Displaying items by tag: GCW389

The cement industry in the Philippines has been generating a lot of ‘steam’ in the past three months. Some of this has now come to a head in the last few weeks with the Department of Trade and Industry’s (DTI) decision to impose tariffs on imported cement and the Philippine Competition Commission’s (PCC) on-going investigation into alleged-anti-competitive behaviour. Then, there was the unnamed sourced quoted by Bloomberg this week that LafargeHolcim was seriously thinking about selling up in the country.

Resistance to imported cement has been building for a while as local producers and importers have repeatedly clashed in the media. The latest thread of this story started in September 2018 when the DTI started an investigation into imports. A review by the department found that imports grew by 70% year-on-year in 2014, 4391% in 2015, 549% in 2016 and 72% in 2017. However, the market share of imports grew from 0.02% in 2013 to 15% in 2017. This was followed by various organisations taking sides. The Philippine Constructors Association, Laban Konsyumer (a consumer group), the Philippine Cement Importers Association and others came out on the side of the importers, warning of the risk to prices and consumers if duties were implemented.

It didn’t stop the DTI though. It imposed a provisional safeguard duty of US$0.16/bag on imported cement, around 4% of the cost of a 40kg bag. The PCC then said that it was going to consider the new tariff as part of its on-going investigation. Its probe started in 2017 following allegations that the Cement Manufacturers Association of the Philippines (CEMAP), LafargeHolcim Philippines and Republic Cement and Building Materials had violated the Philippines Competition Act by engaging in anti-competitive agreements.

Amid all of this, LafargeHolcim popped up earlier this week with a news story that it was actively trying to find the ‘right’ price for its local subsidiary, Holcim Philippines. The ‘right’ price at the moment being something around US$2.5bn for four integrated plants and associated assets. That’s around US$225/t of production capacity using the total of 8.4Mt/yr in the Global Cement Directory 2019 and considering LafargeHolcim’s 75% share in the subsidiary. This is about what you’d expect, but it is certainly higher than the US$120/t LafargeHolcim has officially accepted for its divestment of its Indonesian operations.

Given the anonymous nature of the sources involved, it’s uncertain whether LafargeHolcim’s alleged intentions to sell in the Philippines is anything more than market scuttlebutt. What is more certain is that Holcim Philippines has had a tough time so far in 2018, reporting a 23% year-on-year drop in earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$64.8m in the first nine months of 2018 from US$83.9m in the same period in 2017. Sales have grown but this has been hit by the fuel, power and distribution costs as well as the depreciation of the Philippine Peso against the US Dollar. It also blamed imports for its problems. However, alongside all of this the company announced in December 2018 that it was spending US$300m towards increasing its production capacity by 30% to 13Mt/yr by 2020. This includes upgrades to its plants at Bulacan and Misamis Oriental with the installation of new kilns, mills and waste heat recovery systems.

The latest victory in the war between producers and importers seems to be on the side of the producers as the government steps in with protection for the industry. The Philippines’ economy is doing well with its gross domestic product (GDP) forecast to rise by 6.5% in 2019 by the World Bank. The trick for the government will be striking the balance between shielding industry from dumping and allowing the construction industry to keep on growing. Rumours about LafargeHolcim selling up are enticing but seem less likely than LafargeHolcim’s decision to exit Indonesia. Leaving would mean abandoning South-East Asia and exiting a country with a growing industry.

Dominican Republic: Cemex has appointed José Antonio Cabrera as the president of Cemex Dominicana. He succeeds Alejandro Ramírez, who has been named president of Cemex Colombia, according to the El Nuevo Dia newspaper. The business has operations in the Dominican Republic, Haiti and Puerto Rico.

Cabrera previously served as Vice President of Strategic Planning at Cemex Egypt, as well as Vice President of Strategic Planning for Cemex's Asia, Middle East and Africa (AMEA) region. He first joined Cemex in 2000 and has held positions including Commercial and Operations Director of Cemex Spain and Project Manager of Strategic Planning for Cemex Spain and the Mediterranean region.

Saudi Arabia: Qassim Cement has appointed Tarek bin Mutlaq Al Mutlaq as the chairman of the board of directors. It has also formed new executive and remuneration committees.

Australia: Nick Miller has officially started work as the chief executive officer (CEO) of Adelaide Brighton. He succeeds Martin Brydon, who will continue with the company until 31 March 2019 at the latest.

US: Charah Solutions has appointed Scott Sewell as its president and chief executive officer (CEO). He has also been appointed to the company’s board of directors. He succeeds Charles Price with immediate effect. The company said that ‘the time was right’ for Price to step down from the roles following its move to becoming a public company.

Sewell joined Charah in 2008 as an Operations Manager and held the positions of Vice President of Operations and Senior Vice President of Operations until 2013 when he was appointed Chief Operating Officer (COO). As COO, Sewell was responsible for maintaining oversight of Charah operations, safety management, business development and utility relations. Prior to joining Charah, he worked for Bechtel Corporation from 2002 until 2007.

US: Plibrico has appointed John Finch has joined its team as the Southeastern Territory Manager. He will be based in the greater Omaha, Nebraska area. His appointment supports Plibrico’s strategic direction of strengthening partner relationships as well as increasing its nationwide refractory support coverage. He will report to Norm Phelps, Plibrico Vice President of Sales.

Finch began his career in the industrial market working with a boiler and refractory contractor. His background includes over 20 years of experience in technical and project management roles with several different refractory contractors. In these positions, he honed his skill set and areas of expertise including managing projects in mineral processing companies, power plants, boilers, foundries and heat treatment facilities. Finch is an active member of several different industry and refractory associations. He received his Bachelor of Science from the University of Nebraska.

Uzbekistan: Russia’s Eurocement plans to commission a new 3Mt/yr production line at the Akhangarancement in Tashkent region by 2021. Company president Mikhail Skorokhod discussed the project with representatives of the Chamber of Accounts of Uzbekistan, according to Uzbekistan Daily. US$160m is being spent on the new line and US$40m will be invested towards other improvements at the site. Work on the upgrade stated in October 2018. China’s CNBM is the main contractor on the project.

Thailand: SCG’s revenue from its cement business rose by 4% year-on-year to US$5.82bn in 2018 from US$5.60bn in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell slightly, by 1%, to US$676m from US$711m. The group attributed its cement sales growth to operational expansion in all markets. It reported that local demand for cement increased by 3% in 2018 due to growth in the government sector. Overall, the group’s revenue rose by 6% to US$15.2bn but its EBITDA fell by 15% to US$2.76bn.

India: Ramco Cements’ earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 14% to US$102m in the nine months of 31 December 2018 from US$119m in the same period in 2017. Its revenue rose by 15% to US$510m from US$445m. Sales volumes of cement increased by 19% to 7.83Mt from 6.58Mt. The cement producer said that sales had increased in southern and eastern markets. It blamed its falling earnings on rising diesel price that negatively affected transport costs for both raw and finished materials.

India: The Cement Manufacturers’ Association and a federation of Central Trade Union Organisations (CTU) have signed a memorandum of understanding agreeing an increase in gross pay and other benefits. It will raise worker pay by US$70/month from April 2018 to March 2022, according to the Economic Times newspaper. Other benefits include adjustments to cost of living allowances, length of service perks and more.