September 2024
Boral cuts 1000 jobs 16 January 2013
Australia: Boral, Australia's largest building materials supplier, has said that it will cut 1000 jobs from its global operations this fiscal year as part of a restructuring initiative intended to improve competitiveness. The changes are hoped to save US$95m annually with estimated savings of US$39m in 2013.
CEO and managing director Mike Kane described the company as 'burdened' with excessive overhead costs. "While this may be less obvious during the good times, it becomes critically exposed when times are tough," he said. The restructuring follows a 100 day review of the business which Kane conducted.
The majority of job losses are in Australia, where 885 positions will be axed. This includes the 90 roles Boral said that it would cut in December 2012 as it announced plans to suspend the production of clinker at its Waurn Ponds plant in eastern Australia. 15 jobs will be cut in the US.
In June 2012 the company reported having 14,740 employees, with around 8730 in Australia. A further reduction of 1420 employees will also take place due to Boral's previously announced divestment of assets in Asia and Australia.
Executive changes in Boral's cement division as part of the restructuring include the departure of Mike Beardsell, Divisional Managing Director, by the end of January 2013. He will be replaced by Ross Harper, who is currently in the role of Operations Manager, will increase his responsibilities to become Executive General Manager of the Cement division.
Saudi Cement profits rise 31.4% in Q4 16 January 2013
Saudi Arabia: Saudi Cement Co has reported a 31.4% rise in its fourth quarter profit due to higher local demand, the company reported in a bourse statement. The cement producer made a net profit of US$74m in the fourth quarter of 2012 compared to US$56.4m in the same period in 2011. Its operating profit rose by 36.8% to US$80.2m from US$58.7m.
Jiangxi Cement expects net profit down by up to 70% in 2012 16 January 2013
China: Jiangxi Wannianqing Cement, a Shenzhen-listed producer of cement and clinker, has estimated that the company's net profit has decreased by 60-70% year-on-year in 2012 compared to a net profit of US$81.4m in 2011. The company made the announcement in a performance forecast that was released on 14 January 2012.
Sinoma secures US$350m Indonesian supply contract 16 January 2013
Indonesia: China National Materials Company Limited (Sinoma) has said that its subsidiary Sinoma International Engineering and Indonesia's PT Cemindo Gemilang have entered into an operation contract worth US$350m.
Under the contract, Sinoma International will provide services to PT Cemindo Gemilang including limestone/clay joint breaking and long belt conveying, and one complete clinker production line with a daily production capacity of 10,000t/day. The project is located in County Bayah of Banten Province in Indonesia.
Line closed at Beijing Cement due to record air pollution 16 January 2013
China: According to data released by the Beijing Municipal Environmental Protection Bureau on 13 January 2013 one cement production line was suspended at the Beijing Cement Plant due to air pollution in Beijing. The move followed measurements of particulate matter smaller than 2.5μm (PM2.5) over 900µg/m3 in several districts of the city on 12 January 2013, the highest level recorded since Beijing began publishing the data in early 2012. The World Health Organization considers the safe daily level to be 25µg/m3.
According to data released by the Bureau on 13 January 2013 in addition to the Beijing Cement Plant closure, 54 businesses in Beijing had cut their emissions by 30%, 28 construction sites had stopped foundation work and Beijing Hyundai Motor Co temporarily halted production. The smog also caused the cancellation of at least 25 international and domestic flights to and from Beijing Capital International Airport. Hospitals in Beijing and in the provinces of Hebei and Hubei have reported a rise in the number of patients with respiratory conditions during the period according to local media.
India Ratings upgrades 2013 outlook for cement sector 16 January 2013
India: India Ratings has revised its outlook for Indian cement manufacturers to 'stable to negative' for 2013 from 'negative' in 2012, driven by limited downside risk for demand. The ratings agency also expects consolidation in the medium-to-long-term with large-scale merger and acquisition activities, according to a report. "We expect consolidation in cement industry in the medium-to-long-term with large merger and acquisition activities in the sector," the rating agency said.
The agency expects credit profiles of large cement firms with superior cost positions and a presence across India to remain stable in 2013. However, smaller companies, with unfavourable cost structures and regional concentrations, are likely to be under pressure.
With growth of the housing sector at 13% and that of the commercial real estate sector (CRE) at 4% until November 2012, India Ratings expects cement demand to grow by 5-8% year-on-year in 2013. Cement production volume in 2012 was mainly driven by a relatively robust activity in housing and commercial real estate. From September 2010 to March 2012, the average growth in credit to the housing sector was around 15-16% in commercial real estate.
Large integrated players, those that are among the top five in the country in terms of production capacity, are likely to have median earnings before interest, taxes, depreciation and amortization (EBITDA) margins in the range of 23-24% in 2013, comparable to the levels seen in the 2012 financial year. However, smaller or partially-integrated players are likely to exhibit margins ranging from 17-19%, lower than the median margins observed for such companies in 2012 financial year, the report said.
With regards to consolidation the report says that the top five companies, constituting around 50% of the industry capacity, enjoy a better cost-structure driven by significant vertical integration and locational advantage with respect to sourcing of raw materials and market access.
"Most other companies, because of lack of one or more of these factors, have a weaker competitive position. The industry economics and the regulatory actions exhibited by the Competition Commission of India (CCI) may push marginal players to consolidate", the ratings agency said.
FLSmidth secures Euro125m loan for research and development 15 January 2013
Denmark: Danish cement plant manufacturer FLSmidth has signed a Euro125m loan agreement with the European Investment Bank (EIB). The five-year-bullet loan will finance FLSmidth's global research and development (R&D) programme within the cement industry during the period 2013-2016. The R&D programme will focus on development of innovative products, optimisation of energy efficiency and use of materials and fuel in the production process as well as reduction of harmful emissions.
"Through its focused R&D efforts FLSmidth aims at fulfilling its customers' future needs for innovative technical solutions, high reliability and availability, minimum environmental impact and the lowest possible lifecycle costs. This loan from the European Investment Bank supports these efforts," said Group Executive Vice President and CFO Ben Guren.
In its press release about the loan, FLSmidth noted that it places emphasis on the use of alternative fuels, reduced emissions and waste, improved heat recovery, lower power consumption, minimised water consumption, increased plant capacity, availability and operating efficiency and minimum safety risk.
Green cement executive speaks out over ETS 'anomalies' 14 January 2013
Ireland: The chief executive of Ecocem, which has 'green' cement plants in Ireland, France and the Netherlands, has called for an 80% windfall tax on cement manufacturers in Ireland, which are currently making profits from the EU Emissions Trading Scheme (ETS). Donal O'Riain says that the Irish cement sector has lost 75% of the demand seen during the boom years of the mid-2000s and that 'anomalies' between its current output and the ETS mean that the Irish economy is losing out.
It is thought that the over-allocation of carbon credits, which now far exceed production requirements, have cost the Irish exchequer Euro120m since 2005 and could cost double that in the seven years to 2020. The Irish cement industry currently gets tens of millions of Euros every year in 'profits' as a result of the scheme.
Previously, the Irish Department of Finance increased the tax on profits from the sale of the credits, from 12.5% to 30%, by ruling that they have to be taxed as a capital gain rather than at the corporation tax rate. O'Riain said they should be taxed at up to 80%. He said that a system that was designed to encourage cement producers to reduce their CO2 emissions was instead incentivising them to produce CO2 at the public's expense.
O'Riain has called on the Irish government, while it holds the European presidency, to change the rules governing the ETS system. He said one of the effects of the way the system operated was to subsidise those plants using environmentally unfriendly practices. "Every 1t of polluting cement in Ireland is sold with a taxpayer subsidy of 17% of the selling price," said O'Riain.
US$500m Lafarge investment in Brazil 14 January 2013
Brazil: The French building materials giant Lafarge has announced a US$500m investment plan in Brazil. On 11 January 2013 Bruno Lafont, group CEO, announced the five year investment in a civil construction research centre in the country at a meeting with the Brazilian President Dilma Rousseff. The move follows a number of asset sales by the group.
The Brazilian research centre will be the group's fifth outside France. The others are in the Netherlands, China, Algeria and India. In the past five years Lafarge has invested US$1bn in Brazil.
Plant mothballing causes protests in Benue State 11 January 2013
Nigeria: The people of Benue State have protested against the continued closure of Dangote Cement's Gboko plant. The plant has been temporary shut down as a result of an alleged cement 'glut,' which cement producers say is being caused by massive cement imports.
A statement from Dangote Group said that the chairman, Gboko Local Government, Nahan Zinda decried the continued closure of the Dangote plant, saying that his local government is losing vast sums of revenue and that the closure was having knock-on effects in other areas of the economy, including trading stalls outside the factory. Zinda called on the federal government to expedite action by doing all it takes for the factory to reopen.
"Since the company was closed, cement prices have risen," said Zinda. "Our people have been jobless and suffering. It may also lead to anti-social behaviours. Our women, who have petty businesses outside the gate, are also complaining bitterly," he said.
Grace John, who spoke on behalf of women traders in Gboko, said that social and commercial activities have virtually come to a halt and that life was becoming difficult. She appealed for the quick reopening of the plant in the interest of women traders.
Benue State Commissioner of Finance Conrad Werbga said, "Importation impacts negatively on the economy. It causes lots of ripples. It comes with attendant negative consequences for our nation. The federal government must do all it could to reverse the trend."
All parties will be keen to keep disruption caused by the plant closure to a minimum. On 17 August 2011, a dispute between a trader and cement plant worker rapidly escalated to a full-scale riot, with 20 deaths and widespread looting in Gboko.