Global Cement News

Brazil: KHD Humboldt Wedag International has announced that its subsidiary Humboldt Wedag Inc has received a major order from Brazilian cement firm Cimentos Liz SA.

KHD Humboldt Wedag will supply the Brazilian company with equipment as well as engineering and consulting services on site. It will also provide services for the commissioning of Liz's new facility, which will have a capacity of 5000t/day. The value of the total order is expected to be in the region of USD120m.

Taiwan/China: TCC International, a unit of Taiwan Cement Corporation, has announced that it has entered into a framework agreement to acquire an array of cement and clinker production lines in Chongqing, Jiangxi and Zhejiang in China for a value not exceeding USD250m.

Under the framework agreement, the group will acquire either 100% or not less than 80% of equity interests in a group of companies and assets under Chongqing Kehua Holdings (Group) Limited and Zhejiang Kehua Group Company Limited. The target companies and assets to be acquired possess a total cement grinding capacity of about 8.1Mt/yr and total clinker production capacity of around 6.3Mt/yr.

Meanwhile, another of Taiwan's leading cement producers, Asia Cement, has posted a near 60% increase in net profit for the first half of 2011 compared to 2010 on the back of robust sales in its China operations. It recorded USD204m in net profit, up by 58.8% from a year ago.

Due to production expansion and rising product prices on the mainland market Asia Cement (China), the company's mainland subsidiary, registered USD104m in net profit during the same period, up by 369% compared to the first half of 2010.

However, Asia Cement said that its Taiwan operations suffered product price declines, which resulted from the dumping of low-priced mainland cement onto the island. This was compounded by rising production costs, which included higher fuel prices. With Taiwanese cement firms filing a complaint with the local authorities against the dumping of mainland products, Asia Cement expects domestic cement prices will rise to 'a reasonable level' later in 2011.

Meanwhile, Asia Cement said demand in China is expected to keep rising as the Chinese government carries out its 12th five-year economic development plan, which focuses on infrastucture, rural area development and residential property development. As the Chinese government gears up to phase out outdated cement production facilities, Asia Cement, which largely operates new plants there, is expected to take advantage and receive more sales orders.

Ireland: CRH plc, the Dublin-based international building materials group, has reported a 280% increase in pre-tax profit to Euro95m for the six months to 30 June 2011. The first half of 2010 saw a pre-tax profit of just Euro25m.

Turnover in the first half of 2011 was up by 7% to Euro8.1bn compared to the same period of 2010 when it was Euro7.6bn. Earnings before interest, tax, depreciation and amortisation rose by 10% to Euro574m from Euro520m in 2010. CRH said the increase in profit was largely driven by its Products and Distribution operations in Europe and the Americas.

The group's net debt at 30 June 2011 was down by 17% year-on-year to Euro3.9bn, compared with Euro4.7bn at 30 June 2010. Cash spent in the first six months amounted to Euro163m, while proceeds from disposals amounted to Euro392m.

Commenting on the results, CRH chief executive Myles Lee said that the improved results demonstrated the benefits of the group's recent reorganisation and restructuring, which has been carried out in response to 'exceptionally difficult markets' in recent years.

Looking forward, Lee said that CRH would continue to focus on, "Operational and commercial excellence, delivering the price increases necessary to recover higher input costs in our businesses and on delivering a year of progress for CRH in 2011." He added that this would be difficult given the recent turbulence seen in the global stock markets.

Malaysia: Lafarge Malayan Cement Bhd's pre-tax profit for the quarter ending 30 June 2011 increased to USD34.86m from USD30.6m in the corresponding quarter of 2010. The company attributed the improved result mainly to higher revenue and share of better results from its associated company but added that this was partly offset by the higher cost of fuel and raw materials. A 10% increase in electricity tariff, which came in on 1 June 2011, further added to the cost of production. The company's revenue for the quarter rose to USD223.5m from USD198m in the 2010 quarter.

For the first six months of 2010, its pre-tax profit rose to USD57.9m from USD49.7m in 2010. Its six-month revenue rose to USD425.3m from USD381.8m. The company also attributed this 11% year-on-year increase in first half revenue to higher domestic sales volume and better selling prices.

Nigeria: A disagreement between two workers at the Dangote Benue Cement factory in Gboko, Benue State escalated into a full-scale blood-bath on 17 August 2011, leading to reports of 20 deaths and the destruction of 154 trucks and 60 cars belonging to the company. Gboko itself has become a 'ghost town' after residents fled the town.

The violence started following a simple disagreement at a snack stand between two co-workers, a truck driver, named locally as Suleiman and the operator of the snack stand reported to be a Miss Kwaghkure. Apparently an agreement for Suleiman to be granted credit turned sour when he became unable to pay his debt and slapped Kwaghkure. This prompted an escalation in violence between those supporting the two parties and soon spread into full-scale looting of the plant, halting production.

Violence spread to the nearby town, where banks came under attack and the carnage even spilled out onto the local highway where innocent commuters were robbed. It is not known whether Suleiman or Kwaghkure are among the dead.

The plant's general manager (finance), Mike Etu, ruled out a tribal or religious dispute, saying it was purely driven by the interests of those involved. He lamented that although Dangote had been operating with the interest of the host community at heart, it had been under constant threat from cement looters. He expressed severe regret over the events and gave condolences for the dead and those affected by the incident.Dangote had previously ramped-up its security arrangements at the plant following smaller disputes.