Displaying items by tag: GCW197
What price for cement industry development in Cameroon?
22 April 2015Cameroon announced this week that it intends to ban imported cement to aid the sales from the new Dangote owned cement plant in the country. Readers should note that Dangote is a Nigerian-based company. Protective legislation such as this should come as no surprise given the rise of Nigeria's own cement industry and similar initiatives in that country. The difference here, however, is that the Cameroonian government is protecting investment by a foreign company rather than propping up any home grown concerns.
The new Dangote-run cement plant in Douala will start with a cement production capacity of 0.95Mt/yr with the intention to rise to 1.5Mt/yr in 2016. A meet-and-greet by company officials with local press in early April 2015 revealed that the company intends to snatch 30% of the local cement market in 2015 with prices primed to just undercut the other major producer.
What then of the country's two other integrated cement plants? Both have foreign ownership. Cimenteries du Cameroun, with a 1Mt/yr plant, is a subsidiary of France-based Lafarge. Ciments de L'Afrique, with a 0.5Mt/yr plant, is a Moroccan firm. Add the new 1.5Mt/yr Dangote cement plant and domestic production in Cameroon is anticipated to exceed local demand.
When this happens how will the Cameroonian government view the two non-Dangote producers who may well be importing clinker and other products into the country for their operations? If the experience of Nigeria is a model then a 'self-sufficiency' battle may ensue in the media. Alongside this the price of cement may well stay fairly stable despite any alleged 'gluts'. This week, for example, the Cement Producers Association of Nigeria has lobbied the President-elect of Nigeria, Muhammadu Buhari, to cut the price of cement by half. The hypocrisy during the Nigerian spat over imports was that Nigeria wanted (and has become) a cement exporter.
At the time this column asked how that could work if imports at the time were so much more competitive that they had to be banned at home. Then as now deals seem to mark the way. At that time, in early 2013, Liberia relaxed its tariffs on cement just as Dangote was building a new plant there. Now, in Cameroon, once again Dangote appears to be negotiating some form of preferential treatment.
At the root of these issues, Cameroon's citizens and industry want to build and develop their country. Cheaper cement will enable them to do this by pushing up per capita cement consumption. Protecting their domestic industry or those that have invested in the country may not necessarily lead to cheaper cement.
Lafarge appoints new director of Malogoszcz cement plant
22 April 2015Poland: Lafarge has appointed Jacek Patyk as new director of the Malogoszcz cement plant. He will replace Miroslaw Majchrowicz, who will be in charge of Lafarge's cement plant in Beocin, Serbia
Century Textiles to sell cement business to UltraTech
22 April 2015India: Century Textiles & Industries is reportedly planning to sell its cement business and merge it in an all-share deal with India's largest cement maker UltraTech. Both companies are in the final stages of a plan to merge the cement businesses, according to local media.
Once approved by shareholders, the merged entity's cement production capacity would total 87M/yr. This would help UltraTech achieve 100Mt/yr ahead of its target of 2020. UltraTech would gain access to the eastern market while strengthening its presence in Maharashtra, Chhattisgarh and Madhya Pradesh.
Iran: Iranian cement producers owe €600m to the country's National Development Fund, according to Abdolreza Sheikhan, the secretary of the Union of Iranian Cement Industry Employers. Sheikhan also cited studies supporting that the price of cement should be increased by 17%, due to transportation and production costs, in order to present cement plants being closed.
"Presently, Iran with an output capacity of 70 million tons of cement a year is the world's fourth largest producer of cement after China, India and the United States," said Sheikhan. Iran could become the world's third largest cement producer if its 75Mt/yr nominal production capacity becomes its actual capacity, he noted. In May 2014, Sheikhan said that cement prices might be increased by 22%.
Ghana: Savanna Diamond Cement Co has launched operations of a 0.44Mt/yr integrated cement plant in Buipe, in northern Ghana. President John Mahama officially inaugurated the US$90m project, according to local media. The new plant uses limestone from Buipe. The plant holds a partnership with state power company GRIDCo with a 25MW substation from which 7MW is used by the cement plant and the remaining 18MW is used by the local community. Diamond Cement also owns two other cement plants in the country.
Dangote Cement to start Ethiopian production in May 2015
20 April 2015Ethiopia: Dangote Cement's new cement plant in Ethiopia will open in May 2015. Minister of Mines, Tolosa Shagi visited the plant and commented that new plants and upgrades to existing plants will enable Ethiopia to meet local demand, according to local media. The new cement plant in Oromia cost US$400m and it will have a cement production capacity of 2.5Mt/yr making it one of the largest in East Africa.
Currently, cement demand in Ethiopia is estimated to be around 7 – 8Mt/yr with cement production at 5.4Mt/yr. Once fully operational the Dangote Cement plant is hoped to raise the country's cement production to 8Mt/yr.
US: Lafarge and Holcim have announced further details on the package of assets that they propose to divest in the US as part of their planned merger to create LafargeHolcim. The divestments include:
- Lafarge's 1.1Mt/yr Davenport cement plant in Iowa and seven terminals along the Mississippi River. The units will be sold to Summit Materials for US$450m in cash plus Summit's Bettendorf, Iowa cement terminal;
- Holcim terminals in Michigan and Illinois;
- Holcim Skyway 600,000t/yr slag grinding station in Illinois;
- Holcim Camden 700,000t/yr slag grinding station in New Jersey, along with a terminal in Massachusetts.
The proposed divestments have been negotiated with the staff of the Federal Trade Commission and remain subject to review and approval by the commission. The divestments will be completed subject to acceptance by the commission and to the closing of the merger between Holcim and Lafarge.
McInnis Cement warehouse for New York
17 April 2015US/Candada: Montreal-based McInnis Cement plans to build a US$40m distribution warehouse along the East River in the Bronx, New York, in the hopes of reducing truck traffic in the borough as well as developing its waterfront, according to local media.
McInnis Cement will transport cement down the river from Quebec in 35,000t loads. McInnis will still use trucks to deliver cement from the warehouse to customers, but the new facility should decrease the trucking situation in the borough. "We've done a pretty thorough analysis of the trucking effect in the local community and, in general, we believe that trucking will go down," said Jim Braselton, senior vice president of sales, marketing and logistics at McInnis Cement.
As part of the project, McInnis Cement plans to build a pedestrian pathway on the waterfront. It aims to break ground on the project by the end of the summer of 2015, with completion by the end of 2016.
Spain: Cementos Portland, a subsidiary of Spanish builder FCC, saw its loss grow by 21.2% year-on-year to Euro29.5m during the first three months of 2015.
The company boosted its revenue by 9.4% year-on-year to Euro122m, while its earnings before interest, tax, depreciation and amortisation (EBITDA) slumped by 59.9% to Euro6.3m. Cementos Portland attributed its negative results to a reduction in CO2 emission sales on the secondary market and its new accounting procedures concerning costs generated by the annual renovation of its cement plants.
Should the aforementioned effects be neglected, Cementos Portland would have boosted its results by some Euro7m for the period to a loss of Euro25.7m, versus Euro32.7m a year earlier.
Semen Indonesia to acquire second Vietnamese cement firm
17 April 2015Vietnam: The Indonesian state-owned cement manufacturer Semen Indonesia plans to acquire a second Vietnamese cement company.
Semen Indonesia's finance director Ahyanizzaman said that the company has allocated a total capital expenditure of US$546 – 857m in 2015 to expand its operations, which includes the acquisition of the Vietnamese company. He said that the company was currently conducting a due diligence audit on the Vietnamese firm and that this was expected to be completed by the end of the first half of 2015. "The Vietnamese company is a private firm, which has a local market share of about 4%," said Ahyanizzaman.
If Semen Indonesia goes ahead with the acquisition, it will be its second subsidiary in Vietnam. Through its Vietnamese subsidiary Thang Long Cement Company, it produces about 2.5Mt/yr a year in the country. Ahyanizzaman said the company would borrow up to US$77.9m to support the expansion plan.
Semen Indonesia president director Suparni said that the acquisition plan was part of the company's strategy to take advantage of the ASEAN Economic Community (AEC), which would be implemented before the end of 2015. "Domestic and regional operations cannot be separated when the AEC is implemented, so we want to synergise our business," said Suparni.