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Sagar Cements completes sale of its investment in Vicat Sagar Cement 08 September 2014
India: Sagar Cements has completed the sale of its 47% stake in its joint venture company, Vicat Sagar Cement. Sagar had earlier obtained approval from the shareholders through postal ballot for the sale. Sagar and Vicat entered into the joint venture in June 2008 with the objective of setting up a 5.5Mt/yr cement plant in Gulbarga, Karnataka. The first phase of the plant, which was to reach a production capacity of 2.75Mt/yr, was completed in December 2012. Production commenced in January 2013.
Vietnam: Prime minister Nguyen Tan Dung has agreed to eliminate five more cement projects from the Zoning plan for the 2011 - 2020 period due to lower domestic cement consumption. The projects removed from the master plan have a combined capacity of 910,000t/yr. Earlier the prime minister had also approved the Ministry of Construction's proposal for removing nine clinker projects with a capacity of less than 2500t/day.
In 2013 the Vietnamese government decided to postpone the construction of nine other cement plants in Thanh Son, Tan Phu Xuan, Tan Tao, Yen Mao, Sai Gon Tan Ky, Phu Son, My Duc, Nam Dong and Minh Tam. While these cement plants face the axe, the government approved a project to develop Long Son Cement Plant, which will have a production capacity of 2.3Mt/yr in the northern province of Thanh Hoa. Construction commenced in early 2014 and will be put into operation in 2018.
Despite admitting the current cement glut on the local market, a number of projects are still underway as such schemes are enlisted in the nation's Zoning plan and project owners have invested huge sums in such plants, according Nguyen Van Thien, chairman of the Vietnam Cement Association. Project owners have no other choice but to continue the projects after injecting big funds, otherwise they cannot recover capital to service bank loans.
According to the Vietnam Cement Association, the combined capacity of all the country's cement plants is expected to reach more than 90Mt/yr by 2015, in line with the Zoning plan. Meanwhile, cement demand is forecast at 75 – 76Mt/yr by 2015. Vietnamese cement consumption was only 48Mt in 2012. Should demand rise by 5 - 10%/yr in 2014 and 2015, sales volumes would reach 60Mt, much lower than the expected figure.
LafargeHolcim merger approved in Singapore 05 September 2014
Singapore: Lafarge and Holcim have received approval from the Competition Commission of Singapore (CCS) to merge their businesses in the country.
Holcim (Singapore) and Lafarge Cement Singapore overlap in the manufacture and supply of ready-mix concrete and grey cement. Under Singapore's Competition Act, firms are not allowed to merge if the resulting entity could lead to a substantial lessening of competition in any market. However, Lafarge and Holcim argued that they would not have substantial market power after the merger. Grey cement is also imported to Singapore by Holcim primarily for its own consumption and is supplied to third parties only to a limited extent, they said.
After a public consultation exercise, the CSS issued its decision that 'The transaction is unlikely to lead to substantial competition concerns in Singapore.' This was because the firms are not major players in Singapore, despite being major names in overseas markets. The CSS added, "There is significant localised competition in the relevant overlapping markets in Singapore."
There are also alternative suppliers that can meet any additional demand for ready-mix concrete, thereby limiting the market power of the merged companies. With a number of suppliers in the market, cooperation among firms to raise prices will be harder as well, according to the CSS.
Vietnam cement exports rise in first seven months 04 September 2014
Vietnam: In the first seven months of 2014, Vietnam earned US$563m from the export of 13.1Mt of clinker and cement, a 24% rise year-on-year in value terms and a 20.4% increase in terms of volume. Indonesia, Taiwan and Malaysia were the largest importers of Vietnamese clinker and cement in this period, according to the Vietnamese Ministry of Industry and Trade.
Indonesia imported 1.42Mt of clinker and cement (worth US$69m), Taiwan bought 0.86Mt (US$37.6m) and Malaysia purchased 0.7Mt (US$34.7m). Cambodia was fourth with 0.29Mt (US$15.6m).
Vietnam's domestic cement sales are expected to rise by 9% year-on-year to between 49 - 50Mt in 2014, while cement and clinker exports are likely to hit 16 - 20Mt. The country exported 15Mt in 2013.
Cemex negotiating refinancing deal 04 September 2014
Mexico: Cemex has announced that it is negotiating with a number of banks in order to refinance part of its outstanding bank debt as it seeks to further lower financial costs and extend its debt maturity.
In a regulatory filing ahead of a possible private bond placement, Cemex said it is in advanced talks with a group of banks aimed at reaching a new agreement by the end of October 2014. Proceeds would be used to refinance part of an existing financing agreement with banks.
Cemex refinanced around US$15bn in bank debt during the 2009 global crisis and in 2012, with around half of the amount left to pay, agreed to reschedule some US$6bn in 2014 principal payments to 2017. Cemex has since lowered that further and owes around US$4.3bn under the agreement, which is due in 2017.
Cemex said the current talks with banks are part of its strategy to improve its financial flexibility and lower its overall debt costs. Company officials said recently that Cemex's main priority is to recover the investment-grade ratings that it lost during the 2009 crisis.