Global Cement News
Search Cement News
Mexico: Cementos Moctezuma has announced US$200m of investments to increase its cement production capacity by 1.3Mt/yr to 2.6Mt/yr at its plant in Apazapan, Veracruz. The company, which is owned by Buzzi Unicem, Cementos Molins and Carso, runs three plants in Mexico with a total production capacity of 6.4Mt/yr. Moctezuma's income grew by11% to US$164m in the January - March 2014 period.
EAPCC expects sharp drop in full-year profit 21 May 2014
Kenya: East Africa Portland Cement Company (EAPCC) expects its profit for the financial year that ends in June 2014 to drop by at least 25% compared to the preceding year's performance, in which it made US$19.3m in profit. The company has issued a profit warning, attributing the expected dip in profit to reduced sales and rising costs.
"It is projected that the profit for the 2013 - 2014 financial year will fall by more than 25% compared with the 2012 - 2013 year," the company said. EAPCC also attributed the outlook to reduced export sales and loss of market share in Kenya.
While EAPCC's sales have declined significantly, it has maintained fixed costs, including salaries, at a high level to maintain operations. This implies reduced margins, with the firm having already posted a weaker performance in the first six months of its 2013 – 2014 financial year, which ended in December 2013. Its net profit during the period fell by 43.9% to US$2.09m, weighed by higher costs and flat sales of US$51.2m.
Analysts at the Standard Investment Bank (SIB) said EAPCC has been hit by inefficiencies and perennial business disruptions brought by shareholder disputes. The government, which has a 52.3% stake in EAPCC and Lafarge, which owns a 41.4% stake, have in recent months fought to control the cement firm. The latest battle has seen the government report Lafarge to the Competition Authority for its cross ownership in EAPCC and its rival, Bamburi Cement.
South Africa: PPC has announced that in the first-half of its 2014 financial year, which ended in March 2014, its profit grew by 52% as the company consolidated its foreign units and increased its exports to counteract declining domestic sales.
Net income for the six months grew to US$47.2m from US$31.1m for the same period in 2013. Operating earnings before a number of one-time items rose by 3% to US$84.6m, while sales grew by 9% to US$398m.
Cement sales in South Africa were negatively impacted by a platinum mining strike and heavy rains during the period. Sales volumes in the north west of the country, where many of the platinum mines are located, fell by 25% in the first six months of PPC's reporting period and are not expected to recover in the near future.
"Improvements in export sales and the consolidation of sales from our Rwanda operation and newly-acquired Safika Cement business were partly offset by declining sales volumes in South Africa and Botswana," said chief executive Ketso Gordhan. PPC said that it remains optimistic that cement sales volumes will improve.
To combat a slow domestic market, PPC is expanding across Africa, including in countries such as the Democratic Republic of Congo (DCR), Zimbabwe, Algeria and Mozambique, to boost foreign sales to 40% by 2017.
PPC said that Zimbabwe's economic slowdown had caused 'in-country liquidity constraints,' resulting in a fall in cement demand. Despite the slowdown, analysts have said that the country's infrastructural deficit presents immense opportunities for cement makers. PPC is investing US$12.4m to expand its cement plant in the country and plans to construct a 0.70Mt/yr cement plant under its subsidiary, PPC Zimbabwe. PPC also plans to retire two 'less-efficient' mills at its Bulawayo plant. "The new mill in Harare gives a competitive advantage and a phased capital expenditure approach reduces risk," said Gordhan.
Gordhan said that PPC plans to construct a US$200m clinker plant on the border with Mozambique and a cement plant in Tete, Mozambique.
In the Democratic Republic of Congo (DRC), PPC is investing US$280m to build a 1Mt/yr cement plant in the west of the country. The plant is currently under construction. PPC will assume 69% ownership of the plant, while the Barnet Group will own 21% and the International Finance Corporation will own 10%.
Hodna Cement Company, in which PPC has a 49% interest, plans to construct a 2Mt/yr cement plant near Sétif, Algeria to be constructed by China's Sinoma. "We are optimistic that we will be on site by the end of 2014," Gordhan said. Algerian cement demand is estimated at 22Mt/yr.
France: Italcementi has set the final price for the buyout offer targeting the minority holdings in its French arm Ciments Français SA at Euro79.50/share, excluding dividend.
Italcementi, which currently owns 83.83% of the share capital and 91.03% of the voting rights of Ciments Français, has increased the bid by Euro3.00/share from the Euro78.00/share announced on 6 March 2014, which included a dividend of Euro1.50/share.
The price was boosted after taking into consideration the assessment by Ciments Français and its advisor, FINEXSI, the revised growth projections of the group and recent industry developments. The bid, which is in line with a drive to increase Italcementi's capital and streamline the group's structure, is to be launched in June 2014 and has a maximum total counter-value of some Euro463.5m. Italcementi will use proceeds from a capital hike of up to Euro500m to bankroll the offer.
Ciments Français' board noted that the price is deemed fair by the advisor and is in the high-end of the established valuation range. Moreover, the move is seen to allow Ciments Français to conduct its operations more efficiently, the board added. In the event that Italcementi builds a stake of at least 95% through the tender offer, it would initiate, within three months from the completion of the bid, a squeeze-out procedure for the rest of the shares at the offer price.
Russia: Eurocement Group has signed contracts with Chinese companies for equipment supplies, engineering, installation supervision and employee training totalling Euro387m.
"The contracts, which were signed on 20 May 2014, include the delivery of a complete set of equipment necessary for the construction of new cement dry-production lines," said Eurocement. The contracted supplies include mechanical equipment, furnaces, cyclone heat exchangers, crushers, and mills.
The equipment will be used for the construction of new cement plants with a total cement production capacity of 17Mt/yr in six regions of Russia: Leningrad, Ryazan, Bryansk, Arkhangelsk, Ulyanovsk and Samara regions. Eurocement currently operates 16 cement plants with 40Mt/yr of production capacity.