Global Cement News

Bangladesh: HeidelbergCement officially inaugurated a new cement mill at its plant in the seaport of Chittagong on 12 January 2012. The ball mill, which cost approximately US$16m to construct, has a grinding capacity of about 0.8Mt/yr. Test runs of the new mill were conducted successfully at the end of 2011 and production started in the first week of January 2012.

"We are very pleased that we are able to officially inaugurate our state-of-the-art cement mill today," said Dr Bernd Scheifele, Chairman of the Managing Board at HeidelbergCement. "Bangladesh is an interesting market for HeidelbergCement. We expect the need for high quality cement to increase significantly in the coming years, especially due to new government infrastructure projects. With the new mill we are very well prepared for this growth in demand. The investment in Bangladesh is part of our long-term strategy to expand our cement capacities in attractive emerging markets by brownfield or greenfield projects."

The IMF forecasts a GDP growth of 6.1% for Bangladesh in 2012. The country currently has one of the lowest per capita cement consumption ratios in the world, but it is also one of the fastest growing markets.

Russia: Ciments Français has gone to court to keep a Euro50m advance payment from OAO Sibtsem Holding for Turkish cement assets that the latter company did not acquire.

Ciments Français filed a suit with the Russian supreme arbitration court on 20 December 2011 to recognise the ruling of the Istanbul arbitration court as of 7 December 2010. Under this ruling the French company does not have to return the advance payment to Siberian Cement for the acquisition of Turkish Set Group, which has four cement plants with a capacity 5Mt/yr. On 26 December 2011 the court accepted the suit for consideration.

In March 2008 Sibtsement announced that it would acquire Set Group from Ciments Français, having paid Euro377m and about 5% of its shares, estimated at Euro200m. The first instalment stood at Euro50m. However, the world financial crisis prevented the companies from closing the deal. In the autumn of 2008 the parties began discussing payment for the deal by instalments but they failed to reach an agreement.

In the summer of 2010 the arbitration court of the Kemerovo region in Russia confirmed that Ciments Français had to return the advance payment as the agreement was null and void. In early 2011 the Kemerovo court refused to confirm the Istanbul court ruling.

China: Xinjiang Tianshan Cement Co Ltd, a cement and concrete manufacturer based in the Xinjiang Uygur Autonomous Region, has today announced plans to raise up to US$444m via a public offering for six projects. According to the prospectus, the Shenzhen-listed firm will issue up to 120 million new shares at a price of US$3.27 each.

The proceeds will be used to build five cement production lines and a 1Mt/yr cement grinding facility in Xinjiang. Upon completion the projects company would see the company increase its number of cement production sites from 11 to 16.

By the end of 2013, the firm's total output capacity is expected to reach 46Mt/yr, of which 40Mt will be produced in Xinjiang. The cement supplier also targets 50Mt output capacity for 2015, including a massive 45Mt in Xinjiang.

Indonesia: Indonesia's domestic cement sales grew by 17% in 2011 on the back of new property construction, according to Indonesia's cement association (ASI). Total domestic cement sales in 2011 reached 48Mt, with more than half the sales in the main Java island, data from the association showed.

"Indonesia had large physical development during 2011 and the result followed strong economic growth figures. We also saw a huge decline in exports, which means domestic suppliers prioritised the domestic market," said ASI chairman Urip Trimuryono.

Total cement exports fell by 59% to 1.2Mt from 2.9Mt in 2010. The country's cement sales fluctuate month-to-month depending on factors such as holidays and the government's end-of-year project completion deadlines. Sales volumes in December 2011 rose by 17% from the same month in 2010 to 4.6Mt. The association has forecast cement sales growth by 6% in 2012.

"We believe the 2012 outlook for cement remains promising, supported by the land-clearing law and continued strong property demand on the back of a continued low interest rate environment," said Teguh Hartanto, an analyst at Jakarta-based Bahana Securities.

Indonesia's parliament stamped a long-awaited land acquisition bill in December 2011, an attempt to break the bottleneck in infrastructure development that has long been seen as holding back growth in the country.

Ben Guren will be appointed as the new Group Chief Financial Officer of FLSmidth and a member of the Group Executive Management. Guren is expected to take up his new position no later than 1 July 2012.

Guren, aged 51, is a Norwegian citizen who since 2007 been Group Vice President Finance, IT & Legal of Jotun Group, Norway. From 2006 to 2007 Guren was acting as Chief Financial Officer of Helly Hansen Group, Norway and from 1989 to 2006 he was partner in KPMG, Norway. Guren is a state-authorised public accountant, graduated from the Norwegian School of Economics & Business Administration in Bergen.

Guren replaces Poul Erik Tofte who has been the Group Chief Financial Officer at FLSmidth since 2003.