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Construction work of Cemtech’s US$114m cement plant to start in 2016 24 September 2015
Kenya: Construction work for the long-awaited US$114m, 1.2Mt/yr cement plant project in Sebit, West Pokot will kick off early in 2016, company officials have confirmed.
Cemtech, a subsidiary of India's Sanghi Group, will begin construction work after approval by engineers who had earlier raised queries over its location, among other issues. Residents, some of whom expected to benefit either directly or indirectly from the plant construction, had waited a long time for commencement of the facility, which is long overdue.
Cemtech general manager Diptish Nandha has confirmed that all pending issues have now been resolved. Nadha said that experts had been assessing the quantity and quality of limestone and solving ground geometric technicalities that had delayed the setting up of the plant. "We have now solved the two major challenges on quality of limestone and ground geometric technicalities that delayed the start of construction," said Nadha. He disclosed that upon completion, residents nearby the plant would benefit from power supply from the company.
The cement plant was expected to start up about five years ago, but a number of challenges delayed construction. At one point, region leaders, including the governor and senator John Lonyangapuo, threatened that they would revoke operation license in favour of another investor who would show 'seriousness.'
Nandha said that the suppliers of the plant machinery are redesigning the machines to ease transportation. He revealed that the machines are expected to be on the location at Sebit by January 2016, after which construction works will begin. "The machines are very heavy and cannot be transported easily from Mombasa. That is why we have redesigned dissembled parts so that they can be easily transported from the port of Mombasa," said Nandha.
Will cement industry growth in the Philippines reveal CRH’s plan?
Written by David Perilli, Global Cement
23 September 2015
San Miguel Corporation has upped the pace of its capacity expansion this week to a US$1bn investment towards five new 2Mt/yr cement plants in the Philippines. The announcement builds on its previous plans to build two plants for US$800m. At that time construction had already begun at subsidiary Northern Cement's plant in Pangasinan and Quezon. Plants in Bulacan, Cebu and Davao have now joined the list for completion in 2017.
The scale of this expansion is vast considering that the Philippines has 17 active cement plants with a total integrated production capacity of 24.6Mt/yr. San Miguel president and COO Ramon Ang's comments to media that if there were an oversupply of cement the market would correct itself in a couple of years may sound flippant to anyone who isn't the head of a multi-billion dollar corporation. However, if achieved it will propel the San Miguel subsidiaries from the country's fourth largest cement producer to its largest.
However each of the other major producers also have their own expansion plan in various stages of completion. Holcim Philippines announced US$40m plans in May 2015 to expand its production capacity to 10Mt/yr by the end of 2016, mainly through reviving existing projects. Cemex announced plans in May 2015 to spend US$300m towards building a new 1.5Mt/yr integrated line at its Solid Plant. Lafarge Republic had plans in April 2015 to raise its cement output through the opening of grinding plants at its Rizal and Bulacan cement plants. The former was opened in April 2015 but this is the one plant that hasn't been acquired by CRH following the sale of Lafarge Republic in the run-up to the LafargeHolcim merger. The latter was last reported due for opening in December 2015.
The big change in the Philippine cement industry in 2015 has been the merger of Lafarge and Holcim to form LafargeHolcim. Given that Lafarge Republic and Holcim Philippines held over 55% of the country's production capacity before the merger, it was inevitable that they would be forced to sell off assets. In the end CRH picked up most of Lafarge Republic's cement assets bar the Teresa Plant in Rizal, which stayed with Holcim. The merger has skewed the market towards one clear leader, LafargeHolcim (9.5Mt/yr), followed by Cemex (4.73Mt/yr) and CRH (4.19Mt/yr) with similarly sized cement production bases. These producers are then chased by San Miguel (2.15Mt/yr) and the other smaller firms. If San Miguel succeeds in its expansion strategy then the market will change once again.
Cement sales rose by 11.1% to 11.9Mt in the first half of 2015 according to the Cement Manufacturers Association of the Philippines (CeMAP). They attributed this growth to strong construction activity helped by increases in government infrastructure spending. Alongside this, gross domestic product (GDP) is predicted to rise by 6% in 2015 and 6.3% in 2016 by the Asian Development Bank. Another promising sign for development came from a study by Antoinette Rosete of the University of Santo Tomas which forecast that cement demand would meet 27Mt/yr. Capacity utilisation rates rose to 85% from 68% in 2014 according to Department of Trade and Industry data.
With this kind of encouragement, no wonder San Miguel is betting on such a large expansion project. If Rosete's forecast and capacity utilisation rates hold then the Philippines might need a capacity base of around 36Mt/yr. San Miguel's growth will fill that gap.
Of course other players might have their own ideas about giving away market share. LafargeHolcim and Cemex are likely to be saddled with debt or existing projects. CRH meanwhile is the wildcard as its expansion strategy is opaque. In recent years it has seemed to focus on acquisitions over building its own projects. The Euro5.2bn the company has spent on buying Lafarge and Holcim assets this year seems likely to slow down investment on any internal development plans. However CRH is bringing in local partner Aboitiz in the Philipines to help with a US$400m loan.
The Philippines is clearly an exciting market for the cement industry at the moment. One consequence of the current situation is that it may signal what CRH's global intentions are following the LafargeHolcim merger. If it decides or is able to start building new capacity then it may reveal the start of a new phase for the Ireland-based multinational.
Holcim's Westport job cuts near as cement import facilities open sooner 23 September 2015
New Zealand: Holcim, part of LafargeHolcim, is making faster than expected progress on an operational restructure that will lead to 120 job losses on the west coast.
The New Zealand operation has revealed plans to close its manufacturing plant at Cape Foulwind, Westport, with cement instead to be imported from the Mitsubishi Kanda plant in Fukuoka, Japan, via the Timaru and Auckland ports. Holcim will now close its Westport cement plant in the middle of 2016, with 120 job losses expected. The company said that some employees have switched to other roles.
Holcim is building a 30,000t cement silo at Timaru Port and is spending a similar amount at the Port of Auckland. The company had previously said that the silo and importing facilities would be finished in the second half of 2016. However, Holcim New Zealand country manager Glenda Harvey said that the Timaru facility could be operational in January or February 2016 and that the Auckland facility should be completed in May 2016 rather than June 2016. The Westport cement plant will remain operational until the Auckland import site is fully commissioned, then it will be closed.
When the Timaru and Auckland terminals are completed, there will be about 30 staff employed in sales, operations and technical laboratory roles. Westport cement plant staff have been able to apply for positions at Holcim's Timaru and Auckland operations and also overseas, with a small number having taken up roles in other parts of the business. Workers have redundancy provisions in their contracts. The company has about 40 staff within its Christchurch head office operation and 360 in the country across the cement and aggregates businesses.
Some Westport residents have said that the Westport cement plant site and buildings could be used as an industrial park, for electricity generation or as an eco park. Harvey said there has been no update on the site, or if alternative uses could be found. The cement plant has been operating for 57 years.
Siam City Cement to take 40% of new joint venture company in Cambodia 23 September 2015
Cambodia: Siam City Cement's (SCCC) board of directors has approved a 40% share in a joint venture company in Cambodia, Chip Mong Cement Corporation, a first step in its strategy to take advantage of the upcoming Asean Economic Community.
The joint venture will involve the construction and operation of a 1.5Mt/yr capacity cement plant and related business, said Siva Mahasandana, acting SCCC deputy CEO and senior vice president for marketing and sales. He said the company had signed a definitive agreement with Chip Mong Group and three individuals, known collectively as CMG, to form the joint venture, which is expected to be in place by December 2015.
Mahasandana said that the joint venture company's registered capital would be US$150m, comprising 75,000 ordinary shares at a par value of US$2000/share. Once fully established, the new company will be renamed Chip Mong Insee Cement Corp.
Cambodia has been attracting investment with its government measures and low labour costs. Its economy has been growing measurably and the construction business is expected to grow in parallel, providing opportunities for SCCC's Insee brand. "We trust that this is an absolutely sustainable business venture in Cambodia and at the same time, we are exploring new investment opportunities in the Asean countries, especially in Cambodia, Laos, Myanmar and Vietnam," he Mahasandana.
Cimentos de Mocambique installs kiln filters at Matola 23 September 2015
Mozambique: Cimentos de Mocambique, part of Intercement, has concluded the installation of kiln filters at its cement plant in Matola, Maputo. The company invested US$10m in the equipment to reduce air pollution levels in the area.