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Martin Engineering supplies air cannons to Votorantim 09 August 2012
Brazil: Votorantim Cimentos has ordered 110 air cannons from Martin Engineering to aid material flow in two new plants currently nearing completion in Brazil. The two new plants are part of a massive US$988m investment by Votorantim. They are expected to produce approximately 8500t/day of clinker when they come online later in 2012.
110 Martin Hurricane Supreme Air Cannons are to be installed in the plants in Cuiabá and Rio Branco, covering preheater towers, additive silos and cyclones. Benefits of specifying the new technology for air cannon networks include reduced energy costs, improved system performance and increased uptime, with greater availability of compressed air for other processes within the plant.
How much is an Indian cement plant worth?
Written by Global Cement staff
08 August 2012
Anyone need a spare cement plant? If so then it looks like India is the place to head to this week.
First, Italcementi denied that it was in talks with Jaiprakash Associates to buy one of their Jaypee Cement plants. Then, after much speculation, CRH announced publicly that it had entered negotiations to purchase an equity stake in Jaypee's entire cement business. In addition the Indian government has also revived a plan to sell six Cement Corporation of India (CCI) factories that have been closed for almost 10 years.
All of this raises a question: how much are Indian cement plants actually worth?
According to one source, Italcementi was thought to be offering US$100/t (installed capacity) in the bid it supposedly made but has denied making. Jaypee 'wanted' US$150/t. However analyst commentary with the CRH announcement suggested that Jaypee's asking price was too high! This is hardly surprising. Back in June 2012 when Jaiprakash announced that it was selling its plants it was reported that Holcim was offering up to US$160/t. Alongside the CCI story an analyst was quoted as putting the cost of Indian cement production capacity at US$110/t-US$120/t. Yet these plants have been shut for a decade.
Unlike in Europe, Indian cement industry profits have been rising in double digits in recent years. However, input costs like energy and transport are rising and they are starting to hit margins listed in quarterly reports. Serious additional costs have also arisen from the anti-cartel fines issued by the Competition Commission of India. Throw in questions on infrastructure raised by last week's nationwide power-cuts and Italcementi's (non)decision to stick to US$100/t seems prescient.
Unlike Italcementi however CRH has money to spend. Back in June 2012 it was reported that the company had Euro1.5bn to invest. With Euro250m gone in the first half of 2012 on so-called 'bolt-on' acquisitions that still leaves plenty in the pot to pick up the CCI plants. Now that would be a surprise.
People in the cement industry in brief
Written by Global Cement staff
08 August 2012
Pakistan: Flying Cement has made changes to its board of directors, effective 6 August 2012. The new board consists of Mr Agha Hamayun Khan (Chief Executive), Mr Kamran Khan (Director and Chairman) and Mr Momin Qamar, Mr Yousaf Kamran Khan, Mr Qasim Khan, Mrs Shaista Imran, Mrs Samina Kamran and Mrs Misbah Momin as directors.
Agha Hamayun Khan replaced Kamran Khan with effect from 23 July 2012.
India: Mangalam Cement Limited has said that Mr R C Gupta, Company Secretary, Compliance Officer and Chief Financial Officer of the company resigned with effect from 8 August 2012.
CRH seeks stake in Indian cement maker Jaypee 08 August 2012
Ireland/India: International building materials group CRH has confirmed its entry into negotiations to buy an equity stake in Indian producer Jaypee Cement Corporation. Jaypee Cement owns three cement facilities in the Indian state of Gujurat, in the west of the country, and another in Andhra Pradesh, in the south-east.
CRH said in a statement that the operations in Gujurat consist of clinker plants with a total capacity of 3.6Mt/yr. There are also two cement grinding plants with a total capacity of 2.8Mt/yr. Jaypee Cement is India's third-largest cement maker.
"The completion of any transaction would be subject to satisfactory due diligence, the approval of the respective boards of directors and the granting of regulatory approval," said CRH.
CRH chief executive Myles Lee said at the group's AGM in May 2012 that the company was focused on opportunities in China and India in order to drive long-term growth. CRH has spent close to Euro250m on bolt-on acquisitions in the first half of 2012. This included a further equity injection into its China associate Yatai Building Materials. CRH first entered the Indian market in 2008 through a joint venture with My Home Industries, a cement maker in Andhra Pradesh.
Middle Eastern cement industry improves in 2012 08 August 2012
Middle East: Cement companies in the Middle East witnessed a 24.3% increase in revenues in the first quarter of 2012 to US$1.26bn as construction picked up in certain parts of the region.
The industry's profits rose to US$435.6m in the second quarter of the 2012 financial year, compared to US$359.5m in 2011, a growth of 21.2%. However, according to Global Investment House's report, net margins suffered a fall during the period.
UAE and Oman reported higher revenues due to the better operating environments in both countries. The sales revenue of UAE firms increased by 7.7% to US$258.1m, bringing gross margin back to double digits at 10.5%.
Rizwan Sajan, chairman of Danube Building Materials, said that the UAE construction industry had started to pick up. "The second quarter of this year was much better than the first quarter on positive signs in the UAE," Sajan said. Omani companies witnessed a 16.7% increase in revenue to US$100.3m.
Meanwhile, Saudi Arabia achieved strong growth of 34.7% in revenue during the quarter, outperforming the UAE, Qatar and Oman. Saudi Arabia is witnessing a significant rise in demand because of its development plan. In March 2011 King Abdullah Bin Abdul Aziz ordered the construction of 500,000 housing units, as well as the building and expansion of hospitals. He also ordered the injection of capital into specialised credit institutions to facilitate debt write-offs and increase mortgage lending.
It is expected that Saudi Arabia's cement demand will strengthen in 2013, with US$24bn of transport projects under way or in the pipeline. The Haramain High Speed Railway has taken centre stage, with the final contract for the project, worth US$1.4bn, awarded in July 2011. Attention should now turn to the US$7bn Saudi Landbridge project, an east-west rail line that will link Jeddah and Dammam.