September 2024
James Hardie’s second quarter profit jumps by 66% 20 November 2014
Australia: Fibre cement producer James Hardie has posted a sharp increase in its operating profit for the second quarter of its 2015 financial year, despite a slower-than-expected recovery in the US housing sector.
James Hardie, which generates 66% of its revenue in Europe and the US, had warned of short-term US uncertainty with the recent 'flattening in housing activity,' but has forecast a moderate improvement for the year ending in March 2015. Its Australian, New Zealand and Philippines businesses are also expected to improve.
"Management cautions that, although US housing activity has been improving for some time, market conditions remain somewhat uncertain and some input costs remain volatile," said James Hardie.
The company reported a net operating profit of US$127m for the quarter that ended 30 September 2014, up from US$51.9m in the same period of 2013. Chief executive Louis Gries said that the 66% jump reflected increased volumes and higher average net sales prices across its US, European and Asian fibre cement businesses, which drove net sales up by 12% for both the quarter and the half-year. "The recovery of the US housing market remains below our expectations at the beginning of the year," said Gries.
For the 2015 financial year, James Hardie expects US$205 – 235m of net operating profit, excluding asbestos compensation costs. In the 2014 financial year, the company reported US$197m of net operating profit.
Russia’s Sibirsky Cement expects sales to fall by 7% in 2015 20 November 2014
Russia: Sibirsky Cement has announced that it expects its sales to decrease by 7% year-on-year in 2015, according to first vice president Gennady Rasskazov. "We are making budget plans for next year, but I think that sales will stand at 4 - 4.1Mt," said Rasskazov. In 2014, Sibirsky Cement aims to sell 4.3Mt of cement.
Holcim and Lafarge negotiate merger conditions with Cade 20 November 2014
Brazil: Holcim and Lafarge are actively negotiating an agreement with Brazil's anti-trust council, Conselho Administrativo de Defesa Econômica (Cade), to gain approval for their merger.
The deal involves divestitures of 31% or 3.6Mt/yr of Lafarge and Holcim's joint cement production capacity in Brazil. The assets could be sold to single company or several bidders. Holcim is still bound to pay Cade a US$197m fine that was imposed due to cartel practices. Lafarge paid US$16.7m to Cade in 2007 to end the investigation into its practices.
New PCA chairman appointed 20 November 2014
US: The PCA board of directors has elected Lafarge North America's CEO John Stull as its 2014 - 15 chairman. He succeeds American Cement Co's Cary Cohrs.
"This is an important time for the PCA to champion resilient construction and advocate for critical national infrastructure funding, both of which will ensure the vitality of the cement industry," said Stull, who in addition to being a long-standing director has co-chaired the PCA Manufacturing Technical Committee.
Over a 22-year Lafarge Group career, Stull has progressed through vice president and regional president roles for US, Latin American and Sub-Saharan African businesses. He holds a chemical engineering degree from the University of Akron and is a Harvard Business School executive management programme graduate.
Tanzania Portland Cement agrees prisoner labour limestone deal 19 November 2014
Tanzania: The Tanzania Portland Cement Company (TPCC) and the Tanzanian government have agreed to start producing limestone from mines within Boko prison territory in early 2015. Permanent Secretary at Ministry of Home Affairs Mbaruk Abdulwakil, Commissioner General of Prisons John Minja and TPCC Managing Director Alfonse Rodriguez have announced that a final agreement on the partnership will be sealed by the end of 2014.
"In principle, the government has approved this public private partnership, which is part of reforming and modernising the prison services," said Abdulwakil. The government will receive 1200 cement bags and US$58,000 to build Boko prison staff quarters and office facilities. In return TPCC will mine limestone within the Boko prison premises for use as raw material at its Wazo hill plant.
Bihar government approves US$54m grinding plant for Shree Cement 19 November 2014
India: The Bihar state cabinet has approved a US$54m cement grinding plant planned by Shree Cement planned in the Aurangabad district of the state.
"The company had proposed to set up a cement plant with a production capacity of 2Mt/yr. It will also have a 12MW biomass-based captive power plant," said B Pradhan, Principal Secretary of the Cabinet Secretariat.
The state government agency Bihar Industrial Area Development Authority (BIADA) has provided 27 hectares of land on lease for the project. The project will provide employment to 300 skilled and unskilled persons.
Hebei to move excess cement production capacity overseas 19 November 2014
China: Authorities in Hebei Province have revealed a plan to transfer excess capacity from its heavy industries, including cement, abroad by 2023. Hebei intends to move 5Mt of cement production overseas by 2017 and 30Mt by 2023. The initiative also covers excess production in the steel and glass industries.
Chinese cement, steel and glass producers are struggling, with sluggish growth in the world's second-largest economy crippling demand for their products. The local government will encourage cement producers to establish subsidiaries or joint ventures in regions like Africa, Southeast Asia, South America and Central and East Europe to meet local demand.
Hebei is a major source of industrial pollutants blamed for the smog that often spreads to neighbouring regions like Beijing. The smog has prompted the authorities to rethink and change the growth model and to take more stringent measures to fight pollution.
Drouet appointed as Holcim Area Manager for Africa Middle East 19 November 2014
Switzerland: Dominique Drouet, CEO of Holcim Morocco, has been appointed Area Manager for Africa Middle East and member of Senior Management of Holcim with effect from 1 January 2015. He will assume this responsibility in addition to his current role. Drouet will succeed Javier de Benito, who has decided to leave Holcim effective from 1 January 2015, to take up a new challenge outside the group.
Drouet joined Holcim in 1994 as CEO of Holcim Outre Mer and was appointed CEO of Holcim Lebanon in 1999. He took over his current role in 2004. Before working for Holcim, Dominique occupied various engineering, commercial and managerial roles in the construction materials industry. He holds a degree in Engineering from the Ecole des Travaux Publics in Paris and a Bachelor's degree in Mathematics from the University of Toulouse.
China rides out 19 November 2014
Startling news from Hebei, China this week. The northerly province intends to move out its excess capacity in heavy industries, including cement, to other countries by 2023. 5Mt of cement production capacity is planned for transfer by 2017 and 30Mt is planned for transfer by 2023. The larger figure is about the same as the cement production capacity of France or Germany!
Hebei isn't the biggest cement-producing province in China but it has received attention as the authorities have cut down on 'out-dated' production capacity. The region was targeted in a programme to cut emissions from heavy industry due to its proximity to Beijing and that city's smog issues.
The Ministry of Industry and Information Technology (MIIT) set a target of 60Mt/yr in cement production capacity to be cut by 2017. The region was also the site of massive cement plant demolitions in late 2013 and early 2014. 18 cement plants were demolished in December 2013 followed by 17 cement plants in February 2014 alongside the destruction of connected grinding and storage capacity. Overall an incredible 74 cement plants in the area surrounding Shijiazhuang alone were targeted for demolition by March 2014.
Following this massive spate of capacity elimination, the public announcement to actively move abroad marks a stark change to China's general cement industry strategy so far. The country's equipment suppliers like Sinoma have been taking business from European rivals like FLSmidth or KHD for some time now especially in developing markets.
In 2013, FLSmidth reported a cement market order intake of US$575m and KHD reported an order intake of US$216m. In comparison Sinoma's cement equipment and engineering services reported order intake of US$5.59bn. In its annual report for 2013 FLSmidth estimated that the global market for new kiln capacity was 50Mt. At a capacity construction price of US$150/t this suggests that Sinoma took orders for nearly three quarters of the world's required capacity for new cement kilns in 2013. Order intake covers more than just building cement plants, so this quick calculation presents only a rough impression of what's going on.
More recently Chinese cement producers have started building their own cement plants or funding them outside of China. In October 2014 State Development and Investment Corp and Anhui Conch Cement Company announced plans to fund a plant in Indonesia. In September 2014 ground breaking was held for a Chinese-funded plant in Kyrgyzstan. In June 2014, Huaxin Cement invested in Cambodia Cement. This was its second overseas investment following a project in Tajikistan in 2011.
With China's government still attempting to avoid a hard economic landing as its growth slows, moving industrial overcapacity overseas makes sense. International and national players must be worried about the potential scale of this transition. On the plus side, however, those notorious inscrutable Chinese production figures in the cement industry will be far easier to analyse in plants outside of China facing international competition. Today Hebei, tomorrow the world!
HAVER & BOECKER wins Lafarge Global Supplier Award 2014 18 November 2014
France: Lafarge has held its first global supplier competition, which had a total of seven categories, in a ceremony at its headquarters in Paris. With its ADAMS® technology for filling powder-type products into watertight PE bags, HAVER & BOECKER was able to win in the category of 'sustainability.' The jury's reasoning was that the technology showed 'an ability to operate in a sustainable manner, including the deployment of appropriate corrective actions.'
"Suppliers play an important role in our operations, delivering value year after year and pushing the boundaries in terms of innovation and cost competitiveness," said Thierry Metro, senior vice president of Energy and Strategic Sourcing at Lafarge. "The Global Supplier Awards represents a victory for our suppliers, for Lafarge and for our customers."