Global Cement News

Kenya/Tanzania/Uganda: Cement makers in east Africa are set to get a major lift from an expected surge in demand driven by double-digit growth of the construction sector in the region, according to stockbrokerage firm Kestrel Capital.

Kestrel's analysts say that the construction sector is likely to outpace economic growth, expanding by up to 13%/yr compared to expected GDP growth of 6.0%/yr, 5.5%/yr and 7.0%/yr in Uganda, Kenya and Tanzania respectively.

The growth is expected to boost sales for regional cement makers and reverse the fortunes of Kenya's East African Portland Cement Company (EAPCC), the performance of which has been damaged by management wrangles at the company.

Nigeria: The Cement Company of Northern Nigeria (CCNN) has disclosed plans to raise US$280m for the establishment of a new 1Mt/yr cement production line.

According to the chairman of CCNN, Alhaji Abdulsamad Rabiu, the board of the company is now ready to implement the resolution passed at the 32nd AGM (in 2011) that authorised it to raise the necessary funds.

To help the expansion, the investment includes new coal grinding mill and accessories to help it produce more electricity. CCNN currently produces 90% of its required electrical energy requirements due to high prices and unreliable national network provision. The chairman added that the company had previously implemented an alternative fuel strategy by using rice husks. This has already cut its production costs by 15%.

CCNN made a net profit of US$7.4m in the year to 31 December 2012. This was down by nearly 50% compared to the US$14.2m that it made in the year to 31 December 2011.

Russia: Eurocement Group has announced that it will invest Euro203.9m on the upgrade of its affiliate company Mikhailovskcement, which is located in the Ryazan Region in the west of Russia.

Eurocement said that the upgrade will see the plant's capacity rise to 3.6Mt/yr from 1.9Mt/yr via the addition of a new dry-process cement kiln line. The plant currently has four wet process kilns. A time-scale for completion of the upgrade was not given.

Turkey: Çimsa Çimento has announced that its consolidated net profit surged to Euro82m in the first half of 2013 from just Euro18.5m in the first half of 2013, a rise of 343% year-on-year. Its first-half performance was mainly driven by income from investment activities of Euro53.9m compared to just Euro3.4m a year earlier.

Çimsa's operating profit rose by 13% to Euro26.8m in the six months to 30 June 213 as revenue increased by 18% to Euro176.7m. Its first-half domestic sales rose by 22% to Euro125.9m, while sales abroad were up by 9.0% to Euro50.8m.

The company's second-quarter consolidated net profit jumped to Euro72.8m from Euro15.7m, in the second quarter of 2012. This represents a rise of 363%. Second-quarter revenue increased by 5.7% year-on-year to Euro105.2m.

Sri Lanka: Tokyo Cement's profit rose by 660% to US$4.6m in the quarter ending 30 June 2013 compared to the same period of 2012. The company said that this was due to lower raw material costs.

Tokyo Cement said that its revenue rose by 4% to US$50.8m and that direct costs fell by 5% to US$47.1m. This allowed its gross profit to increase by 87% to US$9.5m. Unspecified other income also rose by 87% to US$1.2m.

Tokyo Cement, which imports clinker for grinding, was hit badly in 2012 as its raw material costs rose and the government, which controls cement prices on the island, delayed a price increase. Now, with higher sales prices and an easing of international commodity and energy prices, clinker prices have fallen. The Sri Lankan Rupee was also more stable in the June 2013 quarter than in the 2012 quarter.