Global Cement News

Argentina: Cement maker Loma Negra, controlled by Brazil's Grupo Camargo Correa, will invest USD404m in Argentina between 2012 and 2014, President Cristina Fernandez has announced.

Camargo Correa officials met with the Argentine president Fernandez and presented an investment plan that includes a new cement plant. "They told me about investments... for USD404m with a cement plant that will allow them to produce 900,000t more," Fernandez, who is seeking re-election in October 2011, said in a speech.

The investments, aimed at increasing output, also include a coal stockpile yard, said Ricardo Lima, vice president of operations at Camargo Correa. Loma Negra has nine cement plants and six concrete plants.

Oman: Raysut Cement's Chairman, Alawi Ali Muqaibal, has announced that the company's pre-tax profit declined by 44% in the second half of 2011, falling to USD19.6m from the USD35m that was earnt in the same period of 2010. For the first six months of 2011 Raysut's production cement production was 1.62Mt and its clinker production was 1.71Mt.

Muqaibal added that during the period under review, total sales reached USD77.6m, a decline of 17% from the USD93m taken in 2010. Despite competition in the UAE, the company's subsidiary, Pioneer Cement, earned USD3m.

India: Grace Construction Products, an operating segment of W R Grace & Company has started manufacturing from a new facility near Delhi, India. Development at the site, which manufactures cement additives as well as concrete admixtures that are sold to cement producers in northern India, is part of Grace's ongoing growth strategy to invest in emerging regions.

Grace's cement additives help cement producers to improve grinding efficiency and overall cement quality, helping to build stronger structures in more energy-efficient ways, which helps to reduce manufacturing costs. In the past India has had issues with sub-standard cement and concrete products, including the much-publicised collapse of a bridge in New Delhi at the Commonwealth Games site in 2010.

The new facility is the most recent addition in a series of emerging market investments in the construction industry for Grace. The company has opened similar facilities in China, Colombia, Panama, Saudi Arabia and Vietnam since 2010.

"We continue to invest in emerging economies in order to meet our customers' needs," said Andrew Bonham, President of Grace Construction Products. "The new facility will allow us to enhance service and delivery times to our customers in Northern India."

The manager at the new plant, Ajay Kapoor said, "Our number one priority is to provide a safe environment and safe practices at the site. We must ensure our company culture extends throughout all our facilities from safety to product quality to community outreach."

China: China's cement industry has maintained its rapid growth in production, sales and profits so far in 2011, according to the latest data released by the Ministry of Industry and Information Technology (MIIT).

According to MIIT statistics China produced 198Mt of cement in June 2011, an increase of 19.9% over June 2010. This represents record highs for both monthly cement output and monthly growth rate. In the first half of 2011, China's cement production increased by 19.6% year-on-year to 950Mt.

Cement and clinker exports stood at 5.6Mt during the same period with an export value of USD310m for June 2011, down 35.5% and 14.9% year-on-year respectively.

According to the statistics provided the cement industry witnessed sales of USD50.4bn in the first five months this year with profits of USD5.4bn, up by 48% and an extraordinary 170% year-on-year respectively. Chinese cement production statistics are viewed with skepticism by some in the cement industry, who believe that they may be inflated.

Greece: Titan Group has recorded a poor set of financial results for the second quarter and first half of 2011, in line with independent forecasts. Turnover in the first six months of 2011 was down by 18.2% year-on-year to Euro557m, earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 12.4% to Euro141.4m and the group's net profit was Euro23.4m, down a massive 65.7% on 2010.

The weakening of the Egyptian pound and Turkish Lira, as well as the US Dollar versus the Euro, led to negative foreign exchange effects. At stable exchange rates, the decline in Group turnover would have stood at 14.1% and the decline in EBITDA would have been 6.6%. The group's results were also negatively impacted by increases in the price of fuels.

The deterioration in operating results was mainly attributed to the sharp decline in construction activity in Greece (reaching a nearly 40-year low), in conjunction with the deep and persisting depression of construction activity in the USA. In contrast, Group's activities in developing countries, particularly in the Eastern Mediterranean region, increased their contribution to the group's operating results.

In Greece, the combination of growing uncertainty regarding employment and attendant future household income, coupled with the decline in new loans issuance on the part of banks and the existing surplus housing stock, resulted in a sharp decline in demand for building materials. The repeated cutbacks in public investment programmes and the state's inability to cover its arrears, have brought public works to a standstill. In Greece Titan's EBITDA consequently declined by 49.4% compared to the first six months of 2010 to stand at Euro26.9m.

In the USA, construction activity continues to be faced with a very poor set of circumstances. Uncertainty regarding the timing of the economy's turnaround in conjunction with the country's debt crisis, the containment of public expenditure and the high levels of unemployment are preventing the recovery of the construction sector. Activity in the south east states, where Titan is primarily active, remains particularly stagnant at the very low levels witnessed in recent years. EBITDA in the USA recorded a loss of Euro4.8m in the first six months of 2011.

In south east Europe, indications emerged that the recovery in the region's economies is gradually beginning to have a positive impact on construction activity. Within the context of its stated goal of reducing its carbon footprint, the group completed the installation of a new unit in Bulgaria within the plant's perimeter for the pre-processing and recycling of municipal waste, which is expected to come on stream in the third quarter of 2011. EBITDA in the region of south east Europe recorded marginal growth, reaching Euro42.7m.

The social upheaval in Egypt is gradually affecting the country's growth rates and subsequently also pulling down the construction sector. In contrast, the growth of the Turkish economy has led to higher demand in the construction sector as well. EBITDA in the eastern Mediterranean region grew by 19.5% to Euro76.5m.

The prospects for Greece in the second half of 2011 remain very poor. Cement demand for the full year is forecast to stand at just 35% of 2006-7 levels. Support from the EU, which aims to kick-start investments and public works, is not expected to lead to a meaningful improvement in the coming year. In line with poor expectations in Greece and Titan's other major areas of interest, the group has said that it will continue to focus its efforts on the generation of free cash flow aiming at improving its financial flexibility.