Global Cement News

Spain: French cement group Lafarge has announced that it has acquired a 35% stake in the cement plant of Spanish construction and property development group Lubasa at the port of Castellon.

Under the agreement, the facility will receive clinker supplies from Lafarge cement plants. The company declined to reveal financial details of the deal.

Pakistan: All Pakistan Cement Manufacturers Association (APCMA) has appealed to the government to rescue the ailing cement industry, which has suffered net accumulated losses of USD16.3m during the first nine months of the current fiscal year (which ends 30 June 2011).

A spokesman for the APCMA said that the cement industry suffered losses mainly due to rapid increase in input prices like coal, furnace oil, electricity, paper bags, interest rate, diesel and transportation. He said that prevailing market cement prices were inadequate to meet the increased cost of production.

In the first nine months only three cement units earned a profit. The spokesman said that this lopsided performance of the sector is mainly due to stagnant domestic demand and a steep decline in exports of 12.52%. The units located in the northern part of the country had lost export viability due to higher transportation costs between their production sites and the coast.

Industry experts fear a total collapse of the sector if immediate remedial steps are not taken and that the decline in domestic sales of cement is a direct reflection of subdued economic activities. However, as the global economy shows signs of recovery, the decline in cement exports should be a matter of grave concern for the economic managers of the country.

Saudi Arabia: Cement companies in Saudi Arabia recorded a 16% increase in sales in April 2011, the highest in more than a year. Domestic cement sales grew to 4.2Mt in April 2011, compared with 3.6Mt in the same period of 2010. Private projects, notably those for housing and schools boosted demand for the material.

"In 2010 people were very wary. The last thing they wanted to do was commit money, but now the outlook is looking brighter," said Farouk Miah, an analyst at NCB Capital in Riyadh. "There is also a lot of activity for plans to develop the rest of the country, in Makkah, Madina and Jeddah," he added.

Saudi Arabia is expected to need two million more homes by 2014 to keep up with the demands of a population that has quadrupled in 40 years. Shares of cement companies have already had a decent run in 2011, up an average of 24% over the same period of 2010.

It is expected that Saudi Cement, Southern Province Cement and Yamama Cement should benefit from the demand because they have the largest volume. Smaller cement companies, which are already running at full capacity, will be less well positioned to benefit.

Japan: Post-earthquake reconstruction demand is expected to boost pre-tax profits at four major Japanese cement firms by a combined USD 411m until 2016.

Assuming that their market shares remain the same, reconstruction demand will push up pre-tax profits by USD 187.2m at Taiheiyo Cement Corp, USD 100m at Sumitomo Osaka Cement Co., USD 62.4m at Mitsubishi Materials Corp. and USD 62.4m at Ube Industries Ltd.

The Japan Cement Association estimates that 10Mt of cement will be used for reconstruction projects. The figure was arrived at based on damages estimated by the Cabinet Office and how cement sales increased in the aftermath of the 1995 Kobe earthquake. The trade group believes that full reconstruction will take about five years.

Cement firms each book an operating profit of about USD 50/t of cement sold. Taiheiyo Cement controls almost 40% of the market in Japan's north-eastern Tohoku region. Reconstruction demand will push up the firm's cement sales by nearly 4Mt, translating to a USD 37.4m contribution to pre-tax profit annually for the next five years.

UK: Cemex has appointed Jesus Gonzalez as the company's new president for its UK operations. He was previously employed by Cemex in Panama, where he acted as president for the company's Central American operations.

Gonzalez has been employed by Cemex since 1998 and replaces Gonzalo Galindo, who has been appointed to the position of regional president, USA East.