Global Cement News

China: With effect from 26 May 2014, Wong Ka Hang resigned from her office as Allied Cement's company secretary. With effect from 26 May 2014 Li Chun Fung has been appointed as her replacement.

Mexico: Further management changes have been implemented at Cemex, including the inclusion of six executive vice presidents, instead of five. The six vice presidents will report directly to the director general, Fernando Gonzalez, with the position of executive vice president of finance to be filled by Jose Antonio Gonzalez.

Juan Pablo San Agustín will continue as executive vice president of strategic planning and business development, while Maher Al-Haffar has been appointed as executive vice president of investor relations, corporate communications and public affairs. Luis Hernandez will continue as executive vice president of organisation and human resources, as well as security and administrative services, while he will also be responsible for processes, IT, innovation, global service organisation (GSO), the securities funding corporation (VMO) and the Neoris project. Ramiro Villarreal will remain head of legal affairs, taking up the position of executive vice president of legal, while he will continue as secretary of the board of directors. Mauricio Doehner has been appointed as executive vice president of corporate affairs and business risk management.

No changes have been made at the regional director level. Cemex executives have also expressed a desire to recover investment grade at the firm, lost during the crisis in 2009.

Following the Standards Industry of Nigeria's (SON) decision earlier this week to ban 32.5 grade cement for all applications except for plastering, the country's cement industry is likely to be faced with some difficult decisions. The new rules state that 42.5 grade cement must be used for casting of columns, beams, slabs and for moulding blocks, while 52.5 grade cement is now mandatory for building bridges. As a developing country, Nigeria is home to a large number of construction and infrastructure projects. To ensure safety this means that the construction industry must be well-regulated.

Arguments against the use of low quality cement in Nigeria have been long drawn out as low quality cement has been blamed for a spate of building collapses, resulting in the deaths of 297 people in 1974 – 2010.

In support of the country's cement producers, SON's director general Joseph Ikem Odumodu was eager to point out that low quality cement is not to blame for Nigeria's building collapses. He said that cement grades 32.5, 42.5 and 52.5 are designed for different applications, which are not being adhered to by builders. While 42.5 grade cement is the minimum suitable grade for multi-story building construction like residential homes, 32.5 grade cement is frequently used instead as it is cheaper and more readily available.

Dangote Cement is currently the only company producing 52.5 grade cement in the country, which it sells at the same price as its 42.5 grade cement. The new SON decision is therefore expected to be good news for Dangote, potentially increasing sales volumes and improving the company's reputation.

With regards to the rest of Nigeria's cement producers, unless they are able to convert their production process for 42.5 and 52.5 grade cement extremely rapidly, Nigeria's cement imports and prices for domestic 42.5 and 52.5 grade cements are likely to increase, in contrast to recent trends. The new regulations, which SON has said will be strictly enforced, provide an excellent opportunity for market share expansion to those cement producers that respond rapidly. It might also be considered the ideal moment for companies to begin exploring brand identities and marketing campaigns. Lookout for our new report on cement branding in a future issue of Global Cement Magazine.

India: JK Cement has announced that the Board of Directors has appointed Paul Hugentobler as an additional director in the Board, to hold office until the conclusion of the next Annual General Meeting. Previous to the appointment, Hugentobler served as an advisor to Holcim between 1 January 2014 to February 2014. Between 1999 – 2000 he was the CEO at Siam City Cement and between 1980 – 1994 Hugentobler was a project manager at Holcim Group Support.

Mexico: Cemex has announced that it has promoted its chief financial officer (CFO), Fernando Gonzalez, to chief executive. Gonzalez replaces Lorenzo Zambrano, who died suddenly on Monday 12 May 2014. It also named Rogelio Zambrano, a cousin of the late executive, as its new chairman. Lorenzo Zambrano had been chief executive since 1986 and chairman since 1995.

"We will stay focused on creating value for all of our stakeholders," said Rogelio Zambrano in a statement. "I am very optimistic about Cemex's future." He has been a member of the Cemex board since 1987 and president of the company's finance committee since 2009.

Fernando Gonzalez joined the company in 1989 and held senior positions in a number of regions before being named executive vice president for finance and administration several years ago. "We are encouraged by the positive outlook and the improving business environment in the markets where we operate," he said in the release.

The board's decision to replace Lorenzo Zambrano from within the company is likely to reassure investors of continuity at Cemex, which is seeing a recovery in earnings after the recent economic crisis led the highly leveraged firm to refinance debt, sell assets and lay off around 10% of its workforce. The speed at which the board has responded is also likely to instill confidence.

After taking over the company, Zambrano embarked on a rapid and ambitious international expansion that transformed Cemex from a regional producer into a global supplier of cement and building materials, borrowing heavily to acquire companies and aggressively paying down debt.