Global Cement News

India: Cement sales in September 2011 showed signs of a revival with monsoon weather subsiding in most parts of the country. However the ongoing unrest over the creation of a new state in Telangana have affected the despatches of ACC. In addition UltraTech Cement, one of the biggest producers in the country, has not yet announced its figures for the month.

Cement demand from the real estate sector has improved with many builders putting their projects on fast track to keep up their promise of timely delivery during the festival season. But there are no substantial developments in the infrastructure sector even as some government projects have been announced.

Analysts warn that it's too early to predict a recovery in cement demand because there is no marked improvement in the economic health of the country along with continuing unstable global developments from the US and Eurozone. With concern over rising input costs and increases in lending rates still lingering, cement companies have kept their production in check in order to align with the demand.

Besides transportation interruptions, the Telangana disruption has paralysed power supplies. Big cement factories have captive power plants but smaller cement units have been badly affected. The supply of coal from Andhra Pradesh was also hit, pushing up the cost of power production for captive plants that had to rely to a large extent on imported coal shipments.

V Srinivasan, a research analyst at Angel Broking, said that cement companies are expected to face margin pressures due to higher fuel costs because of increased domestic and international coal prices. The demand revival has helped cement companies to raise prices across the country, yet despite the rise, cement producers' profitability may be under pressure due to increasing costs.

US: The US House of Representatives approved the Cement Sector Relief Act of 2011 (H.R. 2681) on 6 October 2011. The House voted 262-161 in favour of the bill, with 25 Democrats in support.

If the bill becomes law the Environmental Protection Agency (EPA) will be forced to repeal existing rules for toxic emissions from cement kilns and revise them. The bill would also give those facilities at least five additional years to comply.

The White House and top Senate Democrats strongly oppose the bill, but some Democrats in the Senate have supported delaying the cement regulations, leading supporters of the bill to be optimistic even though passage through the Senate appears unlikely.

Supporters of the bill say that the EPA has set emissions targets that will be difficult to achieve in practice and cause some cement manufacturers to close or scale down production during a recession. The Portland Cement Association stated that about 18 of 97 cement plants in the US would have to close as a result of the rules. By contrast the EPA said that 10 US cement-manufacturing facilities would have to be idled after the rule goes into effect in 2013, unless market conditions changed.

Several congressmen said during a debate on the bill that cement plants in their states could not meet the EPA requirements. "We want a regulation to be promulgated that you can actually achieve with real-world technology," said Texan Republican Representative Joe Barton.

Public-health groups and the EPA also argue that the bill directs the EPA to set standards that are less burdensome to the industry, limiting the agency's ability to impose tough rules if it believes they are necessary. The White House has said it strongly opposes the legislation and that US President Obama's advisers would recommend a veto.

New Zealand: Holcim has put plans to a build a new factory in Weston on hold until at least 2012.

The USD400m plant near Oamaru was to become the company's sole production facility in the region. Its creation was intended to create about 450 construction jobs and 120 permanent positions in the area. The decision to proceed with the factory had been expected in August 2011.

Holcim New Zealand's capital projects manager, Ken Cowie, stated that the company's Swiss headquarters had put the project on hold due to uncertainty created by the global economic downturn. "We realise that this creates ongoing uncertainty but we will continue to keep people informed," Cowie commented.

As reported by Global Cement on 5 July 2011 Holcim was seeking contractors to register interest in building the plant in July 2011. Plans to build the factory will now not be considered until late 2012.

Pakistan: Cement sales fell to their lowest level in Pakistan since September 2010 in August 2011 to 2.4Mt, down 18% month-on-month. This is the steepest month-on-month fall in sales since 2009.

The key contributors to the decline were heavy rainfall along with lesser working hours during Ramadan. Domestic demand stood at 1.6Mt, down 19% month-on-month. Exports slipped to 714,000t, down 14% month-on-month, hindered by logistical issues in Afghanistan.

However, the floods in 2010 have helped total sales in the 2011/12 fiscal year (which started on 1 July 2011). According to statistics from the All Pakistan Cement Manufacturers Association, sales by Pakistani firms rose by 7% to 5.23Mt in the first two months of the 2011/12 fiscal year from 4.91Mt in the 2010/11 fiscal year.

Analysts expect this monthly trend to reverse on the back of an improvement in weather conditions. Overall cement sales should reach 32.8Mt in the 2011-12 financial year, up 5% from 2010-11, mainly driven by increased domestic demand.

Mozambique: A new cement plant in the southern province of Maputo is scheduled to start construction in June 2012. Budgeted at USD78m, the project is being developed by the Chinese company Africa Great Wall Cement Manufacturer, according to the country's provincial director of Trade and Industry, Fanieta Manjate.

The factory will be built in Chichuo, near Magude, covering an area of 80 hectares. The plant will have the capacity to produce up to

500,000t/yr when it starts operating at the end of 2012 or early 2013. Initially the construction work had been scheduled to start in June 2011.

Manjate stated that the company is currently mobilising equipment and building houses to accommodate the staff who will be involved in developing the project. The Environmental Impact Study has already been approved and families living in the area are being relocated to make way for the development of the project.

The Magude plant becomes the third cement factory set up by Chinese investors in Mozambique. The first in Salamanga, Maputo province, is currently under construction at a cost of USD72m with an expected production capacity of 800,000t/yr. The second in Boane, GS Cement, has an investment of USD100m and it will have the capacity to produce 550,000t/yr. Along with domestic upgrade projects the country's cement production could jump from the current level of 1.3Mt/yr to reach 4Mt/yr by 2013.