Global Cement News

US: Vulcan Materials Company saw its loss increase year-on-year to US$54.8m in the first quarter of 2013, from US$52.1m in the same period of 2012. The US construction materials company attributed the widening loss to bad weather, lower production volumes and rising costs.

"Housing starts, as measured on a seasonally adjusted annual rate, are now more than 1 million, indicating the beginnings of a broad-based recovery in residential construction. Growth in residential construction activity and its traditional follow-on impact to private non-residential construction underpins our expectations for volume and earnings improvement in 2013," said Don James, chairman and chief executive officer.

Despite the loss, in revenue increased slightly to US$538m. Vulcan shipped 248,000t in the first quarter of 2013, for internal and external consumption, a 14% rise from the same period in 2012. For the remainder of 2013 Vulcan expects its cement business earnings to improve in 2013 due to lower production costs.

Chinese and Iranian companies have released information on two new projects in Iraq. Chinese cement equipment provider Sinoma has signed a contract with the Faruk Investment Group to build a cement clinker production line and the Islamic Republic News Agency has reported Iran's intention to build a 2Mt/yr plant.

Sinoma's project seems targeted at the domestic market. It is based at Sulaymaniyah, at one of Faruk Group's two plants that it runs with Lafarge near the northern Kurdish city. Lafarge also runs a third plant in Kerbala that announced the arrangement of a US$70m loan for renovations in January 2013. Lafarge holds a cement production capacity of 6.5Mt/yr, 20% of Iraq's total installed capacity of 32.5Mt/yr. Although, following years of neglect installed capacity and actual cement produced can vary significantly. Faruk Group's decision to choose Sinoma marks a move away from the German firm ThyssenKruppPolysius whom they have used previously. The new line will be Sinoma's seventh in Iraq through its Nanjing subsidiary.

Meanwhile, the Iranian project carries more international motives because the clinker for the plant will come exclusively from Iran. The build is based in the southern Muthanna province and is being overseen by the Iranian Azar-Abadegan Khoy cement plant. As reported in late January 2013, clinker stocks rose in Iran due to a decline in cement demand in the country. Iraq is one of the countries Iran has been able to export cement to during the 2012 – 2013 Persian year. In this context expanding into Iraq makes a lot of sense to combat potential Iranian overcapacity.

In addition all the products made at this plant will carry Iranian branding. Given that this plant is in southern Iraq relatively near to the Saudi border this will complicate any plans to sell stock across the border. As we report this week in Global Cement Weekly, Saudi cement producers have been asked to build reserves of cement to manage the shortage better.

Both projects reveal some of the issues facing Iraq's cement industry, specifically Iraq's redevelopment and the pressures it faces lying between massive demand for cement in Saudi Arabia and overcapacity in Iran. After years of low capacity utilisation rates, Iraq is predicted to hit a production capacity of 22Mt/yr by the end of 2014 with demand expected to reach 35Mt/yr.

For more information on the Iraqi cement industry read Global Cement Magazine's article.

Oman: Raysut Cement Company is planning to build a cement-handling terminal at Duqm port with other investors. At an industry seminar reported upon by the Times of Oman, Mohammed Ahmed Al Dheeb, group chief executive officer of Raysut Cement, said the cement handling terminal will be completed within ten months of signing a lease agreement with the Special Economic Zone Authority at Duqm. Al Dheeb added that Raysut is also planning to develop mines in Duqm for limestone.

Raysut Cement has four cement handling terminals: in Muscat, Sohar, Mukalla, and Aden. It has four production lines in Salalah with a total cement production capacity of 3Mt/yr and a fully integrated production facility in Ras Al Khaima with a capacity of 1.5Mt/yr. Raysut also owns two ships for transporting cement to different parts of Oman and other countries.

Greece: Greek authorities have blocked a request made by Heracles Cement to lay-off 229 workers from its plant in Halkis. The move would have shut down the plant. The Supreme Labour Council of the Employment, Social Insurance and Welfare ministry, voted to reject the plan made by the Lafarge subsidiary and recommended to Labour Minister Yiannis Vroutsis not to approve the demand.

Heracles Cement announced in late March 2013 that it had stopped operations at its plant in Halkida, as part of a restructuring program of its production structure. The restructuring programme was aimed at helping the Lafarge subsidiary cope with Greece's recession in its construction sector.

Peru: Cementos Pacasmayo had reported a 13% rise in its net income to US$17.1m for the first quarter of 2013 from US$15.1m in the same period in 2012. The Peruvian cement producer's sales rose by 5% to US$110m from US$105m. The company said its cement sales volume rose by 6.5% to 569,300t from 534,500t.

"The 'self-construction' segment continued to drive sales as a result of economic growth registered in the northern region of Peru," the company said. It also cited favourable financing conditions and the creation of quality jobs for driving growth in private consumption as reasons for increased cement sales volumes.