Global Cement News

Germany: German cement industry supplier Loesche GmbH has acquired the majority of stakes in the aixprocess and aixergee engineering companies based in Aachen, Germany.

aixprocess GmbH develops models and tools for the simulation of complex process and flow-relevant processes and has been providing solutions successfully to customers from the power plant and process engineering sectors for more than 10 years. It has earned its reputation internationally by providing modelling and computation technologies, especially in the area of reactive multi-phase flows.

aixergee GmbH is specialised in the optimisation of production processes in the cement industry and established internationally in the areas of alternative fuel firing, performance improvement, emissions reduction and stabilisation of plant operation. It combines industry-specific knowledge with numerical computation methods customised to meet the requirements of the cement industry in its optimisation concepts.

"Through the incorporation into Loesche Group, a globally well-positioned organisation, we can even better ensure the successful support of our international clientèle," explains Matthias Mersmann who, as Corporate Manager of Technology of Loesche Group, will continue to act as Managing Director of aixergee GmbH.

"We do not intend to act as a single source supplier for every project; however, we would like to offer the best solutions for the challenging tasks of our customers. We are therefore extremely pleased to have been able to ncorporate aixprocess and aixergee, two sector leading companies, into our group. In this way we continue to strengthen our position as a competent partner for the cement, power plant, and natural resource industries," said Dr Thomas Loesche, Managing Partner of Loesche GmbH.

Ireland/UK: The Irish Times has reported that a rifle bullet was sent to the chief executive of the Ireland-based Lagan Group, Kevin Lagan, during the third week of January 2013 in what is thought to be a direct threat linked to Lagan's proposed merger with part of the Quinn Group, which is based in Northern Ireland in the UK.

The rifle bullet was contained within a cigar box, which had, 'Quinn...is this what you want?' written on it. It had apparently been sent from Northern Ireland.

Lagan said he was 'totally amazed' by the package. He said the group's proposed merger with Quinn Building Products posed no threat to jobs. "In fact it secures the future of both Quinn and ourselves going forward," he said. "This is clearly an attempt to intimidate myself and the Lagan Group at a time when we are engaged in discussions with Quinn on combining our cement and building products businesses."

Lagan said that the person or persons behind the 'crude intimidatory tactic' were obviously not interested in protecting jobs. "We will not be swayed from our determination to complete our discussions successfully," he added.

Seán Quinn lost control of the Quinn Group in April 2011 when a receiver was appointed by the former Anglo Irish Bank. There have since been a number of incidents believed to have been carried out by people angry about what has happened.

The Iranian authorities may have taken glee in recent months in reporting that their country is on course to become the third biggest cement producer in the world. It's the position normally taken by the US in recent years (after China and India). For a country reeling from US-led sanctions it must provide some comfort. Yet what is the cost of this industrial 'victory'?

In December 2012 Iran's production for the first eight months of the Iranian calendar year beat the previous period by 6% to 49Mt. Current projections see the country hitting 75Mt by the end of the 2012-2013 year and then 85Mt by the close of the 2013-2014 year. Claims that Iran is now becoming the world's third biggest producer fit with estimated cement production figures for 2011 from the US Geological Survey (USGS) putting Iran behind China and India. The US produced 68Mt in 2011. A rough estimate for Portland cement shipped in the US in 2012 from USGS data is 79Mt.

Two stories this week build up a complex picture of the cement industry in Iran. Iranian news agencies have been reporting frequently how well the domestic industry has done in recent months. The latest concerns how Iran's Bank of Industry & Mine has allocated around Euro400m to complete 15 cement projects since 2010. However, also this week, we can report that Iran is facing a seasonal decline of cement demand leading to large stores of clinker in some plants. One can't quite imagine the state run news agencies reporting that they have larger stores of clinker than the US.

Despite the increasingly complicated international trade sanctions in force against Iran, exports are booming. In the current Iranian calendar year they have jumped by 30% to 9Mt, going principally to Iraq, Central Asia, United Arab Emirates and Afghanistan, where it has displaced a significant proportion of Pakistani exports. As our columnist Yves De Moor commented in the November 2012 issue of Global Cement Magazine, Iranian cement is cheap due to overcapacity but hard to import due to the sanctions.

In the absence of recent consumption figures for Iran, comparing the US and Iran on a graph of cement consumption per capita against GDP per capita helps. The US remains at the upper end of the distribution curve at 250kg/capita and US$48,000/capita. Iran is flying off above the other end of the curve at 1000kg/capita and US$13,000/capita. This suggests either overcapacity or a production boom.

Further overcapacity can only push the price of exported cement down further making neighbouring markets more willing to brave the sanctions. This may support Iran's economy as President Mahmud Ahmadinezhad has stated that non-oil exports are one way his country can overcome the sanctions. Additionally, overcapacity offers some political capital on the world stage. The cost for the Iranian cement industry if and when the sanctions end may be devastating though.

US: Eduardo Garcia has joined Loesche America to support the sales and marketing team for the South American market.

Garcia holds a bachelor's degree in mechanical engineering and a MBA with a

concentration in supply chain management. His prior experience has been within the cement industry with Cemex in Venezuela and more recently for Holcim Group Support in the US. In his previous positions Garcia's responsibilities ranged from contract negotiation of major capital projects, to the operation and maintenance of cement plants and cement marine terminals.

At Loesche America Garcia will responsible for aiding in the definition and execution of sales and marketing strategies to further increase the sales potential in South America. Garcia joined Loesche America in 2012.

Thailand: Siam Cement has reported that it has more than doubled its quarterly net profit as Thailand rebuilt from floods and demand for construction materials and petrochemicals surged. Southeast Asia's second biggest cement maker posted a net profit of US$232m in the October 2012 to December 2012 period, a rise of 116% compared to US$107m in the same period in 2011. Revenue from sales rose by 14% to US$3.35bn.

"An increase of 116% year-on-year was largely due to the sales recovery of the construction-related businesses from floods in the fourth quarter of 2011," the company said in a statement.

Year-on-year increases in revenue and sales were more modest when compared to the previous quarter in 2012. Revenue fell by 4% compared to the July 2012 to September 2012 period and profit increased by 8%. Revenue for the company's cement sector rose by 36% to US$576m in the fourth quarter of 2012. Profit rose by 75% to US$71.1m.

In its statement Siam Cement reported that its export market sales volume dropped by 30% quarter-on-quarter to 1Mt due to seasonal factors and tight supply as a result of plant maintenance. On year-on-year basis, export volume decreased by 22% as a result of the conversion of exports volume to serve the domestic market. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 42% year-on-year due to the better domestic cement market but decreased by 12% quarter-on-quarter to US$117m due to plant maintenance and higher electricity costs.

Siam Cement is Southeast Asia's second largest cement maker with a cement production capacity of 24.2Mt/yr. It is 30% owned by the Thai Royal family's investment arm, the Crown Property Bureau. The company said future profit growth would be partly driven by construction across the developing Southeast Asian nations, where it aims to invest $6.7bn between 2013 and 2017.