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HeidelbergCement has been reportedly showing interest in South Africa and Mozambique this week following the opening of new production capacity in West Africa. The Germany-based cement producer has beefed up its presence in the region with the inauguration of a 1.5Mt/yr clinker plant in in Togo and a 0.7Mt/yr grinding plant in neighbouring Burkina Faso. An additional 0.25Mt/yr grinding plant in the north of Togo is also planned for commissioning in late 2016. Other new projects in Africa include a new 0.8Mt/yr grinding plant in Tanzania that was commissioned in October 2014 and a new 0.8Mt/yr grinding mill at the Takoradi grinding plant in Ghana.

HeidelbergCement has repeatedly stated that it is considering production capacity expansions in other African countries. It currently operates in Ghana, Benin, Liberia, Tanzania, Sierra Leone, Togo, Burkina Faso and the Democratic Republic of Congo. Mostly it's a network of grinding plants with actual clinker producing plants in Tanzania, the Democratic Republic of Congo, Gabon and Togo. Its presence covers a band across central sub-Saharan Africa. Moving out of this zone into southern Africa would start to give HeidelbergCement a truly continental presence. However, from Dangote to PPC to Lafarge Africa other players are hard at work building their own cement empires.

The wild card here is how involved Chinese firms are in this process. Chinese companies like Jidong Development are building their own cement plants like the Mamba Cement plant in South Africa or Gweru in Zimbabwe, where upgrades are currently taking place. More commonly though Chinese companies like Sinoma are building new African cement plants such as a new PPC cement plant in the Democratic Republic of Congo or a new United Cement Company of Nigeria Limited (Unicem) cement line in Nigeria or several Dangote projects.

As part of the commissioning process for HeidelbergCement's new clinker plant in Togo, the Chengdu Design and Research Institute of Building Materials Industry (CDI, part of Sinoma) has emphasised that it will transfer the maintenance responsibility to local Togolese workers. The fact that the CDI's chairman made a point of saying this underlines tensions about both existing and changing international business influences in the region. Contrast this with the more sympathetic way in which Dangote's expansions in Africa that are portrayed by local media. Or look at this week's announcement by Egypt's ASEC Engineering and Management to help run a cement plant in Ethiopia. There is no need for calming statements from ASEC.

Finally, after all the discussion of the effect of oil prices on alternative fuels usage by cement producers it is worth noting what HeidelbergCement stated in its February 2015 trading statement. Principally, a drop in the price of oil is expected to present a positive impact on costs and market demand for the group. HeidelbergCement generates 86% of group earnings before interest, taxes, depreciation and amortisation (EBITDA) in net oil importing countries. In these places lower oil prices means potentially faster GDP growth and greater infrastructure spending. It is also worth considering the impact lower oil prices might have on the group's total oil and diesel bull of Euro250m/yr.

HeidelbergCement's full annual results for 2014 are due to be published on 19 March 2015. Maybe they will be more forthcoming about its intentions in Africa then.

UK: Martin Langvad has been appointed as vice president of cement operations and technology (Northern Europe). Martin has worked for Cemex for 19 years and has more than 30 years experience in the cement industry. With the reorganisation of Cemex in Germany, he has taken over responsibility for cement production in the UK and will continue to be the head of the Northern Europe cement operations.

Philip Baynes-Clarke has taken over responsibility as plant director at Rugby cement plant. His previous role as plant director at the South Ferriby, Humberside plant has been taken by Jan Kristof Peters. Baynes-Clarke has been in the cement industry for 13 years and started at Rugby cement plant as a graduate process engineer.
Jan Kristof Peters has worked for Cemex Germany for five years, starting as a process engineer and more recently as a production manager at the Kollenbach plant. Prior to joining Cemex, Peters worked in the lime industry.

Spain: Cementos Molins plans to replace its managing director Joan Molins Amat, who has been in post since 1967. An executive outside the Molins family has been appointed to take over the role but no further details have been released. Joan Molins Amat, aged 73 years , will be named president of Cementos Molins, replacing his uncle Casimiro Molins Ribot, aged 93 years, who has held the position since 1945.

South Africa: The board of PPC are considering an indicative non-binding proposal from AfriSam Group for a merger between the two cement producing companies. PPC will make a further announcement once its board had concluded the consideration process, according to Pretoria News. The Public Investment Corporation, the managers of the Government Employees Pension Fund, holds a 12.6% share of PPC and a 66% share of AfriSam.

India: The Indian government has published a list of 36 companies committed to supplying 9.5Mt of cement in 2015 for road building. The cement will be sold at a price below market rates with a fixed upper limit of US$2.70/bag. The Ministry has decided to build concrete cement roads in place of traditional bitumen roads as it views them as cost-effective and requiring less maintenance.

"After taking consent of the manufacturers we have put the list on a dedicated website, which any company or government agency can access to book their orders. Since the factories are spread all over the country, they can make the best choice. As per the contract, manufacturers can only reduce the price and increase their commitment to supply more cement," said road transport minister Nitin Gadkari. "Once the reduced price is out, it will have effect on other manufacturers and prices across companies may fall," he added.

Zimbabwe: PPC Zimbabwe intends to invest US$75m in 2015 on its Harare cement mill to develop its export market. The mill will be commissioned in the first quarter of 2016 according to PPC Zimbabwe managing director Njombo Lekula. The cement producer is also spending US$6.4m on production upgrades at its Bulawayo and Colleen Bawn cement plants.

Lekula told local press that PPC Zimbabwe's export market had been cut by 40% due to the strengthening of the US dollar. However, he expected the export market to improve in the remainder of 2015.

Colombia: Colombia's Superintendent of Industry and Commerce (SIC) is expected to issue a final ruling on its on-going competition investigation into the local cement industry. SIC intends to announce its findings by the middle of 2015 according to comments SIC head Pablo Felipe Robledo del Castillo made to local press. Meanwhile, Robledo also said he plans to present a bill on 16 March 2015 that would strengthen the sanctions for anticompetitive practices in Colombia.

"This rule will allow us to increase the sanctions above the nominal amount of US$25m, the current maximum, by adding percentages of a company's revenues or equity, in order to bolster the penalties," said Robledo.

SIC announced in late 2013 that it was investigating whether executives at Colombian cement companies had colluded to inflate cement prices in country since as early as 2010. The investigation targeted 14 current and former top directors at five firms, including Cementos Argos, Cemex and Holcim.

Brazil: Merck Marra Jr, chief executive of Cemento Tupi, has confirmed his company's plans to build a US$295m cement plant in Adrianople, Paraná. The announcement came when Tupi representatives met with state officials to discuss state government support with infrastructure and licencing issues.

Germany: Around 27.1Mt of cement was used in Germany in 2014. This represents a 2.2% increase in consumption as compared with 2013. The German Cement Works Association (VDZ) is also predicting further growth for 2015.

"Significant catch-up effects from 2013 and mild weather really bolstered cement consumption, particularly in the first quarter of 2014," said Gerhard Hirth, president of the VDZ. However, the generally reserved economic climate had a dampening effect on construction investment over the rest of the year. "We experienced considerable increases in demand all year, mainly in housing," said Hirth. "In addition, due to the advantages of concrete construction in multi-storey buildings, cement manufacturers have managed to further increase their market share over recent years."

Domestic cement demand for cement was almost completely covered by German manufacturers in 2014. Just 1.2Mt, or 4%, was imported in 2014. Cement and clinker exports fell slightly year-on-year to 6.2Mt.

According to Hirth, the German cement industry has started 2015 with a positive outlook. "Due to the dynamic overall economic development and the continuing high demand for new housing, we are expecting growth of around 1% in cement consumption to approx. 27.3Mt in 2015," said Hirth.

Bosnia: Bosnia's Tvornica Cementa Kakanj (TCK) has forecast that its cement output will be flat in 2015 after producing 420,000t in 2014, according to company director Branimir Muidza. TCK is majority-owned by Dutch-based CEEM Investment, a unit of Germany's HeidelbergCement.

"Our cement production fell by around 10% in 2014, which was probably the most difficult year since the war for the Bosnian economy and its citizens. The country went through political turmoil in February 2014, followed by record floods in May 2014 and August 2014 and elections in October 2014," said Muidza.

Extraordinarily high rainfall affected Bosnia and Herzegovina between 14 May 2014 and 19 May 2014, the largest precipitation in 120 years. The European Union's delegation in Bosnia said in July 2014 that the cost of the total economic impact from the subsequent devastating floods that hit large parts of Bosnia was Euro2bn.

TCK's total revenues are projected to stagnate in 2015, given that in the first quarter of the year there will be no new major infrastructure works. Those that are expected to resume will mainly do so in the second half of the year. TCK's business outlook for 2015 is based on the low purchasing power of the population, a lack of foreign investments, political instability, a decline in personal consumption of building materials, job insecurity and the expected dynamics and intensity of planned public infrastructure works. Bosnia is expected to consume 1.1 - 1.2Mt in 2015, mostly unchanged from 2014.

Muidza is much more optimistic for 2016 onwards. Large government investments in public infrastructure and energy facilities, such as the pan-European Corridor, new units at thermal power plants Tuzla and Ugljevik and the new hydro power plant Vranduk, could help boost demand for construction materials in the country.

TCK plans to build a new Euro10.2m cement silo by 2018. Construction is expected to start later in 2015. There are also plans to install equipment that will enable the rail transport of bulk cement. During 2015, TCK will also finish a Euro1.53m project for the automation of its cement milling and packing operations.