September 2024
Vietnam: Hoang Phat Vissai Group began work on the Song Lam cement plant with an investment of US$488m in Vietnam's central province of Nghe on 4 February 2015.
Located in Bai Son commune and being transformed from the current Do Luong cement plant, the new 5.6Mt/yr clinker plant will be developed in two phases and will be ready for operation within 18 months, according to company chairman Nguyen Ngoc Oanh. The first phase will last until 2017, with two production lines with a combined capacity of 12,000t/day of clinker installed. The second phase, adding 6000t/day of clinker, will be developed in 2017 - 2020.
Vietnam has 74 cement production lines with a combined output estimated at 81Mt/yr, while sales of cement and clinker are projected to be 73Mt for 2015, according to the data from the Ministry of Construction. Of the sales, 52 – 53Mt are expected to be sold to the domestic market, while 19 – 20Mt will be exported.
CRH wins the race to the LafargeHolcim gold 04 February 2015
CRH has made good on its intentions. This week it stumped up Euro6.5bn to buy assets from Lafarge and Holcim in four continents. The move follows preparation since at least May 2014 when the Irish building materials group announced a divestment programme. In October 2014 it announced that it would sell its brickwork division.
CRH is finding the cash through a mix of existing cash, debt and equity placing. Interestingly, back in 2012 an Irish stockbroking analyst who was interviewed reckoned that the company could spend up to Euro3.5bn on acquisitions whilst remaining within its banking agreements. Throw in the recent sales and planned divestments and the planned acquisition from LafargeHolcim doesn't seem like too much of a stretch for CRH.
If completed, the purchase will see CRH take on 24 cement plants with a production capacity of 36Mt/yr. As a back of the envelope calculation suggests the sale price of Euro6.5bn isn't far off the occasionally used price of US$200/t for western cement production. The deal also includes aggregates, ready mixed concrete and asphalt assets.
The purchase marks a change in CRH's buying strategy both in terms of scale and distribution. Much of CRH's previous acquisitions have been minority shareholdings that make it difficult to accurately report the company's position in the cement industry. For example, in our Top 100 Report CRH was reported to have a production capacity of 6.49Mt/yr for majority shareholdings with another 19.9Mt/yr for minority shareholdings. The new cement capacity being purchased blows this away because it more than doubles CRH's total capacity and it appears to be all majority owned. CRH thinks that this will propel it to become the world's third biggest building materials manufacturer after LafargeHolcim and Saint-Gobain, leapfrogging Cemex and HeidelbergCement in the process. Strangely there is no mention of the huge Chinese players in the top five manufacturers in CRH's acquisition presentation.
CRH has avoided buying plants in southern Europe but it is relying on the slowly improving growing UK market, where CRH will pick up four plants, to balance the risk. Elsewhere in Europe, the three Holcim plants in France have been suffering from continued low construction rates in that country and the two Lafarge cement plants in Romania are unlikely to have recovered from a production fall in 2013. Outside of Europe growth has been poor in Quebec in 2013 and 2014, where CRH is buying two plants from Holcim. Both Lafarge and Holcim have also seen a slowdown in Brazil. However, the Philippines does seem like a better bet for CRH, with solid cement volumes growth seen by Lafarge in 2013 and the first three quarters of 2014.
With CRH now looking like a company that wants to produce cement rather than one that owns parts of companies that produce cement, all eyes are on the construction markets. 14 of the 24 cement plants CRH are buying are in Europe. Buying at the bottom of a sustained production slump makes sense because the asking price will be low. However, has the bottom been reached yet?
Aumund Brazil expands after sales service with new service centre 04 February 2015
Brazil: Aumund has established its fourth global service centre with an integrated warehouse in the state of Minas Gerais, Brazil. The centre is intended to improve the availability and operation of customers' equipment through maintenance. The central location is designed to serve customers in South America, where 10% of Aumund's equipment is supplied and installed. The centre follows the engineering firm's other service centres in Germany, the US and China.
The new centre's service team consists of 10 personnel, including supervisors, inspectors and technicians for field service activities. All inspectors are trained in Aumund's PREMAS maintenance framework. In addition to keeping spare parts in stock the new service centre will also service and repair equipment manufactured by Schade Lagertechnik GmbH and Samson Materials Handling Ltd.
Aumund Brazil started operations in 1975 with a sales office in Rio de Janerio. In 1993 the company moved to Jundai in São Paulo state and then to the city of São Paulo in 1997.
Cemex condemns assassination of its head of security 04 February 2015
Colombia: Cemex has condemned a recent attack that resulted in the death of Clavijo Rojas, head of Cemex security, near to a cement plant that it is building in Maceo, Magdalena Medio. Cemex executives want local authorities to investigate the incident so that the criminals can be apprehended. Clavijo Rojas, a 50 year old German citizen, was travelling in a car with another person when they were fired upon, possibly by a guerrilla group or by those linked to organised crime. Cemex said that it had not received any threats or demands in this area.
Zimbabwe: Plans to build a cement plant in Zvishavane by Chinese investors have been challenged as it has emerged that the mining rights in the area belong to Shabanie Mashaba Mines (SMM). This may delay the project as SMM is still the subject of an ownership dispute between the government and South African-based businessman Mutumwa Mawere.
The project was intended to be built 30km from the Zvishavane along the Zvishavane-Mbalabala road, according to local press. It was part of the deals made with China after President Robert Mugabe's visit to China in 2014 as well as negotiations between the Joint Zimbabwe-China Permanent Commission.
Vicat sales rise by 6% in 2014 04 February 2015
France: Vicat's total sales rose by 6% year-on-year to Euro2.42bn in 2014 from Euro2.29bn in 2013. Cement sales rose by 13.7% to Euro1.26bn. The French building materials manufacturer attributed the growth to markets in Asia and improvement in the US and Egypt.
By region, cement sales fell by 4.4% year-on-year in France to Euro356m with an increased decline seen in the fourth quarter of 2014. This was blamed on a slowdown in the construction sector. In the rest of Europe cement sales declined less sharply by 5% to Euro174m. In the US cement sales rose by 16.7% to Euro114m. In Asia, including Turkey, India and Kazakhstan, sales rose by 20% to Euro466m. In Africa and the Middle East cement sales rose by 23% to Euro374m.
Ministry of Industry and Information Technology to transfer six cement plant being built in Sichuan 04 February 2015
China: The Ministry of Industry and Information Technology (MIIT) has released a plan to transfer the production capacity of six cement projects that are currently being built in Sichuan Province. These schemes, with a total cement production capacity of 6Mt/yr, will be publicised on the national production capacity replacement quota platform for future transfer.
India: Wonder Cement has appointment of Jagdish Chandra Toshniwal as Executive Director. Prior to joining Wonder Cement, Toshniwal spent 18 years with Ambuja Cement and was the Business Head of the Northern Region based in Delhi. An engineer by training, Toshniwal has strong operational and commercial skills.
Wonder Cement is planning to double its manufacturing capacity to 6.75Mt/yr by the fourth quarter of 2015. The company has said it will invest US$259m towards this. Wonder Cement is also in the process of increasing its dealer network. The company has significantly increased its brand spend.
The company's 3.25Mt/yr cement plant is located in RK Nagar, Tehsil-Nimbahera, District Chittorgarh, Rajasthan. A waste heat recovery system is currently being installed and the company is planning to build its own railway line and a captive power plant.
JK group chairman chief patron Singhania dies 04 February 2015
India: JK group Chairman Gaur Hari Singhania died on 4 February 2015 following a heart attack. Singhania, aged 80 years, was also the President of J K Organisation and a Promoter Director of JK Cement Ltd since its inception in 1994. He is survived by a son, Yadupati Singhania.
Singhania held chairmanship in other companies including Jaykay Enterprises Ltd, JK Cotton Ltd and JK Traders Ltd. He also served as Chairman of Merchants of Uttar Pradesh, the Employers Association of Northern India. He was also the founder chairman of the Uttar Pradesh Stock Exchange and founder patron of Associated Chamber of Commerce. Additionally, he served as Director in various corporations, such as in Pradeshiya Industrial Investment Corporation of Uttar Pradesh, UP State Industrial Development Corporation and Uttar Pradesh State Sugar Corporation.
A sports lover, he was the chief patron of Uttar Pradesh Cricket Association (UPCA). He also contributed to various universities and had opened a university at Udaipur, Rajasthan.
Indian cement market expected to grow at 9% CAGR in 2014 - 2019 03 February 2015
India: According to Research and Markets, the cement market in India is expected to grow at a compound annual growth rate (CAGR) of 8.96% in 2014 - 2019. The industry is currently in a turnaround phase, trying to achieve global standards in production, safety and energy-efficiency.
The immense potential offered by the housing sector of the world's second most populous country is expected to drive the cement market. There is also increased governmental support and numerous infrastructure developments ongoing. With supply-side developments in technology, product range and capacity utilisation, the industry is expected to exhibit tremendous growth in the coming years.
The consolidation of the once-fragmented market is a major upcoming trend. Small and medium companies are entering into joint ventures to increase their respective market shares.