September 2024
Chettinad Cement buys 17% in Anjani open offer 30 July 2014
India: Chettinad Cement Corporation has raised its stake in Anjani Portland Cement to 66.08% by acquiring a 17.08% stake through an open offer. The offer was triggered by Chettinad Cement entering into a share purchase agreement in March 2014 to acquire up to 61.74% holding from the promoters of Anjani Portland for US$11.7m.
According to Chettinad Cement, the agreement has built-in flexibility to ensure that its holding is limited to 75%, the maximum allowed for a firm to remain listed. As the open offer attracted a good response, Chettinad Cement had limited its share purchase from the promoters to 49%. Chettinad Cement has to pay US$4.92m to buy shares from the promoters and an additional US$3.23m to fund the open offer. The acquisition will help Chettinad Cement, which has a presence predominantly in Tamil Nadu and Karnataka, to enter Andhra Pradesh and Odisha.
USA/Canada: US Senator Sherrod Brown has urged the Obama Administration to protect the cement industry in Paulding County, Ohio and the thousands of local jobs that it supports.
In a letter to United States Trade Representative (USTR) Michael Froman, Brown called for the administration to crack down on Canada's attempt to 'illegally' subsidise the McInnis Cement plant in Quebec, which would specifically target the US market, hurting the ability of local manufacturers to compete. US cement companies would be affected, he claims, including Lafarge North America, which has a plant in Paulding County.
"Paulding County workers can compete with anyone when given a level playing field," said Brown. "But if countries like Canada illegally subsidise their industries and target the US market, it gives their products an unfair advantage. I urge the administration to investigate the nearly US$500m subsidy package proposed for the Quebec plant, which will directly compete with Lafarge North America's facility in Paulding. Actions must be taken in order to protect Paulding jobs and the economy of north-west Ohio."
The Canadian federal government and Quebec are seeking to offer almost US$500m to McInnis Cement to help its start-up in Port-Daniel-Gascons, Quebec. It is claimed that the size and nature of these subsidies could violate Canada's World Trade Organisation (WTO) obligations and give its cement industry an unfair advantage in the US market.
"Lafarge North America appreciates the inquiry to the United States Trade Representative to address a serious threat to US cement producers and their workers," said John Stull, president and CEO of Lafarge North America. "Given the excess cement capacity in Quebec, the McInnis Cement plant makes no economic sense. Lafarge believes that the plant would not be built without enormous support from the federal and provincial government. Lafarge joins Senator Brown in urging the US government to engage with the Canadian government regarding the provision of subsidies that appear to be prohibited by WTO rules and threaten material harm to the US cement industry."
Uzbekistan seizes Akhangarancement assets 30 July 2014
Uzbekistan: The Tashkent Regional Economic Court in Uzbekistan has seized the assets and bank accounts of JSC Akhangarancement, a subsidiary of Russia's Eurocement Group, according to an Akhangarancement statement. The move follows the granting of a suit brought by the Uzbekistani State Competition Committee on 21 July 2014 regarding the privatisation of the cement producer in 1994, which it is investigating.
Money in bank accounts equivalent to US$177.8m and fixed assets amounting to US$19.1m were seized. An Akhangarancement source said that, despite the seizure of the accounts, the plant continues to work as usual and produce cement.
Eurocement Group claims that the State Competition Committee's claims are contrived and it plans to appeal the decision of the regional court at a higher court. Eurocement has 30 days to file an appeal. If the court upholds the first ruling, this will essentially mean the nationalisation of the asset.
Eurocement became a shareholder in Akhangarancement eight years after it was privatised, buying 75.5% of its shares on the secondary market in August 2006. Currently, Eurocement Group's stake in the enterprise is 83.9186% or 4,136,269 shares, of which Switzerland's Eurocement Holding AG is the direct owner. The rest of the shareholders are private individuals.
Prism returns to profit in second quarter 30 July 2014
India: Prism Cement has reported a net profit of US$2.2m for the second quarter of 2014, which it attributes to higher sales and margins. The performance represents a turn-around from the US$7.96m net loss that Prism suffered in the same quarter of 2013. Total income rose to US$230.9m, mainly due to higher revenue from cement and clinker, of which it sold 1.54Mt during the quarter.
PPC Zimbabwe secures US$18m for new Harare plant 29 July 2014
Zimbabwe: PPC Zimbabwe has secured US$18m for the construction of a new cement plant in Harare Province. The company said that construction of the new plant is currently its main priority.
"Preliminary work at the site is underway and fully-fledged construction is scheduled for August 2014," said PPC's managing director, Njombo Lekula. A road access network to the plant has already been completed and a temporary office is already set up at the site. Public hearings for the Environment Impact Assessment have been concluded, providing the green light for the project to commence.
PPC, which has 1.2Mt/yr of cement production capacity, intends to double its capacity by building a clinker plant in Mount Darwin District in Zimbabwe, as well as cement grinding plants in Harare Province, Zimbabwe and Tete Province, Mozambique. Lekula said that PPC is also looking at investing more in new technology to increase production capacity. According to Lekula, a feasibility study for the construction of a clinker plant and a cement grinding plant in Mashonaland Central Province, Zimbabwe is almost complete.
"We are conducting a feasibility study for the clinker plant in Mashonaland Central, but the plant in Harare is our main priority at the moment," said Lekula. He added that the construction of another clinker plant in Mashonaland Central would go in tandem with the limestone geological studies currently being carried out.
PPC, however, is worried by the performance of its export business. "Currently our plants in Zimbabwe are running at about 70% capacity utilisation and for us to get to decent levels of capacity utilisation, we have to find other markets," said Lekula. "We export to Zambia, Malawi and Mozambique and we continuously look for opportunities in the region." PPC's export business contributes about 20% to its total turnover, but the figure fluctuates. "Our export market margins are impacted by logistics. Sometimes the exports are not very stable hence the need to look at both the local and export markets to ensure sustainability," he added.
Indonesia: Semen Indonesia has reported US$1.13bn of revenue in the first half of 2014, a 12.8% year-on-year increase. During the first six months of 2013, revenues grew by 31.9% compared to 2012. The decelerated growth is attributed to reduced domestic demand, which is affecting the Indonesian cement industry as a whole.
Sales volumes in the first half of 2014 grew by 4.6% year-on-year to 12.8Mt. Semen Indonesia's subsidiary, Semen Gresik, contributed almost 54% of the sales volumes. Semen Padang accounted for 26% and Semen Tonasa contributed the remaining 20% of sales volumes. Net profit for the first six months of 2014 stood at US$46.9m, a 9.3% year-on-year increase, while higher expenses and foreign exchange losses contributed to higher costs. Semen Indonesia has forecast an 8% increase in revenue for the whole of 2014.
The latest statistics from the Indonesian Cement Association show a 4% increase in domestic cement consumption in the first half of 2014, lower than the 7.5% growth reported for the first half of 2013.
Ramco Cements’ net profit dips 47% on low demand 29 July 2014
India: Continued slackness in domestic cement demand led to a 47% fall in Ramco Cements' net profit to US$6.04m during the second quarter of 2014, which ended on 30 June 2014, down from US$11.5m during the same quarter of 2013. Revenues fell by 2.8% to US$160m, down from US$165m in 2013.
On a consolidated basis, Ramco Cements earned a net profit of US$6.10m during the second quarter of 2014, which includes results of its subsidiary company, Ramco Windfarms, as well as its associate company, Ramco Systems.
Ramco Cements expects performance to improve in the coming months. It is establishing a cement grinding plant at Vishakhapatnam, Andhra Pradesh, with a 1Mt/yr grinding capacity, at a cost of US$59.8m. The project will be completed over the next few months and will help the company to grow in the Andhra Pradesh, Orissa and Chhattisgarh State markets. Ramco Cements is also working on increasing capacity at its thermal power plants at Alathiyur Village and Ariyalur Town in Tamil Nadu State.
Philippines: Holcim Philippines has posted a net profit of US$38.0m for the second quarter of 2014, slightly higher than the US$37.4m reported for the same period of 2013, with sales on pace to meet internal targets amid robust demand from the construction industry. Revenue was US$203m during the second quarter of 2014, up from US$188m for the same period of 2013.
This brought first half 2014 net profit to US$76.6m, up from US$70.3m in the first half of 2013, while revenue for the period was US$389m, compared with US$355m in 2013. Holcim Philippines' president and CEO, Eduardo A Sahagun, said that the company is 'on track' with its 8% short-term sales growth target, as well as its 5% to 6% sales growth target for the long term.
"On top of the sustained government and private sector spending, we now see some major private-public partnership projects being implemented in the metropolis, hence, our strong sales," said Sahagun. "We were able to meet this demand due to our ability and commitment to keep the market supplied during this period of robust growth." Other factors that contributed to the company's growth were 'full-swing' construction during the summer months and post-calamity construction in the Visayas Region.
Holcim, which has a local market share of around 34%, is currently in the process of merging with Lafarge, which has a share of around 28%. Sahagun said that the merger might be finalised by May 2015, resulting in a combined market share of 62% in the Philippines.
Anglo American reports 48% increase in profit 28 July 2014
US: Anglo American plc has reported 48% growth in its first half of 2014 pre-tax profit. Its underlying operating profit declined as revenues were hurt by lower commodity prices, despite increased production. Anglo American has also signed a binding agreement for the sale of its 50% stake in the Lafarge Tarmac Holdings Ltd joint venture in the UK for at least US$1.50bn.
During the first half of 2014, Anglo American's pre-tax profit climbed to US$2.95bn from US$1.99bn in the same period of 2013. Special items and re-measurements, including the attributable share of associates and joint ventures and after tax and non-controlling interests, amounted to a gain of US$180m, compared to a loss of US$847m in 2013. Underlying earnings were US$1.28bn, some 3% higher than the US$1.25bn that was reported in the same period of 2013.
Underlying operating profit fell by 10% to US$2.93bn from US$3.26bn in 2013. Lower realised prices of commodities resulted in a reduction of US$1bn in underlying operating profit. Group revenue, including associates and joint ventures, declined slightly to US$16.1bn from US$16.2bn in 2013, which was attributed to a drop in many commodity prices, continuing weak global economic growth and increases in seaborne commodity supply.
"As we look at the global economic outlook, uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets," said Anglo American's CEO Mark Cutifani said. "Over the long term, we expect new supply to be constrained and to see tightening market fundamentals and a recovery in price performance."
India: JK Lakshmi Cement has reported a 31% turnover increase to US$111m in the second quarter of 2014, which ended on 30 June 2014, compared to US$85.0m in the corresponding quarter of 2013. The increase was attributed to 14% growth in production and an 18% increase in sales volumes.
JK Lakshmi Cement's operating profit during the quarter stood at US$19.3m. This represents a 58% increase compared to the same period of 2013, when operating profit was US$12.2m. After providing for interest and depreciation, the company's pre-tax profit rose to US$11.0m, compared to US$2.96m in the same period of 2013. After accounting for exceptional items and tax, JK Lakshmi Cement posted a net profit of US$6.73m for the second quarter of 2014, up from US$2.61m in the corresponding quarter of 2013.
JK Lakshmi Cement has reduced its fuel consumption to 715,000Cal/Kg of clinker in the second quarter of 2014, compared to 731,000Cal/Kg of clinker in the corresponding quarter of 2013. It has also reported satisfactory progress in its 2.7Mt/yr capacity greenfield cement plant in Durg, Chhattisgarh, which is expected to be commissioned in the third quarter of 2014.