Global Cement News

Peru: Peruvian cement producer Cementos Pacasmayo has reported that it more than doubled its net income in 2012, to US$61.6m from US$26.2m in 2011. Fourth quarter income was reported having increased by 41% year-on-year to US$15.5m from US$11m in 2011. Cementos Pacasmayo sold 617,500t of cement in the fourth quarter of 2012, a 14% rise from 540,800t sold in the same period in 2011.

"The strength in public and private investment, favourable financing conditions and the creation of high quality jobs resulted in higher cement sales volume," the company said.

Cementos Pacasmayo supplies cement to northern Peru, where about 22% of the population lives and which accounts for approximately 15% of Peru's national gross domestic product.

India: The Indian Cement Manufacturers' Association (CMA) has demanded a reduction in the excise duty for building materials from 12% to 6-8% in the next Indian Union Budget.

"To encourage cement industry and to bring it at par with other core and infrastructure industries, the excise duty rate be rationalised from 12% to 6-8%," said the CMA in a budget memorandum to the Finance Ministry. The CMA added that the excise duty rates on cement are amongst the highest, beaten only by the rates on luxury goods such as cars. It admitted that the Indian industry suffers from an 'excess of surplus capacity'.

"The levies and taxes on cement in India are far higher compared to those in countries of the Asia Pacific Region. Average tax on cement in the Asia Pacific Region is just 11.4%, with the highest levy of 20% being in Sri Lanka," said the CMA. According to the CMA the Indian cement industry had a production capacity of around 340Mt/yr in March 2012.

The CMA also pitched the idea of levying basic customs duty on imports of cement. Alternatively, it suggested that the import duties on goods required for manufacture of cement be abolished.

At present, the import of cement into India is freely allowed without having to pay basic customs duty. However, all the major inputs required for manufacturing cement - such as a limestone, gypsum, petcoke - attract customs duty.

France: Multinational buildings materials producer Lafarge has shown signs of improved profitability in 2012 as its operating income rose by 12% to Euro2.44bn. Chairman and CEO Bruno Lafont has attributed the turnaround in the group's fortune's to cost reduction measures and continued growth in emerging markets. However the group's net income continue to fall in 2012, by 27% to Euro432m in 2012 from Euro593m in 2011.

"We have delivered on our objectives for 2012 and our results grew for the fifth consecutive quarter, driven by strong operational performance and growth in emerging markets, which generated close to 60% of our sales," said Lafont.

Sales rose by 3% to Euro15.8bn from Euro15.3bn. Earnings before interest, taxes, depreciation and amortisation (EBIDTA) rose by 7% to Euro3.45bn from Euro 3.22bn. The group reduced its net debt 5% to Euro11.3bn.

The overall volume of cement made by Lafarge fell by 3% in 2012 to 141Mt compared to 145Mt in 2011. Lafarge attributed this to the continued construction slowdown in Europe, increased local supply in Egypt, the current situation in Syria and the impact of the US divestments, mitigated by growth in Asia, Latin America and most countries of Middle East and Africa. EBIDTA for Lafarge's cement business rose by 6% to Euro2.96bn from Euro2.73bn. Overall results for the fourth quarter of 2012 were broadly similar to the year although both volumes and sales of cement fell suggesting that Lafarge's recovery remains fragile.

By region, in North America volumes of cement fell by 5% to 12.8Mt in 2012 from 13.5Mt in 2011. However volumes were down by 7% to 3Mt in the fourth quarter of 2012 due to tornadoes and bad weather.

In Western Europe cement volumes fell by 11% to 16.4Mt in 2012 from 18.4Mt in 2011. Notably sales volumes fell significantly in Spain and Greece, by 26% and 37% respectively. In Central and Eastern Europe cement volumes fell by 6% to 13.2Mt from 14.1Mt. Poland was singled out in this region, where sales volumes fell by 21% in 2012, following the completion of construction projects for the European Cup games in June and lower EU funding.

In the Middle East and Africa cement volumes fell by 3% to 45.2Mt from 48Mt. Sub-Saharan Africa, Algeria and Iraq were singled out for strong performance. Egypt's volume sales of cement fell by 5% and Syria reported 'sharp' declines. In Latin America cement volumes rose by 4% to 9.2Mt from 8.8Mt, led by Brazil, Honduras and Ecuador. In Asia cement volumes rose by 4% to 44.3Mt from 42.5Mt, led by strong gains in India, Indonesia, the Philippines and South Korea.

In its outlook Lafarge stated that it expects to see cement demand continue to rise by 1-4% in 2013 driven by emerging markets. The group also plans to reduce its net debt below Euro10bn as soon as possible in 2013.

Tajikistan: Tajik-Chinese joint venture Huaxin Gayur Cement is building a 1Mt/yr cement plant in the Yovon district of Khatlon province, according to the Ministry of Energy and Industries (MoEI). The budget for the coal-powered plant is US$110m.

Elsewhere in Tajikistan a 50,000t/yr plant being built at Vahdat Township by Tajik-Chinese joint venture, Vahdat Hualun is nearing completion. It is expected to start operation during the first quarter 2013. A plant with a cement production capacity of 20,000t/yr in the northern city of Konibodom will start operation in the first half of 2013. Two cement plants funded by foreign investment in Danghara and Shahritous districts are also nearing completion. A 100,000t/yr plant in the Mastchoh district, Sughd province that opened in 2012 has plans to increase its capacity to 1Mt/yr.

According to data from the MoEI, eight cement plants with a capacity of 1.5Mt/yr currently operate in Tajikistan. The country's largest cement plant is OJSC Tojikcement (Dushanbe cement plant) with a capacity of 1.1Mt/yr. However it has not been in operation since the start of January 2013 due to a lack of natural gas.

Tajikistan's annual demand for cement has sharply increased in connection with construction of the Roghun hydroelectric power plant (HPP), highways and other facilities of the nationwide significance. Currently Pakistan is the main supplier of cement to Tajikistan.

Egypt: Alexandria Cement continued producing cement during a recent hostage scenario. In a release to the Egyptian Stock Exchange the producer announced that on 14 February 2013 some subcontractors trapped a number of their management officials and Alexandria Cement's management, including the factory manager. The subcontractors were calling for permanent contracts.

Alexandria Cement informed the authorities. The hostages were freed on 17 February 2013. All of the accused workers were arrested. Throughout the situation Alexandria Cement continued to produce cement, although deliveries were halted during this period.