Global Cement News

India: Suman Mukherjee, CEO and Managing Director of Shree Digvijay Cement Company, has resigned from the cement producer due to personal reasons. His resignation takes effect from 31 October 2013. He will also leave the board of directors at this time.

If you try visiting the website of the United States Geological Survey (USGS) this week you are going to be disappointed.

As part of the on-going US federal government shutdown the site has been marked as 'unavailable'. Anyone in search of US cement data and a raft of other national and international statistics will have to wait. Ditto the US Environmental Protection Agency (EPA). Although its website is still live, its last tweet on 1 October 2013 was, 'The federal government is currently shut down.'

Some cement producers in the US may be relieved that the EPA is on a hiatus. However if you cast your mind back to the Portland Cement Associations' (PCA) optimistic growth forecast in September 2013 you may remember the following from PCA chief economist Ed Sullivan. "Assuming Congress has learned its lesson from the fiscal cliff and will take a more rational approach with the upcoming debt limit discussions, political uncertainty and its adverse impact on the economy is expected to dissipate."

Whoops.

The construction industry will be watching carefully to see how planned future infrastructure spending emerges from the debacle. If it gets cut in the horse-trading then US cement consumption growth will take a blow. Meanwhile, if the residential construction market takes a knock due to all the uncertainty and general reduction of money in the economy from federal employees not working then cement consumption gets hit immediately. Hence Sullivan's get-out comments about Congress.

Perhaps what will really concentrate minds on the fragile state of the US construction economy is if a Chinese company buys into the cement industry, as is happening elsewhere around the world. As reported this week, the state-owned Chinese aerospace and defence company AVIC International made an offer to shareholders to take over German cement plant builder KHD Humboldt Wedag.

The US federal government needs to get back to work.

Nigeria: Lafarge has announced the appointment of Guillaume Roux as the Country Chief Executive Officer for Nigeria and Benin Republic effective from September 2013. He succeeds Jean-Christophe Barbant.

Roux, a joint French and US national, is a graduate of the Institut d'Etudes Politiques in Paris. He joined the Lafarge Group in 1980 as an Internal Auditor.

After holding several key positions in the Finance Department in France and the United States, he was appointed as Vice President, Strategy and Marketing for North America in 1996 and later as Chief Executive of Lafarge operations in Turkey in 1999.

In 2002 he was given responsibility for Lafarge's cement operations in South-East Asia, a position he held until he joined the Executive Committee of Lafarge Group as Executive Vice President and Co President of the Cement Division, with the responsibility for the cement business in Eastern Europe, the Middle East and Africa in 2006.

Roux is a member of the Executive Committee for Lafarge Group and combines this role with his current responsibility for Lafarge's operations in Nigeria and Benin Republic. This is the first time a member of the Group Executive Committee will also be a Country CEO.

Well, it seems like they were serious.

The UK Competition Commission has provisionally decided that Lafarge Tarmac should sell off one of its cement plants in the Midlands. The Commission also wants the sale to exclude buyers from any pre-existing UK cement producer. The door is open from Holcim or CRH downwards to enter the UK market. Although if the enforced Lafarge sale of Hope to Mittal Investments in 2012 is indicative, it may well be to an industry outsider.

If the move goes ahead it will open up the Midlands and north of England from four cement producers - Hope Cement, Lafarge Tarmac, Hanson and Cemex - to five. Lafarge Tarmac's cement production capacity lead of nearly 4Mt/yr will be knocked down to nearer 3Mt/yr, putting it level with Hanson Cement's production capacity.

Unsurprisingly Lafarge Tarmac is not best pleased, putting out the following in response to the commission's announcement. "The Commission's assumptions and reasoning have serious flaws and the biggest loser in this process will be the customer. There is strong evidence to demonstrate there is effective competition in the sector – with new players having recently entered the marketplace."

The Commission also wants to increase competition in the supply chain for ground granulated blast furnace slag (GGBS). According to the Commission findings Hanson dominates the UK GGBS market and Lafarge Tarmac controls the market for its precursor, granulated blast furnace slag (GBS). So production facilities may need to be sold by both Hanson and Lafarge Tarmac.

As an aside it's worth noting that the Belgian Competition Council recently imposed fines due to anti-competitive practices also related to GGBS. Also, elsewhere in the news this week Irish GGBS cement producer Ecocem is aligning itself with the EU carbon roadmap to 2050, partly at least because its product produces less CO₂ per tonne of cement. Whoever or whatever controls the supply of GGBS in the UK has implications for how emissions are lowered in the cement sector.

Other suggested measures from the Commission such as restricting the publication of UK cement market data seem problematic. Although it may make it more difficult for UK cement producers to collude it will also make it harder for related businesses (including press and industry analysts like Global Cement) to understand what is happening at any given time.

Finally, we have to ask what the effects of the Commission's suggestions might be at the start of an uncertain recovery in the UK construction market might be. According to the Minerals Production Association cement production fell from 8.5Mt in 2011 to 8Mt in 2012, the first decrease since 2009. 2013 seems set for modest growth on 2012. The implications of Commission's plans - if they happen – could be huge.

Russia: André Martin has been appointed as Chief Executive Officer of Lafarge Russia effective from 16 September 2013. He had been the Senior VP, Industrial Customer Segment at Lafarge corporate head office in Paris since 2012. Martin replaces Alex de Valukhoff.

A graduate of French management school ESSEC, Martin joined Lafarge in 1995 as cement M&A in Central and Eastern Europe manager. Highlights in his career include becoming president of Lafarge-Agregate-Betoane in Romania in 1999 and joining Lafarge-Beton de Paris as President in 2002. In 2005 André Martin moved to North America as VP Marketing Aggregates and Asphalt & Paving at Lafarge and he became President at Lafarge East US Aggregates & Asphalt in 2008.