Global Cement News

South Africa: Pembani Group, an investment holding company, has become the controlling shareholder of South Africa's second-biggest cement producer, AfriSam, by way of a debt restructuring process. Following a debt restructuring process the Government Employees Pension Fund will hold about 57% of the company and Pembani 38%.

"The company's balance sheet was significantly strengthened by an overall debt reduction in excess of US$1.62bn. A consortium of local financial institutions provided the company with a sustainable long-term debt solution," said AfriSam CEO Stephan Olivier.

AfriSam was severely burdened by debt created by a leveraged buyout in 2007. It nearly defaulted on its debts in 2011. In 2012, all the relevant stakeholders agreed to a consensual restructuring of the debt, whereby the government Employees Pension Fund and Pembani Group injected significant equity into the business and Pembani would exercise strategic control over AfriSam's board.

Vietnam: Companies in Vietnam sold 7.55Mt of cement in the first quarter of 2013, a 15% rise year-on-year compared to 2013 according to the Ministry of Construction. This occurred despite a year-on-year fall of 30% to 2Mt in March 2013. The country's cement production increased by 15% year-on-year to 8.14Mt, according to local media.

Due to the increase in cement sales between January and March 2013, the country's cement inventory dropped by 45% year-on-year to 40,000t. Local cement makers currently have huge inventories and domestic demand remains low due to a frozen real estate market. High production costs, high lending interest rates and rising input costs have also put a burden on local cement producers, the ministry noted.

The ministry predicts that the country's cement sales will rise by 5 - 8% year-on-year to 48 – 49Mt in 2013, equal to total sales of 2011. In 2012, Vietnam's cement sales stood at 53.6Mt, of which 45.5Mt was sold in the domestic market, down 7.1% on-year, while 8.1Mt of cement and clinker was exported, up 30%.

Brazil: Votorantim Cimentos saw its net income nearly double in 2012, reaching US$801m in 2012 compared to US$413m in 2011. Its sales revenue rose by 9% to US$4.69bn in 2012 from US$4.30bn in 2011.

"The combination of a favourable market alongside the opening of new factories and mills allowed a 4% increase in sales volume in Brazil, reaching 24Mt," said Votorantim Cimentos in its 2012 results report.

Votorantim's profit was boosted in 2012 by a US$132m gain recognised on stake swap in which Votorantim Cimentos gave its stake in Portuguese cement maker Cimpor to InterCement in exchange for assets in Spain, Turkey, Morocco, Tunisia, China and India, and a deposit in Peru. Additionally the company obtained US$141m in non-cement operating revenue, mainly from tax benefits.

The firm finished 2012 as the world's eight largest cement producer, with a total production capacity of 52.2Mt/yr, including 34 cement plants and 22 grinding plants, according to the report.

Vietnam: The chairman of Ha Giang Cement JS Company has been prosecuted in a fraud case for an amount in excess of US$344,000.

Viet Nam News reports that police investigations dating back to September 2012 show that Vu Duy Chanh signed contracts to buy two mills without the approval of Ha Giang Cement's management board approval. Chanh then used the contracts as security for bank loans. One of the contracts was reportedly falsified to buy a fictitious machine while Chanh illegally used and sold the secondary machine at a diminished price.

China: Shanghai's municipal government has announced that it will stop cement production when air pollution reaches 'heavy' or greater levels. The plan may affect at least three cement plants in the Shanghai area. The move follows a similar plan in Beijing that was introduced in 2012.

According to the plan, emergency measures will be taken when the PM_2.5 air quality index rises above 200µg/m³ for 18 hours and looks likely to continue. PM_2.5 refers to the measurements of particulate matter smaller than 2.5μm and the World Health Organization considers the safe daily level to be 25µg/m³. The average density of PM_2.5 in Shanghai for the first three months of 2013 was 73 µg/m³. China's daily limit is 75µg/m³ and its yearly limit 35µg/m³.

Other emergency measures include alerting the public, restricting production in highly-polluting industries and reducing the number of vehicles on the roads. In addition power plants will be required to use high-quality coal to reduce pollution, vehicles transporting construction materials and waste will be ordered off the roads and any construction work causing dust will be shut down.