Global Cement News

US: Holcim (US) Inc. has decided to permanently close its cement making operations at its Catskill facility, according to a New York State Department of Conservation Environmental Notice Bulletin. The company is also set to permanently close its Artesia plant in Mississippi. Both plants had previously been mothballed due to the stagnating US economy and low cement demand.

Holcim Vice President of Corporate Communications Robin DeCarlo said that the state of the economy had not improved. She said that this, along with a decrease in demand for cement across the US, had led Holcim to decide to permanently close the plants.

Speaking of the Catskill plant, DeCarlo said, "Nothing has really changed with the plant from the mothball status to the close. We still have staff there, we are still looking at our equipment and are maintaining our permits, so not much has changed."

DeCarlo said that there are no plans for Catskill at this point and that a timeline on the completion of the closures remains unclear. The announcement to cease operations at Catskill was reported to the Department for Environmental Conservation (DEC) for the sole purpose of changing Holcim's solid waste permit. This will allow it to dispose of its raw materials, according to DEC Region 4 spokesman Rick Georgeson.

Indonesia: Indonesia's second largest cement producer PT Indocement has announced plans to build a 2 x 30MW power plant in Pati, Central Java. The plant, which will cost around US$200m, will guarantee a power supply to Indocement's new cement factory, which is to be built in Pati later in 2012.

The new cement factory will cost around US$300m, according to Indocement's corporate secretary Sahat Panggabean. It will have a capacity of 2.5Mt/yr and will be operational by mid-2015. This will take Indocement's domestic cement capacity from 18.5Mt/yr up to 21Mt/yr.

South Korea: A rift between South Korea's construction, cement and ready-mixed concrete companies deepened yesterday as a series of price negotiations ended in stalemate with all sides refusing to compromise.

Squeezed by soaring raw cement costs, some 750 manufacturers of premixed concrete across the country halted production on 22 February 2012, saying they are only losing money by running their plants. They demand that builders accept an 8% increase in prices of ready-mixed concrete and that cement suppliers withdraw a recent 11% increase. They had been prepared to negotiate a lower increase, but two rounds of three-way talks convened by the government have failed to break the impasse. This has seen scores of construction projects put at risk as trucks remain idle.

"Things are not working out because all sides are not willing to step back," said Bae Jo-woong, head of the Korea Federation Ready-mixed Concrete Industry Cooperatives' (CIC) emergency committee and chief executive of Kookmin Remicon. Other officials at the CIC say that the current rates leave no margin for concrete producers and do not reflect sharp growth in cost of coal, sand, gravel and other raw materials seen in 2011.

The CIC argues that while cement manufacturers secured an 11% price hike on 1 January 2012, ready-mixed concrete makers were only allowed to raise their prices by less than 4%. "It made sense to push up cement prices that had been exorbitantly cheap. The recent increase will keep the cement firms afloat but the problem now is that construction companies are resisting raised ready-mixed concrete prices," said Park Jong-rok, an analyst with a Seoul-based brokerage.

Saudi Arabia: The Arabian Cement Company has posted a net profit of US$109m for the year ending 31 December 2011, an increase of 59% compared to the US$68m that it made in 2010. Its gross profit reached US$130m in 2011, an increase of 58% compared to US$85m in 2010, and its operating profit was US$120m, a rise of 55% compared to US$77m. The company attributed the profit rise in 2011 to increases in production and sales.

Lafarge's annual report summed up the European malaise this week: too much debt; too little growth.

The world's biggest cement company posted a Euro3m loss for the fourth quarter of 2011 compared to a Euro62m profit for the same quarter in 2010. Overall for the full year in 2011 its income fell by 28%. Yet all of this occurred in the same year that the group sold the bulk of its gypsum assets for over a quarter of a billion Euros! All of which went into the group's debt reduction of Euro2bn.

Compare this to 2010 when Lafarge recorded a 12% increase in net profit for the year and the group was expecting an increase in cement demand of 6%. Chief Executive Bruno Lafont's words were, "The steps we have taken in 2010, ranging from structural cost savings to strategic investments in growing markets such as Brazil will provide the foundation for further improvement and growth as we enter 2011."

6% growth did happen in 2011 but only in the emerging markets in the Middle East and Africa, Central and Eastern Europe, Latin America and Asia. Overall sales growth remained at 3%, dragged down by sales decreases in North America and western Europe. Understandably Lafarge's outlook for 2012 remains muted.

All this gloom was compounded by the UK Competition Commission raising its concerns about the joint-venture between Anglo-American and Lafarge. With Lafarge expecting 'higher pricing' for 2012 any move with even a whiff of anti-competitive behaviour will draw in the watchdogs. With western European sales down by 2% in 2011 the challenge remains for the group, and for all cement producers, to somehow find profit once more in the mature markets.