Displaying items by tag: Rail

India: The India Ratings and Research has blamed demonetisation and elections for a poor fourth quarter for cement producers in the 2017 Indian financial year. Cement production volumes fell by 15.8% year-on-year in February 2017 and by 5% on a month-on-month basis. India Ratings also attributed the decline to a strong equivalent quarter in the 2016 financial year.

It reported that volumes for the major cement producers contracted by 5% year-on-year in the third quarter. On a regional basis it fell by 3% and 6% for producers in central and northern regions. However, volumes rose sharply, by 21%, in the south. Growth in the southern region has been supported by increases in government spending in the states of Andhra Pradesh and Telangana.

The agency also reported that changes announced by the Ministry of Railways, which requires long-term agreements and contracts for industries like cement, steel and fertilisers, could potentially drive demand for cement. The new policy will provide conditional discounts that could increase the transport of cement through the rail network and cement manufacturers will be able to control freight costs more effectively. However, the availability of wagons during peak periods might also constrain the policy.

Canada: McInnis Cement has signed an agreement with the Gaspé railway corporation (SCFG) to distribute cement from New Richmond, Quebec to various Canadian and US markets. The agreement covers the transportation of 140,000t of cement over a five-year period.

“The use of rail combined with the efficiency of maritime transport provides McInnis the flexibility and competitiveness needed for the distribution of cement that will be produced by the company commencing in the Spring of 2017,” said McInnis Cement chief executive officer, Hervé Mallet. He added that the company might increase its volumes when conditions permit.

The cement will be loaded onto trucks at the plant site in Port-Daniel–Gascons, transported to New Richmond, and then trans-shipped onto tenders through a weight bin to be installed by SCFG. The first shipments are expected to start a few weeks after the plant becomes operational.

UK: Tarmac’s Aberthaw Cement Plant has opened a rail facility to despatch bulk cement. The rail depot will mean that trains will be used to transport cement in Wales for the first time in over 20 years. The yard is expected to replace 2500 annual truck movements on the local roads. Jane Hutt, the Welsh Assembly Member for Vale of Glamorgan, officially opened the facility.

“Reducing our road movements by 25% is a significant achievement and it puts us in an even better position to supply materials to our customers across Wales and the south west of England in a more sustainable way. The plant has been in operation for over 100 years and we employ 109 people, the majority of whom live within 10 miles of the site, so this development demonstrates our commitment to the Vale of Glamorgan,” said Aberthaw Cement Plant manager, Chris Bradbury.

Zambia: Lafarge Zambia and Zambia Railways have signed a transport agreement to improve the delivery of production inputs for cement production and to distribute clinker and cement products locally and to neighbouring countries. The deal is intended to complement other modes of transport, reduce reliance on roads and promote sustainability. The agreement will run for three years and is subject to renewal.

“We continue to have a high fleet of trucks on our roads responsible for both inbound and outbound logistics, in excess of 500 trucks. The pressure exerted on the roads continues to be high as a result of this activity. Therefore, this partnership will relieve some pressure off our roads as it complements other modes of transportation currently in use today and we also anticipate to reduce the safety risk on the road,” said Chrissie Moloseni, Chief Financial Officer of Lafarge Zambia at the signing ceremony on 8 July 2016.

Christopher Musonda, the Chief Executive Officer of Zambia Railways, added that the company has devised a new transport model to improve efficiency. The Wagon Monitoring and Control System (WAMCO) is designed in a way that will enable customers to have dedicated wagons for all movements, thereby improving efficiency levels.

Sri Lanka: Holcim Lanka has inaugurated a transport model for the transportation of its raw materials. In a public-private partnership between Holcim Lanka and the government, the state railway will transport raw materials by rail from the port of Trincomalee to the Mahawa railway station. The company's dedicated trucks will then transport the materials to the Puttalam cement plant. The inauguration took place at the China Bay station in Trincomalee, according to the Daily news newspaper.

“The successful launch of this phase would not have been possible without the support received from the Ministry of Transport," said Holcim Lanka Procurement and Logistics Director Charith Wijendra.

Environmental and efficiency improvements of the new model include using Supramax bulk carriers instead of smaller ships, using dedicated containerised trucks to reduce spillages and cut journeys and a reduction in the use of the railway network.

Tanzania: Tanga Cement is in discussions with the Tanzanian government to increase its use of the Usambara Railway to transport its products to Arusha, according to Makame Mbarawa, the Minister for Works, Transport and Communication. Mbarawa made the comments to local press on a visit to Tanzania Railway facilities and a cement plant in Maweni.

Tanga Cement has pledged to use the railway line to transport 35,000t/month. The move is intended to minimise damage to the country’s road network. In the 2014 – 2015 year Tanzania Railways transported 44,000t of cement. From July to December 2015 the railway transported 24,960t of cement, according to Masanja Kadogosa, the Deputy Director General of Tanzania Railways.

Russia: Mordovcement, part of Eurocement, has launched an investment programme to rebuild local railway infrastructure.

The investment offers funding for the full replacement of 9.1km of track and 42 switches. The proposed repairs will guarantee the continued safe use of the railway infrastructure for the supply of raw materials. The US$3.14m project will raise the turnover of wagons for the loading of cement and will help to establish the stable delivery of cars of raw materials from the quarry to the production area. The development will boost the reliability of the railway track as a whole and extend its lifecycle, reducing the complexity and cost of maintenance and obtaining economic benefits during its operation.

Kenyan cement producers kicked off this week about Chinese cement imports for the Standard Gauge Railway Project in Kenya. Local producers, including ARM Cement and Lafarge, have asked the Kenya Railways Corporation to explain why the Chinese-backed project is importing cement. Project builders the China Rail & Bridge Corporation (CRBC) has imported 7000t of cement so far in 2015 according to Kenya Ports Authority data.

Project completion is planned for 2017 with a requirement of 1Mt of cement. If CRBC carried on this rate then, roughly, the project might only use 42,000t of imported cement if the import rate holds. This is less than 5% of the estimated requirement. However, cement imports increases into Kenya have stayed steady since 2012. Imports rose by 2000t from 2013 to 2014. CRBC's imports will stick out significantly in 2015.

Kenya National Bureau of Statistics (KNBS) data places Kenyan cement production at 5.8Mt in 2014, an increase of 16.3% from 5.1Mt in 2013. Production growth has been steadily building since the late 1990s with, more recently, a dip in the rate of growth in 2011 that has been 'corrected' as the growth has returned. Consumption has risen by 21.8% year-on-year to 5.2Mt in 2014 with imports also rising and exports dropping.

Imports for the railway project are duty free as ARM Cement Chief Executive Officer Pradeep Paunrana helpfully explained to Bloomberg. Producers have also recently upgraded their plants to specifically supply 52.5 grade cement to the project. Given this, it is unsurprising that local Kenyan producers, including ARM Cement and Lafarge, are complaining about this situation, especially given the increasingly pugnacious African response to foreign imports led by Dangote and companies in South Africa. Both ARM and Lafarge hold integrated plants and grinding plants in Nairobi and Mombasa. This is the route of the new railway line.

The backdrop to this is that the Chinese cement industry is struggling at home as it adjusts to lower construction rates and reduced cement production growth. Profits made by the Chinese cement industry fell by 67.6% year-on-year to US$521m for the first quarter of 2015, according to National Development and Reform Commission (NDRC) statistics. At the same time the Shanghai Composite, China's principal stock market, has seen the value of its shares fall by 30% since June.

Although it is unclear where the cement imports in this particular row are coming from, informal or formal business links between large state controlled corporations such as a China's major cement producers will always be questioned by competitors outside of China for both genuine issues of competitiveness and simple attempts to claw more profit. If the Chinese cement producers are sufficiently spooked or they really start to lose money then what is to stop it asking a sister company building a large infrastructure project abroad to offer it some help? Or it might consider asking the Chinese bank providing 90% of the financing towards the US$3.8bn infrastructure project to force the Kenyan government to offer more concessions to foreign firms. Meanwhile one counter argument goes that Kenya has a growing construction market with a giant infrastructure project that may unlock the region's long-simmering low cement consumption per capita boom. The Kenyan government may face some difficult decisions ahead.

Kenya: According to Reuters, Kenyan cement producers have said that they are being left out of a US$3.8bn railway project that China Rail & Bridge Corporation (CRBC) is building, after the company gave an assurance it would source all of the raw materials domestically.

Companies including Lafarge South Africa's Kenyan unit and ARM Cement have asked Kenya Railways Corporation, the implementing agency, to provide clarity on CRBC's local procurement plans, five months after work on the project started, according to ARM Cement CEO Pradeep Paunrana. Kenya Ports Authority data show that CRBC has imported at least 7000t of cement so far in 2015.

"There was an assurance that all of the cement would be supplied by local producers," said Paunrana, who is also chairman of the Kenya Association of Manufacturers. "There has not been transparency on how much we will supply and we don't understand why they are importing cement when we can clearly supply cement to their specifications."

The 'Standard Gauge Railway Project' (SGR) is Kenya's biggest investment in infrastructure since it gained independence from Britain in 1963. The Export-Import Bank of China is funding 90% of the railroad, which will connect Nairobi to Mombasa, East Africa's biggest port. It is scheduled to be completed by 2017. Kenya's Treasury is pinning its 7% growth target for 2015 partly on activities generated during construction of the 609km link. In June 2015, treasury secretary Henry Rotich allocated US$1.46bn to the project for the 2015 - 2016 financial year.

The SGR project requires 1Mt of cement, all to be sourced in Kenya, according to a master list of supplies that the manufacturers' association was given by CRBC. Kenya is a higher cost producer of cement than China and imports for the project are duty-free, according to Paunrana. Kenya Railways spokeswoman Mary Oyuke has said that the company isn't importing cement because the material is available locally and ARM and Bamburi are already supplying the project.

ARM and other producers, including Lafarge's unit Bamburi Cement, have upgraded their plants to produce the 52.5 grade cement required by the contractors. The enhancements cost 'several million dollars' and were commissioned on the understanding that CRBC would buy the cement from domestic manufacturers. "We undertook significant investments in an endeavour to seamlessly supply cement to the project, including long-term agreements with transport companies to make deliveries," said Bamburi CEO Bruno Pescheux. "It is our hope that the project will continue to purchase cement locally rather than import, in light of the above investments." Bamburi supplied 20,000t of cement in April 2015.

US: Lafarge North America has signed a deal to build a cement trans-loading facility in Williston, North Dakota. According to local press, the storage facility and terminal will be located on a new rail spur on the east side of the town. Lafarge North America says that it will allow the company to better serve its customers amid growing demand for construction materials in North Dakota and South Dakota

Roy Sander, general manager of Lafarge Dakotas, noted that the new rail line will remove the company's existing truck traffic from US Highway 2.

North and South Dakota are growing states for cement consumption. As well as traditional construction cements for standard applications, the presence of the Bakken oil field means that the states also require oil well cements and products for soil stabilisation.