Global Cement News

Saudi Arabia: Saudi Cement Company has announced that it will re-start operation of its 4000t/day Kiln No. 6 by the start of May 2012 at the latest. It will have completed a large-scale environmental overhaul and conversion of the kiln from gas to crude-oil by this date.

The company will also recommence operation of three older kilns over a similar timescale. These have a combined capacity of 1325t/day. The total additional available capacity available in May 2012 will be 5325t/day, helping to meet rising demand in the country.

Lithuania: Akmenes Cementas, Lithuania's only cement manufacturer, posted a revenue of Euro63.2m for the whole of 2011, a rise of 37% compared to the Euro46.4m it took in 2010. Cement sales increased by 19% to nearly 0.98Mt.

Lithuania accounted for 55% of the company's sales, with sales rising by 14% year-on-year to 0.54Mt. Sales in the Russian exclave of Kaliningrad rose by 25% to 0.18Mt, or 19% of total sales, while sales in Belarus fell by 25% to 71,000t. Its sales in EU countries surged by 67% to 185,000t.

Akmenes Cementas is in the process of implementing its biggest-ever production modernisation project, worth Euro101m, which involves shifting from wet to dry cement production.

Indonesia: PT Semen Gresik has announced plans to build a new 0.6Mt/yr, US$133m integrated cement plant at Manokwari in Papua. Company CEO Dwi Sutjipto said that Semen Gresik wanted to 'dominate' the cement market in Indonesia's eastern regions.

The plant will be commissioned in 2014 after the installation of a new packaging plant in the region, which is expected be commissioned by August 2012. The company has announced ambitious plans to develop a large number of new packing plants in strategic areas along the archipelago with the aim of improving product distribution and consequently cutting logistics costs. "Currently, Semen Gresik has 18 packing plants. We hope to have 16 to 17 more in the next five years to lower distribution costs," said Semen Gresik's finance director Ahyanizzaman, who added that each of the 0.2-0.3Mt/yr plants would require an investment of about US$10m.

Semen Gresik expects to complete the construction of at least four packing plants in 2012, with ongoing packing-plant projects at Sorong in Papua, Banyuwangi in East Java, Banjarmasin in Kalimantan and Balikpapan in Riau. "The packing plant in Banyuwangi is almost finished and the Papua plant is about 50% complete. Meanwhile, we are ready to construct the plants in Kalimantan. We expect to build in more areas in Kalimantan but we remain constrained by land acquisition," added Ahyanizzaman.

New packing plants are part of Semen Gresik's effort to improve its distribution, especially in areas in eastern Indonesia, which frequently face delivery hurdles leading to higher cement prices. Each packing plant will bag cement sent from its closest Semen Gresik factory.The Sorong plant, for example, will process cement produced by Semen Gresik's factories in Sulawesi. The packing plant will have a capacity of bagging 0.6Mt/yr. The company is investing around US$22.2m= in the Papua packing plant, which will be supported by a 10,000t silo and a 150m harbour.

The finance director also said that he expected Semen Gresik to increase its revenue by 10-12% in 2012 due to the new plants and ongoing work on integrated facilities at Tuban and Tonasa. The company forecasts a more moderate increase in its net profit due to its capital expenditure. "We estimate a growth of 1-2% in net profit in 2012 compared to 2011," said Ahyanizzaman. "The slight increase is due to the new factories producing below their full capacity."

Nigeria: Nigeria's biggest listed company, Dangote Cement opened its new US$1bn cement plant in Ibese, Ogun State, on 9 February 2012, increasing its production capacity in Africa's most populous nation by more than 40%. The new plant will produce 6Mt/yr of cement, taking Dangote's total Nigerian production capacity to 20.25Mt/yr.

"We are working towards making the company one of the eight biggest producers of cement in the world," said Dangote's billionaire owner Aliko Dangote at the plant opening. "With the commissioning of the Ibese plant, Nigeria has been transformed from major importer of cement to self sufficient in production and export."

Dangote said that the new plant would generate around 7000 direct and indirect jobs for local people and spoke about his '20:2020' vision. He forecast that by 2014 his company would be active across 14 African countries, with its production capacity hitting 60Mt/yr.

Giving further details, Dangote added that within the next two years the company would complete upgrades at its Obajana plant in Kogi state, taking its capacity to a massive 15Mt/yr from 10.25Mt/yr at present. If realised, the expansions would make Obajana the largest in the world by installed capacity.

The ceremony was attended by the Nigerian President, Goodluck Jonathan, who cut a symbolic ribbon to officially open the plant for production. He spoke of security challenges in Nigeria, saying that Nigerians were 'tired' of (Boko Haram) bombings and needed more positive developments, like the opening of the Ibese plant.

"This story about commissioning is what Nigerians want to hear," said the President. "We have security challenges in the country. We have challenges in terms of infrastructure but we are totally committed individually and collectively to getting the country out of this situation. Our children want a better Nigeria than this."

The President also spoke about plans for major highway construction and redevelopment projects in Nigeria, many of which will likely source cement from the new plant.

His comments were echoed by the Govenor of Ogun State, Ibikunle Amosun, who said that ongoing industrialisation would be severely hindered without the easy and safe transportation of people and goods. Amosun commended Dangote for 'creating the enabling environment for this kind of gigantic project to materialise.'

Japan: Taiheiyo Cement Corp. has released interim results for the first nine months of its current fiscal year, which ended on 31 December 2011. The results showed a group revenue of US$7.0bn, slightly up on the first nine months of the previous fiscal year.

Its operating profit was reported as US$242m, more than double the US$111m seen in the previous fiscal year. Its pretax profit was US$134m and its net profit for the period was US$14.2m, a turnaround from a US$72.1m loss made in 2010.

Taiheiyo forecast that the whole of the 2012 fiscal year (ending 31 March 2012), would see a revenue of US$9.3bn, an operating profit of US$350m and a net profit US$146m.

Taiheiyo's results come after a decision by Morgan Stanley MUFJ Securities to increase its rating for the Japanese cement sector to 'attractive,' the highest ranking on its three-tier scale. Shares in major companies such as Taiheiyo and Sumitomo Osaka Cement jumped sharply with the new rating.

Analysts at the brokerage said that profits at cement firms will rise in line with their ongoing efforts to cut costs. It also said that higher prices, an increasingly balanced supply and demand relationship and rising demand related to earthquake reconstruction efforts will also support profits in the cement industry.

The analysts also said that investors have undervalued shares of Sumitomo Osaka Cement and Taiheiyo Cement despite expectations that their earnings will improve in the 2012 fiscal year.