Global Cement News

Russia: Nikolay Skornyakov has been appointed chief executive officer of Zhigulevskie Stroymaterialy plant, part of the Eurocement Group. Previously, Skornyakov was the technical director of the cement plant located in Zhigulewsk in Samara.

Skornyakov was born in 1950 in Ulyanovsk. In 1980 he graduated from the Belgorod State Technological Institute of Construction Materials focusing on chemical technology binders. He has since worked in the cement industry for about 40 years, starting at a plant in Ulyanovsk in 1969 as an electrician. In 2001 he was appointed technical director of the Ulyanovsk plant subsequently becoming first deputy chief executive officer.

In 2005 Skornyakov became chief executive officer of the Pikalevskiy plant. In 2006 he became the deputy chief executive office – technical director of the Mikhailovcement plant in the Ryazan region. Since 2009 Skornyakov has been the deputy chief executive officer - technical director of the Zhigulevskie Stroymaterialy plant.

Australia: Boral has reported a 59% fall in second-half profit, hit by weak housing construction in Australia and delays in big resource and road projects. Boral, which removed its chief executive in May 2012, declined to give a fiscal forecast for the year ahead, in light of uncertain market conditions, but said it would update investors at its annual meeting in November 2012.

Net profit for the six months to June 2012 fell to US$35.7m from US$87m a year earlier, as calculated from full year figures. The building products maker issued profit warnings in April 2012 and June 2012.

"Earnings from our Australian business in the six months to June were hit by very weak housing and non-residential building activity, combined with delays and disruption from sustained rainfall across the east coast. The positive impact of price increases was more than offset by much weaker sales volumes in these markets and by higher costs, including from the wet weather," said Boral's chief executive officer, Ross Batstone.

Overall for the year to 30 June 2012 profit, after tax dropped by 42% to US$106m from US$183m. Sales revenue grew by 5%, to US$5.24bn from US$4.94bn, but this excludes the impact of the acquisition of Lafarge's 50% of Boral's stake in their Asian plasterboard joint-venture.

Boral's cement sector reported a slight fall in revenue to US$449m from US$462m, due to a 40% reduction in New South Wales lime volumes, marginally lower cement volumes and broadly flat cement prices. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 12%, to US$124m from US$140m.

For its 2013 outlook Boral expects its cement volumes to be remain flat, with residential demand improvements in the state of North South Wales offset by weakness in Victoria and continued low volumes in South East Queensland. The pricing environment will remain challenging due to the high Australian dollar and low sea freight prices, which allow imports from Asian countries.

Philippines: Ongoing construction demand from 2011 and new infrastructure projects have driven cement sales in the Philippines up by 20% in the first half of 2012, according to data from the Cement Manufacturers' Association of the Philippines (CEMAP). Cement sales from January to June in 2012 reached 9.55Mt, up by about 20% year-on-year.

CEMAP president Ernesto Ordoñez attributed the sales increase to higher infrastructure spending. In 2011 the government deferred the implementation of various projects for review. This resulted in a drop in demand for construction materials, including cement. The implementation of these projects, on top of infrastructure projects lined up for 2012, have increased demand for construction materials.

Cement sales, according to CEMAP, are expected to remain strong for the rest of 2012. The local industry reported combined sales of 15.6Mt in 2011. CEMAP includes cement producers Cemex Philippines, Holcim Philippines, Lafarge Cement Services, Northern Cement, Pacific Cement and Taiheiyo Cement Philippines.

Spain: Asset investor GSO Capital Partners has gathered a group to invest Euro345m in Giant Cement and its owner Cementos Portland Valderrivas. The troubled company, which is reportedly set to close three of its eight factories in Spain, will use the capital injection to refinance and pay down existing debt. In 2011 Cementos Portland recorded a loss of Euro337m, due primarily to cement consumption in Spain falling by 64% from its peak in 2007.

Due to the size of the transaction, GSO decided to bring a group of co-investors into the deal, the majority of which are limited partners in GSO's funds. The Blackstone Group's credit affiliate will invest primarily from its 'rescue' lending fund, GSO Capital Solutions Fund I, which collected more Euro2.6bn in 2010.

GSO is one of many private equity groups to focus on opportunities related to the ongoing economic chaos in Europe, as firms including Kohlberg Kravis Roberts, Apollo Global Management and Oaktree Capital Management have all been focusing on credit-related opportunities in the region.

"We expect Europe to be a happy hunting ground for cash-rich investors who have the skills, resources and patience to pan for gold in Europe's distressed loan portfolios and debt riddled corporates," commented Andrew Traynor and Anthony Smyth of law firm Walkers.

China: China's cement exports have dropped by 15% in volume and by 8.3% in value from January to May 2012. China exported 4.04Mt of cement clinker from January to May 2012, a decrease of 15% year-on-year. The value of export dropped by 8.3% to US$240m.

Exports of cement clinker to Africa and Hong Kong have dropped but those to Bangladesh, Mongolia and the ASEAN region have increased. China's export of cement clinker to Africa dropped by 20.5% year-on-year to 1.76Mt during the five-month period. Exports to Hong Kong also dropped by 17.2% to 244,000t. By contrast, exports to Bangladesh jumped by 230% to 385,000t. Exports to Mongolia increased by 65.6% to 396,000t and exports to the ASEAN region jumped by 4.7% to 348,000t.

A majority, 80%, of the exports were general trade but border trade of cement is also increasing rapidly. State-owned companies were major exporters, exporting 2.07Mt of cement and sharing 51.4% of China's total export of cement. Private companies, exported 17% less year-on-year, 1.40Mt of cement, comprising 34.6% of all cement export. Foreign-funded companies, sharing 14% of cement exports, exported 566,000t of cement. Among all kinds of cement exported 3.15Mt, of 78%, was Portland cement.

The slow economy offshore also hurt cement export to traditional markets. In the five-month period, China's export of cement to the EU dropped by 86.1% year-on-year, while exports to the Russian Federation and Latin America also slid by 61.9% and 57.7% respectively.

The commencement of major infrastructure, railway and transport projects approved by the State Council for the 12th Five-year period (2011-2015) are expected to drive the demand for cement up. A consolidation in cement output may also happen when more foreign companies start to withdraw or scale down their investments in cement projects.