Global Cement News

Italy: An on-going personnel crisis at Italcementi has prompted the company to request unemployment subsidies from the Ministry of Labour and Social Policies.

Following a statement from the company on 11 January 2012 that up to 265 workers would be made redundant, Italcementi sought out the Extraordinary Redundancy Fund, a specialist Italian fund designed to help ailing industries.  This loss represents approximately 7.5% of the company's Italian workforce.

In the statement Italcementi announced that layoffs would affect a total of 265 existing employees: 80 at the headquarters of Italcementi, 60 at Group Technical Centre in Bergamo, 115 (out of a total of 1651 employees) in 18 Italian plants and 10 in the company's commercial network.

Outside of Italy the restructuring of the group will include changes in Spain, Belgium, Egypt and the US. 22,000 employees work for Italcementi worldwide, with 3500 in Italy. In November 2011 the company reported a 51.7% drop in third quarter profits despite the sale of its Turkish assets.

Italcementi has not responded to requests for further information from Global Cement.

This week has seen the start of what is likely to become a string of positive financial results from the Indian cement industry. UltraTech Cement, Shree Cement and Hyderabad Industries have already seen massive improvements in their profits for the final quarter of 2011, up in one case by over 100% compared to 2010.

On the face of it such results do not chime with a recent report by Fitch Ratings, which predicts a 'negative outlook' for the Indian cement industry in 2012. Fitch's report says that based on expected growth of 2-5%, overcapacity and an increase in interest rates will prey on margins in 2012, making any mini-boom short-lived. The impressive profits may well evaporate come the end of March.

India's capacity utilisation rate dropped to just 65% in the last quarter of 2011. This is not a statistic indicative of a booming cement industry and, coupled to reports of increased profits from the sector, indicates that higher prices are being used to maintain margins.

With even more capacity being added every week and the prospect of increased input costs as the year develops, how long will this strategy work? Will the topic of cartelisation be raised again in India? The new head of the Cement Manufacturers' Association has a lot to consider as he takes up his role.

Elsewhere in this issue of Global Cement Weekly, we have the news that the German BDZ and VDZ are to fully merge, plant projects in Russia and Saudi Arabia and the latest on the developing situation in Kenya, where East Africa Portland Cement Company (EAPCC) is still in dispute with its workers. EAPCC and the government's expectation that work can resume on 26 January 2012 appears to be ill-founded considering continued resentment shown by the workforce.

Germany: The German Cement Works Association (VDZ) and the Federal Association of German Cement Industry (BDZ) are due to merge in the spring of 2012 as the German Cement Works Association (VDZ).

This new body will represent 23 domestic cement companies with close to 7500 direct employees. It will represent about 95% of the cement industry in Germany with a turnover of approximately Euro2.1bn. "The merger gives us significantly greater clout and reach," said chief executive Dr Martin Schneider, who is set to lead the new organisation.

The German Cement Works Association will remain in Düsseldorf using the existing structure of the VDZ, allowing substantial resources to be concentrated. Schneider added that the established cooperation with the German Building Materials Association (BBS) will be strengthened allowing for better links between the German cement industry and the construction industry as a whole, as well as other partners in energy-intensive industry.

Mr M A M R Muthiah, the current managing director of the Chettinad Cement Corporation has taken over as president of the Cement Manufacturers' Association (CMA). Muthiah said that the association acts as a bridge between the industry and the Government with an objective to promote the cement sector's growth, protect consumer interests and collaborate with international counterparts outside of India.

Mr O P Puranmalka, a whole-time Director of Ultratech Cement, has taken over as the CMA's new vice-president.

Pascal Casanova has become the general director of Lafarge France, a unit of the French cement giant Lafarge. Casanova was born in 1968 and joined Lafarge in 1999 after having been employed by a number of different construction firms. He served as Lafarge's research and development director since 2008.