Displaying items by tag: GCW121

Well, it seems like they were serious.

The UK Competition Commission has provisionally decided that Lafarge Tarmac should sell off one of its cement plants in the Midlands. The Commission also wants the sale to exclude buyers from any pre-existing UK cement producer. The door is open from Holcim or CRH downwards to enter the UK market. Although if the enforced Lafarge sale of Hope to Mittal Investments in 2012 is indicative, it may well be to an industry outsider.

If the move goes ahead it will open up the Midlands and north of England from four cement producers - Hope Cement, Lafarge Tarmac, Hanson and Cemex - to five. Lafarge Tarmac's cement production capacity lead of nearly 4Mt/yr will be knocked down to nearer 3Mt/yr, putting it level with Hanson Cement's production capacity.

Unsurprisingly Lafarge Tarmac is not best pleased, putting out the following in response to the commission's announcement. "The Commission's assumptions and reasoning have serious flaws and the biggest loser in this process will be the customer. There is strong evidence to demonstrate there is effective competition in the sector – with new players having recently entered the marketplace."

The Commission also wants to increase competition in the supply chain for ground granulated blast furnace slag (GGBS). According to the Commission findings Hanson dominates the UK GGBS market and Lafarge Tarmac controls the market for its precursor, granulated blast furnace slag (GBS). So production facilities may need to be sold by both Hanson and Lafarge Tarmac.

As an aside it's worth noting that the Belgian Competition Council recently imposed fines due to anti-competitive practices also related to GGBS. Also, elsewhere in the news this week Irish GGBS cement producer Ecocem is aligning itself with the EU carbon roadmap to 2050, partly at least because its product produces less CO₂ per tonne of cement. Whoever or whatever controls the supply of GGBS in the UK has implications for how emissions are lowered in the cement sector.

Other suggested measures from the Commission such as restricting the publication of UK cement market data seem problematic. Although it may make it more difficult for UK cement producers to collude it will also make it harder for related businesses (including press and industry analysts like Global Cement) to understand what is happening at any given time.

Finally, we have to ask what the effects of the Commission's suggestions might be at the start of an uncertain recovery in the UK construction market might be. According to the Minerals Production Association cement production fell from 8.5Mt in 2011 to 8Mt in 2012, the first decrease since 2009. 2013 seems set for modest growth on 2012. The implications of Commission's plans - if they happen – could be huge.

Russia: André Martin has been appointed as Chief Executive Officer of Lafarge Russia effective from 16 September 2013. He had been the Senior VP, Industrial Customer Segment at Lafarge corporate head office in Paris since 2012. Martin replaces Alex de Valukhoff.

A graduate of French management school ESSEC, Martin joined Lafarge in 1995 as cement M&A in Central and Eastern Europe manager. Highlights in his career include becoming president of Lafarge-Agregate-Betoane in Romania in 1999 and joining Lafarge-Beton de Paris as President in 2002. In 2005 André Martin moved to North America as VP Marketing Aggregates and Asphalt & Paving at Lafarge and he became President at Lafarge East US Aggregates & Asphalt in 2008.

Ireland: Ecocem has accused the Irish cement industry of failing to align its CO₂ emissions with the European Union carbon 2050 roadmap. The producer of GGBS (Ground Granulated Blastfurnace Slag) cement made the comments in a document detailing its response to the Irish government's Climate Action and Low-Carbon Development Bill 2013. The EU carbon roadmap suggests cutting emissions in Europe by 80% below 1990 levels by 2050.

In its document Ecocem also attacked the European Union's Emissions Trading Scheme (ETS), saying that it provided strong incentives against promoting decarbonisation of the cement sector. It added that a transition to a low-carbon cement and concrete industry could create up to 1200 new jobs within five years.

Ecocem says its product has a carbon footprint of 19kg of CO₂ per tonne of cement, compared with about 750 kg of CO₂ per tonne it says is produced by the traditional Irish cement sector.

Turkey: Batisoke Soke Cimento Sanayii has secured a Euro10m loan from local lender Akbank. The 7.5-year loan will be provided from Akbank under the EURO Turkey Mid-size Sustainable Energy Financing Facility of the European Bank for Reconstruction and Development (EBRD), Batisoke said in a filing with Borsa Istanbul.

With the facility, the EBRD aims to support Turkish private-sector borrowers to implement mid-size renewable energy, waste-to-energy and industrial energy efficiency investments via providing loans to seven Turkish banks for on-lending to private sector borrowers.

US: Registration has opened for the 2014 IEEE-IAS/PCA Cement Industry Technical Conference to be held in Washington, DC from 13 - 17 April 2014. The conference theme will be 'Two Great Ideas".

For the 2014 conference the organisers have introduced training for industry 'junior' professionals. The conference will also feature a tour of the Martinsburg Cement Plant owned by Essroc.

UK: The UK Competition Commission (CC) has provisionally decided that Lafarge Tarmac should sell a cement plant to increase competition in the UK cement market. The CC is also proposing to limit the flow of information and data between cement producers and to increase competition in the supply chain for ground granulated blast furnace slag (GGBS).

"The best way to disturb the balance of a market where producers have focused on retaining their respective market shares rather than competing is to create the opportunity for a major new entrant," said CC Deputy Chairman and Chairman of the Inquiry Group Professor Martin Cave.

In detail the CC has provisionally decided that Lafarge Tarmac should be required to choose between divesting either its Cauldon or Tunstead cement plant. The purchaser of the divested cement plant should be able to acquire a limited number of ready mixed concrete plants from Lafarge Tarmac subject to the purchaser's total internal cementitious requirement being capped at 15% of the acquired cement production capacity. The buyer would have to be approved by the CC and not be one of UK's existing cement producers.

Data currently published by the Minerals Products Association (MPA) and the Department for Business, Innovation & Skills should be delayed by no less than three months from the time period to which it refers before it can be made public. UK cement producers will also be prohibited (with a small number of specific exceptions) from providing their sales and production data to any other private sector organisation.

UK cement suppliers will be prohibited from sending generic price announcement letters to their customers. Instead, they should send letters that are specific and relevant to the customers receiving them.

Subject to further consultation on the GGBS supply chain, Hanson should divest two of its GGBS production facilities and Lafarge Tarmac should divest two of its granulated furnace slag production facilities, again to a suitable purchaser approved by the CC but not to another UK cement producer.

Responses to the CC's suggested measures will now be gathered before it publishes its final report by 17 January 2014.

India: Reliance Cement has said that it will commission its US$485m cement plant in Madhya Pradesh in October 2013. The company is due to complete the project in 22 months, five months ahead of its original schedule. The 5Mt/yr cement plant includes a 10MW waste heat recovery system. The plant is intended to target markets in central, eastern and northern India.

The Madhya Pradesh plant follows the company's 0.5Mt/yr cement plant in Butibori, Maharashtra that was launched in 2012.

Iran: Iran produced 38.4Mt of cement in the first six months of the current Iranian calendar year, which began on 21 March 2013, according to the Islamic Republic News Agency (IRNA). This is a 6% rise year-on-year from the same period in the previous year.

In September 2013, the chairman of the Iranian cement employers association said that Iran was the fourth leading cement producer in the world and the top producer in the Middle East. The country's cement production is forecast to be 80Mt/yr by the end of the current Iranian calendar year.

Kenya/Tanzania: ARM Cement expects its revenue to grow year-on-year at a slightly faster rate in 2013 due new a new cement plant in Tanzania that increased its production capacity. Chief executive Pradeep Paunrana made the forecast in an interview with Reuters. The Kenyan cement producer expects similar growth in 2014.

A new cement grinding plant in Dar es Salaam, Tanzania that was commissioned in 2012 increased ARM's cement production capacity by 0.75Mt/yr to 1.75Mt/yr. Another 1.2Mt/yr clinker plant in Tanga, Tanzania is due to start production in early 2014.

In July 2013 ARM reported that its pre-tax profits for the first half of 2013 had rise by 28% year-on-year to US$11.5m.

US: Texas Industries (TXI) has seen its cement sales rise by 20% year-on-year to US$104m for the first quarter of its 2013 – 2014 financial year, compared to US$87.3m in the same period in the previous year. Cement shipments rose by 17% to 1.31Mt from 1.12Mt.

Although the company noted a general improvement in construction markets, in the cement sector it also saw an increase of sales and prices in its Texas market. CEO Mel Brekhus stated that the start up of the company's new kiln in Central Texas was the most successful of any he had been involved with in his career.

TXI reported a net income of US$429,000 for the first quarter of 2013 – 2014, up from a net loss of US$2.66m in the same period in 2012 – 2013. Net sales rose by 34% to US$233m from US$175m.