September 2024
Cemex sees solid second quarter 20 July 2012
Mexico: Mexico's cement giant CEMEX has released its financial results for the second quarter of 2012. These show total consolidated net sales of US$3.9bn during the period, a 1% rise on a like-to-like basis compared to the second quarter of 2011. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 11% during the quarter to US$702m. On a like-to-like basis operating EBITDA increased by 22% in the same period.
Cemex attributed the increase in consolidated net sales on a like-to-like basis to higher prices in local currency terms in all of its regions. It reported that infrastructure and residential sectors were the main drivers of demand in most of its markets.
Net sales in Cemex's operations in Mexico decreased by 14% in the second quarter of 2012 to US$833m compared with US$968m in the second quarter of 2011. Operating EBITDA decreased by 4% to US$300m versus the same period of 2011. The groups's operations in the US reported net sales of US$795m for the quarter, up by 15% year-on-year. Here its operating EBITDA increased to US$27m, comparing favourably to a loss of US$17m in the same quarter of 2011.
In Northern Europe, net sales for the second quarter of 2012 decreased by 18% to US$1.10bn, compared with US$1.34bn in the second quarter of 2011. Operating EBITDA was US$122m for the quarter, a 19% fall from 2011. Second-quarter net sales in the Mediterranean region were US$384m, 20% lower compared to the US$477m taken during the second quarter of 2011. Operating EBITDA decreased by 23% to US$96m for the quarter compared to the same quarter in 2011.
Cemex's operations in South & Central America and the Caribbean reported net sales of US$529m during the second quarter of 2012, representing an increase of 20% over the same period of 2011. Operating EBITDA increased by 58% to US$189m in the second quarter of 2012 from US$120m in the second quarter of 2011. Operations in Asia reported a 10% increase in net sales year-on-year to US$142m compared to the second quarter of 2011. In this region its operating EBITDA was US$30m, up by 35% from the same period of 2011.
Fernando A González, Executive Vice President of Finance and Administration, said, "We are pleased with our 22% growth in operating EBITDA on a like-to-like basis, on back of a 1% growth in consolidated net sales. This is the highest EBITDA generation since the third quarter of 2009 and the fourth consecutive quarter with a year-over-year EBITDA increase. We are particularly pleased with the quarterly performance of our operations in the United States, South & Central America and the Caribbean and Asia regions."
Waste heat recovery contract for ABB 19 July 2012
Switzerland: ABB, EKZ GETEC and Jura Cement have signed an agreement to install an ABB waste heat recovery (WHR) system at the Wildegg AG cement plant in Switzerland. The WHR is based on organic Rankine cycle (ORC) technology, less common than the steam Rankine cycle, which currently dominates the waste heat recovery sector for cement plants. It is expected that Jura Cement will have to purchase about 20% less electricity from the grid for its operations at Wildegg as a result of the installation. EKZ GETEC is financing the system. It is also supported by the Swiss Federal Department of Energy within its 'Energy Switzerland' programme.
ABB has the expertise required to completely integrate the power plant into the cement production process. The turnkey power station order includes design, project management, delivery, installation and commissioning and is scheduled to be commissioned in November 2013.
Marcel Bieri, production manager at Jura Cement, said, "We will be able to generate 14,400MWh of electric power using ABB's waste heat recovery system. That's enough to satisfy the power demand of about 3600 Swiss households." Cement companies that use WHR technology benefit over the medium to long term because they are less exposed to rising energy prices. Payback times on the capital expenditure necessary for installing WHR plants vary but can be as little as two years in some cases.
Is it worth producing cement in the UK? 18 July 2012
According to government advisors cement producers pay more in the UK than other nations for their electricity and it's getting worse.
A Department for Business, Innovation and Skills (BIS) report published on Friday 13 July 2012 has shown that firms in the UK will be forced to pay an extra Euro36 in green taxes on top of the market price they pay for every megawatt hour of electricity by 2020 due to climate policies. This compares with Euro22 in Germany, Euro20 in Denmark, Euro19.3 in France and Euro12.7 in China.
As the Mineral Products Association (MPA) put it, "...cement is an internationally traded commodity and, if it costs more to make it here than to import it, then we are threatening a strategic indigenous manufacturing industry for no environmental gain." Or to put it more bluntly, if the cost of importing cement from France to the UK is less than the energy saving then say 'goodbye' to the UK cement industry. The issue raises one of the core problem of any carbon tax in a global economy. If your neighbours don't have the same tax as you then they can undercut you. Similar arguments rage in Australia and the US.
The UK will be the first country with legally binding targets for greenhouse gas emissions beyond 2020, with a pledge to introduce a carbon floor price of Euro19.98/t in 2013. As Edwin Trout explained in his recent article in Global Cement Magazine on the British Cement Industry in 2011 and 2012 the government took steps to address this in November 2011 with a Euro318m package for energy-intensive industries. Unfortunately as the MPA has now pointed out, the cement industry is ineligible for the first Euro140m of this package because the EU has ruled against such support for the sector in relation to the EU Emissions Trading Scheme.
Unsurprisingly alternative fuels trials are thriving in the UK, such as that at Lafarge UK's Aberthaw plant, which celebrates 100 years of operation this weekend.
TXI announces additions to the board 18 July 2012
US: Texas Industries (TXI) has announced the addition of Sean Foley (54), Bernard Lanigan (64) and Tom Ryan (47) to its board of directors. The appointments of the directors is effective as of 11 July 2012. All three are from outside of the cement industry.
"We are delighted to have found directors of the quality and experience of Sean, Bernie and Tom to join TXI," said Bob Rogers, chairman of TXI's board. "Given the improvement in construction activity, the near completion of additional cement capacity, the high quality of the company's assets and the markets we participate in, this should be an exciting time for them to be a part of TXI."
UK: The Mineral Products Association (MPA) has demanded that the UK government protect the domestic cement industry from rising electricity costs. The comments came in the MPA's response to a Department for Business, Innovation and Skills (BIS) report has stated that electricity bills for UK manufacturers were higher than other key nations because of environmental regulation.
Commenting on the BIS report the MPA said that the new data confirmed what it had been telling the government since 2011. The MPS added the report clearly shows that the UK cement industry must receive some help if it is to survive and supply the UK's low carbon economy.
"The Government now has the evidence to corroborate the industry evidence," said Nigel Jackson, chief executive of the MPA. "It is time for them to respond and take the action we have been urging them to take for so long and to come forward with their long awaited Energy Intensive Industries Strategy."
The BIS report stated that electricity bills for UK manufacturers were higher than other key nations because of climate change levels. It added that by 2020, green taxes will be double those in other EU nations and many times higher than those in the US. According to the report firms in the UK will be forced to pay an extra Euro36 in green taxes on top of the market price they pay for every MWH of electricity by 2020 due to climate policies. This compares with Euro20 in Denmark, renowned for its renewable energy drive, Euro19.3 in France, Euro22 in Germany, Euro12.7 in China and a fall in the US and Russia.
In its response to the BIS report, the MPA stated that the UK cement industry had reduced its CO2 emissions by 57% since 1990 confirmed its commitment to tackling climate change. It approved of the government's 2011 autumn statement to compensate some energy intensive industries against electricity costs by Euro318m. Yet it also pointed out that the UK cement industry will not qualify for a share of the first Euro140m of this because the EU has ruled against such support for the sector, in relation to indirect costs associated with the EU Emissions Trading Scheme.
India: Coal India Ltd (CIL) has threatened to cut coal supplies and break long-term linkages with four of UltraTech Cement's captive power plants in the states of Rajasthan, Madhya Pradesh and Chhattisgarh due to non-completion of the units.
Maharatna CIL has threatened to break long-term linkages and cut coal supplies for 16 captive power plants, including four of UltraTech Cement's captive power plants. When the Indian state-owned CIL signs long-term linkages with a proposed plant, deadlines for the different stages of completion of a plant and the date of commissioning are agreed. All of these plants were incomplete when the Standing Linkage Committee reviewed their implementation status.
"If the captive plants are found to be commissioned with all the milestones achieved, the Fuel Supply Agreement (FSA) may be concluded with them within three months from the date of issuance this notice. Otherwise, linkages may be cancelled," said CIL.
Saudi producers Q2 profits rise year-on-year 18 July 2012
Saudi Arabia: Southern Province Cement has reported a 9.6% rise in quarterly profits, citing the start-up a second production line at its Tahama plant and increased demand from local markets.
Saudi Arabia's biggest cement producer by market value posted a second-quarter net profit of US$69.9m for the quarter ending on 30 June 2012, compared with US$63.7m for the same period in 2011. However profit was down by 7.75% from the first quarter of 2012, when it was US$75.7m. The company attributed this to instruction by the ministry of commerce and industry decreasing the price that t it is able to sell cement at.
Meanwhile, Saudi Cement Co posted a net profit of US$77.4m for the second quarter, a rise of 36% year-on-year. It cited growing domestic demand for cement and clinker. The Saudi construction sector has been boosted over the past year by ramped-up government spending, including a pledge to build a quarter of a million new houses as well as schools and hospitals.
Saudi Cement Co's profit fell by 10.9% compared to the first quarter of 2012, when it was US$86.8m. The company blamed the decrease on a decline in sales.
Iran: Iran exported 3.34Mt of cement and clinker in the first three months of the current Persian calendar year that began on 20 March 2012. 2.89Mt of cement and 449,400t of clinker were exported during this period.
Iran's cement production capacity will be increased by 6.8Mt to reach 82Mt by the end of the current Persian calendar year. "The country's cement production capacity stood at 76.4Mt in the past calendar year which ended on 19 March 2012," said Mohammad Fatemian, an official with the Industry, Mine and Trade Ministry. Over 10.4Mt of cement was exported in the 2011-2012 year, he said, adding that the figure is projected to rise to 15Mt in 2012-2013.
Iran produced over 66.4Mt of cement in 2011-2012, showing an 8% rise compared to 2010-2011. Minister of Industry, Mine and Trade Mehdi Ghazanfari has announced that the country's current cement production capacity stands at 74Mt. Ghazanfari added that the figure will reach 110Mt by 2015.
Vietnam: Vietnam's Ministry of Construction has proposed the creation of an association for cement and clinker exporters to curb 'unhealthy' competition among them. The proposal has been sent to the prime minister for approval.
In its proposal the ministry said that Vietnam's cement and clinker exports have been 'badly affected' because some companies cut export prices to 'unfairly' compete with the rest. At present Vietnam has eight cement and clinker exporters. Six, Vicem, Ha Long, Thang Long, Cam Pha, The Vissai and Cong Thanh, are domestic. The remaining two, Chinfon and Phuc Son, are joint venture companies.
The ministry has called on local cement companies to cooperate rather than undercut each other in order to liquidate their large inventories through exports. The inventories are the biggest challenge facing the industry, it said. Exporting is considered a temporary measure to deal with the rising inventories which were caused by frozen real estate market and unplanned construction of cement factories nationwide.
Vietnam held around 2.8Mt of cement in inventories at the end of June 2012. The figure is expected to rise to 6Mt by the end of 2012, an increase of 23% on year-on-year.
Aberthaw celebrates 100 years with open day 16 July 2012
UK: Lafarge Cement UK is inviting members of the public to an open day at Aberthaw Works in Wales on 21 July 2012 to celebrate 100 years of operation at the site. Visitors will be able to talk to employees and go on a guided tour of the works and quarry.
Works manager James Kirkpatrick said, "We are very keen to share our centenary celebrations with as many local people as possible. Aberthaw Works has played a very important part in the local economy and communities of the Vale of Glamorgan for a long time. It is important to us that we mark this milestone by opening up our doors for people to come on site and find out more about our operation in the 21st Century.
Kirkpatrick added that the open day would include tours of the cement plant and adjacent quarry, an exhibition giving an overview of the 100-year history of the site and displays from other local companies and organisations.