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South Africa: Chinese cement producer Jidong Cement has secured US$86.6m loan towards building a new cement plant at Koedoeskop in the northern state of Limpopo, South Africa. The 1Mt/yr greenfield project, Mamba Cement, comprises Jidong Cement and the China-African Development Fund, Wiphold.
"A master finance agreement was entered into between Nedbank Capital, Bank of China and a special-purpose vehicle known as Mamba Cement Company," said Nedbank head of infrastructure Brett Botha. South African bank Nedbank signed an agreement with Bank of China for the project on 27 March 2013.
Double-think? Calling for reduced emissions while welcoming fewer regulations
Written by Global Cement staff
27 March 2013
The Mineral Products Association (MPA), which looks after the interests of the cement industry (and other allied industries) in the UK, has said that it welcomes a temporary tax-freeze relating to climate change announced in the UK Budget of 20 March 2013. The MPA singled out the decision to freeze the indexation of the Aggregates Levy until April 2014 and the decision to introduce the Climate Change Levy mineralogical and metallurgical exemption for energy-intensive industries such as cement and lime. Both of these moves by UK Chancellor George Osborne have been welcomed because they bring some relief to the UK cement industry and wider construction activities. MPA members make money from such activites and any potential cost that can be eliminated or delayed, even for a short time, is welcome amid the current slump that is the UK economy. This is especially true as the UK weathers the one of the longest and most severe winters for 50 years. So far, so much sense.
However, how does this reaction to the Climate Change Levy exemption tie in with the MPA's February 2013 announcement that it thinks that the UK cement industry's total CO2 emissions should be reduced by 81% by 2050? What should UK cement producers make of this? The MPA's cement industry CO2 reduction targets are certainly bold. On the face of it, they look achievable given the progress that has been made to date by the UK cement industry, although much is left to the imagination as to which areas could and should contribute most to the reduction target. The 81% reduction target includes the successful future commercial development of carbon capture and storage (CCS) technologies. It also relies on an increased proportion of renewable sources for the electricity that the cement industry will receive in 2050, something else that is totally out of the industry's control.
However, much hard work has already been done by cement companies in the UK. As in other EU countries and developed nations, total dust and toxic emissions have fallen dramatically in the UK cement industry since 1990. The country's alternative fuel substitution rate has now hit ~40%. Yet, as the MPA highlights in its document detailing the targets for 2050, much of the low-hanging fruit has already been taken. Further reduction in overall CO2 emissions will be significantly affected by both regulations and cement company progress. Cement companies can increase their consumption of 'wastes' and fit waste-heat recovery systems. Through such measures they can achieve further reductions in emissions. Some kilns have hit alternative fuel substitution rates of 100% for limited periods and examples from the near continent show that 80% alternative fuels can be the norm. However, unlike these 'bottom-up' approaches, which can be introduced at a plant in a period of months, regulations take years to evolve and come into force, often involving slow and lengthly debate by politicians, associations and consumers.
To discourage the government from seeking to impose stricter environmental regulations for the cement industry by welcoming the exemption, is the MPA undercutting its own calls to reduce CO2 emissions in the UK cement industry? From a cement producer's perspective, it looks like the MPA could hold two contradictory opinions on the same subject: that you can welcome reductions in climate regulation while also calling for stricter emissions regulations. This phenomenon was famously termed 'double think' by George Orwell in his classic novel '1984,' but the MPA's situation is far more subtle. Often the regulators and those being regulated can agree on the same target but not on how that target should be reached. The next 37 years will show whether or not this target is even possible.
Former CEO of SibCem may return as director
Written by Global Cement staff
27 March 2013
Russia: Former President and CEO of SibCem Andrey Muraviev has been nominated for the holding company's board of directors. SibCem shareholders hoped that their decision would help the Russian cement producer to recover its market share and financial performance.
Muraviev is a US-educated Russian entrepreneur, who ran SibCem since 2004 and led the company as its president for its first four years until 2008. During these years, the company brought under its umbrella all the cement assets it controls, stepped up investment in innovative technologies and made an initial public offering.
SibCem was Russia's second largest cement producer by mid-2008. Muraviev quit as CEO in August 2008 over disagreements with SibCem's Chairman Oleg Sharykin. Muraviev is currently President of Parus Capital, a Russia-dedicated investment fund which is a member of the Investor Rights Protection Association.
"I believe SibCem is now one of the most undervalued cement companies the world. I see the main reasons for this in its low transparency and poor corporate governance, lack of new assets and inefficient personnel management," commented Muraviev on his possible return to Sibir Cement. Since Muraviev left in 2008 the company has had its entire top management team and all its directors replaced. SibCem's annual revenues also declined by 75%.
Sinoma considering European spending spree 27 March 2013
China: China Sinoma International Engineering will increase its capital expenditure by 29% to US$1.81bn some of which may be spent on acquiring European companies.
The Chinese state-owned cement equipment manufacturer and cement producer has set aside US$80.5m to acquire mostly foreign cement equipment companies, said chief financial officer Yu Kaijun as reported by the South China Morning Post. "We are in talks to acquire some European cement equipment companies, including German ones."
In the cement equipment sector, Sinoma International would explore opportunities in Africa, the Middle East and Southeast Asia, said Sinoma chairman Liu Zhijiang. "It will secure its footing in long-term strategic markets, including Russia and South America and enhance its influence in India," he said.
In 2013 Sinoma International aims to secure more than US$4.83bn of orders for cement equipment with about two-thirds of these originating from outside of China. So far Sinoma International has secured US$1.61bn of orders since January 2013, mostly from abroad. Sinoma will also invest US$956m in expanding cement production capacity in China, a decrease from the US$1.13bn it spent in 2012.
Heracles Cement shuts production at Halkida 27 March 2013
Greece: Heracles Cement has terminated operations at its plant in Halkida, as part of a restructuring program of its production structure. The production unit at Halkida has been idle since July 2011.
The plant at Halkida was hit by a plunge in construction activity in Attica, with sales falling by 80% between 2008 and 2013. The company said it would seek every possible solution to minimise the effect of its decision to close down the unit on its 236 workers. Heracles Cement said the decision will burden its 2013 results by Euro57m but it expects a positive impact of Euro18m/yr in subsequent years.
The restructuring programme is aimed to help the Lafarge subsidiary cope with Greece's recession in its construction sector. Under the new structure, Heracles Cement will continue cement production from its two units in Volos and Evia, exploiting their comparative advantages, mainly their port facilities, to support the group's activities in Greece and in the wider Mediterranean region.