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HeidelbergCement to expand capacity to 4.4Mt/yr in Ghana 11 March 2013
Ghana: HeidelbergCement is constructing a new cement mill with a capacity of 0.8Mt/yr at its grinding plant in the port city of Takoradi. The investment of US$30m also includes the construction of a clinker silo, a new cement silo and the installation of cement bag packing and dispatch facilities. Commissioning of the new mill is scheduled for late 2014.
"The construction of the new cement mill in Ghana is another project in the context of our strategy of expanding our clinker and cement capacities in growth markets. In particular the countries of sub-Saharan Africa have a very high growth potential due to their early stage of industrialisation and rich natural resources," said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement. Ghana now holds the company's largest capacity in west Africa.
In November 2012 HeidelbergCement inaugurated a new 1Mt/yr cement mill at its grinding plant in Tema, some 25 km east of the capital city of Accra. Upon completion of the new mill at Takoradi, HeidelbergCement's total cement production capacity in Ghana will be 4.4Mt/yr.
‘Resilient’ Vicat takes 20% income drop in 2012 08 March 2013
France: The French cement giant Vicat Group has announced its results for 2012, which show a 20% drop in income compared to 2011. The group's consolidated sales came to Euro2.29bn, 1.2% higher than in 2011 when it took Euro2.27bn in sales.
However, Vicat's earnings before interest, tax, depreciation and amortisation (EBITDA) came to Euro437m, a 10.9% drop compared to 2011 when it had an EBITDA of Euro491m. The drop in its net income was 21.1% year-on-year, falling from Euro164m to Euro129m. The group said that the decline was the result of lower volumes of cement, concrete and aggregates, due to lower business levels in France and Egypt and lower prices in West Africa.
It highlighted particularly difficult production conditions in Egypt, caused by fuel shortages, higher energy costs in India, Egypt and Senegal and higher freight costs in India. These negative factors were partly offset by strong EBITDA growth in Kazakhstan and Turkey, improved performance in the US business and a slight improvement in EBITDA in Switzerland and Italy.
Vicat's CEO Guy Sidos said, "With its greater geographical diversity, the Vicat group confirmed the resilience of its growth model in 2012 in an operating environment that remained tough. The group capitalised on its investments in high-potential emerging markets, along with the gradual recovery in Turkey and the USA."
"Performance improved substantially in the second half and 2012 profitability remained at a satisfactory level," continued Sidos. "In addition, Vicat Sagar started operating in India, completing the group's development plan without affecting its robust financial position. From this solid base, the group has started 2013 confident of benefiting from its investments of the last six years, and with the stated intention of maximising cash flow in order to continue reducing debt before considering the next phase of its international development strategy."
Vicat's cement segment sold 17.89Mt of cement in 2012, a 0.8% drop compared to the cement sold in 2011. The segment's consolidated sales were Euro1.16bn, a 1.6% year-on-year improvement, while its EBITDA came to Euro336m, a drop of 11.5%. Vicat reported increased sales prices in France and Switzerland and Turkey. However, it saw sales reduce in the United States and west Africa.
In its native France, Vicat's took Euro879m in sales, 6.8% down year-on year from Euro939m in 2011. Its French EBITDA was Euro163m in 2012, 19.1% down from Euro202m. Its cement sales in France fell by 11.6% year-on-year.
In Europe (excluding France) Vicat took Euro411m in sales, 2% higher than in 2011 when it took Euro403m. Its EBITDA in Europe was Euro105m, 2.4% up year-on-year. In terms of cement sales were up by 5.0% compared to 2011, although the first half of the year saw an 11% year-on-year drop compared to the same period of 2011.
In the United States, the group made sales of Euro196m, 18.7% higher than in 2011. Its EBITDA was a loss of Euro5m, compared to a Euro9m loss in 2011. Its cement sales were significantly up in the country, growing by 18.7%.
In Turkey, Kazakhstan and India Vicat had sales of Euro442m, a 17% improvement over 2011, when it took Euro348m in sales. In terms of EBITDA the group improved by 23.9% year-on-year, increasing from Euro92m in 2012 from Euro74m in 2011. Its cement sales in these countries were up by 10.9% year-on-year, with average sales prices rising throughout the year.
In Africa and the Middle East, the group took Euro364m in sales, 11.3% down year-on-year, and had an EBITDA of Euro83m, 31.9% lower than in 2011. Notable problems included a 27% fall in sales in Egypt due to gas delivery disruption and ongoing civil unrest. In west Africa, sales were down by 5.2%. The decline here was due to a fall in sales prices.
China Resources: Higher turnover, lower profit 07 March 2013
China: China Resources Cement has announced a turnover of US$3.27bn for the calendar year 2012, 9.1% higher than its 2011 turnover of US$3.00bn. However, its profit attributable to the owners of the company was down by 44.4% year-on-year to US$299.7m from US$538.8m in 2011. In terms of volumes, the company sold 26.5% more cement and 36.0% more clinker than in 2011, selling 55.9Mt and 8.7Mt respectively.
Zhou Longshan, Chairman and Executive Director of China Resources Cement, said, "In 2012, the global economy was still in a downturn and China's economic growth continued to slow down. However, under the 'Steady Growth' economic policies implemented by the Chinese government, the national economy had shown a stable trend (to recovery)."
"During the year under review, the Ministry of Industry and Information Technology issued a list of companies with obsolete capacities. The continuous and effective implementation of obsolete capacity elimination has played an important role in the improvement of demand and supply dynamics of the cement industry. The group managed to achieve the target total sales volume of about 65Mt of cement and clinker, which resulted from the release of new capacities completed and acquired since 2011, reinforcing its leading market position in Southern China."
In addition, China Resources Cement secured a US$64.5m bank loan. It announced the funding on 5 March 2013.
February outputs of Indian cement producers 07 March 2013
India: UltraTech Cement, one of India's largest cement producers, made 3.33Mt of cement in February 2013. Its cement dispatches stood at 3.31Mt for the same month.
Meanwhile, Shree Cement has reported that its production stood at 98,300t for the month, while its cement dispatches stood at 96,700t. Sales were down 16% year-on-year compared to February 2012.
Elsewhere, JK Lakshmi Cement has reported that its production (including clinker) for the month of February 2013 was 44,700t, while dispatches (including clinker) for the same period stood at 44,600t.
In the north, Mangalam Cement cement production of 153,793t during February 2013, while its cement dispatch stood at 163,034t.
The Egyptian cement irony
Written by Global Cement staff
06 March 2013
One of the ironies of the on-going Eurozone crisis is that several of the affected multinational cement producers hold a presence in Egypt. Egypt, which has a population of over 80m and growing demand for cement, should be hauling these balance sheets out of a hole. Instead it teeters on the edge of one. The country, one of the few well-performing countries in Titan's 2012 results this week, came with a sting in its tail.
According to Titan, cement consumption in Egypt reached 'new highs' in 2012 justifying the group's new capacity. Although Titan declined to publish actual figures, it stated that turnover declined only slightly despite the greater total supply of cement in the market. Overall, Titan's Eastern Mediterranean region, which includes Egypt, saw turnover increase by 7% to Euro296m. Yet Titan's operating margins in Egypt were impacted by increases in energy costs. In addition the country's political and economic instability negatively affected the group's outlook there for 2013.
Italcementi commented too in its annual results about how much cement consumption grew in 2012. The Italian-based multinational stated that it grew by 5% from 2011 supported by the residential sector. Revenue grew in Egypt by 2% to Euro564m despite domestic sales volumes falling as much as 15%. As a whole, operating results were slightly lower than in 2011, partly due to the strong increase in the cost of energy factors, notably gas.
Titan and Italcementi are clearly both trying to play up their achievements in Egypt in otherwise dismal annual reports. Other players have no such compunctions.
Cemex encountered a 10% decline in sales volumes for 2012, half its Mediterranean region average of 19%. Lafarge reported that its sales were down by 5% in 2012 and its domestic volumes were down by 12%. It pointedly mentioned the impact of new cement production capacity on its sales. Cimpor in its third quarter results to September 2012 reported a 2% fall in sales volumes and a rise in turnover of 8% to Euro138m.
Looking back at Egyptian cement industry news stories on GlobalCement.com reveals two regular issues echoed by the annual reports: fuel concerns and labour unrest. This week is no exception, with the Egyptian government reacting to price rises related to energy input issues.
A question occurs. How much better would the Italcementi and Titan balance sheets be without the problems in Egypt? It's almost impossible to tell, but one solution would be to tackle energy supply issues by increasing the use of alternative fuels. This is covered by the Global CemFuels Conference & Exhibition that takes place on 11-14 March 2013 in Istanbul, Turkey. For more information and to register visit: www.cemfuels.com.