Displaying items by tag: Lafarge
CCI imposes US$66.2m penalty on Shree Cement
19 June 2014India: The Competition Commission of India (CCI) has imposed the penalty on Shree Cement while issuing the final order in a case against cement manufacturers and their trade body, the Cement Manufacturers Association (CMA).
"The Commission has imposed a penalty on Shree Cement Ltd at the rate of half of its profits for the years 2009 - 2010 and 2010 – 2011, aggregating to US$66.2m," said the CCI. The CCI added that it had, "Found 11 cement manufacturers, including Shree Cement and the CMA, in contravention of the provisions of the Competition Act 2002, which deal with anti-competitive agreements, including cartels." It asked Shree Cement to refrain from such anti-competitive activities in the future.
With regard to the other companies, the CCI said that as they were fined earlier, it was not imposing any penalty on them again for the same period of contravention. In June 2012 the CCI imposed a US$1.05bn fine on 11 leading cement makers, including ACC, Ambuja Cements, UltraTech, India Cements, Binani Cement, JK Cement, Madras Cement, Lafarge and Jaypee Cement. The industry body CMA was also fined US$121,717.
Bamburi CEO Hussein Mansi to leave in July 2014
18 June 2014Kenya: Bamburi Cement chief executive Hussein Mansi is set to leave in July 2014. Mansi is relocating to Lafarge Egypt, ending his five-and-a-half year tenure overseeing Bamburi's operations in Kenya and Uganda. In an internal memo sent to staff, Mansi said he will be replaced by Bruno Pescheux, currently the chief executive of Lafarge Cement Syria.
"After five very interesting years leading the Kenya – Uganda business I have accepted a new challenge with Lafarge in Egypt and will be doing so by the end of July 2014," said Mansi.
Mansi, aged 47, holds a post-graduate certificate of Business Administration from the University of Leicester and a bachelor's degree in civil engineering from the University of Cairo. He began his career in 1991 at Saudi Building Systems as a design engineer and later as the sales manager before joining Orascom Construction Industries as works director in charge of sales and marketing.
Mansi joined Bamburi Cement in January 2009 from Algerian Cement Company (ACC), wholly owned by Orascom, where he was the commercial director for five years until December 2008. Orascom was acquired by Lafarge in 2007 leading to Mansi's promotion to head the French multinational's business in East Africa.
Romania: Industrial energy consumers in Romania will gain a 10-year facility for green certificate acquisition, which will save them approximately Euro750m, the government has decided. About 300 large industrial companies in Romania, including Lafarge, Holcim and CarpatCement Holding, that will benefit from this measure, as they will be allowed to buy up to 85% less green certificates than they currently have to buy. The ratios are established on the rate of energy costs in their total production costs.
However, the adjustment to the green certificate scheme will add 1% to the energy costs for other consumers, who will have to buy more green certificates to support the existing subsidy scheme for green energy producers. The general population and smaller Romanian firms will see increases in electricity bills.
The support scheme will be applied from 1 August 2014 and it will also be notified to the European Commission.
BASF and Lafarge to set up a joint venture in Iraq
16 June 2014Iraq: BASF has entered into a joint venture with Lafarge to set up a new plant for the production and marketing of construction chemicals in the autonomous Iraqi region of Kurdistan. BASF said that the new production site would mainly produce concrete admixtures and cement additives and that the products would be offered to the local market.
For BASF, the joint venture offers the opportunity to further tap into Iraq's growth market with a partner that is already well-established in the region. "This initiative clearly represents BASF's interest and commitment to the Middle East," said Dick Purchase, the head of BASF Construction Chemicals division in the Middle East, West Asia, CIS and Africa. "With this joint venture we are fulfilling our Master Builders Solutions promise of connectedness by being closer to our clients, providing our innovative and sustainable solutions and creating new job opportunities in the region," he added. Under the Master Builders Solutions brand, BASF bundles its advanced chemical solutions for new construction, maintenance, repair and renovation of structures.
Court refuses Lafarge's application to stop Standard Organisation of Nigeria’s cement grade restrictions
12 June 2014Nigeria: A Federal High Court has rejected an application by Lafarge Cement WAPCO to restrain the Standard Organisation of Nigeria (SON) from enforcing the newly introduced cement grade restrictions. Justice Ahmed Mohammed ruled that making such an order would prejudice its order compelling the defendants to appear in court to show cause why they should not be restrained from enforcing the new cement grade.
The defendants in the suit are the SON and the minster of Trade and Investment, Segun Aganga. The counsel for the defendants had opposed Lafarge's application for an order asking parties to maintain the status quo. They argued that the court could not make such an order when its jurisdiction to entertain the suit was being challenged.
The creation of Lafarge Africa, the clearance of the Cemex West acquisition by Holcim in Germany and the sale of Lafarge's assets in Ecuador all hint at the scale of business that LafargeHolcim will command when it comes into existence. Despite the media saturation of coverage on the merger the implications in developing markets are still worthwhile exploring, especially in Latin American and Africa.
In sub-Saharan Africa, Lafarge is merging its cement companies in Nigeria and South Africa to create Lafarge Africa. Analysts Exotix have described the move as, 'the birth of a leading player on a continental scale'. Indeed, if Lafarge wanted to grow Lafarge Africa to encompass its many other African cement producing subsidiaries it could hold at least 17 integrated cement plants (including plants in north Africa) with a cement production capacity of at least 40Mt/yr in 10 countries and infrastructure in others. That puts it head-to-head with Dangote's plans to meet 40Mt/yr by the end of 2014 through its many expansion projects. Following these two market leaders would come South African-based cement producer PPC with its expansion plans around the continent.
Meanwhile across the Atlantic in Latin America the Lafarge-Holcim merger threatens Cemex. Unlike in Africa where Lafarge has a ubiquitous but disparate presence, Lafarge and Holcim's cement assets are more evenly scattered around the Caribbean, Central and South America. In terms of cement production capacity Cemex and Lafarge-Holcim will both have around 30Mt/yr, with Cemex just in front. The next biggest cement producers in Latin America will be Votorantim (present mainly in Brazil) with just over 20Mt/yr and Cementos Argos (Columbia) with about the same. This includes some new acquisitions in the United States for the growing Columbian producer. In Ecuador Lafarge and Holcim held over 50% of the market share, hence the sale by Lafarge of its assets to Union Andina de Cementos for US$553m.
Depending on how well the merger integrates the two companies, corals the various subsidiaries and implements strategic thinking the merger could just create business as usual with little disruption to the existing order. Yet in both continents the merger has the opportunity to shake up and reinvigorate the cement markets as existing players suddenly discover serious new competition and react accordingly.
Africa has a population of 1.1bn and it had a Gross Domestic Product (GDP) of US$2320/capita in 2013. South America had a population of 359m in 2010 and a GDP of US$8929/capita. This compares to US$27,250/capita in Europe and US$54,152/capita in the US. The economic development potential for each continent is humongous. Post-merger, LafargeHolcim will be first or second in line for some of this potential in Latin America and Africa.
Nigeria: The management of Lafarge Nigeria has urged stakeholders in the cement sector to cooperate on the need for proper product labelling by manufacturers.
The company's general manager (Industrial Performance), Lanre Opakunle, said that the step was necessary to address the issue of incorrect cement application in the Nigeria. Opakunle said that there is a need to review how cement products are labelled in order to educate end users on the basic steps necessary for the correct application and results.
"We discovered that labelling is not adequate and we made some proposals," said Opakunle. "However, those proposals have not been taken on board. We will keep making efforts to see that they are." Opakunle added that correct labelling would help to ensure that people have the right information at their disposal.
"Lafarge is the only cement manufacturer in the market that puts the uses and specifications of cement on their bags," said Opakunle. "In our technical submission to SON we said that we want to do more than that; we want to put it in a way that the layman can understand." He noted that issues of cement application should not dwell on the cement grades; rather it should be about knowing the right mix.
"The most widely used individual application of cement in the world is 32.5 grade," said Opakunle. "It is important that the user understands how to use whatever grade of cement that is available on the shelf because of certain risks which may maybe associated with these grades, whether it is 32.5 or 42.5 grade. The information should be properly labelled on the bags."
Nigeria: Lafarge Cement WAPCO, Ashaka Cement and Unicem have established suits against the Standards Organisation of Nigeria (SON) over its recent decision to employ a new Mandatory Industrial Standard Order for the field of cement manufacturing, distribution and effective usage in Nigeria.
The cement producers are also seeking an order of the court restraining SON, their privies, agents and whosoever is involved in purporting to act through the respondent from implementing the Mandatory Industrial Standard NIS 444-1 2014.
Germany: Holcim has received unconditional clearance by the European Commission (EC) for its proposed acquisition of Cemex West in Germany. The decision follows a detailed Phase II review by the EC. Closing of the transactions is expected for the second half of 2014.
The acquisition in Germany is part of Holcim's strategic portfolio optimisation in Europe that includes a series of transactions together with Cemex, which is separate from the intention to merge with Lafarge.
Holcim said that the decision marks a further milestone towards the optimisation of its strategic portfolio in Europe, which was announced in 2013. It will allow Holcim to create value through an optimised footprint in north-western Germany. It will also allow it to further improve the service and support of existing and new customers.
The transaction includes one cement plant and two grinding stations with a total cement production capacity of 2.5Mt/yr, one slag granulator, 22 aggregates locations and 79 ready-mix concrete plants. They would be combined with Holcim's existing Northern German operations.
Zimbabwe: Lafarge Cement Zimbabwe plans to increase its cement production capacity to 0.5Mt/yr once a current plant upgrade is complete, according to an official. At present Lafarge reports a 70% capacity utilisation rate at its Manresa cement plant, producing 0.37Mt/yr.
"Capital to the tune of US$15m has been earmarked to eradicate bottlenecks and to boost volumes," said Lafarge Zimbabwe chief executive Amal Tantawi in an interview reported by the Herald newspaper. Lafarge has spent about US$5m on plant refurbishments over the past five years and it is now focusing on improving the cement production capacity of its existing plant.
Lafarge Zimbabwe is also in the process of conducting feasibility studies to establish a new manufacturing plant to complement the existing one. Tantawi added that Lafarge Zimbabwe was still keen on exporting cement despite a decline in export volumes in 2013. The company has been focusing on the local market since 2013 due to increased demand. Despite high demand for cement Tantawi highlighted liquidity issues with the local economy as the biggest challenge facing Lafarge. To tackle this Lafarge is rolling out different incentives to encourage its customers to make cash payments.
Lafarge Zimbabwe has also launched Supaset cement in the country following its use on other African states. The product is as a fast setting solution for the block making and precast segments of the construction industry.