September 2024
Holcim H1 profit rises by 9% despite European woes 15 August 2012
Switzerland: Holcim's net income has risen by 9% for the first six months of 2012. Despite this, the world's second-largest cement maker plans to cut costs and raise cement prices to meet its financial targets. These have been both hit by poor demand Europe and high-energy costs.
The company's net income attributable to shareholders rose to Euro324m in the January 2012 to June 2012 period from Euro267m in the same period of 2011. Net sales rose by 2%, to Euro8.62bn from Euro8.45bn. Operating earnings before interest, tax, depreciation and amortisation rose by 1.9%, to Euro1.61bn from Euro1.60bn. Sale volumes of cement rose by 4%, to 74Mt from 70.9Mt. Second quarter results for the April 2012 to June 2012 period supported these overall trends.
By region, Holcim's Asia Pacific and Latin America areas showed steady growth while Europe continued its decline. In Asia Pacific sales of cement rose by 8% for the half year, to 41.2Mt from 38.1Mt. In Latin America sales rose by 3.3%, to 12.1Mt from 11.7Mt. In Europe sales fell by 4.1%, to 12.3Mt from 12.8Mt, mainly due to poor performance in the first quarter of 2012. In North America sales rose by 8.6%, to 5.4Mt from 5Mt. In Africa and the Middle East sales rose by 2.7%, to 4.5Mt from 4.4Mt.
"While demand in North America should beat the previous outlook, Holcim now expects a decline in Europe," the Holcim said. The firm's construction industry customers, especially those in southern Europe at the heart of the debt crisis, are suffering as governments slash spending in an attempt to get budgets under control. Analysts at Bank Vontobel said that while Holcim's overall outlook was almost unchanged, the contribution of Europe compared with North America was three times bigger, making this effectively a 'reduction of the outlook'.
The Swiss cement maker said that its spending cuts were under way and would result in an additional operating income of at least Euro125m in 2012.
China Resources Cement's H1 profit slumps by 69% 15 August 2012
China: China Resources Cement Holdings (CRC) has reporting a sharp fall in earnings and profit margins for the first half of 2012, dragged down by weaker demand. Despite turnover rising by 9.8% to US$1.42bn for the six months ending 30 June 2012, the company's net profit slumped by 68.9% to US$81.9m over the same period due to sliding selling prices.
CRC has attributed its poor performance to a number of factors including sluggish demand caused by weakened economy and poor weather conditions in the southern part of China, which led to accumulation of inventory as well as a series of price cuts. CRC expects prices to pick up in the fourth quarter of 2012 due to several large infrastructure projects, including resumed construction of railway networks and on-going affordable home-building drives.
Dangote aims to grow market share in Nigeria 15 August 2012
Nigeria: Dangote Cement has said that it is widening the distribution of its cement in Nigeria by opening more depots and signing on new distributors. It says it is doing this so that domestic consumers can reap the full benefit of the increased local production.
A statement from the company said that there have been growing concerns over the price of cement even with continuous efforts at increasing production. Dangote, which accounts for over 70% per cent of domestic production, has continued to invest in local production by expanding its production lines and establishing new plants. The statement added that the Dangote management believe that only a 'liberalised distribution system' can convert increased local production to cheaper cement.
Domestic production capacity in Nigeria is believed to have reached about 27Mt/yr , whilst demand hovers at between 17Mt/yr and 18Mt/yr.
CRH expects stagnant earnings for 2012 15 August 2012
Ireland: CRH expects the Eurozone's economic problems to deepen a slide in sales in the second half of 2012, preventing it from raising profits despite a recovery in the US construction market.
For its interim results for the six months ending on 30 June 2012 the Irish building materials group reported a 5% rise in sales revenue, to Euro8.59bn from Euro8.17bn in the same period in 2011. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 1% to Euro568m from Euro574m.
"The big question is whether Germany and some of the economies that are performing well can compensate and continue to deliver growth for the Eurozone overall," said chief executive Myles Lee.
"We just don't see how the Eurozone can get their act together in time to have a significant impact in the second half," chief financial officer Maeve Carton added.
Sales in the US, where CRH is the leading producer of asphalt for highway construction, rose 8% on a like-for-like basis in the first half compared with a 5% drop in Europe where bad weather added to governments' debt problems. But CRH noted that the rate of economic growth in the US is tailing off and forecast that sales growth in the second half in the region will be 'well below' the 8% sales growth in the first half.
First-half results were propped up by favourable weather conditions and improving construction markets in the US, with revenue, profit and margin growth across all three of its divisions in the first-half, said CRH. The company said that key European markets such as the Netherlands continue to struggle, while it is expecting a contraction in sales in Poland in the second half of 2012.
The company is seeking to cut costs by more than Euro2bn over a five-year period in response.
ABB scores US$18m modernisation for Century 14 August 2012
Switzerland/India: Engineering company ABB has secured an order worth US$18m in India to design, engineer and supply integrated automation and modern electrification systems for Century Cement's Manikgarh cement plant in central India.
ABB's delivery is part of a two-line expansion and plant modernisation project that will add production capacity of 2.8Mt/yr, more than doubling its current production capacity. The project also includes a 60MW thermal power plant onsite. providing a reliable on-site power supply that will improve energy efficiency. The turnkey project is scheduled to be completed by early 2014.
"Our proven experience in executing large and complex projects, minerals and cement industry expertise and leading automation and power technologies helped us to secure this important order," said Veli-Matti Reinikkala, head of ABB's Process Automation division.
ABB will deliver integrated power and automation systems using a plant-wide 800xA automation system to control, connect and optimise the performance of all processes and systems. The scope of supply includes medium-voltage switchgear, distribution transformers and other electrical equipment and power systems, intelligent low-voltage motor control centres, variable speed drives, instrumentation and collaborative production management systems. ABB will also provide design, engineering, project commissioning and other site services.
India Cements profit falls 39% 13 August 2012
India: India Cements has reported a 39% drop in net profit for the quarter ending 30 June 2012. Profit fell to US$11.2m from US$18.4m in the same quarter in 2011. However, the company earnings before interest, taxes and amortisation (EBITDA) rose by 14%, to US$50.9m from US$40.1m.
The Chennai-based cement manufacturer's total income, which also includes revenue from Indian Premier League (IPL) franchise Chennai Super Kings, rose by 13.5% to US$218m from US$192m. Total expenses increased by 13% to US$167m from US$147m, mainly due to higher fuel consumption and transportation costs.
"Our primary focus this quarter has been on maintaining the margins despite increases in rail fares, power tariff revision in our states of operation, increases in wages and a substantial depreciation of Rupee against the US Dollar pushing up prices of imported coal," commented N Srinivasan, vice chairman of India Cements. He also added that in the reported quarter the company has continued to work on infrastructure connecting its coalmines to ports in Indonesia.
Cement production stayed stable for the quarter at 2.35Mt in 2012 against 2.32Mt in 2011. Cement and clinker sales also reported little change, with 23.8Mt in 2012 reported against 23.1Mt in 2011.
Lucky Cement cleared in South African quality spat 09 August 2012
South Africa: The South African National Regulator for Compulsory Specifications (NRCS) has cleared imports from Pakistan producer Lucky Cement for use in South Africa.
Thomas Madzivhe, the NRCS's acting chief executive, said that complaints of non-compliance received about Lucky Cement imported from Pakistan had been fully investigated and the NRCS was satisfied the certification bodies had done all the necessary checks and tests and that the cement complied with South Africa's regulations. Madzivhe said that the NRCS suspected market access and competitive and market share issues might be a reason for the complaints.
Musa Ndlovu, the NRCS's acting executive for non-perishable products, said a directive had immediately been issued against Lucky Cement when complaints of non-compliance were received at the end of 2010, which meant this cement could not be sold in South Africa. Ndlovu added that the NRCS had carried out a full 28-day test on the cement but the results did not provide it with any tangible evidence to prove the product was non-compliant in terms of quality. The NRCS had only found evidence once of non-compliance but this was based on under-weight bags and not quality.
Martin Engineering supplies air cannons to Votorantim 09 August 2012
Brazil: Votorantim Cimentos has ordered 110 air cannons from Martin Engineering to aid material flow in two new plants currently nearing completion in Brazil. The two new plants are part of a massive US$988m investment by Votorantim. They are expected to produce approximately 8500t/day of clinker when they come online later in 2012.
110 Martin Hurricane Supreme Air Cannons are to be installed in the plants in Cuiabá and Rio Branco, covering preheater towers, additive silos and cyclones. Benefits of specifying the new technology for air cannon networks include reduced energy costs, improved system performance and increased uptime, with greater availability of compressed air for other processes within the plant.
How much is an Indian cement plant worth? 08 August 2012
Anyone need a spare cement plant? If so then it looks like India is the place to head to this week.
First, Italcementi denied that it was in talks with Jaiprakash Associates to buy one of their Jaypee Cement plants. Then, after much speculation, CRH announced publicly that it had entered negotiations to purchase an equity stake in Jaypee's entire cement business. In addition the Indian government has also revived a plan to sell six Cement Corporation of India (CCI) factories that have been closed for almost 10 years.
All of this raises a question: how much are Indian cement plants actually worth?
According to one source, Italcementi was thought to be offering US$100/t (installed capacity) in the bid it supposedly made but has denied making. Jaypee 'wanted' US$150/t. However analyst commentary with the CRH announcement suggested that Jaypee's asking price was too high! This is hardly surprising. Back in June 2012 when Jaiprakash announced that it was selling its plants it was reported that Holcim was offering up to US$160/t. Alongside the CCI story an analyst was quoted as putting the cost of Indian cement production capacity at US$110/t-US$120/t. Yet these plants have been shut for a decade.
Unlike in Europe, Indian cement industry profits have been rising in double digits in recent years. However, input costs like energy and transport are rising and they are starting to hit margins listed in quarterly reports. Serious additional costs have also arisen from the anti-cartel fines issued by the Competition Commission of India. Throw in questions on infrastructure raised by last week's nationwide power-cuts and Italcementi's (non)decision to stick to US$100/t seems prescient.
Unlike Italcementi however CRH has money to spend. Back in June 2012 it was reported that the company had Euro1.5bn to invest. With Euro250m gone in the first half of 2012 on so-called 'bolt-on' acquisitions that still leaves plenty in the pot to pick up the CCI plants. Now that would be a surprise.
People in the cement industry in brief 08 August 2012
Pakistan: Flying Cement has made changes to its board of directors, effective 6 August 2012. The new board consists of Mr Agha Hamayun Khan (Chief Executive), Mr Kamran Khan (Director and Chairman) and Mr Momin Qamar, Mr Yousaf Kamran Khan, Mr Qasim Khan, Mrs Shaista Imran, Mrs Samina Kamran and Mrs Misbah Momin as directors.
Agha Hamayun Khan replaced Kamran Khan with effect from 23 July 2012.
India: Mangalam Cement Limited has said that Mr R C Gupta, Company Secretary, Compliance Officer and Chief Financial Officer of the company resigned with effect from 8 August 2012.