Displaying items by tag: Lafarge
Lafarge Republic invests US$25m in upgrade at Bulacan
03 March 2014Philippines: Lafarge Republic is investing US$25m towards building a new 0.85Mt/yr cement mill at its plant in Bulacan. The plant is expected to be operational by June 2015 following the commissioning of a mill at the Teresa cement plant, which is scheduled for January 2015.
Lafarge said in a statement that the projects will enable the company to produce an additional 1.7Mt of cement by 2015. The upgrades have been commissioned to meet an expected increase in demand in response to anticipated infrastructure spending of US$8.94bn by the Philippine government.
Can the Egyptian cement industry secure its fuel supplies?
19 February 2014Suez Cement and Italcementi's first waste treatment plant in Egypt was inaugurated this week. The project uses 45,000t of household waste to produce 35,000t of alternative fuel annually. Given Egypt's on-going fuel concerns the project will be watched closely.
Italcementi has much riding on the success of the project. It has five integrated cement plants in the country. As reported in early February 2014, the cement producer suffered reduced production capacity in Egypt despite 'potential' domestic demand due to limited energy availability. Cement sales volumes in Egypt for Italcementi have continually fallen since 2011, accelerating from a 5.4% year-on-year reduction in 2011 to a 17.6% year-on-year reduction in 2013. Yet, despite this, rebounding domestic demand was reported in 2012 and 2013.
It must be extremely frustrating for Italcementi. It has the production capacity, it has demand but it doesn't have the fuel to power its lines. Any additional fuel will be welcome. At a rough and conservative rate of 200kg of fuel per tonne of cement produced, Italcementi and Suez Cement's new alternative fuel stream could help to produce 175,000t of cement or about 1.5% of the cement producer's clinker production capacity of 12Mt/yr.
Lafarge, with its mega 10.6Mt/yr cement plant outside of Cairo, hadn't suffered (publicly) as much as Italcementi from fuel shortages until the publication of its financial results for 2013. Although sales had decreased year-on-year since 2009, this has been blamed on competition. Now it has been announced that cement volumes decreased by 30% in the first half of 2013 due to shortages of gas. This was mitigated through fuel substitution to a 19% drop in the third quarter and a 7% drop in the fourth quarter.
However, Lafarge's strategy for fuel security may be threatened as the Ministry of State for Environmental Affairs ordered the producer to stop preparations to build storage units for petcoke in February 2014 citing environmental and economic reasons. What happening here is unclear given that the Egyptian government has been encouraging cement producers to move away from using natural gas.
The examples above show the reactions two multinational cement producers, Italcementi and Lafarge, have made to secure their fuel supplies. The outcomes remain uncertain.
In other news, Shijiazhuang in Hebei province in China has started the demolition of 17 (!) more cement plants. This follows 18 plants that were demolished in December 2013. In total, 18.5Mt/yr of cement production capacity has been torn down.
This is more than the cement production output of most European countries or any single US state! Where was this cement going previously? What were the effects on the price of cement in China? Who is taking the loss for the destruction of this industrial production capacity? BBC News Business Editor Robert Peston has some ideas.
Improved fourth quarter revives flagging annual finances for Lafarge
19 February 2014France: Lafarge's financial results for 2013 have been rescued by an improved fourth quarter year-on-year. It reported a 2% decrease in sales year-on-year to Euro3.71bn for the fourth quarter of 2013 fromEuro3.81bn in 2012. Overall sales for 2013 fell by 4% to Euro15.2bn from Euro15.8bn. The French-based multinational building producer reported increasing sales on a like-for-like basis for both the final quarter and the full year. It attributed the improvement to growing sales volumes, ongoing growth in most emerging markets, the recovery in the United States and stabilisation in Europe.
"In the fourth quarter we saw much more positive operational trends, accelerating compared to the third quarter, while exchange rates continued to be adverse," said Chairman and Chief Executive Officer of Lafarge, Bruno Lafont.
Sales volumes of cement for the 2013 financial year fell by 3% year-on-year to 137Mt from 141Mt. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 9% to Euro3.10bn from Euro3.42bn.
By region, sales volumes of cement fell in North America by 12% in 2013 to 11.3Mt from 12.8Mt but the residential sector in the US recovered. In Western Europe they fell by 14% to 14Mt from 16.4Mt but the French construction market was described as 'resilient' and sales rose in the UK. In Central and Eastern Europe they fell by 6% to 12.5Mt from 13.2Mt, with particular problems in Poland and Romania. In Middle East and Africa they fell by 2% to 44.4Mt from 45.2Mt with problems noted in Egypt, Morocco and Kenya. In Latin America they fell by 4% to 8.8Mt from 9.2Mt affected by 'subdued' growth in Brazil. Although on like-for-like basis they rose by 1%. In Asia cement sales rose by 3% to 45.8Mt from 44.3Mt led by a strong market in the Philippines despite Typhoon Haiyan.
For its outlook Lafarge expects to sees cement growth in its markets of between 2 to 5% in 2014 versus 2013 with markets benefiting from recovery in the US, stabilisation in Europe and on-going growth in emerging markets.
Environmental group challenges permit for Lafarge
14 February 2014Slovenia: A local environmental non-government organisation (NGO), Eko Krog, which has been fighting Lafarge in the city of Trbovlje for years, has launched a challenge to the environmental permit issued to Lafarge in January 2014.
Eko Krog stated that that the basis for issuing the environmental permit for the operations of the cement factory was flawed and that the permit will result in new pollution in the Trbovlje valley. It has appealed to the Ministry of Agriculture and the Environment, which will now have to review the Environment Agency's (ARSO) decision to issue the permit.
ARSO said that the permit for unlimited cement production at the plant meets EU rules. However, Eko Krog has branded the decision was flawed, as key potential emissions were omitted, including those generated at the nearby quarry. Eko Krog also claimed that the documentation for the permit contains other flaws, including the failure to respect all of the recommendations of internationally-adopted standards for use of the best technology in the cement industry.
It is unclear how long the review of the permit by the relevant ministry will take, but Eko Krog has already once succeeded in having Lafarge stripped of the permit. Lafarge first received the permit in 2009, at which time it had invested Euro33m in upgrades, but its plans to use alternative fuels in its kiln subsequently prompted anger among locals and led to the successful challenge of the permit by Eko Krog in 2011. As a result, the plant had to scale down operations, making the January 2014 decision by the Environment Agency a major victory for Lafarge.
The plant responded to the decision by labelling it a first step in restarting cement production and obtaining a permit for the use of alternative fuels, which would be crucial for Lafarge's sustainability in Slovenia.
Lafarge ordered to halt coke use in Egypt
12 February 2014Egypt: Lafarge has been ordered by the Ministry of State for Environmental Affairs (MSEA) to halt its preparations to build storage units for petcoke, according to a statement by the ministry. The MSEA expects the French cement manufacturer in Egypt to wait for a final decision on the use of petcoke as fuel in industrial operations.
France-based multinational cement producer Lafarge submitted a study to MSEA on the environmental impact of petcoke in May 2013 and awaits a government decision on its use. The MSEA does not allow cement factories to import coal, citing hazards to the environment and the economy. The cement industry consumes 9% of the total amount of natural gas produced in Egypt, after the electricity and fertiliser sectors. The switch to coal was first suggested as an alternative to gas when the government announced plans to gradually remove gas subsidies.
Gebr. Pfeiffer wins Ravena upgrade contract
10 February 2014US: Lafarge North America has contracted Gebr. Pfeiffer Inc. to supply an MVR vertical roller mill as part of the overall modernisation project underway at the Lafarge Ravena plant located in the Town of Coeymans, New York. The modernisation project will replace the current wet process kiln with a dry line, allowing the plant to cut emissions and also increase its capacity.
A Gebr. Pfeiffer MVR 6000 R-6 will be installed in a complete new line at the plant, replacing two existing raw material mills. The scope of supply will also includes a 5600kW motor, engineering, supply and related services. Commissioning for this project is planned for the middle of 2016.
Court blocks plan to dilute Lafarge’s stake in EAPCC
07 February 2014Kenya: The Kenyan government has been stopped from asking French conglomerate Lafarge to dilute its stake in East Africa Portland Cement Company (EAPCC) as the High Court seeks to establish whether the cement maker is a state-owned firm.
On 6 February 2014 Justice George Odunga allowed activist Charles Omanga to oppose the government's latest bid to have Lafarge reduce its interest in EAPCC. In 2012, the Competition Authority of Kenya issued Lafarge with an ultimatum to voluntarily offload part of its shares in EAPCC or have its stake in the company diluted by force under anti-trust laws.
The court will also review recommendations of a task force appointed by President Uhuru Kenyatta, which says that EAPCC does not qualify as a state-owned company because National Social Security Fund (NSSF) shares do not belong to the state but to contributors. Omanga wants this recommendation adopted in what will see the government lose the power to appoint the chairman of EAPCC, shifting the power to French giant Lafarge.
"I have granted leave to commence judicial review in terms of requests 2a, b and d," ordered Justice Odunga. "The implementation of the decision of the presidential task force for the government to invoke the Competition Act and dilute shareholding of (Lafarge) in EAPCC is to be kept in abeyance." The requests mentioned touched on Omanga's plea for the state to be stopped from interfering with Lafarge's stake with regard to competition matters and the declaration of EAPCC as public and not state-owned.
This recommendation of the taskforce will see the state ownership in EAPCC drop below 50%, given that the government has been treating NSSF shares as its own, making the cement firm a state corporation.
The government's stake in EAPCC stands at 25% compared to NSSF's 27%, Lafarge's 41% and the remaining 6% is held by investors through the Nairobi bourse. Lafarge also owns 58.9% of Bamburi Cement and the government has accused the French firm of seeking to damage EAPCC in order to protect its interests in the rival cement maker.
EAPCC has been embroiled in a long shareholder war that is mainly centred around the government's determination to have a new team shepherd the firm, a move that has been difficult with Lafarge's upper hand in the board.
Unfair competition in Canada
05 February 2014On 31 January 2014, the Québec government announced that it would invest US$350m in a new US$1bn, 2.2Mt/yr cement plant and port facility, to be operated by McInnis Cement at Port-Daniel. To say that this has prompted outrage in the industry is an understatement. Rival cement producers, including Lafarge and Ciments Québec have been unanimous in condemning the funding, which they see as an unjustified affront to fair competition in the province's cement industry. There was an angry response on the Global Cement LinkedIn Group, with dissatisfaction on a number of levels.
Firstly, established manufacturers highlight that the Québec cement market is in a slump, with 100-150 members of Métallos, the United Steelworkers union, currently on rolling temporary furloughs at any one time. There is over-capacity as it is. How will another cement plant help this situation? One contributor to the Global Cement LinkedIn Group said that the funding was like, "Taking the money I pay as taxes to break my legs." Another said, "Imagine our tax dollars heavily subsidising our direct competitor - totally unacceptable!"
Secondly, the government will have a direct interest in the cement industry, diverting public funds to a sector that (in the West) is traditionally left to its own devices. What does the government have to gain from this move? Well, there are suggestions that the awarding of future government cement and concrete contracts can no longer be fair due to the rather obvious conflict of interest. Could the government effectively award contracts to itself? Arguments from the government and McInnis that its distribution will be outside the areas served by the other plants don't seem to wash with the established producers.
Thirdly, there are fingers pointed at the Gaspasia paper mill project, a failed government-funded installation that was not established in the 1990s at a cost to the taxpayer of US$300m. It is unlikely that any of the parties involved would like to see a repeat at Port-Daniel.
Finally, the Canadian government appears to have turned its back on its own 'Wood First' policy, signed in April 2013, which stated that wood should be preferred in construction over cement and steel due to environmental concerns over embodied CO2. At the time Canadian cement manufacturers were at pains to point out that cement and concrete constructions were actually sustainable in comparison to many other building materials, especially with repect to long-term use and minimisation of energy consumed during a building's lifespan. At worst this seems to be a government U-turn but it could yet get more ugly. Now, with funding for new cement capacity, Québec appears to have 'listened' to the cement producers. How long before some cynics point to this change as evidence that the government wanted McInnis Cement to happen all along?
Whether a gross miscalculation or a deliberate ploy by the government, the McInnis Cement saga will not be going away. Ciments Québec and Lafarge will line up to fight the decision and, in litigation-heavy North America, this story could run and run.
Competition regulator recommends Naikuni removal from East Africa Portland Cement Company
05 February 2014Kenya: The Competition Authority of Kenya (CAK) has recommended that Titus Naikuni stops chairing the Technical Committee of the East Africa Portland Cement Company (EAPCC) board, citing the risk that his position poses to the firm's strategic leadership in light of the fact that he represents Lafarge, which has a controlling stake in the rival Bamburi Cement.
The competition watchdog says that Lafarge's two board seats and control of strategic committees at the EAPCC amounts to anti-competitive behaviour that needs to be reviewed. Naikuni chairs the Technical Committee of the Portland board while lawyer Hamish Keith, another representative of Lafarge, is the chair of the Tender and Procurement Oversight Committee.
The authority has concluded that Lafarge's sizeable shareholding in Kenya's leading cement makers, Bamburi and the EAPCC gives it control of more than half of Kenya's cement market and amounts to monopolistic behaviour and undue concentration of economic power.
"The authority was of the view that this high market share and directorship of Lafarge in key strategic committees (tender and procurement and technical committees) at EAPCC exhibited features of unwarranted concentration of economic power," said the CAK in its 2013 annual report. The regulator made the recommendation in response to Industrialisation principal secretary Wilson Songa's December petition over Lafarge's dominance of Kenya's cement market that is linked to the French firm's multiple ownership of cement makers and its representation on Bamburi and EAPCC boards.
The move follows Songa's previous attempt to investigate directors at the EAPCC following a chaotic annual general meeting in late 2013.
Lafarge Republic to build 0.85Mt/yr grinding plant
05 February 2014Philippines: Lafarge Republic plans to build a 0.85Mt/yr grinding plant for its Norzagaray cement plant to meet increased cement demand. The grinding plant will be commissioned in the second quarter of 2015.
The new grinding plant is intended to supplement the output of a new mill at its Teresa cement plant in Rizal province, which due to be commissioned in the first quarter of 2015. The Teresa mill is expected to have an investment of at least Euro25m and will have a production capacity of 0.85Mt/yr.
The two mills will increase Lafarge Republic's cement production capacity to 6Mt/yr. Lafarge manufactures the cement brands Portland, Pozzolan and Type 1P. It sells its products in 40kg bags or in bulk at 800kg and 1000kg per load in bulk carriers.