Global Cement News

South Africa: Sephaku Cement, a subsidiary of Nigeria's Dangote Cement, has secured US$223m of domestic debt funding for a US$389m cement plant and grinding facility project in Mpumalanga and North West provinces.

Two of the country's big four banks, Standard Bank and Nedbank, advised by Sasfin Capital, have jointly funded the 10-year deal. Sephaku said this was a 'strong' vote of confidence in South Africa's market and that the agreement would enable it to become a significant competitor in the wholesale and retail cement trade in the region.

Sephaku Cement, established in 2006, is an associate of JSE-listed Sephaku Holdings, a 64%-owned subsidiary of Nigerian-based Dangote Cement. Dangote had invested more than US$126m in the venture, the largest ever foreign direct investment in South Africa by an African company. The new project includes a production facility, which would produce about 1.2Mt/yr, at Aganang near Lichtenburg in North West.

India: Business conglomerate Aditya Birla Group has revived negotiations to purchase cement manufacturer Jaiprakash Associates' cement plants in Gujarat and Andhra Pradesh.

Aditya Birla is reported to have made an offer of up to US$130/t to buy the cement assets of Jaiprakash Associates which have an overall capacity of 9.8Mt. This follows Irish building materials firm CRH decision to cancel talks with Jaiprakash Associates in early October 2012. In August 2012 CRH was reportedly close to buying a 51% equity stake in the Indian cement producer's plants in Gujarat. Top officials from Aditya Birla's cement business and executives from foreign lender Barclays Bank are in talks to finalise the pricing of the deal.

US: The Carroll County Board of Commissioners has unanimously approved plans by Lehigh Cement Co. that will allow it to build an underground conveyor system from the company's New Windsor quarry to the plant in Union Bridge, Maryland.

The conveyor transportation systems are now allowed to be built in both the county's industrial zoning districts and the agricultural district. Conveyor systems will be prohibited in residential districts and in all other zoning types they will be listed as a conditional use, which means they would have to be approved by the county board of zoning appeals. Lehigh Cement has said that a conveyor system is the favoured method for transporting limestone from its quarry to the plant in Union Bridge, about 6km away, compared to other options like using rail or trucks.

Once completed the conveyer will carry about 12,000t/day of stone from the quarry to the plant. Lehigh needs to get material from the new quarry after its quarry in Union Bridge ends production in 2020. Lehigh says the conveyor will be 3m to 20m underground.

Russia: Holcim Russia has decided to invest Euro350m towards upgrading its Volskcement plant in the Saratov region. The modernisation project will include the installation of a new 'semi-wet' production line with a capacity of 2500t/day. Currently the plant uses a wet process. Construction will take two years and is expected to start in the second quarter 2013. The new line will be commissioned in the third quarter of 2016.

Kenya: ARM Cement (formerly known as Athi River Mining Ltd) has posted a net profit of US$9.71m for the first nine months of 2012. This marks a 328% growth in profit compared to same period in 2011 when it made US$2.26m. ARM's turnover has climbed by 29% to US$90.7m, driven primarily by higher sales of its Rhino Cement brand.

ARM Cement Ltd received US$50m from the African Finance Corporation (AFC) to partly fund a plant in Tanzania as well as expansion efforts into the region. Rhino Cement, which is ARM's flagship brand, was launched in Tanzania in October 2012.

"(The Tanzanian launch) will contribute to the group revenues in the fourth quarter of 2012," said the company in a statement. The statement further explained that construction at a 1.2Mt/yr clinker plant in Tanga is progressing to schedule. ARMs' overall outlook remains optimistic for the immediate future with expectations of growth in demand for Rhino Cement and other products.

Meanwhile, Standard Investment Bank (SIB) has announced that, since 2007, the cement industry players in east Africa have invested over US$500m into capacity expansion projects in the region. This investment has seen cement grinding capacity in the region increase by 65.8% over the same period to 10.4Mt/yr, a figure that SIB expects to further increase by 41.8% to 14.76Mt/yr by 2015.

Between 2001 and 2010 total cement traded across the East African Community jumped from 0.45Mt/yr to 2.18Mt/yr. Kenya remains the region's largest net exporter with 0.61Mt in 2010, up from 0.23Mt in 2002. Rwanda is the largest net importer with 0.21Mt in 2010.