Displaying items by tag: Sales
Update on Saudi Arabia
25 April 2018No consolidation has happened yet in the Saudi Arabian cement industry but exports have started to be announced. Yanbu Cement signed an export deal in March 2018 to despatch 1Mt of clinker and 0.5Mt of cement from one year from 1 April 2018. Prior to that, Al Jouf Cement Company started a contract to export 72.000t/yr to Jordan from late February 2018. Earlier still, Bahrain was expected to benefit from a lifting of cement export tariffs at the end of January 2018.
Its early days yet but some of sort of action is starting to happen about the country’s falling cement sales. If export deals are in the early stages of being set following the lifting of the ban, then local movements of cement have intensified. As Al Rajhi Capital reports in its latest market update, that producers have been forced by low sales and high inventory levels to take action. It says that cement companies have started to sell products in different parts of the country than they do normally leading to a ‘price war’. The financial services and analytical company has pinpointed the central region as the key battleground as company market shares have fallen over the last six months as northern producers have moved in.
Graph 1: Cement sales (Mt) by quarter in Saudi Arabia, 2015 to March 2018. Source: Yamama Cement.
Cement sales fell by 15% year-on-year to 11.8Mt in the first quarter of 2018 from 13.7Mt in the same period in 2017. This is the first time in recent years that sales did not rise from the fourth quarter to the following first quarter. Not a good sign. Despite the bad news, a few producers did mange to increases their deliveries in the first quarter, including Saudi Cement, Hail Cement, Umm Al Qura Cement and United Cement.
Bizarrely, into this sales environment, plans for the long delayed Al Baha Cement cement plant project have re-emerged. The project previously has received coverage at various stages over the years. This time it has reportedly gained a licence to set up the company and it hopes to start tendering for the build in the second half of 2018. The investors may want to leave it a little longer given the current state of the Saudi cement industry.
Indonesia: Cement sales rose by 8.4% year-on-year to 16.4Mt in the first quarter of 2018 from 15.1Mt in the same period in 2017. Particular rises were noted in Central Java, Sumatra and Kalimantan, according to data from the Indonesian Cement Association. Total exports of cement and clinker rose by 79.6% to 0.70Mt from 0.39Mt.
Saudi Arabia: Cement sales fell by 11% year-on-year to 11.8Mt in the first quarter of 2018 due to a continued slowdown in the construction industry. Weak demand and high inventory levels has forced cement producers to sell their cement in other parts of the country and export to other countries, according to a report by Al Rajhi Capital. The report cited Yanbu Cement's export agreement although it said that its low production costs gives the company the advantage to export at lower prices than its competitors.
Increased competition within Saudi Arabia has led to a price war. The report marked the central region as an attractive region for northern region cement companies due to the relatively bigger market. The sales market share for northern cement companies increased in the last six months. On the other hand, central region companies' market share decreased slightly during the same period.
Yanbu Cement signed a one-year agreement to export 1Mt of clinker and 0.5Mt of cement from April 2018. It is estimated that the deal with Yanbu Cement US$26.6m in extra sales revenue in 2018. Al Rajhi Capital reckoned that the cement producer would be likely to renew the export deal in 2019 as its low margins are unlikely to aid earnings.
Polish cement sales rise by 7% to 18Mt in 2017
13 April 2018Poland: Cement sales rose by 7% year-on-year to around 18Mt in 2017, according to the Polish Cement Association. The country has a cement production capacity of 24Mt/yr and the capacity utilisation rate is approximately 75%. The Institute of Economic Forecasting and Analysis forecasts that sales will grow by 8% in 2018 to 17.9Mt.
Dominican Republic cement sales fall slightly in 2017
13 April 2018Dominican Republic: Cement sales fell slightly by 1.5% year-on-year to 4.18Mt in 2017 from 4.24Mt in 2018. Adocem, the Dominican Portland Cement Producers Association, blamed the slowdown on a slowdown of the general economy. It also reported that exports grew in 2017 to 20.1% of production from 17.3% in 2016.
Production continues to soar in February 2018 in Vietnam
13 March 2018Vietnam: 7.62Mt of cement was sold in Vietnam in February 2018, a year-on-year rise of 38%, according to the Vietnam Building Material Association. Of the sum, 5.02Mt were sold domestically, an 11% rise from a year earlier. This included 1.96Mt sold by Vietnam Cement Industry Corporation (VICEM). 2.60Mt of cement were exported, a 30% rise year-on-year.
In January and February 2018, Vietnam sold 18.6Mt of cement, 85% more than in the first two months of 2017. It exported 5.5Mt in the same period, a 121% rise year-on-year. In just two months, the country has produced 22.9% of its whole year target as local demand continues to be outpaced by supply. The country faces a glut of 25 - 36Mt/yr of cement by 2020 if current production and consumption trends continue unabated.
Cementos Argos makes inroads in Honduras
07 February 2018Honduras: Colombian cement manufacturer Cementos Argos has reported a positive performance in Honduras. The company, which entered the domestic market in 2013, sold over 1.1Mt of cement in the local market in 2017, a record figure that was 15% more than the 0.95Mt that it sold in 2016.
Sales rise in Argentina in January 2018
07 February 2018Argentina: Cement producers in Argentina sold 1.03Mt of Portland cement in January 2018, including exports. This represented a 3.2% increase compared to sales in December 2017 and was 17.3% higher than sales made in January 2017, according to data from AFCP. Domestic sales, including imports, totalled 1.04Mt, 3.9% above the same sales in December 2017 and 19.4% higher than sales in January 2017.
SNIC pins hopes on recovery in second half of 2018
11 January 2018Brazil: The Brazilian cement association SNIC expects an ‘effective’ recovery in cement sales to come in the second half of 2018. The association forecasts sales to grow by 1 – 2% overall in the year, according to the Valor Econômico newspaper. However, it expects a few months of weak demand before the market starts to change. Cement sales volumes fell by 6.4% year-on-year to 53.8Mt in 2016. The market previously peaked at 71Mt in 2014.
Pakistan sales drive continues in second half of 2017
08 January 2018Pakistan: Cement sales rose by 12% year-on-year to 22.2Mt in the last six months of 2017 from 19.8Mt in the same period in 2016. Data from the All Pakistan Cement Manufacturers' Association (APCMA) shows that domestic consumption rose by 17.4 % to 19.8Mt from 16.9Mt, according to the Express Tribune newspaper. However, exports continued to decline in the period by 17.3% to 2.9Mt from 2.4Mt. Exports fell in most parts of the country, particularly in the south, despite increases from plants in Punjab and Khyber-Pakhtunkhwa. The APCMA has blamed this on high industry costs, foreign imports and local legislation.