September 2024
CRH profit down by 5% in 2012 27 February 2013
Ireland: Irish building materials supplier CRH has reported a loss before tax of 5% to Euro674m in 2012 from Euro711m in 2011. Chief executive Myles Lee pinned the blame on weakening consumer and investor confidence within the Eurozone, although this was tempered by the recovering US market.
The group's sales revenue rose by 3% to Euro18.7bn in 2012 from Euro18.1bn in 2011. Earnings before interest, taxes, depreciation and amortisation (EBITDA) remained flat at Euro1.64bn compared to Euro1.66bn.
By region, CRH's Europe Materials division, which includes cement production, saw its sales revenue fall by 10% from Euro2.99bn to Euro2.69bn. EBITDA fell by 7% to Euro405m from Euro 436m. However, CRH's cement production volumes increased in Ukraine by 32% due to a new cement plant and an acquisition in Odessa. Ireland and Spain only comprised 5% of the division's EBITDA. Ireland saw a 17% decline in cement volumes and CRH declined to present any data about Spain other than a 30% decline across 'all sectors.'
America Materials saw its sales revenue increase by 13% to Euro4.97bn from Euro4.40bn. EBITDA increased by 7% to Euro566m from Euro530m.
In its outlook CRH expects its American operations to make progress in 2013, fuelled by the continued recovery of the US economy. Its European forecasts suggest only modest growth at best for 2013. American improvements and further profit improvement initiatives are expected to outweigh continued trading pressures in Europe.
Indian cement price set to rise following Railway Budget 27 February 2013
India: Indian cement producers are poised to pass on a 5.79% increase in the freight rate to consumers following the Railway Budget. However a cement producer quoted by the Press Trust of India said that a final decision would be taken after the Union Budget.
"With the hike in freight charges, the impact will be US$2.41/t - US$2.78/t of cement production," said Shree Cements managing director H M Bangur.
An analyst tracking the cement industry said that cement makers never absorb the hike in freight costs and these are always passed through. In the budget Railway Minister Pawan Kumar Bansal raised the freight charges for cement, diesel, LPG, steel and iron-ore by up to 5.8%.
Edo Cement to commission 3Mt/yr plant in 2014 27 February 2013
Nigeria: Edo Cement Company's new US$500m plant in Okpella, with a cement production capacity of 3Mt/yr, will be ready for commissioning in early 2014, the chairman of parent company BUA Group has said.
Alhaji Abdulsamad Rabiu made the announcement at the signing of a US$35m contract agreement between BUA Group and Siemens to build a new gas turbine power plant for the plant. The contract, which was signed with Siemens at BUA's London office, was for Siemens to supply three SGT 500 turbines manufactured by Siemens Industrial Turbo Machinery AB in Finspang, Sweden with a total capacity of about 45MW. These will supply power to the Edo Cement plant, which is currently under construction.
"I am particularly very impressed so far by the civil construction work done by Julius Berger. 70% of the cement plant equipment has been shipped and is currently on site and the pace of work is very comprehensive and impressive. By early 2014 the cement factory will be ready for use," commented Rabiu on the plant's progress.
Dangote partner Sephaku sees loss double in South Africa 27 February 2013
South Africa: Sephaku Holdings, the listed company with a 36% shareholding in Sephaku Cement, has nearly doubled its headline loss to US$1.11m in the six months to 31 December 2012 compared to US$0.63m in the same period of 2011. However, the company is in a strong cash position according to CEO Lelau Mohuba.
Sephaku Cement plans to commission a clinker plant towards the end of the 2013, which will produce 2.5Mt/yr of cement. It is 64%-owned by Nigeria's Dangote Cement. Mohuba said the commissioning was on schedule and that Sephaku would become a major player in the South African cement market, which currently produces 14Mt/yr.
Meanwhile shareholders have approved the acquisition of Metier Mixed Concrete on 11 January 2013. The company concluded a 10 year funding agreement deal valued at US$220m with Standard Bank and Nedbank in October 2012. Sephaku's directors said this agreement would close the gap in terms of the capital they would require for Sephaku Cement to be fully prepared for market entry and for it to become a significant competitor in the wholesale and retail cement trade.
Dangote has, according to reports, invested more than US$124m in the cement venture at Aganang, near Lichtenburg in North West Province, making it the largest foreign direct investment in South Africa by a company from elsewhere in Africa.
Nexe Grupa files for pre-bankruptcy settlement 27 February 2013
Croatia: Croatian building materials producer Nexe Grupa has submitted a motion for the opening of a pre-bankruptcy settlement procedure. The company also said in a bourse filing that its affiliates Nasicement, Dilj, Luka Tranzit, Igma and Nexe Beton have likewise filed for pre-bankruptcy settlement before the competent authorities.
By setting the bankruptcy procedure in motion, Nexe Grupa wishes to accelerate the financial and operational restructuring of the company, having in mind the large number of creditors involved, the company said in a separate statement.
Nexe Grupa comprises around 20 companies operating in Croatia, Bosnia, Serbia and Montenegro. It runs the Nasicecement cement plant in Nasice with a cement production capacity of 1Mt/yr.
Adelaide Brighton grows profit by 3.9% to US$158m in 2012 27 February 2013
Australia: Construction materials maker Adelaide Brighton has increased its net profit by 3.9% to US$158m in 2012, from US$152m in 2011. The company said that mining and resources projects in South Australia, Western Australia and the Northern Territory had more than offset weakness in residential and commercial construction.
"While net profit increased only modestly in 2012, we see this as a good result considering the challenges facing the industry," said managing director of Adelaide Brighton, Mark Chellew.
The company's revenue rose by 6.9% to US$1.21bn in 2012 from US$1.13bn in 2011. Earnings before interest and tax (EBIT) rose by 1% to US$232 from US$229m.
Although the company didn't provide any specific details on the cement part of its business, it did comment that sales increased overall in 2012 due to increased mining and project demand despite the weak building sector. Energy costs increased by 8%, including the US$3m after tax impact of the carbon tax. Adelaide Brighton said it is employing a number of strategies to mitigate rising energy costs including fixed price energy contracts for a portion of energy requirements, the use of alternative fuels and a continual review of operational improvements.
In December 2012 Adelaide Brighton acquired 30% of an integrated white clinker and cement production facility in Malaysia for US$29.5m. The investment is expected to generate acceptable returns and secure long term supply for Australian markets.
Chellew said the carbon tax, environmental regulations and cost pressures were likely to affect the outlook for 2013 but reaffirmed the company's commitment to reducing its carbon footprint by using imported materials and alternative fuels. The company said the high Australian dollar had enabled it to import more clinker, cement and blast furnace slag at cheaper prices. However, the strong currency and mixed local demand had curtailed domestic price growth.
Tanzania allows cement imports for the moment 27 February 2013
Tanzania: The Tanzanian government has rejected calls by local cement companies to place trade barriers on imported cement because local production is still insufficient. Tanzania's Minister for Industry, Trade and Marketing, Dr Abdallah Kigoda said that despite the expected progress from cement industries, the government will still allow cement imports until local producers meet domestic demand.
Kigoda admitted that although imported cement is sold at a lower price compared to locally-produced cement, it should stand as an 'eye opener' for local industries to become competitive. Tanzania has three cement factories: Tanga Cement, Mbeya Cement and Twiga Cement. Another four plants are under construction. The country's cement production capacity stands at 3.25Mt/yr with actual demand placed at 4Mt/yr.
"In order to control importation of more cement local factories had to increase production to meet the demand as the country was surrounded by potential market opportunities such as Southern Africa Development Community (SADC) and the East Africa Community (EAC)," said Kigoda. He also mentioned other challenges facing the domestic cement industry such as a unreliable power sources and high distribution costs caused by poor infrastructure.
CPV and CRH swap assets 26 February 2013
Spain/Ireland/UK: On 26 February 2013 Irish buildings materials supplier CRH plc announced that it and Spanish cement business Cementos Portland Valderrivas SA (CVP) had reached an agreement, effective immediately, regarding an asset swap in relation to certain Spanish assets.
CRH will transfer its 26% stake in Corporacion Uniland SA to CPV. In return, CPV will transfer its 99% stake in Cementos Lemona SA to CRH. CRH will also acquire Southern Cement Ltd, a cement importation business, based in Ipswich, UK as part of the transaction. As part of the transaction CRH and CPV will terminate all legal disputes with each other.
EAPCC returns to profit, eyes expansion 25 February 2013
Kenya: The East Africa Portland Cement Company (EAPCC) plans to expand after returning to profit during the six months ending 31 December 2012. The company said that it was boosted by cost reduction and improved cement sales. EAPCC, Kenya's third largest cement producer, said that it was optimistic of strong full-year results and was exploring expansion into Tanzania. The company already operates in Uganda and South Sudan.
"We are now discussing the financing of these (new) projects," EAPCC's managing director Kephar Tande told investors in Nairobi. The company plans to raise new capital through the Nairobi bourse, with the aim of increasing clinker production to 1.5Mt/yr by 2016 from 0.45Mt/yr at present. Tande also expects EAPCC to double its exports (as a proportion of total production) to 10% by 2014.
EAPCC made a pretax profit of US$4.3m during the six months ending 31 December 2012, compared with a pretax loss of US$2.82m during the same period of 2011. Tande said the business boosted profits by saving about US$9.7m through increased efficiency.
This news is in stark contrast to EAPCC's 2012, which was blighted by boardroom disagreements, strikes, sackings, protests and even a shooting at the plant.
China produces 2.18Bt of cement in 2012 22 February 2013
China: Cement output in China increased by 7.4% year-on-year in 2012 to 2.18Bt, according to data released by the Ministry of Industry and Information Technology. Clinker output rose by 1% to 1.28Bt. Obsolete cement production capacity of 220Mt/yr was eliminated.
In other news the China Building Material Federation has released production information for regions in north-western China. Xinjiang Uyghur Autonomous Region produced 41Mt of cement in 2012, a year-on-year increase of 32.8%. Ningxia Hui Autonomous Region saw cement output increase by 10% to 16.1Mt. Shaanxi Province saw cement output increase by 16.3% to 76Mt. Gansu Province saw cement output increase by 32% to 36.7Mt.