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Lafarge net loss doubles in Q1 07 May 2013
France: Lafarge's net loss has nearly doubled year-on-year to Euro117m for the first quarter of 2013, from Euro60m in the same quarter in 2012. The multinational building materials producer blamed the result on poor weather, production limitations in Algeria and Egypt and reduced working days in the quarter.
"The first quarter traditionally represents a small proportion of our results and is not indicative of full year trends. Our outlook remains unchanged and we expect to see cement demand growth in our markets of between 1 to 4% in 2013," said chairman and chief executive officer of Lafarge, Bruno Lafont.
Lafarge's cement volume's decreased by 8% year-on-year to 28.7Mt in the first quarter of 2013 from 31.3Mt in the same quarter in 2012. Sales fell by 6% to Euro3.14bn from Euro3.35bn. Earnings before interest, taxes, depreciation and amortisation fell by 26% to Euro380m from Euro511m. However, the company reduced its net debt by 4% to Euro11.8bn from Euro12.4bn.
By region, cement volumes declined by 25% in north America to 1.5Mt from 2Mt, affected by adverse weather. In western Europe cement volumes declined by 24% to 2.9Mt from 3.8Mt, with sales volumes down by higher percentages in Spain and Greece. In central and eastern Europe cement volumes declined by 14% to 1.6Mt from 1.8Mt. In Middle East and Africa cement volumes declined by 10% to 10.1Mt from 11.2Mt, affected by a strong first quarter in 2012 and work stoppages and gas shortages in Algeria and Egypt respectively. Notably, Egypt showed a 31% drop in cement volumes. In Latin America cement volumes fell by 4% to 2.2Mt from 2.3Mt. In Asia, cement volumes rose by 3% to 10.4Mt from 10.2Mt. Notably, Lafarge reported that prices fell due to increased supply in China.
In its outlook the group repeated its aims to reduce net debt below Euro10bn as soon as possible in 2013. Capital expenditures will be limited initially to Euro800m in 2013. Price increases have been actively implemented in most of its markets and Lafarge expects to see benefits from this later in the year.
Oman Cement first quarter sales up 35% 03 May 2013
Oman: Oman Cement Co has reported a 35% rise in its net profit for the first quarter of 2013 on the back of improved sales volumes. Its net profit rose to US$17.9m from US$13.3m in the same period of 2012.
The company reported sales of 628,553t of cement during the first quarter of 2013, 12.5% higher compared to the 558,495t sold in the same period of 2012. In value terms, sales for the three-month period rose by 12% to US$40.7m from US$35.6m in the same period of 2012.
Company chairman Dr Abdullah Abbas Ahmed said, "We have continued to successfully improve our sales and profit with a balanced approach of marketing efforts, a competitive price structure and discount scheme backed by the quality of our products and adopting effective expenditure control measures."
"As demonstrated by increased sales volume during the first quarter, the company is confident of the demand for cement in the country. With the company's well-structured pricing policy, we hope that in spite of stiff competition with other cement manufacturers, particularly from neighbouring countries, the company will continue to do well in retaining its market share," added Ahmed.
Oman Cement Co is in the process of increasing its cement-grinding capacity by installing a new 150t/hr cement mill. The company is also planning to improve its pollution control equipment on one of its kilns to decrease dust-emission levels. The process of identifying a suitable consultant for this task is in progress.
Mondi plant up-and-running in Iraq 03 May 2013
Iraq: Mondi has announced that it recently started full production at its new industrial bags plant in Sulaimaniyah, northern Iraq. Together with its local partner Kaso Group this greenfield project is set to strengthen Mondi's industrial bags business in the expanding Middle East and North African (MENA) region. The plant is the first industrial bags plant in Iraq and will serve the growing cement industry that is rebuilding the country.
"We are proud to announce the opening of our new greenfield plant in Sulaymaniah," said Issa Azar, regional manager (MENA) Mondi Industrial Bags.
"Iraq is now one of the Middle East's growing countries and the construction industry is helping to rebuild the rebuild the nation", explained Abdel Hafez Abki, managing director of Mondi Kaso Iraq. "The new plant further strengthens Mondi as a reliable industrial bags partner in the region."
As Omar Ismail, managing director of Mass Iraq Company for industrial investment illustrates, "We are pleased with the startup of Mondi's bags factory in Iraq and are looking forward to further constructive cooperation between both companies."
Rozhgar Barzan, procurement and sourcing manager at United Cement Company (Lafarge Iraq), said, "Having Mondi's industrial bags plant close to our cement factories strengthens our long-term business relationship and is important for good logistics and supply management."
Vulcan Q1 loss deepens 02 May 2013
US: Vulcan Materials Company saw its loss increase year-on-year to US$54.8m in the first quarter of 2013, from US$52.1m in the same period of 2012. The US construction materials company attributed the widening loss to bad weather, lower production volumes and rising costs.
"Housing starts, as measured on a seasonally adjusted annual rate, are now more than 1 million, indicating the beginnings of a broad-based recovery in residential construction. Growth in residential construction activity and its traditional follow-on impact to private non-residential construction underpins our expectations for volume and earnings improvement in 2013," said Don James, chairman and chief executive officer.
Despite the loss, in revenue increased slightly to US$538m. Vulcan shipped 248,000t in the first quarter of 2013, for internal and external consumption, a 14% rise from the same period in 2012. For the remainder of 2013 Vulcan expects its cement business earnings to improve in 2013 due to lower production costs.
Iraq: right time, right place?
Written by Global Cement staff
01 May 2013
Chinese and Iranian companies have released information on two new projects in Iraq. Chinese cement equipment provider Sinoma has signed a contract with the Faruk Investment Group to build a cement clinker production line and the Islamic Republic News Agency has reported Iran's intention to build a 2Mt/yr plant.
Sinoma's project seems targeted at the domestic market. It is based at Sulaymaniyah, at one of Faruk Group's two plants that it runs with Lafarge near the northern Kurdish city. Lafarge also runs a third plant in Kerbala that announced the arrangement of a US$70m loan for renovations in January 2013. Lafarge holds a cement production capacity of 6.5Mt/yr, 20% of Iraq's total installed capacity of 32.5Mt/yr. Although, following years of neglect installed capacity and actual cement produced can vary significantly. Faruk Group's decision to choose Sinoma marks a move away from the German firm ThyssenKruppPolysius whom they have used previously. The new line will be Sinoma's seventh in Iraq through its Nanjing subsidiary.
Meanwhile, the Iranian project carries more international motives because the clinker for the plant will come exclusively from Iran. The build is based in the southern Muthanna province and is being overseen by the Iranian Azar-Abadegan Khoy cement plant. As reported in late January 2013, clinker stocks rose in Iran due to a decline in cement demand in the country. Iraq is one of the countries Iran has been able to export cement to during the 2012 – 2013 Persian year. In this context expanding into Iraq makes a lot of sense to combat potential Iranian overcapacity.
In addition all the products made at this plant will carry Iranian branding. Given that this plant is in southern Iraq relatively near to the Saudi border this will complicate any plans to sell stock across the border. As we report this week in Global Cement Weekly, Saudi cement producers have been asked to build reserves of cement to manage the shortage better.
Both projects reveal some of the issues facing Iraq's cement industry, specifically Iraq's redevelopment and the pressures it faces lying between massive demand for cement in Saudi Arabia and overcapacity in Iran. After years of low capacity utilisation rates, Iraq is predicted to hit a production capacity of 22Mt/yr by the end of 2014 with demand expected to reach 35Mt/yr.
For more information on the Iraqi cement industry read Global Cement Magazine's article.