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Votorantim to build four new plants 19 January 2012
Brazil: Votorantim Industrial, Brazil's largest diversified industrial conglomerate, intends to use proceeds from the sale of its stake in steelmaker Usiminas to expand its cement and mining output.
Chief executive, Raul Calfat, announced that the US$1.34bn raised by Techint's purchase of Votorantim's 13.5% voting stake in Usiminas had boosted the group's cash holdings to US$6.5bn. This high level of cash will allow the investment holding company to avoid borrowing at a time when financial markets remain shut for all but the most credit-worthy companies, said Calfat. It also gives the company room for funding heavy investment plans with its own cash.
Calfat said that the group's cement unit, Brazil's largest producer of the building material, would get one-third of the Usiminas stake sale proceeds. He said that the money would go towards the construction of four factories by 2013.
Holcim profit shock - The tip of the iceberg?
Written by Global Cement staff
18 January 2012
Holcim announced yesterday a shock profits warning after it included Euro641m in one-off charges in its 2011 accounts. Over half of this amount, a massive Euro343m, came from writedowns at its former South African subsidiary AfriSam, which has been unable to deal with poor trading conditions there. Writedowns in the US and parts of Europe made up the rest of the one-off costs. The move has prompted fears from analysts that other cement manufacturers may follow suit, taking the sector into unknown territory. What other skeletons are hiding in the cupboards of the big multinationals?
Meanwhile, an old cement industry problem that is not unfamiliar to AfriSam, cartelisation, has reared its ugly head again. After five Spanish producers were ordered to pay a combined Euro11.1m over an alleged cartel in northern Spain, authorities in Pakistan searched the offices of its national cement association, the APCMA, on Monday. They were following a tip-off that cement companies have been monitoring each others' dispatches, a practice deemed illegal in previous investigations. A previous cartel case from 2009-2010 is still pending in Pakistan so any action against producers will likely to take years to be brought.
Elsewhere, the situation has gone from bad to worse at the East Africa Portland Cement Company in Kenya, with protests over the re-instatement of previously-fired board members turning violent on Monday. With one worker hospitalised after being shot by an over-zealous security guard, it is hard to see how the current situation can be resolved without the removal of the current management. The government has assured the workers that it is working on the problem.
At the same time in Kenya, National Cement Company's (NCC) plans to build a quarry and clinker plant south of Nairobi have been slammed by local Massai groups, environmental NGOs and even the state-owned Kenya Wildlife Service. NCC plans to 'buy-off' the Massai with a jobs scheme, but this doesn't address the conservation issues. Global Cement urges NCC to re-examine its plans and the location of its proposed plant, and to work closely with the Kenya Wildlife Service.
Cementos Portland Valderrivas appoints new board members
Written by Global Cement staff
18 January 2012
The Spanish cement producer Cementos Portland Valderrivas has approved the nominations of Juan Bejar and Jose Manuel Burgos as board members. Bejar currently occupies the post of executive chairman at domestic motorway operator Globalvia and Burgos is a vice-chairman at the real estate firm GMP. They will replace Rafael Martinez-Ynzenga Canovas del Castillo and Feliciano Fuster.
Worker killed at Cemex plant in Rugby 18 January 2012
UK: A worker was killed in an industrial accident at the Cemex plant in Rugby in the early hours of this morning.
A spokesman for the plant confirmed that a man working for a sub-contractor was killed at the plant and emergency services attended the scene. Police officers and the Health and Safety Executive are currently at the site investigating what happened. Another man suffered a broken arm in the incident and had to be taken to hospital for treatment.
Cemex community affairs manager Ian Southcott said, "Regrettably one person has died and our thoughts and sympathies are with their family and friends. Cemex is cooperating fully with all of the investigations taking place." Southcott refused to reveal any more details about the accident while investigations are on-going.
The cement plant is currently in its annual shutdown period for regular maintenance. There are a number of contractors working on the site as a result. In December 2011 Cemex was fined for a worker's death in 2008 at the same plant.
CCP inspects APCMA over cartelisation claims 18 January 2012
Pakistan: The Competition Commission of Pakistan (CCP) has conducted searches and inspections at the premises of the All Pakistan Cement Manufacturers Association (APCMA) and Kohat Cement in Lahore under Section 34 of the Competition Act 2010. It said that it carried out the searches to look for proof of suspected cartelisation in the cement sector.
According to a statement issued by the CCP, it had obtained information from an informant that contained copies of certain e-mails that had been sent by the Secretary of APCMA to cement manufacturers. The contents of the e-mails provided by the informant revealed that the cement manufactures had prima facie collectively devised a vigilance plan by which the cement dispatches at one cement production unit are monitored by a team of another unit and vice versa.
Such monitoring of cement dispatches was previously recognised as an integral part of a collusive arrangement among the cement manufacturers. The CCP has declared such arrangements to be in violation of Section 4 of the Competition Act 2010. It imposed a penalty of nearly US$700m on the APCMA and its members. This matter has been taken to court and is still pending.
The fresh probe by CCP was based on a separate set of facts that suggested that the cement manufacturers have again formed a collusive arrangement and to ensure compliance the monitoring function is being performed by cement manufacturers themselves under the auspices of APCMA. When the CCP search and inspection team arrived at the APCMA premises, it discovered that the APCMA secretary was not present in the office and all the records were locked. After initial hesitation the APCMA allowed the CCP to access the data. A search and inspection was also carried out at of the office of the APCMA President, who is also the Chief Executive of Kohat Cement.
Local media has long speculated that cartelisation was in place in the cement sector based on rapid cement price increases in recent months. Pakistan's cement capacity utilisation also dropped to a 10-year low of 69.7% in the six months to 31 December 2011. "The expected turn around in the economy did not materialise because the capacity of the sector continued to increase," said a spokesman from the APCMA, commenting before the CCP inspections were made. He said that expansions in the cement sector had been planned several years ago when the economy had been in a far better situation.