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Molins purchases mothballed Cemex assets 14 June 2013
Spain: Cementos Molins has signed a contract to acquire the cement production and commercial activities of the 0.9Mt/yr Cemex España facility at Sant Feliu de Llobregat, Barcelona. Cemex suspended the cement production activities at the plant and laid off its employees several months ago. It is not known whether or not Cementos Molins will restart production.
Indian firms get a week more to pay fines 13 June 2013
India: The Indian Supreme Court (SC) today refused to give interim relief to cement manufacturers in their appeal against the interim penalty imposed on them on charges of forming a cartel, confirmed for now by the Competition Appellate Tribunal (CAT). It did, however, delay the deadline for the penalty by over a week.
The CAT had told the companies to pay 10% of the total US$1.1bn penalty imposed by the Competition Commission of India (CCI) by 16 June 2013 and it posted their main appeal for August 2013. The manufacturers appealed against this to the SC. Now the deadline for payment has been moved from Sunday 16 June 2013 until Monday 24 June 2013. However, the court insisted on their complying with the CAT's interim order.
The order was imposed by CCI against 11 major cement producers including ACC, UltraTech and Ambuja and their association. The apex court refused to lift the penalty order or reduce the rate, despite long arguments over two days by senior counsel Abhishek Singhvi for UltraTech Cement and Ranjit Kumar for Jaiprakash Associates. According to the modified order, the amounts shall be deposited with the tribunal and kept in a separate fixed deposit with a nationalised bank. The deposit shall be renewable after six months. The amounts deposited, with interest, shall be dealt with by the tribunal at the time of the disposal of the appeals of the cement companies.
The case was originally filed by the Builders Association of India before the CCI, alleging cartelisation by the cement companies. The director general (investigation) of the CCI found evidence of formation of a cartel by the cement companies, with capacity utilisation held down to control prices. The penalty was calculated on the basis of the annual turnover of the companies in question over a certain period.
A sub-Saharan showdown…?
Written by Global Cement staff
12 June 2013
In the global cement news this week, we see that PPC (the former Pretoria Portland Cement), a large-scale domestic player in the South African cement industry, has taken it upon itself to provide association-like services to cement and concrete consumers in the country. PPC says that it felt obliged to supply information on things like quantity analysis, setting advice and product testing in the place of the now-defunct Cement and Concrete Institute (CCI).
The CCI, lambasted by PPC and other cement producers for years, was accused in April 2013 by PPC of not providing the kind of advice and services that cement producers should expect from an association. PPC, Lafarge and AfriSam all pulled funding and the CCI collapsed.
If the CCI had simply ceased to exist, PPC's new stance, putting its own cash into industry-wide assistance, might be seen as laudable. However, the CCI has been re-born as the Concrete Institute (CI), an organisation that is, by its own admission, no longer on the lookout for the interests of the whole industry. The CI is largely backed by Sephaku Cement, itself majority owned by the Nigerian cement juggernaut Dangote Cement, making PPC's stance suddenly look like one of self-preservation. Dangote is making rapid progress in the sub-Saharan cement industry and firms like PPC cannot afford to let it sweep aside the status-quo in South Africa.
The speed and scale of Dangote's rise, covered previously in this column, is huge. Nigeria's largest company now has interests in Senegal, Zambia, Tanzania, Congo, Ethiopia, Cameroon, Ghana, Sierra Leone, Ivory Coast and Liberia as well as Nigeria and South Africa. Not a month goes by without the announcement of another upgrade, plant or project. Dangote has a fantastic position in its domestic market that has enabled these new projects to be funded.
By contrast PPC is battling a stale construction market in South Africa. South African cement sales fell by 3.8% year-on-year in the fourth quarter of 2012. To counteract this, PPC has committed to expand outside of South Africa to the tune of 40% of total production by the start of 2016. It announced in early 2013 that production is on track to come online in Rwanda, Ethiopia and the Democratic Republic of Congo by the fourth quarter of 2015. Zimbabwe is expected to follow suit by the middle of 2016. It already has interests in Botswana and Mozambique.
With two of its largest home-grown cement producers both expanding rapidly outside of their domestic markets, and a relative lack of interest from the big four multinationals, the sub-Saharan cement market is set for big changes in the medium to long term. PPC and Dangote are expanding towards each other and already share many markets. Dangote has expanded more rapidly and is moving towards exports from Nigeria. PPC is catching up by taking shares in strategically-placed plants. Is sub-Sahara headed for a showdown...? Whatever happens, the future of this rapidly-growing market will certainly be interesting.
CEMBUREAU elects new President and Vice President
Written by Global Cement staff
12 June 2013
Europe: Peter Hoddinott has been elected as President of CEMBUREAU for a two-year term at the Association's General Assembly, which was held in Vienna, Austria on 11 June 2013. He has completed his mandate as Vice-President over the past year. He takes over from Ignacio Madridejos. In addition, Daniel Gauthier, a member of the HeidelbergCement managing board, has been elected as Vice-President of CEMBUREAU, also for a two-year term.
Peter Hoddinott has been Executive Vice-President for Energy and Strategic Sourcing at Lafarge since 2012, responsible for worldwide energy strategy and sourcing of Lafarge's externally-sourced inputs. Previously, he held operational roles in Western Europe Cement, Latin America and South East Asia for Lafarge.
On his election as President of CEMBUREAU, Hoddinott stated, "Being elected to serve the cement industry of Europe is a privilege and honour. I am keenly looking forward to working with the whole sector to build on the foundations laid by Ignacio Madridejos over the past two years. Specifically, this involves actions to reinforce and strengthen the sector in the face of its current challenges."
"I take this opportunity of thanking Ignacio Madridejos for his commitment to the Association over the last two years" said Koen Coppenholle, CEMBUREAU Chief Executive. "I also wish to thank the Association of the Austrian Cement Industry, VÖZ, for organising this latest CEMBUREAU General Assembly. As highlighted by the European Cement Research Academy (ECRA), there are several innovation initiatives in the pipeline, and I look forward to progress in this field over the next decade."
PPC steps up to pseudo-association role 12 June 2013
South Africa: PPC (formerly Pretoria Portland Cement) launched a news and cement services 'online service desk' on 11 June 2013. The digital service follows hot on the heels of a mobile cement calculator app that can help calculate the amount of cement required for a specific job and offers real-time advice on how and when to lay concrete, based on local weather conditions.
PPC's said that it felt 'an obligation' to provide its customers (and those of the South African cement industry in general) with the information after it pulled its financial support from the Cement and Concrete Institute in April 2013. The CCI has since been dissolved. PPC had accused the CCI of being outdated and no longer able to supply the services that it, as a producer, required from an association. PPC's exit was quickly followed by AfriSam and Lafarge.
Aside from its digital services, PPC will also provide financial and technical support to universities to help develop SA's building materials and civil engineering industries. It will also expand its cement and concrete testing services, as the institute closed its testing laboratory years ago.
The CCI has since been re-established as the not-for-profit organisation the Concrete Institute (CI). It is headed by former CCI managing director Bryan Perrie, who stated that the CI is no longer representative of the whole South African industry. It is strongly linked to Sephaku Cement, which itself is majority-owned by Nigeria's dominant producer Dangote Cement.