Global Cement News

Switzerland: Wolfgang Reitzle has been proposed to the Annual General Meeting on 17 April 2012 for election to the board of Holcim Ltd. Reitzle, aged 63 and a German citizen, studied engineering and economics at the Technical University of Munich and holds a degree and a PhD in mechanical engineering.

From 1976 to 1999 he worked for the car manufacturer BMW, where in 1987 he was appointed as a regular member of the Executive Board, responsible for research and development. In 1999, Reitzle took over as CEO of the Premier Automotive Group and Vice President of the US car manufacturer Ford. In 2002, he joined the Executive Committee of Linde, a world-leading gases and engineering company, and became CEO in 2003.

India: The Cement Manufacturers Association of India (CMA) has asked the Railway Board of India to reduce the cost of freight haulage. The CMA raised the issue in the wake of the board's decision to raise freight rates by 24%, which came into effect on 6 March 2012.

The CMA highlighted the disparity in the transportation costs of cement by rail compared to road. Other key concerns included the need to reduce the total cost by suitably lowering the classification for cement and clinker and by curtailing penalties, wharfage/demurrage charges and terminal charges.

The CMA now expects that cement prices will rise. "With this steep hike, the rail transportation cost of cement, which is already very high, will go up further including the transportation cost of input materials like coal, slag, gypsum assuming an average rail lead of 600km for the cement industry," said the CMA's President MMAR Muthiah.

According to Muthiah, transportation contributes about 20% to the operating cost of the cement industry. In addition, the industry has been highly taxed at over 60%. In the last couple of years railways have revised the classification of cement and clinker consistently from class 130 to 150 resulting in indirect freight hikes. In addition, a further burden on cement industry has been imposed by levy of various surcharges like a busy season terminal surcharge and development surcharge in the last few years.

Myanmar: Indonesian giant Semen Gresik has announced plans to build a cement factory in Myanmar with a production capacity of up to 2.5Mt/yr. The project is estimated to cost US$500m according to Ahyanizzaman, the finance director of Semen Gresik.

PT Semen Gresik is one of four state companies asked by the government under Indonesia Incorporated to expand its operations to Myanmar. Ahyanizzaman added that Semen Gresik chose to expand to Myanmar as demand for cement in that country is strong with supplies falling well short of demand. Cement demand in Myanmar is approximately 8Mt/yr compared to a current domestic production of 4Mt/yr.

The three other state companies asked to expand their operations to Myanmar include oil and gas company PT Pertamina, construction company Wijaya Karya and Bank Negara Indonesia.

Indonesia: Indonesia's domestic cement sales grew strongly in February 2012, up by 23.9% year-on-year, according to data from the country's largest cement firm PT Semen Gresik. Sales for the month reached 4.1Mt, slightly higher than January 2012's 4.06Mt.

"Low 2011 loan to GDP ratio at around 30% combined with low interest rates should allow credit to continue growing, paving the way for economic growth," said Teguh Hartanto, deputy head of research at Jakarta-based Bahana Securities. The country's cement sales fluctuate from month to month depending on a variety of factors, including religious holidays, which can delay construction, and the government's end-of-year project completion deadlines.

Mexico: Cemex has paid 20% of the US$361m in taxes it owes the Mexican government, with the rest due in January 2013.

The company said it made a US$72m payment on 1 March 2012. It said it has an option to extend the January 2013 obligation and opt for 36 instalments instead, a move that would cost the company a bit more.

"Cemex thinks it has adequate provisions to meet the (tax) requirement," the company said in a statement.

In 2008 the Supreme Court overturned a ruling that protected Cemex from paying taxes linked to investments in offshore tax havens. The court cited several articles in Mexico's income tax law that required Mexican companies to pay taxes locally on investments in countries where there are no taxes or where levies are 75% lower than in Mexico.