Displaying items by tag: Mamba Cement

Sectoral adjustment continued for the cement industry in China in 2024. Now that the financial results from many of the larger China-based cement producers are out it gives Global Cement Weekly a chance to review the world’s biggest cement market. The decline in national output of cement accelerated in 2024 and the results showed this. CNBM summed up the situation as follows: “In 2024, affected by the reduction of real estate investment and the slowdown of infrastructure projects, the cement industry in China was caught in a situation of insufficient demand and aggravated overcapacity.” Output dropped by just under 10% year-on-year to 1.83Bnt in 2024 according to data from the National Bureau of Statistics of China (NBS). This is the fourth consecutive annual decline and the lowest figure the sector has experienced since around 2010.

Graph 1: Cement output in China, 2018 to 2024. Source: National Bureau of Statistics of China.

The China Cement Association’s (CCA) assessment concurred with CNBM. Although it detected a slowing in the decline in the second half of 2024, especially in the fourth quarter. It noted that the country has a production capacity of 1.81Bnt/yr and an estimated clinker utilisation rate of 53% in 2024. Note the large apparent difference this may suggest between the NBS and CCA figures. Data from the NBS for the first quarter of 2025 has shown a slowing of the decline. Output was 331Mt, a fall of just 1.7% year-on-year from the same period in 2023. The CCA’s prediction for 2025 is that cement demand will fall by 5% as the real estate market continues to deflate. However, it expects government-led capacity reduction schemes to start making progress.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports.

Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.

CNBM’s sales revenue fell by 14% to US$24.8bn in 2024. Sales of its Basic Building Materials segment fell by 23% to US$12.5bn. This was blamed on falling volumes and prices of cement and other heavy building materials. Sales from the group’s two other segments - New Materials and Engineering Technology Services - rose modestly but this wasn’t enough to hold up total group sales. Operating profit from the Basic Building Materials segment decreased by 45% to US$544m. It was a similar picture at Anhui Conch with sales revenue and net profit down by 36% to US$12.4bn and by 25% to US$1.01bn respectively. Notably, CNBM’s sales volumes of cement decreased by 21% to 245Mt in 2024 compared to a decrease of 6.5% to 268Mt by Anhui Conch. This made Anhui Conch the world’s biggest cement company by sales volumes in 2024.

Tangshan Jidong Cement and China Resources Building Materials Technology (CRBMT) both reported a similar situation. Revenue was down and a net loss was reported by the former. Both revenue and net profit were down for the latter. CRBMT said that its cement capacity utilisation rate was 69% in 2024, down from 71% in 2023. This appears to be significantly higher than the national rate mentioned above by the CCA but the company’s regional distribution may be at play here.

Following from recent years, Huaxin Cement bucked the general market trend and its revenue rose modestly to US$4.7bn in 2024. Its net profit still fell by 12.5% to US$330m. Its overseas businesses made the difference. It reported an increase of 37% to 16.2Mt in overseas cement sales with its non-China cement production capacity rising by 8% to 22.5Mt/yr. Milestones include various new or upgraded plant projects in Sub-Saharan Africa capped off by its announcement at the end of 2024 that it was preparing to buy Lafarge Africa. Other cement companies were also keen to promote overseas activity. CNBM said that the first signing of overseas merger and acquisition was achieved in 2024. This is likely to be the purchase of the Djebel El Oust cement plant in Tunisia from Votorantim Cimentos that was completed in late March 2025. Tangshan Jidong Cement acquired the remaining 40% share in South Africa-based Mamba Cement in April 2024.

All of this leaves the cement sector in China still waiting for the market to stabilise. US tariffs seem unlikely to have an effect in any meaningful way unless the general economy is altered. The declining real estate sector and cement production overcapacity are the main drivers at the national level. The CCA expects the real estate market to continue to fall in 2025 although it hopes that government remedy measures will start to show an effect. It is more optimistic about capacity reduction plans. One route towards this is through merger and acquisition activity. In a recent response to investors about industry integration, Huaxin Cement speculated that the sector might consolidate down to 30 companies from around 300 at present. There is clearly still a way to go.

Tanzania: EAM, Mamba and Sungura are planning to invest in the cement industry. Industry, Trade and Investment Minister Charles Mwijage said that the companies have all requested to enter the industry at the Dar es Salaam International Trade Fair, according to the Tanzanian Daily News. EAM wants to build a 3Mt/yr plant in the Tanga region on condition that the government lets it export cement internationally. It has also requested other conditions that are in discussion with the government. Mamba and Sungura are also in discussion with the government regarding their projects.

South Africa: Costs relating to Sephaku Holdings' new cement business Sephaku Cement dragged the group to a loss in the year that ended in March 2014, though management has said that indications are positive for its cement venture.

Sephaku Holdings has a 36% share of Sephaku Cement, which in January 2014 completed the construction of two plants in North West Province and Mpumalanga. Nigeria's Dangote Cement is the majority shareholder in Sephaku Cement. Sephaku Holdings reported a post-tax loss of US$260,300 in the period under review, largely due to a loss from Sephaku Cement of US$1.37m.

Sephaku Holdings' latest results include little revenue from the cement business, as one of the plants began producing only in January 2014 and the other is due to begin production in July 2014. The South African cement market is currently oversupplied and is likely to remain that way for some time, but Sephaku and another newcomer, Mamba Cement, are banking on healthy demand growth and cost-efficiency advantages from their modern plants. Mamba has a plant under construction near Northam in Limpopo.

South Africa: Investors have confirmed that construction has started on a new 1Mt/yr cement plant by Mamba Cement in Northam, Limpopo. Nedbank Capital and the Bank of China Johannesburg are providing US$107m of debt capital to fund Mamba, according to Business Day. Equity was provided by majority shareholder Jidong Development Group, the China-Africa Development Fund and by Women Investment Portfolio Holdings.

Nedbank Capital's infrastructure, energy and telecommunications head Mike Peo said that construction had already started and the project was expected to be completed by 2016.

"We obviously had a very hard look at the South African cement market. This plant is very close to Johannesburg, a primary market, so the transport costs and the actual cost point at which it can compete is going to be very attractive," said Peo. He added that the outlook for cement demand was 'extremely good' driven by government's infrastructure plans and the provision of housing.