Global Cement News

Mexico: Cemex has reported that consolidated net sales reached US$4.0bn during the second quarter of 2013, an increase of 4% compared to the comparable period of 2012.

Operating earnings before interest, tax, depreciation and amortisation (EBITDA) also increased by 4% year-on-year during the quarter to US$730m. Adjusting for the higher number of business days in its operations during the quarter, consolidated net sales improved by 2% and operating EBITDA increased by 2% year-on-year. Operating earnings before other expenses, net, during the second quarter increased by 24% to US$451m. Cemex said that an increase in consolidated net sales was mainly due to higher prices in local currency terms and higher volumes in most of its regions. However, controlling interest net income was a loss of US$152m, an improvement over a loss of US$187m during the same period of 2012.

Fernando A González, executive vice president of finance and administration, said, "We are pleased to report that this is the eighth consecutive quarter with year-over-year improvement in EBITDA. We also saw an increase in our consolidated prices in local-currency terms for cement, ready mix and aggregates during the quarter. On the cost side, our alternative fuel substitution initiatives remain a very high priority. On a consolidated basis, our alternative fuel utilisation reached 28% during the quarter. In addition, we are implementing targeted cost-reduction initiatives in Mexico and northern Europe, which we expect will result in savings of about US$100m during the second half of 2013."

Net sales in Cemex's Mexican operations increased by 2% year-on-year in the second quarter of 2013 to US$847m. Operating EBITDA decreased by 17% to US$250m. In the United States, Cemex reported net sales of US$868m for the quarter, up by 9% year-on-year compared to the 2012 quarter. Operating EBITDA increased to US$80m in the quarter, compared to US$27m in the same quarter of 2012. Cemex's operations in South, Central America and the Caribbean reported net sales of US$561m during the second quarter of 2013, representing an increase of 6% over the same period of 2012. Operating EBITDA increased by 12% to US$211m in the second quarter of 2013, from US$189m in the 2012 quarter.

In Cemex's Northern Europe region, net sales for the second quarter of 2013 decreased by 1% to US$1.09bn, compared with US$1.1bn in the second quarter of 2012. Operating EBITDA was US$108m, 11% down year-on-year. Second-quarter net sales in the Mediterranean region were US$400m, 4% higher compared with the US$384m taken during the second quarter of 2012. Operating EBITDA in this region decreased by 2% to US$94m.

Operations in Asia reported a 14% increase in net sales for the second quarter of 2013 at US$162m. Operating EBITDA for the quarter was US$38m, up by 29% from the same period in 2012.

Colombia: Cemex Latam has reported that its consolidated net sales rose year-on-year by 8% to US$431m in the second quarter of 2013. The Cemex subsidiary, based in Colombia, Panama, Costa Rica, Nicaragua, El Salvador, Guatemala and Brazil, attributed the rise to higher volumes, driven by improved construction activity and higher prices. Cemex Latam's operating earnings before interest, taxes, depreciation and amortisation (EBITDA) increased year-on-year by 16% to US$166m

"We are very pleased with the favourable results in the second quarter, as evidenced by the record level of operating EBITDA margin that reached 38.5%. We are also very encouraged with the results seen so far in connection with our new strategy based on commercial solutions that are allowing us to capture incremental value," said Carlos Jacks, CEO of Cemex Latam.

By region, Cemex Latam's operating EBITDA in Colombia increased by 12% to US$103m in the second quarter of 2013 and net sales increased by 6% to US$238m. In Panama, operating EBITDA increased by 14% to US$40m and net sales increased by 8% to US$81m. In Costa Rica, operating EBITDA increased by 37% to US$19m and net sales increased by 28% to US$42m. In Cemex Latam's remaining territories operating EBITDA increased by 7% to US$21m and net sales were US$74m.

China: Hebei Jintaicheng Building Materials Shareholding Co. has ordered a Loesche vertical roller mill from Loesche Mills (Shanghai) to grind granulated blast furnace slag.

Hebei Jintaicheng has ordered a LM 4600CS2 that will produce up to 90t/hr with 4500 Blaine. The mill drive will have a capacity of 3150kW. The contract was signed in December 2011, the components have been delivered and the mill is currently being installed.

Hebei Jintaicheng, a building materials processing private enterprise founded in 2009, is located in the industrial area of Baita County, Shahe City. The company produces and sells ground granulated blast furnace slag. The project has a planned output of 500,000t/yr of ground granulated blast furnace slag.

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.

US: Ash Grove Cement Company has announced that Stuart E Tomlinson has joined the company as its vice president of manufacturing for the Midwest region and will be based in the company's home office in Overland Park, Kansas. He join will Ash Grove on 15 August 2013 and replaces Edwin Pierce, who will retire on 31 December 2013.

"Stu is a cement industry veteran and he possesses more than three decades of experience," said Ash Grove's senior vice president of manufacturing. "He is an industry leader and will be an important part of the Ash Grove leadership team."

In his new role, Tomlinson will direct Ash Grove's cement operations in the Midwest region, which includes four cement manufacturing plants in Chanute (Kansas), Foreman (Arkansas), Louisville (Nebraska) and Midlothian (Texas).