Global Cement News

Spare a thought for your fellow cement workers this week as reports emerge of plant employees being forced back to work at gunpoint in Kenya and Chinese workers being kidnapped in Egypt.

The news that workers have been coerced with bullets is just one horror story from the ongoing soap opera that is the East African Portland Cement Company. Since the Kenyan government dismissed the directors in December 2011, over allegations of alleged mismanagement, progressively more murky disclosures have emerged. Although the latest reports suggest that all the 1200 permanent employees have now returned to work, the situation remains volatile. Anyone who thought that a judge could simply order the plant back to work because he said so has underestimated the situation.

On one side sit the directors who have already been sacked and reinstated by the government following accusations of non-competitive tenders and rampant expenses claims in December 2011. Running scared of their own employees, they now have to face the Maasai elders who supporting the directors by ordering the closure of the gypsum, limestone and pozzolana mines. On the other side is the Kenyan government which was legally forced to return the directors they dismissed. In the middle remain the workers, at work for now but for who knows how much longer.

By contrast the 25 mostly Chinese cement factory workers who have been kidnapped in Egypt's Sinai Peninsula may have had the best management in the world. Yet working internationally can bring risks such as political instability that are hard to predict.

Elsewhere in this issue of Global Cement Weekly, you can read about new plant plans in Indonesia, rampant overcapacity in Vietnam, soaring profits in Saudi Arabia and the news that Italcementi is likely to have to sack 7.5% of its workforce.

Egypt: Bedouin in Egypt's Sinai Peninsulas kidnapped 25 mostly Chinese cement factory workers on 31 January 2012. They demanded that authorities free fellow tribesmen from prison, sources from the tribe said.

"We will not release the Chinese until our demand for the release of these sons of Sinai are met," said one of the Bedouin who wanted to remain anonymous.

The workers were kidnapped on their way to a Sinai Cement plant and were being held in a tent near a road that the Bedouin had blocked for the past three days to press their demand, the sources said. They said their jailed tribesmen were arrested between 2004 and 2006 as part of an investigation into bombings at the Taba resort on Sinai's Red Sea coast in which 31 people were killed.

Malaysia: Lafarge Malayan has appointed Bradley Peter Mulroney as its president and chief executive officer and Malaysian Chen Theng Aik as its executive director.

Mulroney, aged 49, is a British national. He holds a Bachelor of Arts from the University of London and he initially started his career with Redland plc, where he rose to the rank of a general manager. Redland was acquired by Lafarge SA in 1996.

Aik, aged 45 is a Malaysian who was previously the senior vice-president, finance and chief financial officer of Lafarge Malayan.

Vietnam: The Vietnamese cement industry continues to suffer the effects of overcapacity and is struggling to export enough cement. The industry faced many difficulties in 2011, in part due to its stagnant real estate market. In 2012, however, eight new cement plants will go into operation with a combined capacity of 6.9Mt/yr. This will bring the total capacity of the country to 73Mt/yr, worsening the oversupply situation.

According to the Vietnamese Cement Association, the total demand for cement in 2012 will be about 60Mt/yr, of which 53Mt/yr will be for domestic consumption. Currently cement is exported to China, India and a number of Asia Pacific nations. Africa is also becoming a promising market. While China is reporting soaring consumption, India itself is facing overcapacity as demand weakens, threatening this export market for Vietnam.

Vietnam currently faces difficulty in supplying cement overseas. Its domestic infrastructure is poor and input costs, like those around the world, are increasing. There is also a poor perception of Vietnamese cement exports, which may be damaging trade.

Indonesia: PT Indocement Tunggal Prakasa has reported that it will build a US$500m cement factory with a production capacity of 3Mt/yr in the regency of Pati, Central Java.

Sahat Pangabean, Indocement's corporate secretary, said that the company was hoping that the process of licensing the plant would be completed within 2012 and that construction would start immediately afterwards. Sahat added that the company was currently in the process of conducting an analysis of the plant's potential environmental impact.

The project will be run by Indocement's subsidiary PT Sahabat Mulia Sakti and is expected to be operational in 2015.