November 2024

Brazil: KHD Humboldt Wedag International has announced that its subsidiary Humboldt Wedag Inc has received a major order from Brazilian cement firm Cimentos Liz SA.

KHD Humboldt Wedag will supply the Brazilian company with equipment as well as engineering and consulting services on site. It will also provide services for the commissioning of Liz's new facility, which will have a capacity of 5000t/day. The value of the total order is expected to be in the region of USD120m.

Taiwan/China: TCC International, a unit of Taiwan Cement Corporation, has announced that it has entered into a framework agreement to acquire an array of cement and clinker production lines in Chongqing, Jiangxi and Zhejiang in China for a value not exceeding USD250m.

Under the framework agreement, the group will acquire either 100% or not less than 80% of equity interests in a group of companies and assets under Chongqing Kehua Holdings (Group) Limited and Zhejiang Kehua Group Company Limited. The target companies and assets to be acquired possess a total cement grinding capacity of about 8.1Mt/yr and total clinker production capacity of around 6.3Mt/yr.

Meanwhile, another of Taiwan's leading cement producers, Asia Cement, has posted a near 60% increase in net profit for the first half of 2011 compared to 2010 on the back of robust sales in its China operations. It recorded USD204m in net profit, up by 58.8% from a year ago.

Due to production expansion and rising product prices on the mainland market Asia Cement (China), the company's mainland subsidiary, registered USD104m in net profit during the same period, up by 369% compared to the first half of 2010.

However, Asia Cement said that its Taiwan operations suffered product price declines, which resulted from the dumping of low-priced mainland cement onto the island. This was compounded by rising production costs, which included higher fuel prices. With Taiwanese cement firms filing a complaint with the local authorities against the dumping of mainland products, Asia Cement expects domestic cement prices will rise to 'a reasonable level' later in 2011.

Meanwhile, Asia Cement said demand in China is expected to keep rising as the Chinese government carries out its 12th five-year economic development plan, which focuses on infrastucture, rural area development and residential property development. As the Chinese government gears up to phase out outdated cement production facilities, Asia Cement, which largely operates new plants there, is expected to take advantage and receive more sales orders.

Ireland: CRH plc, the Dublin-based international building materials group, has reported a 280% increase in pre-tax profit to Euro95m for the six months to 30 June 2011. The first half of 2010 saw a pre-tax profit of just Euro25m.

Turnover in the first half of 2011 was up by 7% to Euro8.1bn compared to the same period of 2010 when it was Euro7.6bn. Earnings before interest, tax, depreciation and amortisation rose by 10% to Euro574m from Euro520m in 2010. CRH said the increase in profit was largely driven by its Products and Distribution operations in Europe and the Americas.

The group's net debt at 30 June 2011 was down by 17% year-on-year to Euro3.9bn, compared with Euro4.7bn at 30 June 2010. Cash spent in the first six months amounted to Euro163m, while proceeds from disposals amounted to Euro392m.

Commenting on the results, CRH chief executive Myles Lee said that the improved results demonstrated the benefits of the group's recent reorganisation and restructuring, which has been carried out in response to 'exceptionally difficult markets' in recent years.

Looking forward, Lee said that CRH would continue to focus on, "Operational and commercial excellence, delivering the price increases necessary to recover higher input costs in our businesses and on delivering a year of progress for CRH in 2011." He added that this would be difficult given the recent turbulence seen in the global stock markets.

Malaysia: Lafarge Malayan Cement Bhd's pre-tax profit for the quarter ending 30 June 2011 increased to USD34.86m from USD30.6m in the corresponding quarter of 2010. The company attributed the improved result mainly to higher revenue and share of better results from its associated company but added that this was partly offset by the higher cost of fuel and raw materials. A 10% increase in electricity tariff, which came in on 1 June 2011, further added to the cost of production. The company's revenue for the quarter rose to USD223.5m from USD198m in the 2010 quarter.

For the first six months of 2010, its pre-tax profit rose to USD57.9m from USD49.7m in 2010. Its six-month revenue rose to USD425.3m from USD381.8m. The company also attributed this 11% year-on-year increase in first half revenue to higher domestic sales volume and better selling prices.

Nigeria: A disagreement between two workers at the Dangote Benue Cement factory in Gboko, Benue State escalated into a full-scale blood-bath on 17 August 2011, leading to reports of 20 deaths and the destruction of 154 trucks and 60 cars belonging to the company. Gboko itself has become a 'ghost town' after residents fled the town.

The violence started following a simple disagreement at a snack stand between two co-workers, a truck driver, named locally as Suleiman and the operator of the snack stand reported to be a Miss Kwaghkure. Apparently an agreement for Suleiman to be granted credit turned sour when he became unable to pay his debt and slapped Kwaghkure. This prompted an escalation in violence between those supporting the two parties and soon spread into full-scale looting of the plant, halting production.

Violence spread to the nearby town, where banks came under attack and the carnage even spilled out onto the local highway where innocent commuters were robbed. It is not known whether Suleiman or Kwaghkure are among the dead.

The plant's general manager (finance), Mike Etu, ruled out a tribal or religious dispute, saying it was purely driven by the interests of those involved. He lamented that although Dangote had been operating with the interest of the host community at heart, it had been under constant threat from cement looters. He expressed severe regret over the events and gave condolences for the dead and those affected by the incident.Dangote had previously ramped-up its security arrangements at the plant following smaller disputes.

Bolivia: The Bolivian investment holding Cimsa, which is the majority shareholder of the country's largest cement firm, Soboce, has said that it will seek arbitration against Mexican cement firm Grupo Cementos Chihuahua for allegedly violating a partnership agreement.

GCC withdrew from Bolivia in a recent deal after completing the sale of its 47% share in Soboce, a private firm, to Peru's Consorcio Cementero del Sur, a subsidiary of Grupo Gloria.

Cimsa, owned by Bolivian opposition politician Samuel Doria, had a preferred interest in GCC's stake under Bolivian law, the company said in a statement.

"Cimsa will begin an arbitration process so that the failure to comply with the shareholder agreement and Cimsa's right of first refusal are adequately remediated, and the sale of the shares by GCC can be reversed," read a statement issued by Cimsa.

Earlier in 2011, GCC pulled out of a planned USD100m investment in a Bolivian housing project, citing a lack of legal security. In September 2010 Bolivia's government nationalized 33.4% of Soboce's shares in the state cement producer Fancesa. Soboce says it has yet to receive any compensation.

Bolivia/Peru: The Mexican cement maker Grupo Cementos de Chihuahua (GCC) has announced that it has finalised the sale of its 47% stake in Bolivian peer Sociedad Boliviana de Cementos (Soboce) to a unit of a major Peruvian conglomerate. GCC said that its stake in Bolivia's top cement maker would go to Consorcio Cementero del Sur, S.A., a subsidiary of the agroindustrial Grupo Gloria. It gave no details regarding the value of the deal.

"Proceeds from the transaction will be used primarily for debt reduction, in line with the company's goal of improving its financial profile and strengthening its core businesses in the US and Mexico," said GCC in a statement.

Previously, in April 2011, a judge in Bolivia ordered a freeze on assets held by Soboce, 53% of which is owned by a group controlled by Samuel Doria Medina, who is a political rival of the country's President Evo Morales.

India: Cement consumption in India fell for the first time in nearly 20 years in the three months to 30 June 2011, with a political impasse in large consumer states holding up infrastructure and realty projects. Demand fell by 0.68% during the period compared with the corresponding period in 2010 but demand changes were different depending on location. In Andhra Pradesh, demand contracted by 21% and in Karnataka it was down by 8.04%, according to data from Cement Manufacturers' Association (CMA).

Elsewhere, demand was down by 2% in June 2011 in Kerala and in Tamil Nadu, it was down by 1.9%. In comparison Gujarat saw cement demand grow by 4.9%, but growth was less strong than the same period of 2010, when 15% cement demand growth was seen.

The demand for cement is not assisted by problems that are expected to hinder government's proposed USD107bn investment in state road development during the 12th Plan period. The government has cited a lack of capacity in the private sector to make large investments, political sensitivity surrounding road-tolling, land acquisition disputes (which have caused a slow-down and resentment from locals at the site of the Formula 1 circuit site in Greater Noida, Uttar Pradesh) and a shortage of trained manpower as key problem-areas that may hamper the execution of the programme, due to start in 2012.

It is estimated that because of these problems, around 80% of the cost of the proposed investment will have to be met by public funds. The plan includes the construction of over 30,000km of new dual-carriageways, 5000km of four-lane highways and another 41,500km of single-track roads that are due for restructuring. The plan stipulates that the roads will be finished with either cement-based finishes or asphalt.

Australia: Cement and lime manufacturer Adelaide Brighton Ltd (AB) has announced that its half-year profit for the first six months of 2011 declined by 10.6% amid weakness in the housing sector. The company stressed, however, that it was confident with regard to its future earnings. AB's net profit fell to USD64.67m for the six months to 30 June 2011 from USD72.0m in the first half of 2010. Its revenue declined by 2.2% USD531.5m.

While outlining a mixed to steady outlook of demand for its building products, AB said that it was, "confident on future earnings due to its strong exposure to infrastructure and resources."

Covering off the furore over Australia's potential CO2 tax, AB said that it had, "already significantly reduced its carbon footprint by using alternative fuels and sourcing alternative raw materials." It added that it had already closed inefficient clinker facilities and was now the largest importer of cement and clinker into Australia. This, it said, has helped to reinforce a strong position for the company relative to domestic cement and clinker competitors.

AB's apparent stance is distinctly opposed to those of the members of the public (who came out in protest in the capital Canberra on 16 August 2011), Opposition politicians, BCG Cement and the Cement Industry Federation, which have variously warned of massive job losses in the cement industry, price increases and emission leakage to countries with weaker environmental regulations.

Chris Harris from AB said that the company believed that the carbon tax, as proposed, would not have any significant impact on the continuation of AB's successful growth strategy of the past decade and that AB would continue its successful long-term strategy of operational improvement, growth in the lime business and vertical integration into downstream markets.

Turkey: Kahramanmaras Cimento Beton Sanayii Ve Madencilik Isletmeleri (KCS) has awarded KHD Humboldt Wedag the contract to supply equipment for its second cement production line with a capacity of 4500t/day clinker near the city of Kahramanmaras in southeastern Turkey. Commissioning of both the new kiln line and the clinker grinding system is planned for the end of 2012.

Signing with KHD Humboldt Wedag for delivering clinker production line I in May 2006 allowed KIPAS Holding to enter the cement industry via the subsidiary to meet the requirements for entering the Turkish cement industry as a producer. The scope of KHD´s delivery and services includes the engineering and delivery of mechanical and electrical equipment as well as advisory supervision of erection and commissioning (including training) for the new kiln line and for the clinker grinding system. Its capacity will increase from 100t/hr to 200t/hr at a fineness of 3600cm²/g.

For its second line, KCS has chosen to install a KHD combustion chamber, with which coarse secondary fuels and/or secondary fuels associated with difficult ignition and combustion can be used. The new technology should lower the quality requirements for the alternative fuels as well as preparation requirements. This will be the second KHD combustion chamber in Turkey, following the first installation in a cement plant near Ankara. The increase in clinker capacity with the new kiln line accompanied a decision by KCS to increase the output of the existing cement mill, a ball mill of Chinese design with a throughput capacity of 100t/hr CEM I 42.5.