Displaying items by tag: Production

Middle East: Cement companies in the Middle East witnessed a 24.3% increase in revenues in the first quarter of 2012 to US$1.26bn as construction picked up in certain parts of the region.

The industry's profits rose to US$435.6m in the second quarter of the 2012 financial year, compared to US$359.5m in 2011, a growth of 21.2%. However, according to Global Investment House's report, net margins suffered a fall during the period.

UAE and Oman reported higher revenues due to the better operating environments in both countries. The sales revenue of UAE firms increased by 7.7% to US$258.1m, bringing gross margin back to double digits at 10.5%.

Rizwan Sajan, chairman of Danube Building Materials, said that the UAE construction industry had started to pick up. "The second quarter of this year was much better than the first quarter on positive signs in the UAE," Sajan said. Omani companies witnessed a 16.7% increase in revenue to US$100.3m.

Meanwhile, Saudi Arabia achieved strong growth of 34.7% in revenue during the quarter, outperforming the UAE, Qatar and Oman. Saudi Arabia is witnessing a significant rise in demand because of its development plan. In March 2011 King Abdullah Bin Abdul Aziz ordered the construction of 500,000 housing units, as well as the building and expansion of hospitals. He also ordered the injection of capital into specialised credit institutions to facilitate debt write-offs and increase mortgage lending.

It is expected that Saudi Arabia's cement demand will strengthen in 2013, with US$24bn of transport projects under way or in the pipeline. The Haramain High Speed Railway has taken centre stage, with the final contract for the project, worth US$1.4bn, awarded in July 2011. Attention should now turn to the US$7bn Saudi Landbridge project, an east-west rail line that will link Jeddah and Dammam.

Iran: Iran produced 24.44Mt of cement during the first four months of the current Iranian year, which began on 20 March 2012.

According to a report released by the public relations office of the Industries, Mines and Trade Ministry, about 6.43Mt of cement were produced in the country during the period between 20 June 2012 and 21 July 2012. The country produced 5.64Mt of clinker over the same period.

The latest estimates from the Ministry of Industries and Mines show that Iran will need 70Mt/yr of cement by 2021.

Spain: Spanish cement production fell by a further 60% year-on-year in the first half of 2012 according to Oficemen, the sector's national association. Oficemen noted that demand for cement in Spain has now dropped to a 48-year low, with levels as low as this not seen since 1964. The association previously announced that the country produced 6Mt of cement in the five months to 31 May 2012, but did not provide a total amount for the first half of 2012.

Consumption also fell, by 34.7%, year-on-year to 7.2Mt in the first six months of 2012. Oficemen expects demand to plunge by 25% to 15Mt for the full year. Accordingly, it is expected that exports from Spain will increase by 40% year-on-year to 6Mt in 2012.

These figures compare unfavourably with 2011's own poor figures and come as the Spanish economy continues to struggle with its Eurozone debt, protests at austerity measures and unemployment of 25%.

Vietnam: The Vietnamese minister of construction has claimed that the master development plan for the country's cement industry from 2011 to 2020 approved by the Prime Minister is still in line with market movements and that there is no 'cement crisis' in the country.

Trinh Dinh Dung said that Vietnam consumed 55Mt out of 64Mt of cement produced in 2011, with consumption accounting for 89% of production. "I confirm that there is no cement crisis caused by the development scheme as raised by some people," said the minister.

The country currently has a huge cement surplus given its low domestic consumption. Under a policy of public spending cuts, the amount of construction work is actually falling, pushing down consumption of building materials.The country is forecast to use 55-56Mt of cement in 2012, accounting for just 80% of its own output. "We can't say that the cement development plan triggers an oversupply crisis," said Dung.

One of the biggest questions is why the country still imports cement when it faces huge inventories. The minister explained the country must stick to local commitments that stipulate that ASEAN members cannot impose import bans or tariff barriers on cement. Furthermore, market forces also prompt cement imports, he said.

Cement is mainly produced in the north of Vietnam, resulting in high cement prices in the south due to transport fees. Sometimes, the price of local products gets higher than that of products imported from Thailand.

"In a market economy, the country must import goods from overseas markets at competitive prices if domestic production shows low efficiency," said the minister.

Czech Republic: Czech cement production posted a year-on-year drop of 14% to 466,000t in the Jan-March 2012 period owing to the fall of the construction sector and a colder winter, according to the latest data of the Czech Cement Producers' Association. Cement producers commented that domestic consumption and cement exports also went down.

"A combination of several effects was behind the significant drop in Czech cement production and consumption in the first quarter," said Ceskomoravsky cement board chairman Jan Hrozek. He also blamed unclear policies from the Czech Transport Ministry and the resulting changes that these had on priorities in infrastructure projects.

First-quarter cement sales on the domestic market were 8% lower at 404,000t. Exports sank by 24% over the same period. Cement producers have said that the outlook for 2012 is currently uncertain.

"Overall I expect domestic cement consumption to stagnate in 2012, with possible recovery to come at the end of the third quarter," Hrozek added.

Leading cement producers in the Czech Republic include Ceskomoravsky cement of the German group HeidelbergCement, French group Lafarge, Swiss company Holcim and the Czech branch of Dyckerhoff of Germany.

Vietnam: Vietnam's Ministry of Construction has announced that it will temporarily delay work on several approved cement projects in the country. The move was announced with the spectre of severe cement overcapacity looming over the country. In 2012 it is expected that the country will consume around 50Mt of cement, 10Mt short of its existing 60Mt/yr capacity, according to the Vietnam Cement Association (VCA).

The director of the ministry's Construction Materials Department, Le Van Toi, noted that many cement producers were facing losses due to decreasing consumption and high interest rates. "Many cement producers have had to borrow up to 80% of their total investment capital and that eats most of their profits while interest rates remain high," he said.

Toi said that the Thanh Liem Cement Plant in northern Ha Nam Province had to close its doors due to significant losses, although the plant has not yet declared bankruptcy. Many other plants have cut their capacity sharply. "If the situation continues, the number of cement plants that will have to shut down will surge in the near future," Toi warned.

VCA's chairman Nguyen Van Thien urged cement producers to boost their trade promotion and export heavily in 2012 to deal with the surplus. He expected that the producers could export more than 7Mt of cement in 2012, a massive increase over 2011, when the country exported 1.5Mt. Vietnamese cement is exported mainly to China, Indonesia and Bangladesh, as well as several African and southeast Asian countries.

China: China's cement output growth dropped in November 2011, but was still 6.1% up on November 2010 at 11.2%. State statistics show that China's cement output reached 1.89Bnt in the first 11 months of 2011, an increase 17.2% over the first 11 months of 2010.

Total profits from China's entire building materials industry surged by 53.1% year-on-year to US$38.68b in the first 11 months of 2011.

Romania: Cement production in Romania were up by 8.1% year-on-year in the first half of 2011 to 3.18Mt. Domestic cement sales increased by 2.4% to 2.95Mt according to data released by the Romanian Association of Cement Producers (CIROM). Romania's cement market is dominated by the local units of Lafarge, Holcim and HeidelbergCement.

Iran: Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) has announced that Iran produced 23.41Mt of cement in the first four months of the current Iranian year (21 March 2011 to 22 July 2011) showing a 19% rise compared with the same period in 2010.

The report added that Iranian companies produced 6.37Mt in Tir (4th month in the solar calendar, 22 June 2011 – 22 July 2011). Mohammad Hassan Pourkhalil, the secretary of the Cement Industry Contractors Union, stated that Iran exported 0.94Mt of cement in this month. Pourkhalil added that Iran's exports of cement and clinker surpassed 3.40Mt from 21 March to 22 July, showing a 14% growth compared with the same period in 2010.

In June 2011 Iran launched two new cement factories in the provinces of West Azerbaijan and Golestan. Khoy cement factory, which cost USD140m, has the capacity to produce more than 1Mt/yr. Galikesh cement factory, which employs some 210 workers and cost about USD165m, has the capacity to produce more than 3,400t/day.

China: China's cement industry has maintained its rapid growth in production, sales and profits so far in 2011, according to the latest data released by the Ministry of Industry and Information Technology (MIIT).

According to MIIT statistics China produced 198Mt of cement in June 2011, an increase of 19.9% over June 2010. This represents record highs for both monthly cement output and monthly growth rate. In the first half of 2011, China's cement production increased by 19.6% year-on-year to 950Mt.

Cement and clinker exports stood at 5.6Mt during the same period with an export value of USD310m for June 2011, down 35.5% and 14.9% year-on-year respectively.

According to the statistics provided the cement industry witnessed sales of USD50.4bn in the first five months this year with profits of USD5.4bn, up by 48% and an extraordinary 170% year-on-year respectively. Chinese cement production statistics are viewed with skepticism by some in the cement industry, who believe that they may be inflated.