September 2024
Sinoma forecasts massive drop in net profit 04 July 2012
CO2 capture and conversion trial for St Marys 03 July 2012
Canada: The Cement Association of Canada has applauded the Government of Canada's announcement that it will invest almost US$1m in Ontario-based Pond Biofuels for the advancement of Canadian biofuel technology and expertise. The investment will be made under the Federal Economic Development Agency for Southern Ontario's 'Investing in Business Innovation' initiative.
The contribution will help Pond Biofuels complete a pilot demonstration of a technology developed jointly with St Marys Cement to capture and convert CO2 and other emissions from the cement manufacturing process into oxygen and biomass.
"This technology pioneered by Pond Biofuels in partnership with St Marys Cement speaks to the Canadian cement industry's commitment to innovation and commitment to reducing its carbon footprint," said Michael McSweeney, President and CEO of the Cement Association of Canada. "Government support plays a critical role in fostering innovation and we warmly welcome the investment in this groundbreaking initiative as an important step in the future of sustainable development for Canada's cement industry."
Lafarge places a seven year Euro500m bond 02 July 2012
France: Under its Euro Medium-Term Note programme, Lafarge has today issued a Euro500m bond with a 7 year maturity and fixed annual coupon of 5.875% to institutional investors. While the French cement and building materials giant had said that it had no immediate refinancing needs, the proceeds of this bond issuance will reinforce the already strong liquidity position of the group.
The settlement and issuance of the bond are expected to occur on 9 July 2012.
Semen Gresik plans expansion in Vietnam 29 June 2012
Indonesia: PT Semen Gresik, Indonesia's largest cement producer, plans to spend US$400m-US$500m to expand its operation into Vietnam and Myanmar by the end of 2012, according to its general director Dwi Soetjipto.
Semen Gresik intends to finance 20% of the expansion with internal cash and the remainder with external sources, possibly from a global bonds issue. In case any negotiations conclude by the end of 2012, Semen Gresik would likely issue bonds in 2013, Dwi added.
The company has been assessing potential local partners for a joint venture for a plant in Myanmar to produce around 600,000t/yr, in which Semen Gresik will contribute US$150m. However, Dwi Soetjipto declined to discuss Vietnamese expansion plans in detail, hinting at an acquisition.
Semen Gresik reported total assets of US$2.25bn at the end of March 2012. The firm's revenues in the first quarter of 2012, rose by 20% year-on-year to US$458m. Its cement sales fell at 4.94Mt in Jan-Mar period, making up 39.3% of Indonesia's market share. Semen Gresik predicts that its cement sales will reach 22.5Mt/yr in 2012, up from 19.72Mt/yr in 2011. Revenues are expected to rise 15% year-on-year to US$1.93bn.
China Resources shares feel the slowdown 28 June 2012
China: Shares in China Resources Cement Holdings fell by as much as 5% on the Hong Kong stock-exchange today after the cement maker warned of a sharp fall in first-half earnings. Its losses demonstrate that weaknesses in the world's second-largest economy are starting to hit corporate profits. An increasing number of companies are feeling the pinch of a slowdown in consumer demand and the economy as a whole.
China's central bank cut its policy rates in June 2012 for the first time since the onset of the global financial crisis because economic data for April and May 2012 suggested that growth was weakening more than previously thought.
Yesterday, Gansu Qilianshan Cement, a small Shanghai-listed cement producer, forecast that its net profit would decrease by at least 50% year-on-year in the first half of 2012. In the first half of 2011 it made a net profit of US$38.9m.
Boral downgrades profit forecast for a second time 27 June 2012
Australia: Boral, Australia's leading building materials supplier, has downgraded its overall profit forecast for the second time in two months, saying earnings could be as much as US$75.5m lower than it expected in February 2012. The downgrade comes with predictions that the group will announce asset writedowns when it delivers its full-year result in August 2012.
It is now expected that Boral will post a net profit before significant items for the current financial year in the range of US$100-110m. The company has continued to blame the profit downgrades on bad weather and weak conditions in the property and construction market and said that an early maintenance shutdown at Waurn Ponds Cement Works in Victoria was also weighing on earnings.
Cartel fine will cast a long shadow 27 June 2012
India: The announcement last week that 11 Indian cement producers face a combined US$1.1bn penalty for a price-fixing cartel will cast a long shadow over the country's increasingly vulnerable-looking cement industry.
For years the Indian cement industry has been beset by suspicions of over-capacity despite a constant stream of new capacity. Now the Competition Commission of India (CCI) thinks that it has got to the heart of the paradox by accusing manufacturers of limiting production amid high demand and colluding to artificially raise prices.
The amount that the CCI has fined the companies, 50% of their net profits for the two fiscal years to 31 March 2011, is quite astonishing. If enforced in its entirety the fine effectively negates a large portion of the sector's profits for an entire fiscal year. This is clearly not a slap-on-the-wrist from the CCI.
In the 1990s and early 2000s a similar cartel case involving European (and specifically German) cement producers led to fines in the order of hundreds of thousands of US Dollars. The industry has since cleaned up its act considerably as a result. Indian producers would be foolish not to follow suit. What are the likely effects in the Indian case?
Removing the cartel that the CCI purports to have found would reduce prices, which are inflated by an oft-quoted 25% median in a cartel. This is clearly good news for consumers and potentially the development of the Indian economy in general. The obvious losers in this situation would be the producers, which would see a reduction in profitability. Some of the smaller producers would find such a situation very challenging, with the risk of going bust or being absorbed into larger companies.
Another possibility is that the accusations will spread along the value chain. Shortly after the announcement of the fine, the Builders' Association of India (BAI), announced that it wants the fine increased to accommodate compensation claims from contractors and consumers that it feels are out-of-pocket as a result of the cartel. Many will feel aggrieved now that they 'know' the cement companies were profiteering - sorting out claims from affected parties could be a long and costly exercise.
The effects of the fine could also extend to outside of India. Indian cement producers, very good customers of the Chinese and European cement plant manufacturers in recent years, will have to deal with lower revenues. This will clearly dampen their enthusiasm to contract further capacity and may cause knock-on-effects for Sinoma, KHD, Polysuis and other major suppliers. The cement industries of neighbouring countries, like Pakistan, may also be affected.
Whatever happens in the Indian cement industry as a result of the CCI's fine, the authority, only formed in 2009, has shown that it is serious about taking on corruption in India. In the long run that can only help develop the potential of the country.
"The first thing for any new competition regulator is to go out and find the cement cartel. My experience of this subject is, it is always there, somewhere," wrote Richard Whish, a Professor of Law at King's College London in 2001. "The only countries in which I had been unable to find the cement cartel is where there is a national state-owned monopoly for cement."
Otto Jung retires from Gebr. Pfeiffer 27 June 2012
Germany: Dipl.-Ing. Otto Jung will retire from Gebr. Pfeiffer SE on 30 June 2012 after nearly 40 years with the company. Dr.-Ing. Robert Schnatz will take over Jung's technical responsibilities on the executive board.
Jung started his career as a development and project engineer. In 1988, he became head of the projects and sales department processing and then in 1996 he was appointed to the Executive Board of Gebr. Pfeiffer SE, a position he held for 16 years. During this time a number of innovateive new projects were launched for the cement industry.
Loesche supplies largest ever cement mill in Europe 27 June 2012
Turkey: Nuryol Çimento has decided to use Loesche GmbH as the supplier of all mills for its new 4000t/day cement plant project in Karasu, around 150km east of Istanbul. Loesche will supply mills for coal grinding, cement raw material grinding and clinker grinding. The complete project execution and coordination will be done by Sintek Mining Machinery Industry Construction, which is based in Ankara.
Loesche will supply one Loesche mill type LM 46.4 to grind cement raw material at a rate of 330t/hr to a fineness of 12% R90u and a Loesche mill type LM 28.2 D to grind coal. The design capacity of the coal mill is 30t/hr, to a fineness of 3% R90u.
For cement grinding Nuryol has purchased a Loesche mill type LM 63.3+3, including process filter and fan. The mill is designed to grind OPC cement with a capacity of 240t/hr to a fineness of 3800cm2/g according to Blaine. This Loesche mill represents the largest vertical roller mill for cement grinding in Turkey as well as in the whole of Europe. It will have a table diameter of 6.3m and will be driven by a motor with a rated capacity of 7200kW.
Loesche's innovative Compact Plant design for cement grinding plants was an important factor that Nuryol says led it to choose a Loesche vertical roller mill for cement grinding. Compact Plant design eliminates the need for a large and expensive mill building, leading to massive savings in the required plant plot, in cost for structural steelworks and civil works as well as in erection time.
MP opens new bagging plant at Lafarge site 27 June 2012
UK: MP for Rushcliffe and UK Government Cabinet member Ken Clarke has visited Lafarge Cement UK's Barnstone cement blending plant in Nottinghamshire to officially open a new state-of-the-art cement packer at the site. As well as significantly increasing the plant's output, the packer will also secure the future of some 60 local jobs and provide a boost to the local economy.
Supplying the local market with a range of 26 ready-to-use cements, Barnstone also exports specialist cements to 27 countries. Over recent years Lafarge has invested Euro8.5m at Barnstone, expanding production facilities, refurbishing offices and improving safety.
Clarke said, "I was very impressed by the professionalism of all (those that) I met at the plant. Lafarge should be congratulated for its most recent investment in the area and I'm proud the company has this site in my constituency."
The Barnstone plant manager Chris Stephens said, "While the (UK) construction industry currently faces real challenges, our new sophisticated packer will support new secured business and provide capacity and flexibility for future business."