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Saudi producers report profit growth in 2012 08 January 2013
Saudi Arabia: Two of Saudi Arabia's largest cement producers, Yamama and Yanbu, have reported a growth in their profits in 2012.
Yanbu Cement announced a net profit of US$192m for 2012, an increase of 36.1% compared to 2011. The company said that such a performance had been made possible as a result of improved sales and the opening of a fifth production line part way through the year. The company also saw a 32.7% year-on-year increase in its fourth quarter sales to US$54.1m.
Yamama Cement revealed that its full-year net profits for 2012 increased by 11% to US$218m. However in the fourth quarter of the year its profits fell by 9% year-on-year to US$46.4m. The company blamed the lower sale prices achieved during the fourth quarter before the decline was reached.
A recent report by the National Commercial Bank (NCB) said that demand for cement in Saudi Arabia remains strong, with ongoing projects set to sustain growth for several years to come. It forecasted growth in market demand with a rate of 8.2% predicted in 2013 as demand reaches 56Mt. In the longer term NCB predictions expect continued demand growth of 6.3%/yr until 2015.
Yanbu is likely to benefit from any significant growth in demand, as it has three lines with a combined capacity of 1.3Mt/yr currently sitting idle. Predictions that this growth in demand will be disproportionately stronger in the western region could well yield another successful year to come in 2013.
Lafarge Tarmac starts trading after deal approved 07 January 2013
UK: Lafarge and Anglo American have announced the completion of a 50:50 venture which combines their cement, aggregates, ready-mix concrete, asphalt and asphalt surfacing, maintenance services and waste service businesses in the UK. The joint venture will be known as Lafarge Tarmac and began trading today. The Lafarge Tarmac combination is expected to generate savings of Euro74m through improved operational, logistical and purchasing efficiencies and the introduction of value-added products across a wider geographic area.
Completion of the Lafarge Tarmac joint venture follows final clearance from the UK Competition Commission, based on the completed sale of a portfolio of Tarmac and Lafarge construction materials operations in the UK, which also occurred on 7 January 2013. The agreed sale of Tarmac's 50% ownership interest in Midland Quarry Products is subject to a right of pre-emption in favour of Hanson Quarry Products Europe Limited. As a result of this the completion of this transaction is pending.
"We have successfully united two high quality and complementary UK businesses to create the leading UK construction materials company with high quality assets, two experienced management teams and a portfolio of well-recognised, innovative brands," said Cynthia Carroll, Chief Executive of Anglo American.
"The closing of this transaction and the creation of a new British construction materials champion reinforce Lafarge's ongoing commitment to the UK market and its efforts to continuously improve its offering to customers, as well as playing a full role in developing the infrastructure needed for a growing economy," said Bruno Lafont, Chairman & Chief Executive of Lafarge.
Environmentalists could sue over EPA cement standards 07 January 2013
US: Washington-based news agency InsideEPA has reported that environmentalists may be preparing to sue the US Environmental Protection Agency (EPA) over its revised emissions limits for the cement sector because the rules largely adopt weaker limits and extended compliance deadlines that had been sought by the industry. The agency says that critics warn that the ruling will create more toxic air emissions and criteria pollutant emissions that pose significant risks to public health.
"By the EPA's own numbers, that delay will cause between 1920 and 5000 Americans to die prematurely from exposure to cement plants' soot pollution. The rules will also allow cement plants to pump an additional 15,000kg of mercury into the environment," said one environmentalist quoted by Inside EPA, citing the EPA's data.
The EPA had faced a 20 December 2012 consent decree deadline to issue the rules, which revise its national emission standards for hazardous air pollutants (NESHAP) air toxics limits and new source performance standards (NSPS) criteria pollutant controls for the sector. The rules address a cement sector push for reconsideration of the NESHAP and NSPS as set in 2010, in addition to a federal appeals court ruling partly remanding the 2010 rulemaking to EPA.
In June 2012 the EPA proposed to revise the rules by weakening the particulate matter (PM) limit for new and existing kilns. It also proposed to extend the compliance deadline for the air toxics standards from 2013 to 9 September 2015. Both measures were sought by the cement sector, which argued that the 2010 rules were too stringent.
Environmental groups, including Earthjustice and the Natural Resources Defense Council, filed comments criticising the proposal as unlawfully weak under the Clean Air Act, and opposing the changes.
It now looks likely that the revised cement rules will prompt a lawsuit from these and other environmental groups given their warnings in written comments that the proposed version was unlawful under the Clean Air Act.
In contrast, the Portland Cement Association (PCA) President Greg Scott has welcomed the rules, saying that they, "Will provide PCA members and the cement industry the additional time needed for compliance with the revised standards. Such time is essential to properly complete the planning, engineering, permitting, testing and construction of the various new technologies that will be necessary to implement the revised standards."
He added that the rules, while now achievable, were still 'extremely challenging.' mitigating fears that the industry could sue over their implementation.
CRH confirms continued interest in India 04 January 2013
Ireland: CRH chief executive Myles Lee has confirmed that the building materials group is interested in expanding its presence in India. The comment follows rumours from the Indian media that CRH and Holcim are both in separate talks with the Shriram Group to buy a stake in Sree Jayajothi Cements (SJJCL).
Lee said that CRH remained interested in expanding its presence in India, but declined to comment on Sree Jayajothi. CRH 'terminated' negotiations with Jaypee Cement Corporation in October 2012 because the parties were unable to agree terms.
"We have been on the lookout for a partner for quite some time and we keep having several discussions with different players both strategic and financial," said T Shivaraman, managing director and chief executive of Shriram Engineering and Procurement Company, which owns SJJCL. He refused to comment on the involvement of either CRH or Holcim. It has been reported that private equity giants Blackstone and KKR are also in separate preliminary talks with Shriram about its stake in the cement manufacturer. SJJCL owns a cement plant with a production capacity of 3.2Mt/yr based in Andhra Pradesh.
The rumours arrived at the same time that CRH announced it had made acquisitions and investments valued at Euro630m in 2012. The bulk of the money was spent in the US, where Euro256m was spent in the second half of the year. In Europe CRH spent Euro119m in the second half of 2012 in acquisitions in Finland and the UK. Lee confirmed that CRH holds between Euro1bn and Euro1.5bn to spend on deals.
Both CRH and Holcim have a combined capacity of around 61Mt/yr in India. Holcim controls ACC and Ambuja Cements while CRH has a venture with Hyderabad-based My Home Industries, which owns a 4.2Mt/yr plant.
Nigerian producers hit back at Ibeto 03 January 2013
Nigeria: Cement manufacturers have hit back at Ibeto Cement Company over its resolve to continue to import cement into Nigeria, despite the capacity of local manufacturers to meet demand.
A statement by Dangote Cement's head of corporate communications Anthony Chiejina said that Dangote and Lafarge WAPCO Cement were worried about the glut created by, according to him, importers.
Cement manufacturers, under the aegis of Cement Manufacturers Association of Nigeria (CMAN), have also said that unless the federal government fulfils its promise of halting importation the cement sub-sector of the economy might go into serious decline, with inventories building up at plants and reduced production. Cement producers are strongly lobbying for the development of concrete roads in Nigeria.
CMAN chairman, Joseph Makoju, said that the domestic cement production level of 18.5Mt/yr was being threatened. "The target of 18.5Mt/yr represents just 65% of the present total installed capacity of the industry," he explained. "Between 2002 and May 2012 a total of US$6bn in new investment was made by local manufacturers, while the ongoing expansion and new plants are estimated to have cost another US$3.5bn. Due to continuous rapid growth the nation no longer requires cement imports as local demand is being effectively met and even surpassed."
The reported oversupply in the the Nigerian market has already forced Dangote to halt production in its 4Mt/yr Gboko plant in Benue State and has prompted Lafarge WAPCO to reduce production. According to the plant manager at Lafarge's Ewekoro cement plant, Lanre Opakunle, 50% of Lafarge's Shagamu plant had been shut down. The Ewekoro plant has reportedly been running on a skeletal staff to prevent it from being closed completely. The manufacturers stress that, if the cement glut continues, it may force 'hundreds of thousands' of Nigerians out of jobs.