Displaying items by tag: Sri Lanka

Sri Lanka: Work on Thatta Cement's cement grinding, storing and bagging plant in Sri Lanka has come to a screeching halt.

The company informed investors on 14 March 2014 that the project was 'temporarily suspended' as the Sri Lanka Ports Authority (SLPA) had not executed the Land Lease Agreement (LLA), despite the fact that basic engineering of the project had been completed by Thatta Cement Company (Pvt) Ltd, a subsidiary of Thatta Cement Company.

The CFO and company secretary of Thatta Cement, Muhammad Taha Hamdani, complained that the SLPA had also signed an agreement with another business venture of car trans-shipment in close vicinity to the proposed cement project, "Without anticipating the expected operational conflict, which now appears to hinder setting up the proposed cement project within the layout originally planned by the SLPA."

The company official stated that further progress on the project would recommence as soon as the LLA is signed with the SLPA.

Sri Lanka: Holcim Lanka has launched its fourth 'Holcim Village' in Akmeemana, Galle, in the south of the island nation. Holcim said that by laying the foundation for this new Holcim Village, it demonstrates its commitment towards its 'triple bottom line' of economic return, social responsibility and environmental protection. The village at Akmeemana follows three previous projects carried out in Medirigiriya, Eluwankulama and Puttalam.

The Holcim Village in Galle specifically addresses the needs of the community surrounding Ruhunu cement works. The US$900,000 project will house 13 homeless families in fully fledged housing units with electricity, water and access roads, upon completion.

Sri Lanka: Holcim Lanka has appointed Nirmala GihanWickremeratne as chairman and Premila Perera as director.

Wickremeratne has a long and distinguished career at one of Sri Lanka's most respected conglomerates, the Hayleys Group, where he served as managing director / CEO of Dipped Products Group and later as chairman and chief executive of the Hayleys Group. He is credited with the establishment of Dipped Products plc and its evolution into a world leader in its field. Wickremeratne was the founder chairman of the Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) and has been a committee member of the Ceylon Chamber of Commerce, the Chamber's representative on the National Labour Advisory Council and president of the Sri Lanka-France Business Council. Following his retirement, he served as an independent non- executive director of a premier private sector bank.

Premila Perera, formerly partner and head of tax at KPMG in Sri Lanka, is a fellow of the institute of Chartered Accountants of Sri Lanka. She has served as regional tax director of KPMG Asia Pacific in Singapore, a member of KPMG International's 'Firm of the Future' Task Force and on the faculty of the Tax Business School of KPMG International.

Sri Lanka: Tokyo Cement's profit rose by 660% to US$4.6m in the quarter ending 30 June 2013 compared to the same period of 2012. The company said that this was due to lower raw material costs.

Tokyo Cement said that its revenue rose by 4% to US$50.8m and that direct costs fell by 5% to US$47.1m. This allowed its gross profit to increase by 87% to US$9.5m. Unspecified other income also rose by 87% to US$1.2m.

Tokyo Cement, which imports clinker for grinding, was hit badly in 2012 as its raw material costs rose and the government, which controls cement prices on the island, delayed a price increase. Now, with higher sales prices and an easing of international commodity and energy prices, clinker prices have fallen. The Sri Lankan Rupee was also more stable in the June 2013 quarter than in the 2012 quarter.

Sri Lanka: The State Resources and Enterprise Development Ministry of Sri Lanka will re-establish a currently closed cement plant in Kankesanthurai, Northern Province, in the extreme north of the country. The plant will be restarted by Sri Lanka Cement. The ministry estimates that, with an investment of US$11.4m, the plant can become operational again within 12 months.

Project proposals to re-establish the factory were presented to State Resources and Enterprise Development Minister Dayasritha Tissera by Sri Lanka Cement Corporation Chairman N S M Samsudeen on 26 July 2013.

According to the project proposal, funds will be sought from the Bank of Ceylon and a copy of the project proposal was also presented to the Bank of Ceylon by Samsudeen. The project aims to produce a minimum of 12,000 x 50kg cement bags per day, which is 600t/day, or 0.2Mt/yr.

Sri Lanka Cement said that it could cover the project cost if it is selected as the main cement supplier for the Northern Highway project initiated by the government. "The project can save US$13m/yr in foreign exchange spent to import cement to the country and it will also generate 300 direct employment and 400 indirect employment opportunities for people in Kankesanthurai," said Samsudeen. Sri Lanka is in the process of building a series of new highways and toll-roads.

The announcement regarding Sri Lankan Cement comes shortly after a series of announcements regarding capacity expansion in Sri Lanka despite a decrease in demand for cement in the first half of 2013. Tokyo Cement plans a 1M/yr plant and Pakistan's D. G. Khan Cement and Thatta Cement have both announced plans for grinding capacity on the island.

Sri Lankan cement demand fell in the first half of 2013. Yet this doesn't seem to be stopping the cement industry's slow recovery following the civil war that ended in 2009.

As reported by Sri Lankan media around the launch of Holcim Lanka's 2012 Sustainability Report, the local cement industry has seen volumes fall by 7% but this is expected to improve in the second half. Tokyo Cement, a grinding plant operator, confirmed a similar drop in the first quarter of 2013.

Despite the talk of downturn so far in 2013, Tokyo Cement has announced plans for a 1Mt/yr cement plant costing US$50m complete with its own captive biomass power plant. In addition, plans have emerged of a joint venture involving Pakistan's D.G. Khan Cement to build a grinding plant at Hambantota in the south of the island. Costing US$15m, the plant is intended to process exports to South Africa and Kenya.

The explicit intention to produce clinker in Pakistan and then grind it in Sri Lanka before export to a third destination makes an interesting notion. The Pakistan cement producer may benefit from being able to export cement from Sri Lanka with the added security of knowing that the grinding plant is located in a growing market itself. A helpful strategy given Pakistan's cement production overcapacity.

The Hambantota project is also noteworthy because another Pakistan-based company, Thatta Cement, announced in April 2013 that it had signed an agreement with the Sri Lanka Ports Authority to a build a grinding and bagging plant at Hambantota. Also in 2013 the Nepali entrepreneur Binod Chaudhary submitted a US$75m plan for a cement plant in the north of the island.

Of course all of this appears miniscule in comparison to the level of investment Semen Indonesia has chalked up to spend between now and 2016: up to a whopping US$2bn.

Elsewhere in the news this week the price of extending a US Environmental Protection Agency (EPA) deadline has revealed itself to be US$1.5m. Lafarge North America has succeeded in pushing back pollution controls at its Ravena plant by over a year in exchange for interim limits and an investment in air pollution projects in the local community. It's not a fine but the announcement follows other pollution-related payments at cement plants run by Holcim and Ash Grove. Let's hope that any new plants in Sri Lanka avoid these kind of payments.

Sri Lanka: The Tokyo Cement Company intends to build a US$50m cement in Trincomalee, Eastern Province a top official has said. The new 1Mt/yr plant will be called the Tokyo Eastern Cement Company. The build will also include a captive 10MW biomass power plant.

"We are currently in the process of finalising a 33-year lease agreement with the government for the land to construct the factory," said Tokyo Cement Managing Director (MD), S R Gnanam. Tokyo Cement has received tax breaks on the investment that will be financed by internal funds and bank loans. The company anticipates a 10% year-on-year growth in cement demand in the medium term.

Sri Lanka: Sri Lanka's cement demand will pick up in the second half 2013, ending a slump that began in 2012, according to Philippe Richart, the head of Holcim (Lanka) Ltd. However, he added that cement volumes were 7 - 9% down year-on-year in the first half of 2013. In 2012 the firm posted revenues of US$152.9m.

"We expect the second half to be better, whereas 2012 saw a little bit of a decline," said Richart. "Overall we think the market this year will be probably down by 2%."

Tokyo Cement, another Sri Lankan firm which operates grinding plants had also said demand has fallen by 7% in the first quarter but that an improvement was expected.

Official data shows that Sri Lanka's domestic cement production was down by 3.4% year-on-year to 320,000t in the first two months of 2013. Imports were down by 34% to 593,000t. However, production picked up in March 2013 and first quarter production was up by 0.7% year-on-year. Imports for the first quarter also surged by 118% to 854,000t.

Sri Lanka: Nepali entrepreneur Binod Chaudhary has submitted a US$75m proposal to the Sri Lanka government to build a cement plant on the Jaffna Peninsula in northern Sri Lanka. According to Daily News, a Sri Lankan online news portal, Chaudhary has invested an estimated US$200m in several projects in Sri Lanka. He has been investing substantially in Sri Lanka ever since he acquired a substantial stake in the Taj Lanka Hotels of the island nation in 2000.

Sri Lanka: Pakistan's Thatta Cement is proceeding towards the construction of a US$15m grinding plant in Sri Lanka after signing a 25-year lease agreement with the island's port agency in the week ending 5 April 2013.

The plant, with a capacity of 0.3Mt/yr, will be located at the Hambantota port in the southern Sri Lankan region of Hambantota District. It is expected to grind 0.1Mt of cement in the first year, catering to the domestic market. It will gradually increase its output to 0.3Mt/yr. A second stage expansion is expected to take capacity up to 1Mt/yr.

"The team at Sri Lanka Ports Authority (SLPA) were all supportive," said Thatta's chief financial officer, Muhamad Taha Hamdani. "At the last meeting with SLPA chairman, he was very supportive. There was a certain issue (but this) was solved within 15 to 20 minutes."

Thatta Cement chief executive Fazlullah Shariff said the firm had been exporting more than 0.1Mt/yr of cement to Sri Lanka since 2011 and that the firm had acceptance among constructors in the country. He said the grinding plant would not be limited to clinker from Pakistan but would also accept clinker from other countries depending on the international movement of prices.