September 2024
South African cement project finalised with Chinese investment 21 November 2013
South Africa: The South African Mamba Cement project, jointly funded by China's Jidong Development Group, the China-Africa Development Fund and a South African cement company, inked a deal regarding financing on 20 November 2013.
The project, with an investment of US$220m, is situated in Limpopo Province, South Africa. The capital fund of the project is US$100m, 51% of which is held by Chinese shareholders.
Unlike traditional overseas investment financing, Mamba received US$120m through project financing, which is based on the projected cash flow of the project rather than the balance sheets of its sponsors. This marked China's first successful investment through project financing in Africa. The loans are jointly provided by Nedbank South Africa and Bank of China's Johannesburg office.
Chen Ying, vice-president of China's Jidong Development Group, said that the success of the financing deal meant the South African bank's accreditation to Chinese companies. "Project financing offers Chinese companies a new way to make overseas investments," stated Ying.
The project includes a new cement clinker production line with an output of 1Mt/yr, a waste heat recovery (WHR) system with a generating capacity of 26.8MKW/hr and other supporting facilities. The electricity generation system together with the cement plant makes Mamba the first cement company in possession of WHR technology on the African continent.
India bowls Holcim-Ambuja merger a googly 20 November 2013
Minority shareholders have bowled a googly at Holcim's attempt to simplify its business structure in India.
Or for readers unacquainted with cricket terminology, domestic institutions which hold about 9% in Ambuja Cements have been widely reported in the Indian media as having voted against a move to merge the cement producer with its parent company, Holcim India. The final results of the shareholders vote will be publicly announced on 21 November 2013. The shareholders actions follow Holcim's recent approval by the Indian Foreign Investment Promotion Board for the merger.
That this is bad news for Holcim is not in doubt given that the multinational cement producer has taken a hit in its Asia-Pacific region, particularly in India. Overall for the region its operating profit fell by 32.5% year-on-year to US$333m for the quarter to 30 September 2013.
Specifically, Ambuja Cements managed to maintain its sales volume of cement and clinker year-on-year at 4.89Mt for the third quarter. However, its net profit after tax fell by 45.4% to US$27m. It blamed the decline on subdued demand due to overall economic slowdown combined with higher input costs. Meanwhile, ACC saw its sales revenue from cement fall slightly to US$388m for the third quarter while its profit for cement before costs and tax fell by 57% year-on-year to US$22m.
As mentioned in August 2013 when this column last looked at India, the parallels to cement industry consolidation in China are telling. In China guidelines have been issued to cut overcapacity in the cement industry, with the Ministry of Industry and Information Technology releasing lists of companies that should cut excess production. Alongside this, the country's leading cement producers have reported a return to profit so far in 2013. Who exactly is taking the loss from this production retraction in China, if it is happening, remains unreported and unclear.
In India, much more light has been shone upon an over-producing cement industry. Holcim and its subsidiaries are just some of the companies reporting falling profits at present. Ambuja's minor shareholders look like they have made a decision that is counter to the best interests of the Indian cement industry.
In a recent UK newspaper article, political theorist David Runciman compared the respective merits of democratic and more autocratic modes of government. Unsurprisingly for a British academic Runciman came out in favour of democracies, yet the advantages of more centralised governments were noted, such as the ability to make wide-reaching decisions faster and more comprehensively.
In light of this, comparing the Indian and Chinese cement industries in 2040 will be fascinating. Minor shareholder tussles will likely be forgotten but cement (and hopefully cricket) will be as vital then as they are now.
Andre Tissen appointed head of Beumer cement business unit 20 November 2013
Germany: Andre Tissen has been appointed manager of the cement business unit at Beumer Group effective from October 2013.
His responsibilities include managing Beumer's cement competency centre at the company's headquarters in Beckum, marketing Beumer's product portfolio, developing Beumer's sales team, optimising the company's sales structure and coordinating communication between the company's factories around the world.
Tissen, aged 43, has previously held various sales positions in the cement industry. Before joining Beumer, Tissen worked as Sales Manager, Europa & Key Accounts, at a conveyor equipment specialist.
VAS wins Cemex contract 20 November 2013
Germany: VAS® the IT logistics system from FRITZ & MACZIOL group has won a contract from Cemex in Germany. The Mexico-based multinational cement producer will use a bespoke version of the software and will roll the system out to several Cemex plants starting in Germany. FRITZ & MACZIOL cited VAS®'s ability to cover all requirements towards an IT logistics solution specified by Cemex as a key reason for its selection. At Cemex the implementation of a VAS® workshop is currently being prepared.
"Cemex takes over the role of a trailblazer. At present many firms operating in the raw material sector are thinking about how to standardise their global operations and logistic processes by using a template-based solution in order to replace their older and often isolated systems," said Claus Jordan, the Director of Business Development and Marketing of the FRITZ & MACZIOL Industrial Applications and Services division.
Jordan sees the emergence of Web 2.0 technologies as a reason for this development, as they can be used to simplify the automation of logistic processes within different plants. He added that, "A template-based rollout reduces time, effort and costs on the customers side and as such secures a fast return-on-investment."
Adrian Brown, Sales Director for FRITZ & MACZIOL in UK and Ireland, described VAS® to Global Cement.
This process-orientated software solution for the raw materials industry, forms the entire process chain from delivery via dispatch and loading, right up to departure. As the link between ERP systems and technical systems, VAS® represents the key function for efficient process sequences. In addition, VAS® supports reporting functions and supplies real-time information to further systems, for example for production, sales or controlling. All external technical systems such as the weighing, silo or metering technology are completely integrated into the VAS® logistics system processes.
According to Brown, VAS® is currently used in more than 160 plants worldwide within the raw materials industry. More than 30 of these implementations are within the cement and minerals industries in the UK and Ireland.
Holcim looks at foreign funds to cement US$2.32bn Ambuja deal 20 November 2013
India: Domestic institutions, which together hold 9% in Ambuja Cements and have voted against the Ambuja-Holcim merger deal, have left the whole transaction on a knife-edge as Holcim is now banking on foreign funds to rescue it.
For the US$2.32bn deal to go through, Holcim needs approval from the majority of Ambuja Cements' minority shareholders.
This is the first merger and acquisition transaction to go under the hammer of minority shareholders after India's capital market regulator, Sebi, empowered them to approve or reject transactions in February 2013.
The voting process, which ran for three weeks, closed on 19 November 2013 and early indications suggest that most of the Indian minority shareholders have voted against the deal.
LIC, the biggest Indian institutional investor in Ambuja Cements, GIC and other public sector insurance companies have voted against the deal that would enable Ambuja Cements to emerge as Holcim's flagship firm in India.
The exact response of foreign institutions such as Aberdeen, JP Morgan and Oppenheimer, who together own about 30% stake in Ambuja Cements could not be ascertained.
Ambuja Cements declined to comment on the voting results, which will be officially released on 21 November 2013.
PPC announces 10% year-on-year profit increase in 2013 20 November 2013
South Africa: PPC (formerly Pretoria Portland Cement) has announced that full-year profit in 2013 was increased by 10% after improved sales in its home market and neighbouring Zimbabwe. Net income rose to US$92m in the 12 months to September 2013 from US$83m in 2012.
"Cement sales in our home territories, particularly Zimbabwe and South Africa, have shown good growth," said Ketso Gordhan, chief executive officer of PPC.
PPC is expanding in Africa through acquisitions to offset tougher competition in its domestic market. The company will have three new plants operating in the Democratic Republic of Congo, Rwanda and Ethiopia by the end of 2015, boosting capacity by more than a third to as much as 11Mt/yr.
"Due to modest growth, the domestic trading environment remains tough and highly competitive," said a PPC representative. "We are on track to meet our strategic objective of generating 40% of our revenues from the rest of the continent by 2017."
Qingsong Building Materials acquires cement company in Xinjiang 20 November 2013
China: Xinjiang Qingsong Building Materials & Chemicals has acquired a 31.6% stake in Yili Nangang Building Materials for US$27.7m. After the acquisition, Qingsong Building Materials' stake in the Xinjiang Uyghur Autonomous-based company has increased to 51%, further expanding its market share in the region.
Lafarge opens fourth world research laboratory in Algiers 20 November 2013
Algeria: Lafarge inaugurated its fourth laboratory dedicated to research in construction materials in Algiers on 18 November 2013. The Euro1.75m laboratory is the first such facility that the multinational cement producer has opened in Africa.
Luc Callebat, CEO of Lafarge-Algeria, described the laboratory as a "platform technology to coordinate and accelerate innovation to serve the needs of the Algerian construction market," during the inauguration ceremony. The project is intended to meet increasing demand for housing in terms of quality, cost and energy efficiency. The laboratory joins Lafarge's existing network in France, China and India.
Covering an area of 2290m2, the research laboratory includes control laboratories and research in cement, concrete, aggregates and building systems. The laboratory also organises specialised training in the construction industry.
Lafarge Republic orders cement grinding plant from Fives 20 November 2013
Philippines: Lafarge Republic signed a contract with Fives FCB for a new cement grinding plant for the Teresa plant located in Rizal province. The proposed plant will add 850,000t/yr production capacity to the Teresa plant's capacity in 2015. No financial information for the contract has been released.
The contract includes raw material feeding, with clinker and pulverised coal fed through the existing circuit and other additives, such as a limestone, gypsum, fly ash, fed by truck dump. A cement grinding workshop will be fitted with one Horomill® 3800 and one TSV™ 4500 classifier, associated with a dryer-aerodecantor and a TGT™ filter (under Fives Solios licence). A Fives Pillard vertical hot gas generator (12 MW) for the pouzzolana (25% moisture) drying will also be fitted.
The plant's cement silo will have a capacity of 5000t. A new cement transport system will connect the new silo, the site's existing silos and the packing plant. The contract also includes the control and supervision system and an electrical sub-station for the new build.
Indonesia: JFE Engineering Corporation has started work on a 28MW waste heat recovery (WHR) project for PT Semen Indonesia, the leading state-owned cement company in Indonesia. The WHR project will be designed and manufactured by the Japanese engineering firm with installation by local contractors at the Tuban cement plant in West Java. Commissioned of the plant is scheduled for the end of 2014.
The Semen Indonesia project is the second WHR build JFE Engineering has undertaken in Indonesia following a previous project for Semen Padang. This project is expected to reduce CO2 emissions by 130,000t at full load operation. Further collaboration between JFE Engineering and Semen Indonesia, following a strategic agreement signed on 23 October 2013, will see coordination between the companies on WHR projects and waste management in Indonesia and Vietnam.
The project from JFE Engineering is part of a feasibility study of the Joint Credit Mechanism (JCM) by the Ministry of Environment of Japan (MOEJ), to offset Japan's emissions targets through low carbon projects overseas. Once awarded accreditation on the scheme, the project will be supported by a subsidy from the MOEJ.