September 2024
India Cements slips into the red 27 May 2014
India: India Cements has incurred a net loss of US$5.19m for the quarter that ended in March 2014, driven by capacity overhang and weak demand. The company had earned a net profit of US$6.86m in the same period of 2013.
Net sales fell to US$183m from US$202m during the same period of 2013, while expenses dipped marginally to US$183m."Oversupply pressure continues, coupled with poor demand in south India," said India Cement's managing director N Srinivasan. Cement demand in south India was flat during the period. Consequently the company ran its southern cement plants at 70% of their rated capacity. Its Rajasthan plant produced cement at 98% of its rated capacity.
The company has been under a corporate debt-restructuring (CDR) scheme since January 2003, which ended in March 2014 with a US$9.69m charge. India Cements also incurred a US$7.97m loss due to foreign exchange fluctuations.
"With a new government in place we expect a turnaround in demand in the second half of this fiscal year," Srinivasan said.
Additional management adjustments at Cemex 23 May 2014
Mexico: Further management changes have been implemented at Cemex, including the inclusion of six executive vice presidents, instead of five. The six vice presidents will report directly to the director general, Fernando Gonzalez, with the position of executive vice president of finance to be filled by Jose Antonio Gonzalez.
Juan Pablo San Agustín will continue as executive vice president of strategic planning and business development, while Maher Al-Haffar has been appointed as executive vice president of investor relations, corporate communications and public affairs. Luis Hernandez will continue as executive vice president of organisation and human resources, as well as security and administrative services, while he will also be responsible for processes, IT, innovation, global service organisation (GSO), the securities funding corporation (VMO) and the Neoris project. Ramiro Villarreal will remain head of legal affairs, taking up the position of executive vice president of legal, while he will continue as secretary of the board of directors. Mauricio Doehner has been appointed as executive vice president of corporate affairs and business risk management.
No changes have been made at the regional director level. Cemex executives have also expressed a desire to recover investment grade at the firm, lost during the crisis in 2009.
Rwanda: South Africa's PPC has said that it will begin the commissioning of its 0.60Mt/yr cement plant in Rwanda by the end of 2014, while construction of new plants in the Democratic Republic of Congo (DCCR), Zimbabwe and Ethiopia continues.
Jidong Cement plans to buy into Jilin Yatai 23 May 2014
China: Tangshan Jidong Cement plans to acquire about 108.48 million additional shares in Jilin Yatai Group for US$60.3m, at US$0.56/share. After that, Jidong Cement will hold less than a 5% stake in Jilin Yatai. Jidong Cement said that the capital source of the external investment was a self-owned one and that the deal would not affect its 2014 operations.
South Africa: PPC has announced that when the next round of PPC salary adjustments takes effect in October 2014, company CEO Ketso Gordhan would earn only 40 times more than his lowest-paid worker.
When Gordhan took over as CEO in January 2013 he was earning 120 times more than his lowest-paid worker. However, the company's drive to reduce the earnings differential had reduced this to a multiple of 48. This followed Gordhan's US$96,370 pay cut in October 2013, while the remuneration of his top 60 managers was frozen so that the wages of the cement maker's 1200 lowest-paid workers could be raised.
Gordhan said that he would not take a pay increase in October 2014 and PPC's other executives would be awarded increases of about 4.5 - 5%, less than the usual 6.5%. This would allow the minimum total pay package at PPC to be hiked to nearly US$1060. According to Gordhan, the 40-times multiple was seen by many as 'a justifiable spread.'
The company's new black economic empowerment (BEE) deal, which gives employees 12% share ownership in the company, could generate as much as US$193m for PPC's employees over five years if share price targets of US$5.78/share are reached.
The company's new BEE deal is a restructure of its 2008 deal, which was designed around broad-based trusts but was complicated and costly. The new BEE deal involves the issue of ordinary shares to the PPC Phakamani Trust and the issue of a new class of perpetual preference shares, to be used to raise capital to fund the unwinding.
James Hardie doubles annual profit 22 May 2014
Australia: Fibre cement producer James Hardie Industries said on 22 May 2014 that it expects the US housing construction market to improve in 2014 as it posted a more than doubling in annual net profit. "The company continues to expect improvement in the US operating environment," said James Hardie.
James Hardie, which generates two-thirds of its revenue in Europe and the US, said that its annual net sales in those markets grew by 19%, helped by strong rises in US single-family building permits. James Hardie posted a net profit of US$99.5m for the year to 31 March 2014, up from US$45.5m in the previous year. Net operating profit, which excludes charges for asbestos liability, asset impairments and regulatory charges, was US$197.2m compared with US$140.8m in the prior year. Overall net sales grew by 13% to US$1.49bn.
James Hardie has been compensating Australian victims of asbestos-related illnesses such as mesothelioma and said that its asbestos liability grew by US$186.18m to US$1.44bn by 31 March 2014, after the number of claims were higher than expected for a second consecutive year.
India: Reliance Cement Company, part of the Anil Ambani-controlled Reliance Infrastructure, is looking at a turnover of around US$341m in the current fiscal year on the back of capacity expansion and entry into West Bengal. The company has made a foray into West Bengal, a market with 14Mt/yr of cement demand and the potential to grow by 8%/yr in the coming years.
"We are targeting cement sales of 3.5Mt and a revenue of US$307 - 341m in fiscal 2015," said Reliance Cement Director & CMO Atul Desai. "We hope to cover the entire West Bengal market in fiscal 2015, which is expanding by 8%/yr. We expect to sell 0.6 - 0.7Mt of cement in the state in fiscal 2015."
"West Bengal is one of the largest cement-consuming states in eastern India with a total consumption of around 14Mt/yr," said Reliance Cement Head (East) Deepak Ranjan. He added that Reliance Cement hopes to garner a healthy market share in the region.
Reliance Cement also plans to set up a 2.1Mt/yr cement grinding plant in Raghunathpur, West Bengal. Desai said that the company has 0.40km2 of land and is in the process of getting regulatory clearances for the project.
Reliance Cement has also lined up cement plants in various locations to increase capacity and is in various stages of acquiring limestone mining leases. "The group aims to expand its cement production capacity to 50Mt/yr over the next couple of years," he said.
India: Chettinad Cement has acquired a 20.58% stake in Anjani Portland Cement Ltd from its promoter KV Vishnu Raju. The acquisition was done in an off-market transaction and 37,84,014 shares were acquired by Chettinad Cement at US$1.054/share on 20 May 2014. After the transaction, Chettinad Cement's stake in Anjani Portland Cement rose from 20.58% to 41.16%.
Nigerian cement industry upheaval 21 May 2014
Following the Standards Industry of Nigeria's (SON) decision earlier this week to ban 32.5 grade cement for all applications except for plastering, the country's cement industry is likely to be faced with some difficult decisions. The new rules state that 42.5 grade cement must be used for casting of columns, beams, slabs and for moulding blocks, while 52.5 grade cement is now mandatory for building bridges. As a developing country, Nigeria is home to a large number of construction and infrastructure projects. To ensure safety this means that the construction industry must be well-regulated.
Arguments against the use of low quality cement in Nigeria have been long drawn out as low quality cement has been blamed for a spate of building collapses, resulting in the deaths of 297 people in 1974 – 2010.
In support of the country's cement producers, SON's director general Joseph Ikem Odumodu was eager to point out that low quality cement is not to blame for Nigeria's building collapses. He said that cement grades 32.5, 42.5 and 52.5 are designed for different applications, which are not being adhered to by builders. While 42.5 grade cement is the minimum suitable grade for multi-story building construction like residential homes, 32.5 grade cement is frequently used instead as it is cheaper and more readily available.
Dangote Cement is currently the only company producing 52.5 grade cement in the country, which it sells at the same price as its 42.5 grade cement. The new SON decision is therefore expected to be good news for Dangote, potentially increasing sales volumes and improving the company's reputation.
With regards to the rest of Nigeria's cement producers, unless they are able to convert their production process for 42.5 and 52.5 grade cement extremely rapidly, Nigeria's cement imports and prices for domestic 42.5 and 52.5 grade cements are likely to increase, in contrast to recent trends. The new regulations, which SON has said will be strictly enforced, provide an excellent opportunity for market share expansion to those cement producers that respond rapidly. It might also be considered the ideal moment for companies to begin exploring brand identities and marketing campaigns. Lookout for our new report on cement branding in a future issue of Global Cement Magazine.
JK Cement appoints new additional director 21 May 2014
India: JK Cement has announced that the Board of Directors has appointed Paul Hugentobler as an additional director in the Board, to hold office until the conclusion of the next Annual General Meeting. Previous to the appointment, Hugentobler served as an advisor to Holcim between 1 January 2014 to February 2014. Between 1999 – 2000 he was the CEO at Siam City Cement and between 1980 – 1994 Hugentobler was a project manager at Holcim Group Support.