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James Hardie doubles annual profit 22 May 2014
Australia: Fibre cement producer James Hardie Industries said on 22 May 2014 that it expects the US housing construction market to improve in 2014 as it posted a more than doubling in annual net profit. "The company continues to expect improvement in the US operating environment," said James Hardie.
James Hardie, which generates two-thirds of its revenue in Europe and the US, said that its annual net sales in those markets grew by 19%, helped by strong rises in US single-family building permits. James Hardie posted a net profit of US$99.5m for the year to 31 March 2014, up from US$45.5m in the previous year. Net operating profit, which excludes charges for asbestos liability, asset impairments and regulatory charges, was US$197.2m compared with US$140.8m in the prior year. Overall net sales grew by 13% to US$1.49bn.
James Hardie has been compensating Australian victims of asbestos-related illnesses such as mesothelioma and said that its asbestos liability grew by US$186.18m to US$1.44bn by 31 March 2014, after the number of claims were higher than expected for a second consecutive year.
India: Reliance Cement Company, part of the Anil Ambani-controlled Reliance Infrastructure, is looking at a turnover of around US$341m in the current fiscal year on the back of capacity expansion and entry into West Bengal. The company has made a foray into West Bengal, a market with 14Mt/yr of cement demand and the potential to grow by 8%/yr in the coming years.
"We are targeting cement sales of 3.5Mt and a revenue of US$307 - 341m in fiscal 2015," said Reliance Cement Director & CMO Atul Desai. "We hope to cover the entire West Bengal market in fiscal 2015, which is expanding by 8%/yr. We expect to sell 0.6 - 0.7Mt of cement in the state in fiscal 2015."
"West Bengal is one of the largest cement-consuming states in eastern India with a total consumption of around 14Mt/yr," said Reliance Cement Head (East) Deepak Ranjan. He added that Reliance Cement hopes to garner a healthy market share in the region.
Reliance Cement also plans to set up a 2.1Mt/yr cement grinding plant in Raghunathpur, West Bengal. Desai said that the company has 0.40km2 of land and is in the process of getting regulatory clearances for the project.
Reliance Cement has also lined up cement plants in various locations to increase capacity and is in various stages of acquiring limestone mining leases. "The group aims to expand its cement production capacity to 50Mt/yr over the next couple of years," he said.
India: Chettinad Cement has acquired a 20.58% stake in Anjani Portland Cement Ltd from its promoter KV Vishnu Raju. The acquisition was done in an off-market transaction and 37,84,014 shares were acquired by Chettinad Cement at US$1.054/share on 20 May 2014. After the transaction, Chettinad Cement's stake in Anjani Portland Cement rose from 20.58% to 41.16%.
Nigerian cement industry upheaval
Written by Global Cement staff
21 May 2014
Following the Standards Industry of Nigeria's (SON) decision earlier this week to ban 32.5 grade cement for all applications except for plastering, the country's cement industry is likely to be faced with some difficult decisions. The new rules state that 42.5 grade cement must be used for casting of columns, beams, slabs and for moulding blocks, while 52.5 grade cement is now mandatory for building bridges. As a developing country, Nigeria is home to a large number of construction and infrastructure projects. To ensure safety this means that the construction industry must be well-regulated.
Arguments against the use of low quality cement in Nigeria have been long drawn out as low quality cement has been blamed for a spate of building collapses, resulting in the deaths of 297 people in 1974 – 2010.
In support of the country's cement producers, SON's director general Joseph Ikem Odumodu was eager to point out that low quality cement is not to blame for Nigeria's building collapses. He said that cement grades 32.5, 42.5 and 52.5 are designed for different applications, which are not being adhered to by builders. While 42.5 grade cement is the minimum suitable grade for multi-story building construction like residential homes, 32.5 grade cement is frequently used instead as it is cheaper and more readily available.
Dangote Cement is currently the only company producing 52.5 grade cement in the country, which it sells at the same price as its 42.5 grade cement. The new SON decision is therefore expected to be good news for Dangote, potentially increasing sales volumes and improving the company's reputation.
With regards to the rest of Nigeria's cement producers, unless they are able to convert their production process for 42.5 and 52.5 grade cement extremely rapidly, Nigeria's cement imports and prices for domestic 42.5 and 52.5 grade cements are likely to increase, in contrast to recent trends. The new regulations, which SON has said will be strictly enforced, provide an excellent opportunity for market share expansion to those cement producers that respond rapidly. It might also be considered the ideal moment for companies to begin exploring brand identities and marketing campaigns. Lookout for our new report on cement branding in a future issue of Global Cement Magazine.
JK Cement appoints new additional director
Written by Global Cement staff
21 May 2014
India: JK Cement has announced that the Board of Directors has appointed Paul Hugentobler as an additional director in the Board, to hold office until the conclusion of the next Annual General Meeting. Previous to the appointment, Hugentobler served as an advisor to Holcim between 1 January 2014 to February 2014. Between 1999 – 2000 he was the CEO at Siam City Cement and between 1980 – 1994 Hugentobler was a project manager at Holcim Group Support.