EBITDA in the region will reach US$120 – 130m in 2015. Operating income was up by 16.8% to US$2.9bn in 2014, while total EBITDA was up by 8.4% to US$534m. Cement sales were up by 8% in 2014 to 12.5Mt. In 2014 Cementos Argos made acquisitions valued at US$785m and invested US$230m in expansion and modernisation.
Arabian Cement gets US$107m loan 26 February 2015
Saudi Arabia: Arabian Cement Company has signed an agreement with Saudi British Bank for US$107m of Islamic financing. The loan is to be repaid over a period of five years, including a one-year grace period. Arabian Cement said that it will use the loan to finance part of the first phase of an expansion project to install two new cement mills.
Cement consumption expected to decline by 15% in 2015 26 February 2015
Russia: According to the Russian Cement Association (CMPRO), for the first time since 2009, domestic cement consumption is expected to decline by 15% in 2015 due to the reduction in housing and infrastructure development.
Sales have dropped by at least 5% since the start of 2015. The slow decline may continue for several years. Lafarge expects that the strongest drop, by some 8 - 12%, will be seen in central regions of Russia. Lafarge intends to produce about 2.6Mt in 2015. Siberian Cement has predicted that the cement market of Siberia may shrink by 5 - 7% in 2015 and will reduce its production by 7% to 4Mt during the year. According to the NEO Centre consulting group, cement output in Russia grew by 3% year-on-year to 68.4Mt in 2014.
TCL reports US$15.3m loss for 2014 26 February 2015
Trinidad & Tobago: Trinidad Cement Limited (TCL) has recorded major losses in 2014. Company CEO Alejandro Ramirez said that TCL achieved a pre-tax loss of US$15.3m in 2014, compared to a pre-tax profit of US$6.14m in 2013. TCL also recorded a post-tax loss of US$33.2m in 2014, compared to a profit of US$10.5m in 2013.
TCL's sales increased by 9% year-on-year from US$299m in 2013 to US$330m in 2014. This was mainly driven by TCL's cement and Readymix segments. Earnings before interest, tax, depreciation and amortisation (EBITDA) remained flat at US$63.4m in 2014. Despite the sales increase, EBITDA didn't increase because there were some extraordinary items that affected the results, according to Ramirez. He said that the 'extraordinary' expenses totalled US$8.97m and included the impairment of weather-damaged clinker, which was stored outside TCL's Barbados subsidiary Arawak Cement Company for several years.
Holcim is rebranded as Cemex Cement in Czech Republic 26 February 2015
Czech Republic: Holcim (Cesko) will change its name to Cemex Cement from 1 March 2015. At the same time, Holcim will transfer part of the plant producing ready-mixed concrete to Cemex Czech Republic and part of the stone aggregate production plant to Cemex Sand. The changes follow the acquisition of all of Holcim's assets in the Czech Republic by Cemex in January 2015.
Dalmia Cement increases its stake in OCL India to 74.6% for US$165m 26 February 2015
India: Dalmia Cement has raised its stake holding in OCL India from 48% to 74.6% through an inter-se share transfer within the promoter group. It acquired a 4.13% stake from Mridu Hari Dalmia and a 22.45% stake from Mridu Hari Dalmia Parivar Trust at a share price of US$10.9 though open market transactions. The deal is worth US$165m. Since the deal involves inter-se transfer, it will not trigger an open offer for OCL India, despite breaching the creeping acquisition limit of a listed firm.
As part of consolidation and growth of the cement sector, Dalmia Bharat Group has been strategically acquiring assets and creating new assets in southern, eastern and northeastern India. OCL India has plants in Odisha and West Bengal. With Dalmia Cement increasing its stake in OCL India, Dalmia group will have 48% of its capacity in south India and the remaining 52% in east and northeast India.
"The move will help to create better operational synergies. It is a step forward in the commitment towards aligning all stakeholders' interests and overall value creations," said Dalmia Bharat. Dalmia Group expects to have a total capacity of 24Mt/yr in the 2015 – 2016 financial year through both greenfield and brownfield projects.