September 2024
Pakistan sales stagnant as exports fall 09 December 2011
Pakistan: Total cement sales in Pakistan have remained flat during the first five months of the 2011/12 fiscal year.
From July to November 2011 sales were 12.42Mt compared to 12.54Mt to the same period in 2010/11. It is expected that exports are likely to decline by 4% to 3.75Mt as demand from Pakistan's major export markets in the Middle East have been slowing down on account of subdued economic activity. Monthly sales figures for November 2011 are expected to show a decline by 12% on a year-on-year basis to 2.12Mt. This has mainly been driven by a 14% decline in exports to 0.59Mt compared to 0.68Mt in the same period in 2010/11.
This national trend was repeated locally in Karachi where sales underwent a tiny improvement to 8.67Mt in the first five months of 2011/12 compared to 8.62Mt in the same period in the pervious year. Local sales declined by 11% to 1.53Mt compared to 1.73Mt in November 2010 due to a slowdown in construction activities in northern Pakistan. Despite low sales it is expected that Karachi will perform well in the Pakistan sector due to improved pricing power after the adoption of 'price discipline strategies'.
Vietnamese fuel subsidies threatened 08 December 2011
Vietnam: Vietnamese cement producers are facing calls to end subsidies on buying electricity. According to Minister of Finance Vuong Dinh Hue, cement and steel producers enjoyed subsidies of US$120m in 2010, with foreign investors netting US$24m of this total.
Hue raised the issue at the latest National Assembly whilst explaining the loss incurred by Vietnam Electricity (EVN). Citing the auditing results in 2010, Hue said that the cement and steel industries consumed 11% of the total commercial electricity output (982Mkwh). The problem was that the producers only had to pay US$0.04/kwh used, while the electricity production cost was
US$0.06/kwh in 2010, according to the Ministry of Industry and Trade. Naturally foreign investment has flocked to Vietnam, turning the country into a production base for export.
"We need to settle the problem when regulating the pricing mechanisms," Hue said before the National Assembly.
Member of the National Assembly's Finance & Budget Committee Nguyen Huu Quang, who once worked for the Vietnam Cement Corporation, said that EVN now has to pay US$0.06/kwh for electricity it buys from China, but that it has to sell at less than US$0.05/kwh to cement producers.
"I asked many times to restrict the export of cement and clinker, because the export prices are lower than the domestic prices. In exporting, enterprises can earn profits, but the State cannot, while the subjects for subsidisation in the society, also cannot enjoy any benefits from this," Quang said.
Chinese firm to build US$180m plant in Iraq 07 December 2011
Iraq: Sinoma International Engineering Co Ltd, a Jiangsu Province-based Chinese company principally engaged in the mechanical equipment and cement businesses, has recently signed an engineering contract with Iraq-based Gulf Research Development. Sinoma will build a 5000t/day cement production line in the Kurdistan city of Sulaymaniyah at a cost of $180 million.
PIC to convert AfriSam debt 06 December 2011
South Africa: A South African court ruled on 2 December 2011 that the Public Investment Corporation (PIC) can convert AfriSam's debt of US$580m into equity. PIC, which manages US$120bn in South African state pensions, will now gain control of the South African producer. This will enable it to restructure the company's debt which threatens to bankrupt the company.
AfriSam's two largest shareholders, empowerment venture Bunker Hills Investments and Holcim, previously applied to block the conversion of preference shares into ordinary shares, but this was dismissed by Judge Eberhard Bertelsmann in the North Gauteng High Court.
AfriSam CEO Stephan Olivier said, "Our focus... remains on the day-to-day operations of the company and ensuring maximum operational and financial efficiency." AfriSam had earlier said Bunker Hills and Holcim had a contractual obligation in respect of the conversion.
Holcim created AfriSam in 2006 by selling 37% of its South African business to investors led by Bunker Hills, and retaining a 15% stake. Bunker Hills had earlier said these shareholdings would be diluted to 'almost nothing' after the PIC preference share conversion.
In his ruling Judge Bertelsmann said, "There can be no suggestion that there is any illegal threat to the applicant's rights." He also said AfriSam's board must approve the conversion of the PIC's preference shares into equity within 20 days.
"Owing to the limits of confidentiality we are not in a position to provide all details. This is purely to avoid jeopardising the current stakeholder's engagements," the PIC CEO Elias Masilela said after the judgement.
CRH cleared for Odessa expansion 05 December 2011
Ukraine/Ireland: Ukraine's Antimonopoly Committee (AMKU) has allowed Jura-Cement Fabriken AG, a subsidiary of Ireland's Cement Roadstone Holding (CRH), to acquire control of LLC Cement in Odessa. The AMKU committee said that this decision allows Jura-Cement-Fabriken to hold over 50% of the votes in the Odessa plant's management body.
The Odessa Cement Plant started operations in 1965 and its capacity is currently 550,000t/yr. The plant was acquired in May 2005 by the Portuguese company Cimento e Produtos Associados S.A., which is owned by Cimpor, Teixeira Duarte and Engenharia e Construcoes, amongst others. LLC Cement's general director, Miguel Machado, has stated that Euro40m has been invested in the Odessa plant since 1996. CRH currently owns OJSC Podolsk Cement and LLC Lviv Concrete in Ukraine.
Loesche Automation wins contracts in Indonesia and Chile 03 December 2011
Indonesia/Chile: Loesche Automation has been awarded contracts for building cement mills in Indonesia and Chile.
In Indonesia PT Semen Baturaja (Persero), Palembang have placed an order for an LM46.2+2 C/S vertical mill and awarded Loesche Automation the contract for the electronic and automation engineering. The company is to deliver virtually all the equipment, from the automotive engineering to the software engineering and visualisation.
The medium voltage switching system and main drives have been supplied, as have the MCCs and low voltage main distribution. The order also covers the necessary I/O cabinets and the instrumentation and process control circuits based on Loesche Automation Basic and Detail Engineering.
In Chile Hormigones Transex Ltda, Santiago awarded the contract for a LM46.2+2C/S cement mill in Puente Alto to Loesche GmbH. Loesche Automation has been charged with providing the electronic and automation engineering for this mill.
The contract covers the delivery of the mid-voltage switching system and main drives, the low-voltage main distribution with MCCs and the supply of automation components with software engineering and visualisation. The project also included the basic and detailed engineering, the necessary I/O cabinets and the instrumentation of the process control circuits.
For both projects the software engineering is specially tailored to the requirements of the plant using Loesche solutions. In order to ensure that all of the processes run smoothly, Loesche Automation is responsible for project management, commissioning and monitoring. At the same time, Loesche Automation will carry out training services. The components are due to be delivered in May 2012 and commissioning is scheduled for March 2013.
Venezuela signs on US$600m compensation to Cemex 02 December 2011
Venezuela: The Venezuelan government has agreed to pay US$600 million to settle a claim from Cemex over the 2008 nationalization of Venezuela's cement sector. The case is one of many which the Hugo Chavez administration is facing after nearly 13 years of sweeping socialist reforms, including widespread nationalisations across the South American OPEC member's economy.
A Venezuelan government statement said the amount corresponded to 76% of the shares in the expropriated local unit but it was less than half the US$1.3bn Cemex had originally sought. "We've reached a favourable deal between both parties," Industry Minister Ricardo Menendez said in the statement. The government will pay US$240m initially, followed by four annual payments of US$90m, he said.
"We are convinced the agreement has been positive for everyone," the Venezuelan Information Ministry statement quoted Jaime Elizondo, Cemex's president for South America and the Caribbean, as saying.
The Chavez government announced the takeover of the cement sector in April 2008, targeting Cemex, Holcim and Lafarge. Lafarge and Holcim agreed to stay on as minority partners. Cemex disputed the case at the World Bank's International Center for Settlement on Investment Disputes. In late 2010, the court recognised Cemex's right to sue for the loss of its assets.
Lafarge limps forward in Algeria 01 December 2011
Algeria: Lafarge has agreed to undertake a project inherited from an acquisition of an Egyptian firm in 2007 according to an Algerian minister of state.
Responding to a parliamentary question in mid-November 2011, the Algerian Industry and Investment Promotion Minister, Mohammed Benmeradi, said that Lafarge had agreed to undertake the project as a minority partner, owning 49%, in accordance with a foreign ownership law passed in 2009. Lafarge originally inherited the project as part of its acquisition of the global cement interests of Egypt's Orascom Construction Industries (OCI). OCI had secured licences for a new plant at Oum El Bouaghi, in the east of the country, shortly before the Lafarge takeover was announced.
Benmeradi said that the Oum El Bouaghi project would cost US$500m and would take 12-16 months to complete. He said that Algeria is currently self-sufficient in cement, producing 17Mt/yr, of which 5.5Mt/yr comes from privately owned plants. The government has a huge capital spending programme, which points to a steady increase in demand for cement. Most of the state-owned plants are in a poor state of repair.
Reliance targets Bengal for new plant 30 November 2011
India: Reliance Cement Company Limited is planning to start production in Bengal. The company wants to set up a 3Mt/yr plant at Raghunathpur in the Purulia district.
Reliance Cement plans to invest US$100m in the project and has submitted its letter of intent to the Bengal state government. The government is likely to highlight the project as it prepares its 200-day performance report to be unveiled in December 2011.
The Bengal unit will be the third plant from Reliance Cement as the company embarks on a capacity expansion plan to take production to 50Mt/yr. Projects with a capacity of 5 Mt/yr were announced in 2010 for Madhya Pradesh and Maharashtra. In 2008, the company secured limestone-mining licences at Satna in Madhya Pradesh.
China pins hopes on top-ten for Five-year Plan 29 November 2011
China: China aims to make its top ten cement manufacturers hold at least 35% of the domestic cement market by 2015 according to its 12th Five-year Plan. Currently China's top ten cement manufacturers hold less than 25% of the domestic market.
China's Ministry of Industry and Information Technology (MIIT) has released the 12th Five-year Plan (2011-2015) for the country's building materials industry and five sub-plans for five building materials sectors including cement and plate glass. From 2011 to 2015, the development of the industry will mainly focus on eliminating outdated production capacity and promoting mergers and acquisitions.
According to the plan, cement companies above a designated size will expand at an average rate of above 10% from 2011 to 2015. 250Mt of outdated production capacity will be eliminated. Cement producers are expected to cut emissions of nitrogen oxides and sulfur dioxide by 10% and 8% respectively. Emissions of carbon dioxide per unit of industrial added value will be reduced by 17%.
It forecasts the domestic market demand for cement to rise by 3%-4% annually on average to reach 2.2Bt in 2015, a slower pace than the current level as the country increases efforts to make its economy less reliant on fix-asset investment and more on technologies and consumption.