
Displaying items by tag: demand
Housing demand in New Zealand falls by 20% year-on-year
11 April 2023New Zealand: Cement producer and construction firm Fletcher Building has reported a 20% year-on-year drop in domestic housing demand during the first quarter of 2023. The Australian newspaper has reported that the company attributed the decline to ‘soaring’ interest rates in the country. It now expects to sell 800 residential units in 2023, 20% below its previous expectation of 1000 units. Fletcher Building said that building materials costs rose by 5 – 10% between 2020 and 2022, due to ‘higher input and commodity costs’ in production.
CEO Ross Taylor said that Fletcher Building faces labour shortages in its civil construction business, but maintained a strong order pipeline. Taylor said “It won’t drive an uptick in volumes but it will underpin the volumes in the next three to four years.”
Pakistan: Local cement producers delivered 30.6Mt of cement to customers in Pakistan during the first nine months of the 2023 financial year, down by 15% year-on-year from 36.1Mt in the corresponding period of the 2022 financial year. The Dawn newspaper has reported that producers exported 3.04Mt of cement, 9% of total sales of 33.6Mt. Exports fell by 35% from 4.64Mt, while total sales fell by 18% from 40.8Mt.
The All Pakistan Cement Manufacturers Association (APCMA) said “Continued political instability, currency devaluation and poor economic conditions are badly affecting all the industrial sectors, including the cement industry.” It continued “Construction activities in both the northern and southern regions of the country have been declining significantly over past months. Employment opportunities for skilled and unskilled labour attached to the construction sector are also in decline.”
Adani Group to fund growth through internal accruals
03 April 2023India: Adani Group says that it will raise funds for its 2028 capacity expansion plan through internal accruals. The producer plans to double its cement capacity to 140Mt/yr by 2028, and also double its sales to US$8.5bn that year. The Financial Express newspaper has reported that the group says its internal accruals will be 'sufficient' to realise its aims. The group is reportedly 'on track' to commence the first phase of the planned expansion in early-mid-2023. It has also set out a cost reduction roadmap with a view to becoming India's most profitable cement company.
Chair Gautam Adani says that he anticipates a 'multi-fold rise' in all-Indian cement consumption due to forecast high economic growth and the government's infrastructure spending plans.
China: China National Building Material's (CNBM) revenue fell by 16% year-on-year to US$33.4bn in 2022 from US$40.0bn in 2021. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 31% to US$5.18bn from US$7.50bn. Sales from its cement and concrete business segments fell by 18% to US$16.0bn and 29% to US$5.25bn respectively. Adjusted EBITDA fell by 42% to US$2.89bn and 7% to US$470m. Its sales volumes of cement and clinker decreased by 15% to 316Mt from 373Mt. Sales volumes of concrete decreased by 24% to 84.7Mm3 from 112Mm3.
The group said that, “In 2022, the triple pressure from shrinking demand, supply shock and weakening expectations persisted, and the complexity, severity and uncertainty of the development environment increased.” With regards to the building materials segment it blamed a declining real estate market, a poor economy and general poor demand in both the peak and off seasons. It added, “The downturn in demand has further aggravated the contradiction of overcapacity in the industry, with prices running low, coupled with a sharp rise in the cost of coal and other elements leading to escalating production costs, the production and operation situation was extremely critical.” In response the company is continuing to push for supply-side reform, promote precise staggered peak production, working on stablising the market and seeking out opportunities to supply large-scale infrastructure projects.
China: Anhui Conch Cement plans to invest US$2.81bn in capital expenditure (CAPEX) throughout 2023. The investments will go towards building new capacity, upgrading to new technologies and increasing plants' energy efficiency. The Morning Star newspaper has reported that the producer currently faces high energy costs, against a backdrop of reduced cement demand.
Anhui Conch Cement recorded sales of US$19.2bn in 2022, down by 21% year-on-year from US$24.4n in 2021.
West China Cement's sales rise in 2022
28 March 2023China: West China Cement recorded US$1.23bn in sales in 2022, up by 6% year-on-year from US$1.16bn in 2021. The producer's profit dropped by 23% to US$176m from US$230m.
Looking to the 2023 full year, West China Cement said that it expects demand in Guizhou and Xinjiang Provinces to 'remain subdued.' It noted upcoming infrastructure projects in Shaanxi Province as a source of substantial demand, but overall does not expect significant demand growth there. Meanwhile in Mozambique, the group expects its performance to remain unchanged.
Thang Thang Cement despatches cement to Central America
23 March 2023Vietnam: Thang Thang Cement has despatched a shipment of 55,000t of cement produced at its Ha Nam cement plant to a customer in Central America. Vietnam Investment Review News has reported that Lotus Cement and Commodities Trading Corporation shipped the order from Ho Chi Minh City.
Vietnamese cement producers are reportedly seeking new trade partners due to 'lingering headwinds' in the domestic and global markets.
Indian cement sector to grow to 715 - 725Mt/yr in 2027
20 March 2023India: Credit rating agency Crisil expects the Indian cement sector's capacity to expand at a compound annual growth rate (CAGR) of 4 - 5% over the four-year period up to the end of the 2027 financial year on 31 March 2027. It would thus begin the 2028 financial year at 715 - 725Mt/yr in installed capacity, compared to 570Mt/yr at the end of the 2023 financial year. The industry's total investment in the expansion is expected to be US$14.5bn. Major multi-state producers are expected to contribute over US$7.25bn (50%) of investments towards the total sum.
Over the same period, Crisil expects all-India cement demand to rise at a CAGR of 6 - 7%.
New Montego Bay cement terminal plan announced
20 March 2023Jamaica: Local investor Mark Hart plans to establish a new cement terminal at Montego Bay, St James. Hart plans to invest US$8m in the terminal's construction. The Jamaica Observer newspaper has reported that construction will commence later in 2023. Once operational, the terminal will supply local roadbuilding and hotel, home and hospital construction. Current projects in this vein include a widening of the North Coast Highway and construction of the Montego Bay perimeter road and Runaway Bay and Discovery Bay bypasses, worth a total US$274.5m, and of new hotels with a total of 20,000 rooms.
Buying House Cement operates the only existing cement terminal in Montego Bay. The company imports cement produced in the Dominican Republic by Domicem. It currently serves 10% of Jamaica's demand. Hart is chair of Cargo House Handlers, which holds a 30% stake in the importer.
Hart said " We have highways, we have hotels, we have the hospitals being built in the west, we have a lot of housing projects. The government has a very ambitious plan to provide a lot of housing units. And all these things rely on stable, well-priced cement." He continued "We are proposing to offer an alternative to the one supplier that exists so that they have stability of supply and stability of pricing for the customers, so that the construction industry can continue to do what they do."
Cementir Holding reports 2022 results
10 March 2023Italy: Cementir Holding recorded 'record' revenues of Euro1.72bn in 2022, up by 27% year-on-year from 2021 levels. Its earnings before interest, taxation, depreciation, amortisation (EBITDA) rose by 7.8% to Euro335m, also a record figure, according to the group. Throughout 2022, Cementir Holding sold 10.8Mt of cement and clinker, down by 2.8% from 11.2Mt. It attributed this to a 'general slowdown of the market,' mainly in Türkiye, Denmark, China and Belgium, especially during the second half of the year.
Chair and CEO Francesco Caltagirone noted the 'solidity and resilience' of Cementir's business model, even in spite of 'geopolitical uncertainty and more restrictive monetary conditions.' He said "We have already achieved significant results in terms of decarbonisation, innovation and transparency, evidenced by the improvement of all environmental, social and governance (ESG) ratings and we want to continue on this virtuous path, in the interest of all stakeholders."