September 2024
Cement quarry explosion kills ten in China 29 August 2012
China: An accidental explosion at a quarry supplying a cement plant in southern China has killed ten people and left 18 with confirmed injuries.
Workers were in the process of unloading 13t of explosives from three trucks at a quarry of the Longshan Cement Company in Yingde city in Guangdong Province when some of the explosives ignited on 27 August 2012. Of the 18 injured, nine are workers from the cement company and the others are residents in the nearby town of Yinghong, which is separated from the quarry by a river.
At least nine people living in a nearby town were also injured in the blast when windows shattered. Among the dead were quarry workers and others who transported and unloaded the explosives.
An investigation team has been set up and sent to the site of the accident to search for evidence and handle the remains of the explosives. A probe into the cause of the blast is underway.
Longshan Cement Company, a subsidiary of Anhui Conch Cement, employs 950 people, including 240 who work at the quarry.
Zuari Cement settles with L&T for US$33.8m 28 August 2012
In July 2012 L&T filed for arbitration proceedings against the cement maker to claim US$33.8m in unpaid bills and payment delays. L&T alleged that Zuari failed to pay US$5.66m it owed to the engineering company for the construction of a 5500t/day cement plant at Yeraguntala in Andhra Pradesh. L&T claimed the rest of the amount as a penalty for payment delay and for cashing a performance guarantee.
US: Texas Industries (TXI) has requested that the US Department of Commerce and the Interagency Trade Enforcement Center investigate and counteract 'unfairly' priced portland cement imports from Greece and the Republic of Korea.
In a letter to the organisations, TXI, the largest producer of cement in Texas and a major cement producer in California, stated that it believes that imports from Greece and Korea are being sold at less than a 'fair' value and are benefiting from government subsidies. In addition it alleged that these imports have materially injured Texas cement producers and their employees.
Imports from Greece and Korea to Texas increased by almost 40% from 2009 to 2011, and increased another 14% from the first half of 2011 to the first half of 2012. Allegedly these imports have taken substantial sales volumes from Texan producers resulting in underutilisation of local production capacity and reduced profits.
Lafarge UK plant hits 50% alternative fuel rate 24 August 2012
UK: Lafarge Cement UK's Cauldon Works in Staffordshire has received recognition for its industry-leading sustainability achievements, which have seen it reach an alternative fuel substitution rate of 50%. The achievement is the latest milestone for the plant, which has been researching, developing and using alternative fuels, mainly processed sewage pellets (PSP) and tyre chips, for a decade.
Its parent company, Lafarge Group, has honoured the works as part of its annual awards. These champion the efforts of employees worldwide who are transforming the way in which products are manufactured. As part of the latest achievement, Lafarge has announced that the Cauldon team was able to run the calciner for a trial 10hr period using just PSP and tyre chips. Cauldon is only the third of Lafarge's 166 production sites across the world to achieve 100% alternative fuel substitution on the calciner for a limited period.
Cauldon Works' optimisation manager, Andy Woodcock, said, "We are aware that environmental legislation across the construction sector will increase in the near future and we want to be sure that we have measures in place to stay at the forefront for environmental performance and delivering sustainably-produced products to our customers. We're pleased to announce this development, which will help us continue to reduce our carbon footprint and reinforce our position as Lafarge UK's flagship works for the use of waste-derived fuels."
UAE cement company results 24 August 2012
UAE: A series of results has been released by cement producers in the United Arab Emirates. Sharjah Cement has announced a US$3.5m net profit for the first half of 2012, an improvement from a US$0.6m loss in the first six months of 2011. Its revenue was up by 14.5% to US$87.5m from US$76.4m.
Meanwhile, Union Cement posted a profit of US$5.6m, which, like Sharjah, was an improvement from a loss. It lost US$4.1m in the first half of 2011. Union's sales revenue was down marginally year-on-year to US$88.3m, a drop of 0.2%.
Gulf Cement also made an improvement year-on-year, increasing its revenue by 14.9% from US$35.4m to US$40.7m. However, the company went from a profit of US$3.64m to a US$0.78m loss.
Chinese producers profits in free-fall 23 August 2012
China: On the back of similar reports from numerous Chinese cement producers, two more companies have announced large drops in their profits in the first half of 2012.
Tangshan Jidong Cement Co Ltd, a Hebei Province-based cement producer, posted US$17m in net profit for the first half of 2012, a year-on-year drop of 85%. The company's operating revenue slid by 10.7% year-on-year to US$1.0bn.
Meanwhile, Jiangxi Wannianqing Cement Co Ltd, a Jiangxi Province-based cement maker has posted a net profit of US$9.1m for the first half of 2012, a year-on-year decrease of 80%. Its operating revenue slid by 22.1% to US$316m.
Shree profit sky-rockets 23 August 2012
India: Shree Cement, one of the top-five Indian cement producers, has reported an incredible 539% jump in its net profit for the first quarter of the 2013 fiscal year. Its net profit rose to US$63.6m for the quarter ending 30 June 2012, whereas the net profit of the company stood at US$10.0m during the same period in 2011. Shree's total income rose by 43.8% to US$269m during the quarter, from US$187m.
The company did not explain the massive increase in net profit, but it is likely that the year-ago period saw a large non-operating payment.
European bargain hunt 22 August 2012
The news this week that GSO Capital Partners has patched together a group of investors to recapitalise Giant Cement and its owner Cementos Portland Valderrivas (CPV) has been a long time coming.
Giant may be based in the US but CPV is Spanish. Here cement production fell by 28% year-on-year for the first half of 2012. For its 2012 forecast Oficemen, the country's domestic producers association, forecast in July that consumption will fall by 25% compared to 2011, to 15Mt/yr, representing a drop of 73% from a high of 56Mt/yr in 2007. Potentially the Spanish cement industry could regress to a per capita consumption of only 325kg/capita, figures not seen in the country for nearly 50 years! It has already hit a 48-year low.
In other words it is the perfect time for cash-rich foreign firms to pick up a bargain. Yet the question that should be asked, especially by anybody else thinking of investing in highly indebted European cement assets, is how do investors expect to make any return?
Simply waiting for the market to improve is one strategy for those who can afford it. According to the Global Cement Directory 2012, Spain has 38 cement plants with a capacity of 48Mt/yr. Of this the big players – Cemex, Holcim, Lafarge and CPV – comprise 28Mt/yr. Even if the smaller producers stopped producing cement overnight the big producers would still have the capacity to produce twice as much cement as is currently required.
However, the focus on the CPV subsidiary Giant Cement is telling. The owner of CPV, Fomento de Construcciones y Contratas SA (FCC), was originally reported as trying to sell Giant by March 2012. With the US market starting to pick up, Giant would make an attractive acquisition. FCC's last attempt to sell Giant was, however, delayed by CPV's debt.
With a Giant sale delivering some return to the GSO Capital Partners investors, followed up by further on-going debt repayment from CPV, the only loser would be the future development of the Spanish cement industry outside of that done by the multinationals. Heavily indebted European cement producers with profitable overseas assets must be looking very attractive indeed to international investment firms. The bargain hunt has begun.
New CEO appointed at Zhigulevskie Stroymaterialy 22 August 2012
Russia: Nikolay Skornyakov has been appointed chief executive officer of Zhigulevskie Stroymaterialy plant, part of the Eurocement Group. Previously, Skornyakov was the technical director of the cement plant located in Zhigulewsk in Samara.
Skornyakov was born in 1950 in Ulyanovsk. In 1980 he graduated from the Belgorod State Technological Institute of Construction Materials focusing on chemical technology binders. He has since worked in the cement industry for about 40 years, starting at a plant in Ulyanovsk in 1969 as an electrician. In 2001 he was appointed technical director of the Ulyanovsk plant subsequently becoming first deputy chief executive officer.
In 2005 Skornyakov became chief executive officer of the Pikalevskiy plant. In 2006 he became the deputy chief executive office – technical director of the Mikhailovcement plant in the Ryazan region. Since 2009 Skornyakov has been the deputy chief executive officer - technical director of the Zhigulevskie Stroymaterialy plant.
Boral’s second half profit hit by slow housing market 22 August 2012
Australia: Boral has reported a 59% fall in second-half profit, hit by weak housing construction in Australia and delays in big resource and road projects. Boral, which removed its chief executive in May 2012, declined to give a fiscal forecast for the year ahead, in light of uncertain market conditions, but said it would update investors at its annual meeting in November 2012.
Net profit for the six months to June 2012 fell to US$35.7m from US$87m a year earlier, as calculated from full year figures. The building products maker issued profit warnings in April 2012 and June 2012.
"Earnings from our Australian business in the six months to June were hit by very weak housing and non-residential building activity, combined with delays and disruption from sustained rainfall across the east coast. The positive impact of price increases was more than offset by much weaker sales volumes in these markets and by higher costs, including from the wet weather," said Boral's chief executive officer, Ross Batstone.
Overall for the year to 30 June 2012 profit, after tax dropped by 42% to US$106m from US$183m. Sales revenue grew by 5%, to US$5.24bn from US$4.94bn, but this excludes the impact of the acquisition of Lafarge's 50% of Boral's stake in their Asian plasterboard joint-venture.
Boral's cement sector reported a slight fall in revenue to US$449m from US$462m, due to a 40% reduction in New South Wales lime volumes, marginally lower cement volumes and broadly flat cement prices. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 12%, to US$124m from US$140m.
For its 2013 outlook Boral expects its cement volumes to be remain flat, with residential demand improvements in the state of North South Wales offset by weakness in Victoria and continued low volumes in South East Queensland. The pricing environment will remain challenging due to the high Australian dollar and low sea freight prices, which allow imports from Asian countries.