September 2024
Oman: Cement sector players in Oman are scaling up their production capacity to meet the ever-rising local demand and also from export markets such as Yemen and various East African nations. Until recently, the Omani cement manufacturers were ‘victims’ of a cheap influx of cement from the UAE.
In 2011, imports met 25% of cement demand in Oman, mainly from the UAE where the weak construction sector had resulted in a excess of cement. Now with rising operational costs, producers in the UAE are no longer in a position to offer cement at lower prices, boosting the prospects of Omani producers.
In the first quarter of 2012 Oman Cement has seen its cement sales increase by 13.8% on a year-on-year basis, driven by lower prices and an increase in domestic construction activity.
Meanwhile, Raysut Cement group's net profit before tax soared by 37% to US$17.7m in the first three months of 2012, from US$12.9m in the same period of 2011. The profit before tax of Raysut Cement Company (RCC) soared by 26% to US$14.5m, from US$11.6m during the same periods. The group as a whole sold 0.06Mt of clinker and 1Mt of cement during the quarter that ended on 31 March 2012 against 0.03Mt and 0.83Mt respectively in the same period of 2011.
Raysut attributed its increase in profit to higher sales volume and better price realisation in spite of competition, both in the domestic and in the export markets. Construction activity in Oman is expected to continue its upswing during the current year.
HeidelbergCement Ukraine sees worrying loss 02 May 2012
Ukraine: HeidelbergCement incurred losses of Euro6.7m in the first quarter of 2012, according to a company report. The loss is nearly three times the amount that the company lost in the whole of 2011, when it lost Euro2.3m. HeidelbergCement Ukraine reported a net revenue of Euro14.2m for the first quarter of 2012.
UK: The UK Competition Commission (CC) has announced that Anglo American plc (via UK subsidiary Tarmac) and Lafarge will have to sell a significant portfolio of operations, paving the way for entry by a new competitor into the UK cement market, before their proposed construction materials joint venture can go ahead.
In February 2012, the CC provisionally ruled that the proposed joint venture between Anglo American and Lafarge could damage competition in certain markets for construction materials. In its final report, the CC has reiterated its concern that the joint venture would increase the danger of coordination in the market for bulk cement and would reduce competition in local and national markets for other products including aggregates, asphalt and ready-mix concrete.
Anglo American and Lafarge will now be required to sell an extensive package of operations including:
• Lafarge's cement plant in Hope, Derbyshire as well as the nearby Dowlow quarry and three linked rail depots.
• A substantial network of readymix concrete plants, representing well over half of the proposed joint venture's readymix concrete capacity.
• Six aggregate quarries as well as Tarmac's share of two quarries owned through its Midlands Quarry Products joint venture with Hanson and one rail
depot.
• Two asphalt plants as well as Tarmac's share of five plants owned through Midlands Quarry Products joint venture.
The CC further stated that the sale would have to be completed before the joint venture would be allowed to proceed.
Major Middle Eastern contract for FLS 30 April 2012
Denmark: FLSmidth has signed a contract worth approximately Euro85m with a company in the Middle East to supply a complete 6000t/day cement production line. The country and precise location of the plant were not announced.
The contract comprises complete equipment supplies and includes a combined limestone and clay crusher, a gypsum crusher, a circular stacker and reclaimer store, a stacker and side scraper store for additives, an ATOX vertical raw mill, a CF silo, a double-string preheater tower, a ROTAX kiln, an FLSmidth Cross-Bar cooler, an OK mill and equipment for the packing and dispatch of cement. FLSmidth will also supply automation equipment.
"FLSmidth has a long history in the Middle East and is maintaining its leading role in serving the rapidly-expanding cement market," said Group CEO Jørgen Huno Rasmussen. "The growing economy and increasing infrastructure investment in the region continue to offer opportunities. This project confirms that the slowdown from the 'Arab Spring' is lifting."
The company added that the cement plant would feature state-of-the-art equipment including the latest technology to ensure an environmentally-friendly and energy-efficient production process.
Argos sees significant improvement in first quarter 30 April 2012
Colombia: Colombia's Grupo Argos has announced that its consolidated net profit in the first quarter of 2012 was US$125m, a fourfold increase from that seen in the first quarter of 2011. The group said that it had seen a surge in growth in its most significant business areas, namely cement and electricity. The group, which has a 61% stake in Cementos Argos, said that its earnings before interest, taxes, depreciation and amortisation, were US$250m.
Lucky Cement to build plant in Iraq 27 April 2012
Iraq: The board of directors of Pakistan's Lucky Cement Company has decided to set up a greenfield cement grinding plant with a production capacity of 0.87Mt/yr in Iraq under a joint venture. The board also decided to invest US$15m in the cement plant, which is estimated to cost US$30m as 50% share of its equity. The technical and financial evaluation of the proposed project has already been carried out.
Cemex loss narrows in first quarter of 2012 26 April 2012
Mexico: Mexican cement giant Cemex has reported that sales growth in its operations in the United States, Central and South America and the Caribbean helped it to narrow its first-quarter loss in 2012.
"The favourable performance in most of our regions leads us to believe that we are in the initial stages of a turnaround," said Fernando Gonzalez, Cemex's executive vice president of finance and administration, who added that the quarter marked Cemex's sixth consecutive quarter of top-line growth.
Sales rose by 4% year-on-year in the January-March 2012 period to US$3.5bn. Higher sales in the US helped compensate for weaknesses in Mexico and Europe, although the US operations were still a drag on operating earnings before interest taxes, depreciation and amortisation (EBITDA).
Cemex said its operating EBITDA rose by 7% on the year to US$567m. On a like-to-like basis for its ongoing operations and adjusting for currency fluctuations, operating EBITDA increased by 10%.
Cemex's net loss for the quarter was US$26m, narrower than a loss of US$229m loss a year earlier.
Japanese sales up on reconstruction demand 26 April 2012
Japan: Cement sales in Japan increased by 2.1% year-on-year in the year to 31 March 2012 to 41.91Mt, according to figures released by the Japan Cement Association. Sales were up for the first time in six fiscal years on the back of earthquake reconstruction and rebuilding.
Sales grew particularly in the Tohoku region due to very strong reconstruction demand in areas devastated by the March 2011 earthquake and tsunami. The Greater Tokyo area also contributed to the rise, seeing an increase in urban redevelopment projects.
In March 2012 alone domestic cement sales rose by 8.7% compared to 2011 to 3.64Mt, the fourth straight monthly rise.
Too much cement in Nigeria? 25 April 2012
Nigeria: This week has seen a major development in the Nigerian cement industry, with a call from domestic manufacturers to ban cement imports, three months ahead of the government's schedule for the ban. The call has been presented in some quarters as proof that the country, long blighted by high cement imports, has achieved President Goodluck Jonathan's bold target of making Nigeria a net exporter of cement before 2013. In the face of steadily diminishing oil revenues the government would like Nigeria to be known as the regional cement exporter, but what else might happen?
According to the Cement Manufacturers' Association of Nigeria (CMAN), the country's total cement capacity now stands at 22.5Mt/yr. Domestic consumption is estimated at 18.5Mt/yr, translating into a required capacity utilisation rate of 82%. It is bizarre, therefore, that cement producers feel the need to call for an import ban. Perhaps:
a) The producers know that they can't compete with the low cost of imports from outside Nigeria,
b) The producers want to recoup their plant investment costs as quickly as possible,
c) The producers know that they can't export if the country continues to import.
With notoriously poor transport links within Nigeria, option c may be a small factor. If road and rail links are poor, transport costs increase and exports become less desirable for both the supplier and the end-user. What is more likely however, is a combination of a and b. Producers need to recoup their investments but can't if China and India can undercut them from thousands of miles away. If the desire to recoup investments goes unchecked when the import ban comes in, there is a high potential for cartel-like behaviour to surface again in the country.
One does not have to look back far to the last major incident of apparent cement market cartelisation in Nigeria. In mid-2011 President Jonathan had to step in and personally call for a 25% price reduction. His target was hit within three months, but since then prices have slowly started to rise again, even with Dangote's Ibese 6Mt/yr plant coming online just three months ago! With four producers committed to setting up a 3Mt/yr plant each by 2015 in exchange for 2011 import licences, the supply of cement in Nigeria will continue to rise, making the temptation to collaborate even stronger.
Madras Cements promotes Dharmakrishnan to CEO 25 April 2012
India: Madras Cements has promoted its executive director for finance, A V Dharmakrishnan, to chief executive officer.
"A V Dharmakrishnan has been designated as chief executive officer of the company with effect from 1 April 2012," the Chennai-based cement maker said in a BSE filing.
Dharmakrishnan is a chartered accountant who began his career with Madras Cements in 1982. He has been an additional director at Rajapalayam Mills and Ramco Systems since 2008 and serves as a director On-Time Transport Company Limited. In addition he is a member of Institute of Chartered Accountants of India.
Madras Cements is the flagship company of the diversified Ramco Group and it produces 13Mt/yr at its five manufacturing plants across Tamil Nadu, Karnataka and Andhra Pradesh. Apart from cement, Ramco Group has presence in real estate, paper production, hardware and stainless steel.