Global Cement News

Nigeria: One worker was killed on 31 July 2013 at the Dangote Cement Gboko plant when he was hit by falling limestone, according to the All Africa Media Group. The deceased labourer, Solomon Ashir, was killed instantly.

Ashir was from the local community, which reacted angrily towards Dangote following his death. Many were of the opinion that health and safety measures at the plant had been deficient.

Bonfires were lit on the roads used to access the plant in the hope of trapping key staff members in the plant and Ashir's body was even carried into the office of the local Assistant General Manager (AGM) in charge of mines. He had fled the office in fear for his life before the protesters arrived.

Local media reported that Dangote representatives took the body to the local hospital after the protesters had vacated the office. Dangote's community relations manager could not be reached for comment.

Meanwhile, Benue State Police Public Relations Officer, Daniel Ezeala, confirmed that the incident had taken place and said that an investigation into the cause of the incident was underway.

New Zealand: Holcim New Zealand Ltd has announced that it will spend more than US$80m on the construction of an import terminal and related infrastructure that will allow it to import and distribute bulk cement to the New Zealand market, according to local news agency Scoop Independent News. The terminal is expected to be operational in two to three years time. The location of Holcim New Zealand's new import terminal is yet to be finalised and the company is investigating options at a number of New Zealand ports.

Announcing the decision, Holcim New Zealand Ltd managing director Jeremy Smith said, "This represents a substantial commitment by Holcim to the New Zealand building materials market. It means we will be able to leverage off the vast resources available through the Holcim Ltd worldwide supply network to ensure that our New Zealand customers receive cement of a quality and specification suitable for New Zealand conditions."

Once operational, cement imported through the new terminal will replace local production at the company's Westport cement plant. Holcim New Zealand has signalled for some years that the Westport plant was not sustainable in the long term. The decision also means that the long-delayed proposal for a new cement plant at Weston, near Oamaru, is on hold for the foreseeable future. Holcim will, however, maintain ownership of its land assets for the foreseeable future.

"We recognise that this decision has an impact for our staff, customers and for the Westport and Weston communities," said Smith. "It's one we've arrived at after extensively investigating a range of cement supply options and we will be working through the implications with those who will be impacted by the move. For the current economic environment, constructing an import terminal and importing cement is simply the most appropriate decision."

Half-year results from some of the major global cement producers are starting to present a detour from the usual European doom-and-gloom and optimism for the BRIC economies (Brazil, Russia, India, China and South Africa) of recent years.

Yes, Europe is dragging balance sheets down (particularly certain countries), but some indicators are starting to stabilise following a good second quarter. Very possibly the cost cutting programmes of the multinational cement producers are starting to kick in. Alternatively, perhaps these cement markets have finally bottomed out.

Lafarge has suffered a bad six months with cement sales down by 6%. However, its sales decline in Western Europe has slowed down with the worst news now coming from Central & Eastern Europe. Cemex has reported a better second quarter in 2013 with overall sales up by 4%. It too can show softened declines in its European territories. Italcementi and its subsidiary Ciments Français both saw revenues falling in the half year but either at a reduced rate or with a slowdown in the rate that earnings before interest, taxes, depreciation and amortisation (EBITDA) are declining.

Only HeidelbergCement's results have resisted any direct signs of an improvement in Europe. Overall revenue has remained stable for the half year with its profit up year-on-year. In Europe its revenue reduction has worsened to 4.7% for the half year. However it did observe a 'significant' improvement in cement sales in the UK.

Meanwhile, one of the cement industry's more reliable markets in recent years – India – is showing signs for concern.

As our news roundup this week reports, the country's largest standalone cement producer, UltraTech, had its profits drop year-on-year by 13.5% to US$111m for the most recent quarter and its net sales actually dropped slightly. Holcim has also been active in India with the announcement that it is simplifying its corporate structure to cut costs. In addition Lafarge reported that its market growth in India was 'subdued', considerably down from the 24% growth in cement sales seen in that country in the first half of 2012.

The news from UltraTech and Lafarge suggest that the rate of growth of the Indian cement industry is slowing. The unanswered question from Holcim's activity in India is whether they are doing it to counteract European losses or to counteract a loss of profitability in India.

Holcim's half-year results will make interesting reading when they are released in mid-August 2013 and may help to decide whether the worst is over in Europe.

India: JK Cement has appointed Shri Jagendra Swarup as an additional director on the board of the company until its next annual general meeting.

Germany: HeidelbergCement has announced improved operating results in the second quarter of 2013 despite claims that poor weather conditions in Europe and North America had hampered its performance. The group's revenue was stable at Euro3.8bn for the three months to 30 June 2013 and at Euro6.56bn for the first six months of 2013.

HeidelbergCement's net profit for the second quarter of 2013 was Euro469m, a 92% increase year-on-year from Euro245m in the second quarter of 2012. Over the first half of 2013, its profit rose by Euro285m from just Euro86m in the first half of 2012.

"HeidelbergCement has successfully continued the positive earnings development in the second quarter despite challenging conditions," said Dr Bernd Scheifele, chairman of the managing board. "The measures that we introduced to improve margins are showing results. We were able to implement price increases in our principal markets and our efficiency improvement programmes are progressing according to plan."

The group saw regional variation in its cement sales during the period under review. While construction activity in Europe and parts of North America was hindered due to heavy rain and flooding in some areas, HeidelbergCement's cement deliveries benefited from the sustained increase in demand in its Asian and African markets as well as from the continued economic recovery in other parts of North America, especially in the southern US.

During the second quarter, the group's cement and clinker sales volumes dropped slightly by 0.8% to 24.3Mt from 24.5Mt in 2012. The Asia-Pacific group area experienced the strongest growth in sales volumes, followed by North America and Africa-Mediterranean Basin. Cement sales volumes in the Western and Northern Europe group area remained broadly stable. Deliveries in the UK were more than 10% above the values of 2012 due to the emerging recovery in private residential construction. Sales volumes in Germany and in the bordering countries of eastern Europe were adversely affected by heavy rainfall and flooding.

The Eastern Europe-Central Asia group area recorded a decline in sales volumes of more than 10%. Poland, Romania and the Czech Republic were the most severely affected. In addition, the harsh austerity policies of these countries had a negative effect on public infrastructure construction. In the first half of 2013 cement and clinker sales volumes decreased slightly by 0.8% to 42.4Mt from 42.7Mt in 2012.

Looking ahead, in North America, HeidelbergCement still expects ongoing economic recovery and consequently a further increase in demand for building materials, especially from residential construction and the raw materials industry. A three-layered economic development is anticipated in Europe and central Asia. It says that the markets in Germany, northern Europe and the UK should continue to develop positively and expects those in central Asia to remain stable. In Benelux and eastern Europe a continuing weak development of the economy and demand for building materials is anticipated. In Asia and Africa, the group still expects sustained positive demand.