Displaying items by tag: Sinoma
Tanzania: Sinoma will build a US$1bn cement plant in the coastal city of Tanga that is focused on exports. Prime Minister Kassim Majaliwa commended the plans following a meeting with representatives of Sinoma, Hengya Cement and local officials, according to the Xinhua News Agency. 70% of cement produced at the plant will be exported to local countries including Somalia, Kenya, Mozambique, Sudan, the Democratic Republic of Congo and Uganda. Construction at the site is expected to start in May 2017. The project will also include building a wharf to aid exports.
Algeria/Nigeria: CBMI Construction (Sinoma) has issued paperwork passing over completed projects to Lafarge Africa, a part of LafargeHolcim, for projects in Algeria and Nigeria.
A provisional taking-over certificate (PTC) was signed by representatives of Unicem, a joint venture partly operated by Lafarge Africa in Nigeria, at Sinoma’s Beijing headquarters on 18 January 2017. Tomas Lorent, Lafarge Africa Project Manager and Liu Xinwang, CBMI Project Manager signed the paperwork on behalf of their companies. The certificate was signed eight weeks ahead of the contract. The new production line at the Calabar cement plant in Cross River State started operation in the summer of 2016. It includes one of the world’s largest vertical roller mills supplied by Loesche.
Meanwhile, a different PTC was signed on the same day by Didier Michel, Lafarge Algeria’s Project Manager and Gu Jinjun, CBMI Project Manager at Lafarge Algeria’s headquarters in Algiers. The 2.7Mt/yr CILAS Biskra cement plant, a joint operation between Lafarge Algeria and Souakri Group, was commissioned in the summer of 2016.
Georgia: Gebr Pfeiffer has received an order to supply a mill for HeidelbergCement Group’s Kaspi plant. The vertical roller mill will be used in a new 3000t/day kiln line at the site. The order was placed through the China’s Sinoma Chengdu in November 2016.
The type MPS 4000 B mill, equipped with a SLS 3750 B type classifier, has been designed for a capacity of 270t/hr of raw meal. The mill will be delivered with an enlarged housing to allow the raw material with a moisture of up to 10% to be dried almost exclusively with the available preheater gases.
Commissioning of the plant is scheduled for 2018.
Sinoma subsidiary ordered to pay back US$8.3m tax rebate
04 January 2017China: Sinoma Hanjiang Cement, a subsidiary of China National Materials Company (Sinoma), has been ordered to pay back a US$8.3m tax rebate by the Tax Office of Hantai District, Hanzhong City in Shaanxi. A notice issued by the office said that the cement producer failed to meet the requirements for the rebate, according to ET Net News agency. The office decided to disqualify Sinoma Hanjiang from the entitlement due to its policies regarding rebate and exemption of value-added tax for products and labour services involving comprehensive utilisation of resources. Sinoma said that the extra cost is expected to decrease its profit in 2016.
Sinoma to supply waste heat recovery plant for Fauji Cement
19 December 2016Pakistan: Sinoma Energy Conservation Company has signed an agreement with Fauji Cement to install a 7.6MW waste heat recovery (WHR) plant. The agreement was signed by Sardar Mahmood Ali Khan, Director-General of Fauji Cement and officials of Sinoma in Rawalpindi, according to the Nation newspaper. The power plant will be installed by the end of the first quarter of 2018. Once the project is complete the cement producer will be able to produce 80% of electricity requirements from captive sources. Previously Fauji Cement installed a 12MW WHR plant in early 2015.
PPC Zimbabwe commissions Msasa cement grinding plant
15 November 2016Zimbabwe: PPC Zimbabwe has commissioned its 0.7Mt/yr cement grinding plant in Msasa. The plant was built by China’s Sinoma International for a cost of US$85m.
At a tour of the plant PPC Zimbabwe managing director, Kelibone Masiyane complained about the cost of electricity in the country compared to its neighbours. “If you go to Zambia, they charge US$0.06 and we are setting up a plant in Ethiopia, where they charge about US$0.03. As such, competing in other countries will be difficult for Zimbabwe. Transporting cement from Botswana is quite expensive, so we are hoping that the plant will help with that,” he said in comments reported by the News Day newspaper. He added that the cost of electricity in Zimbabwe is US$0.15. Ideally PPC Zimbabwe would like to export cement to Malawi, Zambia and Mozambique.
Sinoma unit sells stakes in Midong Tianshan and Fukang Tianshan
23 September 2016China: Xinjiang Tianshan Cement, a subsidiary of China National Materials Company (Sinoma), has arranged to sell stakes in two of its companies to Zhongtai Chemical. Zhongtai Chemical will acquire a 64.6% equity interest in Xinjiang Midong Tianshan Cement and the entire equity interest in Xinjiang Fukang Tianshan Cement, currently held by Tianshan Cement. It will also acquire a 19.47% equity interest in Midong Tianshan held by Xinjiang Tunhe Cement.
Sinoma said that the equity transfer aims to respond to the national policy of production capacity reduction, quality improvement and efficiency enhancement, and to realise the preservation and appreciation of the assets of Tianshan Cement.
Mali government signs agreement to build 1.5Mt/yr cement plant
19 September 2016Mali: Mohamed Ali Ibrahim Ag, the Minister of Industrial Development, and the CEO of Gaia Equity have signed an agreement to build a 1.5Mt/yr cement plant at Guinbané for US$330m. The project will create 400 direct jobs and 500 indirect jobs, according to the Mali Jet news website. Gaia Equity will be supported by Chinese company Sinoma in the construction of the plant. The plant is expected to ease the country’s 2Mt/yr demand for cement.
Can China’s cement companies merge themselves into profit?
30 August 2016Check out this graph of Chinese cement prices from September 2015. An author at Business Insider attributes it to Larry Hu, the Chief China Economist for Macquarie. It pretty much sums up the mood analysts have at the moment regarding the Chinese cement industry.
Figure 1: China cement prices, 2012 – 2015. Source: CEIC, Bloomberg, Macquarie Research September 2015.
The recent announcement by the Assets Supervision and Administration Commission regarding the merger of China National Building Materials Group Corporation (CNBM) and China National Materials Group Corporation (Sinoma) comes hot on the heels of a series of poor half-year financial returns from China’s major cement producers. Attempts to tackle overcapacity in its local cement industry have been underway for a few years now. Actions taken include demolishing outmoded capacity, merging companies and expanding overseas. However as the construction markets have cooled in the country the scope of what the cement industry is facing has become clear, as revenues and profits have tumbled.
Now that the first half cement sales volume data has become available from the National Bureau of Statistics of China (NBSC) the response of the cement industry to its predicament has emerged. As can be seen in Figure 2 there has been a rough trend of sales decline throughout 2014 and 2015. The first half of 2016 has started to buck this trend as sales volumes have risen year-on-year for both quarters.
Figure 2 – Chinese cement production by quarter, 2014 – 2016. Source: National Bureau of Statistics of China.
Sales revenues have dropped for most of the major companies that have publicly released their results for the first half of the year. The exception is Taiwan Cement, which makes a large proportion of its sales revenue outside of China (People’s Republic of China). Its sales revenue in China barely rose year-on-year in the first half of 2016. However, the cement sales volumes for all these companies have started to show what is happening. They have risen for most of the producers examined. Essentially, each of these producers is producing more cement but making less money. As Digital Cement puts it, the industry is in a 'low-profit position.' Increased market competition and endemic industry overcapacity are causing this.
Mergers and acquisitions have been the big story for the European multinational producers following the economic crash in 2007. Returns from low growth markets have been substituted for efficiencies of scale, knowledge sharing and greater international reach. Lafarge and Holcim merged in 2015 and HeidelbergCement is due to complete its acquisition of Italcementi later this year. However, as LafargeHolcim's disappointing financial returns and its continued slew of divestments show so far, the merger has not worked as well as may have been hoped… yet.
Whether China's version of this works with its large state owned enterprises is uncertain. Mergers are meant to cut out inefficiencies through economies of scale. Yet the question remains: can even larger Chinese cement producers do this when they are state controlled and harangued by pressures outside the normal market, particularly when local regions try to preserve their industries. The last such big deal, between Anhui Conch and China Resources Cement, fell apart in July 2016. The plans for CNBM and Sinoma may fare better but if the price of cement keeps falling then the market may have other ideas.
For more information see the China country report in the September 2016 issue of Global Cement Magazine
Fall in Sinoma's sales revenue lead by engineering division
30 August 2016China: China National Materials Company's (Sinoma) sales revenue has fallen by 5.8% year-on-year to US$3.26bn in the first half of 2016 from US$3.46bn in the same period of 2015. All three of its business divisions reported falling revenue in the period, led by its cement equipment and engineering services business, which recorded the greatest decline at 8.51% to US$1.42bn from US$1.55bn. Sinoma blamed this on a fall in orders. Its cement business reported a 4.22% fall in sales revenue to US$1.2bn from US$1.25bn. This was attributed to 'intense' market competition and low cement prices. Cement sales volumes rose by 7.61% to 33.5Mt. The company's overall net profit rose by 2% to US$64m from US$62.8m. However, its net profit attributable to shareholders fell by 30.9% to US$46m from US$66.6m.