September 2024
NGO demands suspension of forest officials over mining 14 November 2011
India: Jaintia Youth Federation, a social organisation, has demanded the immediate suspension of forest officials who have declared forest areas as 'non-forest' land in the Jaintia Hills area of Meghalaya. The organisation expressed its fury that a large number of cement plants have been effectively allowed to mine limestone in forested areas. It also said that the state government should ask the eight cement companies in Jaintia Hills to contribute to compensatory afforestation.
"Officials who have declared such forests as non-forests need to be suspended and severe action needs to be taken against them as they have cheated and hoodwinked the government and helped the cement companies to function all these years," said the president of Jaintia Youth Federation, refering to a 1996 technical ruling.
Majaw added that similar action to that seen recently against Lafarge needed to be brought against all of the cement companies mining in the same area.
Titan income plummets by 46% in 2011 11 November 2011
Greece: Titan has reported a 46% decrease in income for the first nine months of 2011. The group attributed the fall to a 'rapid decline in construction activity in Greece' in conjunction with the ongoing Greek debt crisis.
Income for the first nine months of 2011 was Euro52.9m, a year-on-year fall of 46.2% from Euro98.3m in 2010. The year-on-year quarterly decline was less severe dropping 1.7% to Euro30m in 2011 from Euro29.5m in 2010. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 15.5% to Euro219.8m for the first nine months of 2011 from Euro 260.3m in 2010. Turnover fell by 18.4% to Euro838.9m in the first nine months of 2011 from Euro1028.5m in 2010.
Aside from the domestic construction slump, the group also cited continuing low levels of demand in the US and the slowdown recorded in Egypt during the third quarter of 2011. Increased prices for liquid and solid fuels also had a negative impact on production costs. In addition the depreciation of the Egyptian Pound as well as the Turkish Lira against the Euro negatively impacted results. At constant exchange rates, the group predicted that turnover would have declined by 14%, while the decline in EBITDA would have stood at 10.5%.
FLSmidth cuts 2011 cement capacity growth forecast 10 November 2011
Denmark: FLSmidth's profits have fallen by 12% year-on-year for the third quarter of 2011. The company has subsequently cut its estimate for world cement capacity growth in 2011, blaming stalled activity in India. Group profit was hit by weaker sales in its cement division despite higher sales in its minerals machinery business.
The profit for the quarter ending 30 September 2011 profit fell by 12% to Euro54m from Euro62m in the same quarter of 2010. For the nine months to 30 September 2011 profit fell by 8% to Euro117m from Euro128m in 2010. Total group revenue rose by 5% for the third quarter to Euro743m from Euro706m in 2010.
In the group's cement sector revenue for the nine months to 30 September 2011 decreased by 18% to Euro776m from Euro950m in 2010. Quarterly revenue for cement has fallen upon each consecutive quarter, with one exception, since the end of 2009.
"We cannot say how long the growth pause will last but it will definitely also extend into 2012," said chief executive Jorgen Huno Rasmussen, adding that India will continue to be a large and promising market.
The group said that it now expected the cement plant market in 2011 to grow by about 55Mt of new contracted cement kiln capacity worldwide, excluding China, against an earlier forecast of 65Mt. India is now expected to account for approximately 10Mt/yr compared to the previous projection in 2010 of approximately 20Mt/yr. Emerging markets such as Russia, South America, Africa and Asia were singled out for their high activity.
Unrest in North Africa hit cement consumption and investment in the region in the first nine months of 2011, the company said, adding that activities in Libya might resume in 2012 as the country headed towards greater stability.
Holcim blames 32% income drop in third quarter on strong franc 09 November 2011
Switzerland: Holcim has blamed a 32% fall in income for the third quarter on the strong Swiss franc.
Holcim's income fell by 32% to USD460m in the third quarter from USD680m in the second quarter of 2011. Over the nine months to 30 September 2011 its income fell by 18% year-on-year to USD1.1bn from USD1.4bn in 2010. Sales mirrored this decline, falling year-on-year by 6.1% to USD5.9bn over the nine months to 30 September 2011 compared to USD6.3bn in 2010. The decline in sales between the second and third quarters was similar at 6.7%.
Despite the fall in total group income and sales, sales of cement rose in both the nine-month and quarterly period. For the nine months to 30 September 2011 sales rose by 5.2% to 108Mt from 103Mt. For the quarter ending 30 September 2011 volume sales rose by 6.2% to 37.2Mt from 35Mt in the quarter ending 31 July 2011.
"The strong appreciation of the Swiss franc during the first half of 2011 continued to negatively impact the financial result during the quarter, albeit to a lesser extent than during the second quarter," said Chief Financial Officer Thomas Aebischer. Holcim's sales during the three months to 30 September 2011 were reduced by USD948m by the currency. Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) were reduced by USD200m, according to Aebischer.
As expected, Holcim noted that many emerging markets enjoyed brisk construction activity. In the Eurozone and in North America growth mainly remained restrained. The Latin America cement sector achieved the strongest rise in sales volumes, followed by Asia Pacific and Europe. In particular, the group's companies in Russia, Singapore, Indonesia, Colombia and Australia made larger contributions in Swiss francs to the sales. Where other group companies improved their results in local currency terms these successes were cancelled out overall by the strong Swiss franc.
In its outlook Holcim has pinned its hopes for consistent growth in the emerging markets of Latin America and Asia whilst singling out Africa and the Middle East for continued poor trading. In Europe and North America Holcim's intends for its lean cost structure to enable it to benefit more than average from any economic recovery. Lastly, the group mentioned that the sharp global rise in energy, raw material and transportation costs call for further price adjustments.
Italcementi reports third quarter profit drop 08 November 2011
Italy: Italcementi has reported a 51.7% fall in third quarter net profits to Euro25m despite the sale of its assets in Turkey earlier in 2011.
The profit over the nine months to 30 September 2011 was up at Euro123.2m from Euro18.5m in 2010, with the group saying that cement sales were up in Belgium, France, North America and in the emerging markets of India, Morocco and Thailand. Total group sales remained almost unchanged at Euro3.6bn for the same period. Italcementi's cement sector reported Euro2.3bn for the first nine months of 2011, a drop of 8.4% from Euro2.5bn in the same period in 2010. Cement sales volumes remained steady at 38.9Mt. The group reported a contraction in Egypt due to the civil unrest there and said there was, "stagnation in some industrialised economies."
"The positive results seen on emerging markets where, with the exception of Egypt, sales volumes rose by around 3%, confirms their strategic importance," said Italcementi's chief executive Carlo Pesenti in a statement. "More than 60% of our production capacity is located in these regions and this will increase in the near future with the new development projects recently set up in India," Pesenti continued.
The group said the profit fall was due to 'the unfavourable dynamic of operating costs and exchange rate effects' Italcementi sold equity investments in Turkey for Euro133.4m earlier in 2011 and said it would continue with cost cutting.
"While the Egyptian market will still be affected by political instability and increased local competition, the rest of the group should generate improved operating results, also thanks to positive price trends in Italy," it said. "In the fourth quarter, the group should record a decline in operating results that will be less than those of the previous quarters," it said, adding that it expected a 'significant improvement' in net profit for 2011 overall.
Heidelberg leads interest in join venture with RINL 07 November 2011
India: Heidelberg and major Indian cement companies including UltraTech and Reliance Cements have shown interest as joint venture partners in state-run Rashtriya Ispat Nigam's (RINL) proposed USD204m cement plant at Vizag, in Andhra Pradesh.
"We are looking for a partner to set up a 3Mt/yr plant at Vizag. Heidelberg, Ultratech and Reliance Cements have shown interests to be our joint venture partner," RINL Chairman and Managing Director A P Choudhary said. Zuari Cements, Bhavya Cements, JP Cements and Binani Cements have also shown interests in the joint venture.
"The finalisation of the partner will not take more than 2-3 months from now. We will be able to establish the joint venture before the end of the current fiscal year," Choudhary said.
Asked how much of a stake the steel-maker would offer to its partner, Choudhary said that no decision has been taken yet. However RINL is willing to give up to 74% to the partner since cement making is not its core business. The proposed venture will use fly ash and slag generated from RINL's Vizag plant, where the capacity will shortly be increased from 3Mt/yr to 6.4Mt/yr.
Around USD204m in investment will be required to set up the cement plant, Choudhary said, adding that the cost would be borne by the two firms according to the shareholding pattern. Production at the plant is likely to commence two years from the start of construction.
Lafarge third quarter sales up but reliant on emerging markets 04 November 2011
France: Lafarge has released its financial results for the third quarter of 2011, which reveal an increasing reliance on emerging markets. Its sales were up by 1% in the third quarter to Euro4.21bn and were up by 6% in like-for-like sales. Its current operating income was down by 9% to Euro750m, a 7% drop like-for-like. The group's net income was down by 10% to Euro336m.
For the first nine months of 2011, its sales are up by 2% compared to 2010 (up by 4% like-for-like) and its current operating income was down by 12% to Euro1.64bn. Its net income fell by 22% to Euro596m.
Sales in Lafarge's cement sector increased by 1% in the quarter (up by 5% like-for-like) and increased by 2% for the year-to-date (up by 3% like-for-like), reflecting volume improvements in emerging markets partially offset by the negative impact of foreign exchange. Its cement volumes increased by 6% in the quarter (up by 5% like-for-like) and by 7% for the year-to-date (up by 5% like-for-like), with growth driven by emerging markets. Pricing moved marginally higher in the third quarter versus 2010 while slightly down on a year-to-date basis. Despite the group's cost reduction programme, higher cost inflation and foreign exchange weighed on results and margins.
The group achieved Euro50m of structural cost savings in the third quarter and Euro150m for the year-to-date, on pace with its Euro200m full-year target. Lafarge also announced a new cost savings programme of Euro500m for 2012. The group made the strategic decision to divest its gypsum activities in the early part of the quarter. In total, Lafarge has secured over Euro2bn of divestment proceeds for 2011 for debt reduction.
Bruno Lafont, Chairman and Chief Executive Officer of Lafarge, said, "In the current economic environment, the group continues to be proactive and already secured over Euro2bn of divestments as part of its actions to reduce debt. These efforts will continue and today the Group is announcing a new Euro500m cost reduction programme. These measures, including price actions in response to a high cost environment, are part of ongoing steps to strengthen profitability, reduce debt and maintain strong liquidity."
"Looking ahead, the fundamentals of our business are strong. The group, fully focused on its core businesses, foresees sustainable cash-generating growth led by high quality positions, a unique exposure to emerging markets and the advantages created by innovative products and solutions."
Overall, Lafarge continues to see cement demand moving higher and maintains its estimate of market growth of 2-5% in 2011 compared to 2010. Emerging markets continue to be the main driver of demand and growth and Lafarge benefits from its well balanced geographic spread of high quality assets.
Filipino producers seek standards for raw materials 03 November 2011
Philippines: Cement producers in the Philippines have asked the Department of Trade and Industry (DTI) to impose mandatory standards on the raw materials used to ensure that quality standards are being followed. These standards would also effect producers of finished products that make significant use of cement. DTI Undersecretary for consumer welfare, Zenaida C Maglaya, made the announcement following a recent meeting of Cement Manufacturers Association of the Philippines (CeMAP).
According to Maglaya, CeMAP would like raw materials such as fly ash and aggregates to be placed under mandatory standards following complaints from contractors working on infrastructure projects. CeMAP said it will take years to find out the impact of poor quality fly ash. "We are asking CeMAP to submit their study because this is a technical issue," Maglaya said.
Maglaya explained that the standards for raw materials for cement are voluntary under the Philippine law. Being voluntary, Maglaya said, the responsibility lies on the end manufacturer although this can still be raised before the DTI. The move to standardise raw materials of cement and end-products using cement has followed a crackdown by the Department of Public Works and Highways against contractors of government infrastructure projects.
AfriSam settles over cartel claims 02 November 2011
South Africa: The South African Competition Commission has reached a settlement agreement with AfriSam, which has admitted that it took part in a cement cartel.
AfriSam has agreed to pay a penalty of USD16m representing 3% of its 2010 cement annual turnover in the Southern African Customs Union (comprising South Africa, Botswana, Lesotho, Swaziland and Namibia). This settlement is a reflection of AfriSam's material cooperation with the Commission in uncovering and providing further information on its conduct.
"This settlement is a reflection of AfriSam's material co-operation with the commission in uncovering and providing further information on the conduct," the commission commented on 1 November 2011.
This agreement follows the Commission's investigation of price fixing and market allocation against four main domestic producers Pretoria Portland Cement Company Limited (PPC), Lafarge Industries South Africa (Lafarge), AfriSam Consortium Ltd and Natal Portland Cement Cimpor (NPC-Cimpor). Previously, PPC applied for leniency and confirmed the existence of a cartel among the four cement producers. In terms of the settlement, AfriSam admits that it entered into agreements and arrangements with PPC, Lafarge and NPC to divide markets and indirectly fix the price of cement. The case against Lafarge and NPC continues.
"To facilitate this process we conducted a systematic and comprehensive review of some of the company's business practices from a competition law perspective," Stephan Olivier, AfriSam CEO stated. "We are, of course, saddened and embarrassed by what has happened. I say categorically that the AfriSam of today is an honourable and ethical company, fully committed to rigorous compliance with competition law."
Saudi fuel row heats up 01 November 2011
Saudi Arabia: Saudi Aramco has said that it continues to supply all of the fuel contracted by Saudi Yanbu Cement Co, to accusations from the cement producer about a lack of fuel.
As reported in Global Cement Weekly #16 Yanbu Cement was forced to delay the launch of a production line that was scheduled to open by the end of September 2011. Yanbu Cement has now announced in a stock market statement that Aramco had not responded to its requests for additional fuel.
"Saudi Aramco confirms it is currently supplying Yanbu Cement with all the allocated volumes of fuel oil as per the signed agreement," Aramco said in a statement. "Yanbu Cement Co should have secured the needed fuel ahead of a commitment to expand and build the fifth production line. The fact that no agreement was concluded in advance absolves Aramco from responsibility that may result from any fuel shortage," Aramco added.
However other cement companies have also reported that shortages of subsidised fuel is threatening growth. Safar Dhufayer, the chief executive of Southern Province Cement Co (SPCC), raised the issue at the Reuters Middle East Investment Summit in Riyadh. He said that his firm, the Gulf country's biggest cement producer by market value, may delay the launch of a new line that is expected to raise its production capacity due to the fuel shortage.
"Our new line under construction should be commissioned by the end of 2011, but if there is not enough fuel we will not run it and that will create more pressure from rising demand which we cannot meet," Dhufayer said. "We only receive 80% of the fuel we need."
Demand for cement in the largest Arab economy is seen at 48Mt in 2011, increasing to up to 52Mt by 2013, while supply is 55Mt/yr in 2011 and plans for growth are uncertain, Dhufayer said. Cement companies in Saudi Arabia have a competitive advantage over global rivals as they benefit from subsidised fuel, supplied by government-owned Saudi Aramco.
Cement firms in Saudi Arabia, which is spending over USD400bn on infrastructure projects and is planning to build 500,000 new homes, faced a cement shortage in the market in 2008 that led to a ban on exports. The ban is still in effect.