Global Cement News

Nigeria: The Cement Manufacturers Association of Nigeria (CMAN) has disclosed that the sector is poised to receive US$11.4bn in investment as national output reaches at least 45Mt/yr by 2015.

The managing director of Lafarge Cement WAPCO, Joe Hodson, said at a CMAN forum in Lagos that the consumption of cement in Nigeria was currently inconsistent with the existing economic realities in the country and would inevitably rise. He stressed that the per capita consumption of cement in Nigeria was a fraction of that in Egypt providing a lot of potential for development. Hudson noted that, having grown local cement output in Nigeria from less than 10Mt/yr in 2008 to about 28Mt/yr in 2012, the sector had made significant effort to save scarce foreign exchange and helped to create many jobs. However Hudson called on the Federal Government to address a lack of affordable power, lack of transportation infrastructure and dearth of skilled manpower.

The Federal Government responded by stating that it was now set to release the final result of the concession exercise it conducted for three major road construction projects in the country, which are to be handed over to the private sector. These projects included the Second Niger Bridge linking Delta State and Anambra State, the Bridge over River Niger at Nupeku in Niger State and the expansion and upgrade of the Apakun-Murtala Muhammed International Airport Road in Lagos.

Kenya: Athi River Mining has posted a 17% rise in first quarter pretax profit to US$4.7m, helped by higher production and growing demand for cement for infrastructure projects.

Kenya's second-largest cement firm, the turnover of which jumped by 61% to US$32m for the quarter ending 31 March 2012, said it would recommend a share split of five for every one ordinary share and a name change to 'ARM Cement Limited' at an annual general meeting scheduled for 24 July 2012. The company also said in March 2012 that it planned to raise US$50m, equivalent to 13.6% of its total equity, through a six-year convertible loan from Africa Finance Corp to finance expansion of its clinker and cement plants later in 2012.

Portugal: Brazilian construction group Camargo Corrêa, which is trying to take over Portugal's top cement maker Cimpor, has rejected Cimpor management's counter-proposal for a merger with Camargo's cement unit, saying it was 'unrealistic.'

Cimpor's board, which had earlier said the price of Euro5.50/share offered by Camargo was too low, said that a merger would widen Cimpor's portfolio and create better synergies, preventing the withdrawal of another Brazilian shareholder, Votorantim. Its proposal involves paying up to Euro1.00/share in dividends to Cimpor shareholders.

Camargo's unit Intercement responded that the proposal was "untimely, unrealistic and inappropriate as it does not address various interests at play at Cimpor that have already been publicly expressed."

Two key Cimpor shareholders, including state-controlled bank CGD, have already said they are prepared to sell their stakes under Camargo's terms and most analysts expect Camargo to acquire Cimpor at some point. Camargo is already the largest single Cimpor shareholder and the two stakes would give it control. The Portuguese government has said a Cimpor deal has to help CGD to deleverage and defended Camargo's bid from suggestions it was against the national interests. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a Euro78bn EU/IMF bailout for Portugal.

Previously, Portuguese conglomerate Semapa proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands. The Portuguese government said that such a move would not help deleverage CGD.

US: Ash Grove Cement is seeking tax abatement for upgrade projects on its Midlothian plant in Texas. Plant manager Kevin Blankenship presented plans to the Ellis County Commissioner's Court on 14 May 2012.

Ash Grove needs to upgrade its plant in line with Environmental Protection Agency (EPA) regulations that will go into effect September 2013. The company is considering two options that will put the plant in compliance with the new regulations. The first option is to upgrade the plant enough so that it will comply with the new emissions standards. The second option is to fully modernise the plant by upgrading to a single dry kiln and shutting the other two existing wet kilns, a project that would cost US$130m. Since the presentation was not an agenda item at the meeting the court took no action.

The Midlothian plant has been in operation since 1966. Ash Grove currently intend to continue running the plant until 2050, but filed a request to shut the wet kilns in April 2012.

Italy: Buzzi Unicem has reported a widened net loss of Euro45.9m for the first quarter of 2012 from Euro32.8m for the same period in 2011, a drop of 29%. The producer, Italy's biggest cement maker by market value, blamed the performance on lower cement demand and the extremely cold winter in Europe.

Net sales fell by 1.3% year-on-year to Euro562.2m. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 47.6% to Euro22.4m. The net debt rose to Euro1.21bn at the end of March 2012 from Euro1.14bn at end of December 2011. Buzzi Unicem confirmed it expects to post in 2012 operating results similar to the ones booked in 2011.