Global Cement News

Russia: The leading Russian cement producer Eurocement has placed an order worth more than Euro80m with KHD for a new cement plant to be built in Stavropol, Russia.

The contract between Stavropolsky Zavod Stroitelnih Materialov, a member of the Eurocement Group, and ZAB Zementanlagenbau GmbH Dessau, a subsidiary of KHD Humboldt Wedag International AG, is for a new cement plant with an annual output of 1.3Mt/yr.

KHD's scope will cover the supply of production equipment, starting from raw material crushing all the way up to cement loading and packing. KHD will also supply automation and control equipment for the new production line. In addition, the companies concluded a separate contract for erection and commissioning supervision services, which is part of the total order volume.

The project will be booked as order intake immediately upon receipt of a down payment.

Portugal: Portugal's Treasury Secretary Maria Luis Albuquerque has defended the takeover bid by Brazil's Camargo Corrêa for Portuguese cement maker Cimpor from suggestions that it was against Portuguese national interests and that the price offered by Camargo Corrêa was too low.

"This operation appears to us the best alternative for the company," said Albuquerque, speaking to a parliamentary committee. "It safeguards the national interests in the most attractive form that is possible to secure." Opposition Socialists had demanded that the government answer questions on the takeover.

Camargo Corrêa, Brazil's second-largest construction group, launched a Euro5.5/share takeover bid at the end of March 2012 for the 67.1% of Cimpor that it does not already own. Cimpor's board has said the bid is too low and lacks detail on its plans for the company's future.

Two key Cimpor shareholders, including the state-run bank CGD, have already said they are prepared to sell their stakes under Camargo Corrêa's terms and many analysts expect the bid to succeed. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a Euro78bn EU/IMF bailout for Portugal.

Albuquerque said that Camargo Corrêa's bid would make Cimpor's shareholder structure more stable, preserve the company's listing in Lisbon and 'bring liquidity advantages to the national economy, allowing Cimpor to refinance its debt."

Oman: Cement sector players in Oman are scaling up their production capacity to meet the ever-rising local demand and also from export markets such as Yemen and various East African nations. Until recently, the Omani cement manufacturers were ‘victims’ of a cheap influx of cement from the UAE. 

In 2011, imports met 25% of cement demand in Oman, mainly from the UAE where the weak construction sector had resulted in a excess of cement. Now with rising operational costs, producers in the UAE are no longer in a position to offer cement at lower prices, boosting the prospects of Omani producers. 

In the first quarter of 2012 Oman Cement has seen its cement sales increase by 13.8% on a year-on-year basis, driven by lower prices and an increase in domestic construction activity.

Meanwhile, Raysut Cement group's net profit before tax soared by 37% to US$17.7m in the first three months of 2012, from US$12.9m in the same period of 2011. The profit before tax of Raysut Cement Company (RCC) soared by 26% to US$14.5m, from US$11.6m during the same periods. The group as a whole sold 0.06Mt of clinker and 1Mt of cement during the quarter that ended on 31 March 2012 against 0.03Mt and 0.83Mt respectively in the same period of 2011.

Raysut attributed its increase in profit to higher sales volume and better price realisation in spite of competition, both in the domestic and in the export markets. Construction activity in Oman is expected to continue its upswing during the current year.

Ukraine: HeidelbergCement incurred losses of Euro6.7m in the first quarter of 2012, according to a company report. The loss is nearly three times the amount that the company lost in the whole of 2011, when it lost Euro2.3m. HeidelbergCement Ukraine reported a net revenue of Euro14.2m for the first quarter of 2012.

UK: The UK Competition Commission (CC) has announced that Anglo American plc (via UK subsidiary Tarmac) and Lafarge will have to sell a significant portfolio of operations, paving the way for entry by a new competitor into the UK cement market, before their proposed construction materials joint venture can go ahead.

In February 2012, the CC provisionally ruled that the proposed joint venture between Anglo American and Lafarge could damage competition in certain markets for construction materials. In its final report, the CC has reiterated its concern that the joint venture would increase the danger of coordination in the market for bulk cement and would reduce competition in local and national markets for other products including aggregates, asphalt and ready-mix concrete.

Anglo American and Lafarge will now be required to sell an extensive package of operations including:

• Lafarge's cement plant in Hope, Derbyshire as well as the nearby Dowlow quarry and three linked rail depots.

• A substantial network of readymix concrete plants, representing well over half of the proposed joint venture's readymix concrete capacity.

• Six aggregate quarries as well as Tarmac's share of two quarries owned through its Midlands Quarry Products joint venture with Hanson and one rail

depot.

• Two asphalt plants as well as Tarmac's share of five plants owned through Midlands Quarry Products joint venture.

The CC further stated that the sale would have to be completed before the joint venture would be allowed to proceed.