Displaying items by tag: market

Poland: Holcim has entered into an agreement to acquire waterproofing, adhesives, polystyrene products and plaster producer Izolbet. Izolbet employs 170 people and operates four production plants in Budzyń, Gostynin, Kleszczów and Chmielów, with most of its business in the high-growth repair and refurbishment market. Holcim says that the new acquisition will help to strengthen its footprint in the renovation, thermal insulation and finishing segment.

Europe, Middle East and Africa region head Miljan Gutovic said “Speciality building solutions have been a key focus for expanding Solutions & Products in Europe, notably with the recent acquisitions of PRB Group in France and PTB-Compaktuna in Belgium. I’m excited to be welcoming all of Izolbet’s employees into the Holcim family, to unleash our next chapter of growth together.

China Daily ran a story this week entitled “Steel and cement don't reflect China's growth story any more.” The piece reassured English-language readers that the country’s economy is moving on and that recent falling production of cement simply reflected the “profound changes China's economic structure is undergoing.” Profound is the right word here given that China is home to the world’s largest cement sector.

Graph 1: Cement output by quarter in China, 2019 - 2022. Source: National Bureau of Statistics of China.

Data from the Ministry of Industry and Information Technology shows that cement output fell by 12% year-on-year to 387Mt in the first quarter of 2022. This compares to 7% and 15% falls in the third and fourth quarters of 2021 respectively. On an annual cumulative rolling basis, output previously hit a low of 2.22Bnt in March 2020 as the initial coronavirus outbreak was brought under control. Output then surged to a high of 2.53Bnt/yr in April 2021 before it started to fall in the autumn of 2021. On a monthly basis, output volumes fell by 5.6% year-on-year to 187Mt in March 2022.

As covered in last week’s column (GCW 555), the financial results from the larger Chinese cement producers have also suffered in the first quarter of 2022. CNBM’s total operating revenue fell by 1% year-on-year to US$7.29bn in the first quarter of 2022. Anhui Conch’s revenue fell by 26% to US$3.85bn and China Resources Cement’s (CRC) turnover fell by 18% to US$889m. Of these three only CRC has released cement sales volumes. Its sales volumes of cement and clinker decreased by 34% and 12% respectively.

In its own analysis, the China Cement Association (CCA) has summarised the current situation as one of rising costs, falling demand and declining benefits. The latest large-scale coronavirus lockdowns and a poor real estate market have hit demand. Rising energy and freight prices have increased the cost of cement. Together, higher costs and falling demand have hit the profits of the cement producers. CNBM’s net profit, for example, fell by 9% to US$420m. Regionally, the CCA observed that the losses of the northern-based producers had increased and that the profits of the southern producers had started to fall sharply also. Another interesting point it made was that the year-on-year decline in March 2022 was slower than compared to the first quarter as a whole and that high levels of inventory may have made March 2022 look worse than it actually was. The association is now pinning its hopes upon demand and prices picking up again later in the second quarter after the current quarantine controls are eased and the government curbs high coal prices.

The CCA’s take doesn’t seem unreasonable, although the first quarter of 2022 was previously deemed to be a continuation of the trouble the Chinese cement sector experienced in the autumn of 2021. Possibly the first quarter has turned out worse than expected but the monthly output in March 2022 has started to look like it might be a tail-off from the worst. The period to watch remains the second quarter of 2022. Looking more widely, energy shocks from the war in Ukraine couldn’t be easily predicted but coal prices were already becoming a concern in the autumn of 2021. China’s renewed zero-Covid policy meanwhile is starting to look unpalatable both economically and socially. Throw in a continued slowdown of the real estate sector and China Daily’s profound pronouncement about the future of cement may prove accurate.

Pakistan: Cement producers in Pakistan sold 44.3Mt of cement in the first 10 months of the 2022 Pakistani financial year, which runs from 1 July 2021 to 30 June 2022, down by 8.2% year-on-year from 48.3Mt in the corresponding period of 2021.Members of the All Pakistan Cement Producers Association (APCMA) record domestic deliveries of 39.5Mt, down by 1.8% from 40.2Mt, and exports of 4.8Mt, down by 40% from 8.02Mt.

The association said that political and economic uncertainty in March 2022 had stalled construction sector investments. It called on the government to help to increase sales and reduce the cost of cement production.

Uzbekistan: Kyrgyzstan-based Kant Cement has announced plans to open a sales office in Uzbekistan. Kant Cement is a subsidiary of United Cement Group and operates the Kant and AC cement plant in Kyrgyzstan’s Chüy Region.

France: Vicat recorded first-quarter sales of Euro789m in 2022, up by 12% year-on-year from Euro707m in the first quarter of 2021. The group reported ‘solid’ year-on-year consolidated sales growth across all of its regions, with price rises offsetting negative volume effects. Cement sales grew by 7.4% in France, 4.1% in the rest of Europe, 18% in the US, 26% in Brazil and 8.5% in Africa. The Russian invasion of Ukraine did not manifest in any impacts on group activity in the quarter. Vicat estimates that in order to offset higher power costs it will need to raise its cement prices by 15% year-on-year in 2022 as a whole.

Group chair and chief executive officer Guy Sidos said “Vicat’s first-quarter sales performance reflects the dynamism of its markets, despite a high basis of comparison.” He continued “In a global environment providing little visibility in the short term, especially as regards energy costs, we are executing our strategy to improve our production performance, make greater use of secondary fuels and implement a pricing policy tailored to this new environment in pursuit of our operational, environmental and societal targets."

Denmark: FLSmidth’s sales were US$670m in the first quarter of 2022, up by 27% year-on-year. Its earnings before interest, taxation and amortisation (EBITA) rose by 59% to US$43m. The supplier’s cement business recorded a sales increase of 10%. This contributed to a continuation in the ‘positive trend’ in earnings from the end of 2021, along with improvements from executed reshaping activities. The business made a property sale worth US$3.27m. In light of the results for the quarter, the company announced that it has maintained its guidance of US$2.49 – 2.71bn consolidated sales and US$783 – 855m in cement business sales in 2022.

Chief executive officer Mikko Keto said “The first quarter of 2022 saw a strong momentum in order intake driven by both mining and cement.” Keto expanded “Our cement business has continued its positive development on improving profitability.”

Regarding the on-going Russian invasion of Ukraine, he said “Our key priority in this challenging time of war has been on the safety and well-being of our employees. We closely follow this tragic situation to ensure we take the right responsible decisions from a humanitarian, legal, and financial point of view.”

China: Cement output fell by 12% year-on-year to 387Mt in the first quarter of 2022. Data from the Ministry of Industry and Information Technology also shows that cement output volumes fell by 5.6% year-on-year to 187Mt in March 2022, according to the Xinhua News Agency. The China Cement Association has blamed this on the latest local coronavirus wave, limited construction project funds and poor weather.

Kenya: Bamburi Cement’s net profit was US$11.9m in 2021, up by 22% year-on-year from 2020. The company attributed the growth to increased domestic selling prices in Kenya, due to a higher proportion of premium products sales and targeted price actions in the retail segment.

Managing director Seddiq Hassani said that he envisages cement demand growth in Bamburi Cement’s markets in the rest of 2022, supported by a stable economic environment. He looked optimistically to possible export growth arising from the Democratic Republic of Congo’s admission into the East African Community (EAC) in March 2022. He further noted the impact of the Rwanda-Uganda border closure as a downside risk.

Mexico: Cemex recorded consolidated sales of US$3.77bn in 2022, up by 13% year-on-year from first-quarter 2021 levels. The group recorded operating earnings before interest, taxation, depreciation and amortisation (EBITDA) growth of 3% year-on-year, to US$691m. Cemex said that sales growth in its Europe, Middle East and Africa region led the earnings increase, supported by strong underlying demand conditions with robust volume growth in Europe and the US. It recorded double-digit like-for-like price rises across its global operations. During the quarter, group CO₂ emissions fell by 4% year-on-year.

Chief executive officer CEO Fernando González said “We are quite pleased with our first quarter performance despite the unprecedented global macro challenges. Against the backdrop of the worst inflation headwinds in more than 40 years, we achieved strong pricing traction across our products. Given the tight supply and demand dynamics in most of our markets, we are optimistic that we can recover input cost inflation. In addition, our diversified energy, supply chain and Climate Action strategies are paying off and helping us respond to energy cost pressures.”

Regarding the quarter’s sustainability achievements, González said “Our performance gives me great confidence that we can reach not only our 2030 climate goal but also our Net Zero ambition.”

South Korea: Finance Minister Hong Nam-ki has announced plans for a further increase to his country’s coal imports from Australia in order to enable cement production to continue and prevent a shortage. The Yonhap News Agency News has reported that the government plans to accelerate customs clearance processes around the fossil fuel. Hong added that the government will ‘sternly deal with any illegal hoarding or price fixing’ of cement.