Global Cement News

India: Holcim expects the Indian construction market to more than double by 2020. According to one of the company's presentations made earlier in 2012, the Indian construction market will replace Japan as the third largest, after China and the US, by 2020, by which time, emerging markets will outweigh mature markets.

At US$360bn, India accounted for 5% of the US$7.2tn global construction market in 2010. However, by 2020, India is likely to capture a 7% market share, at US$840bn, of the US$12tn global market.

Holcim, which entered India post-2000, has its presence in the country through two established brands: ACC and Ambuja Cements. Collectively, these companies have the largest market share in India. The company currently has an Indian capacity of close to 57Mt/yr and is ahead of domestic giant Aditya Birla Group's UltraTech Cement, at 52Mt/yr.

Both have plans to augment capacities. UltraTech has plans to take its overall capacity to 75Mt by 2015. Holcim's Ambuja Cements will pump in around US$365m by 2013 to add more capacity.

According to India's 12th five year Plan (2012-17) document, the two segments most important to construction activity are infrastructure and housing. Since infrastructure spending is expected to go up to 9% of gross domestic product (GDP) or US$1tn for the Plan period (2012-17), this should translate into double-digit growth for the demand segment.

The Indian cement sector is the world's second largest, after China. During the current Plan (2007-12), cement players invested around US$10bn to add fresh capacities of 150Mt. According to the 12th Plan documents on the industry, the sector would need to increase capacity to 470Mt by 2017.

Indonesia: PT Indocement, Indonesia's second largest cement producer, has announced that its fourth-quarter 2011 net profit rose 20% as demand for construction jumped in Southeast Asia's biggest economy. The firm's fourth quarter net profit was US$109m in 2011, compared with US$91m in the same period in 2010.

The HeidelbergCement subsidiary reported a full year 2011 net profit of US$392m, up by 12% from US$351m in 2010. Analysts forecast that the full-year 2011 net profit will rise by 11% to US$391m. Indocement's 2010 full-year net revenue rose by 25% to US$1.5bn.

India: Lafarge is focused on expanding its own operations in India and isn't considering any acquisitions at present, according to its chairman Bruno Lafont.

"We will continue to grow, mostly through internal growth and by expanding our existing cement plants and growing through several green-field plants," Lafont told reporters on the sidelines of an event.

He said the company will continue with its program to increase production capacity in India by 2Mt/yr, but he didn't say when the expansion will be completed. Lafarge has increased its capacity in India from 6.5Mt/yr in 2010 to 8Mt/yr in 2012. Lafont said the company will continue investing in its concrete and construction aggregates businesses in India.

The company recently expanded its capacity through new production lines at Jojobera in Jharkhand and at Mejia in West Bengal. Its four greenfield projects in Rajasthan, Karnataka, Meghalaya and Himachal Pradesh are in different stages of progress. Lafarge entered the Indian market in 1999 with the acquisition of Tata Steel's cement business. This was followed by the purchase of the Raymond Cement facility in 2001. Lafarge currently has four cement plant across the country - in Sonadih and Arasmeta in Chhattisgarh, Jojobera and Mejia.

Lithuania: Akmene Cement, Lithuania's only cement producer, says it will be affected by the European Union's sanctions against Belarus. Previously the producer sold cement to the Belarusian company Triple, owned by oligarch Yury Chyzh, which has been affected by the blacklist.

"We discussed it today at our company. It is hard to say what it is going to be like now," Arturas Zaremba, head of Akmenes Cementas, stated. "I do not know myself how those sanctions would work. Does it mean that we will not be able to maintain any business relations with them? We will need to clear that up."

EU foreign ministers decided to impose sanctions against 29 Belarus companies and 12 individuals related with Alexander Lukashenko's regime. Akmenes Cementas exported around 70,000t of cement to Belarus in 2011.

Kuwait: Gulf Cooperation Council (GCC) cement companies have emerged from two years of decline following the credit crisis with a strong 14.2% increase in revenue, according to a report by Global Investment House. Sector profits, however, increased by 2.7% in 2011. Revenues reached US$4.6bn in 2011 compared to US$4bn in 2010. Net profits increased from US$1.44bn in 2010 to US$1.48bn in 2011.

By country, Saudi Arabia, Oman, United Arab Emirates (UAE) and Kuwait overturned declining revenues in 2010 and all four countries reported increasing sales for 2011 except Qatar. UAE, which witnessed declining sales revenue since 2008, enjoyed a 5.9% increase in sales to reach US$940m. Yet net profit was negative for the first time since the researchers started to compile UAE cement data.

Oman witnessed a 12.8% increase in sales revenue reaching US$342.3m in 2011, the second highest revenue in Oman's cement history. However Oman reported a 39.4% decrease in profits in 2011. Kuwait reported a 5.4% increase in revenue reaching US$66.9m in 2011, but it posted a 47.1% decrease in net profits compared to 2010. Qatar was the only GCC country reporting declining sales and profits. Saudi Arabia posted a healthy 22.6% increase in sales revenue and a 25.2% increase in net profits in 2011.

According to Saudi government officials, Saudi Arabia will spend an estimated US$400bn on large infrastructure projects from 2012 until 2017. Ever since the country banked upon diversification, the cement sector witnessed a tremendous pick up in demand from less than 20Mt in 2005 to 49Mt in 2011. In the wake of increasing demand locally, the government imposed a conditional ban on cement exports in 2010 that further pushed demand. Saudi Arabia lifted a ban on cement imports in March 2012 and neighbouring exporter nations, Oman and the UAE, are expected to benefit greatly from the change.