Global Cement News
Search Cement News
Pouring into the Philippines cement industry
Written by Global Cement staff
29 May 2013
Three stories this week from the Philippines build a complex picture of a booming cement industry. San Miguel purchased a 25% stake in Northern Cement, Lafarge Republic announced its capital expenditure budget for 2013 and the country's on-going price probe reported on its progress.
San Miguel's entry into the market should raise the most interest since its president stated that the company intends to spend US$750m on the construction of three cement plants. Each plant will have a cement production capacity of 2Mt/yr with construction timed to start in 2013 and finish by the end of 2015.
This level of investment, if it happens, surpasses the last major build announcement in the Philippines. In May 2013 Holcim released details of a US$550m plant in Bulacan with a capacity of 2.5Mt/yr. Some indication of the viability of San Miguel's plans may be gleaned from the comparative costs of the projects. San Miguel's plans will cost US$125/t of installed capacity, less than half of Holcim's US$220/t. Possible reasons for this difference may lie in San Miguel releasing the wrong figures or a reliance on lower build quality. However San Miguel's sheer size - its net income was US$2.25bn in 2011 - may itself herald the start of a major player in the domestic cement industry.
Meanwhile the Department of Trade and Industry (DTI) has continued to investigate why the price of cement has risen since 2012. Currently prices are about 5% above the suggested retail price for cement. Cement producers blamed the increases on a higher cost of coal.
The Philippines is currently experiencing massive cement sales increases. In 2012 sales rose by 17.5% to 18.4Mt from 15.6Mt in 2011. With a total capacity of 21Mt/yr and a capacity utilisation rate of 85% in 2012, this growth looks set to continue in 2013, as confirmed by more rises in sales in the first quarter.
Power Cement announces new directors
Written by Global Cement staff
29 May 2013
Pakistan: Power Cement, formerly Al Abbas Cement Industries, has released the names of its directors for the period to 2016. Kashif Habib, Samad Habib, Muhammad Ejaz, Nasim Beg, Syed Salman Rasheed, M Yousuf Adil and Muhammad Yahya Khan are all set to be elected unopposed at the company's extraordinary general meeting to be held on 4 June 2013 in Karachi.
Indonesia: PT Semen Baturaja is seeking to raise up to US$163m in an initial public offering (IPO) in June 2013, officials have said. It will use the proceeds to increase its cement production capacity to 2Mt/yr.
The state-owned cement producer plans to sell 2.34bn shares, equivalent to 23.8% of the company after the issuing. It will sell the shares in an indicative price range of US$0.05–0.07 each, according to State Enterprises Ministry strategic planning deputy Wahyu Hidayat.
"We're targeting production to reach 2Mt this year from 1.2Mt in 2012. We will invest about US$270m in a new 1.85Mt/yr plant. We aim to start operation of the additional capacity in the fourth quarter of 2016," said chief executive Pamudji Raharjo. The offering is scheduled for between 20 June 2013 and 24 June 2013.
Tanzania: Dangote Cement has started construction of a US$500m cement plant in Mtwara, Tanzania. The 3Mt/yr plant is expected to be completed by March 2015. Company president Aliko Dangote said commencement of the Tanzania plant is part of the strategy of the group's strategy to increase its cement production capacity to at least 29Mt/yr by 2015.
"Our investment in this sector, which is outside the traditional mining sector, is to take advantage of the abundance of limestone in the country and work towards making Tanzania self-sufficient in cement production. We must commend the government and people of Tanzania for recent public sector and banking reforms as well as revamped and new legislative frameworks, which have spurred private sector-driven investment," said Dangote.
Lafarge prepares US$47m expansion in 2013 29 May 2013
Philippines: Lafarge Republic has set aside US$47m for capital expenditure in the Philippines in 2013 to increase cement production capacity to meet demand. President Renato Sunico made the announcement at the company's annual stockholders' meeting in response to a profit of US$23.6m in the first quarter of 2013, a 35% increase year-on-year from US$17.5m in 2012. He added that the industry expects total demand for cement to increase by 6 to 8% in 2013.
Lafarge Republic is increasing its capital expenditure for a new mill at its plant located in Teresa, Rizal which will have a capacity to produce 850,000t/yr from 2015 onwards. It is also automating the processes of some of its plants, including that in Norzagaray, Bulacan. Sunico added that various productivity improvement projects are also expected to deliver additional capacity to supply the rising cement consumption. He noted that the company is planning to add an additional 2.3Mt/yr in cement milling capacity by 2015 to its current capacity of 6Mt/yr.
"We are predominantly strong in Luzon because all our four plants are here. We wanted a national footprint so we are moving to Davao, Iloilo, Batangas and mostly to Cagayan," said Sunico. He added the company is relying on the growth of high-rise real estate projects, increasing remittances of overseas Filipino workers and increases in the call centre industry to boost cement demand.
In 2012 Lafarge Republic spent US$35.3m on improvements at its cement plant in Danao City, for its Iligan City pre-heater project and the construction of the feeding system for refuse-derived fuel (RDF) at its Bulacan plant.