Global Cement News

India: A Memorandum of Understanding (MoU) was signed on 13 June 2011 for the disposal of plastic waste between the Department of Environment, Government of Goa, and ACC's Wadi Cement plant. The MoU was signed by Michael D' Souza and M Sai Ramesh from ACC in the presence of Minister for Environment Aleixo Sequeira.

The MoU envisages establishing a collection and segregation mechanism for plastic waste from non-biodegradable solid waste for disposal through co-processing at the plant. It will be valid for a term of three years from the date of execution with an option of renewal by mutual consent on agreed terms and conditions. ACC will provide the services free of cost to the Department of Environment and to the state government.

Mexico: Cemex has announced that it has plans to cut 6% of its workforce worldwide (around 2800 jobs) as part of its wider plans for reorganisation that were announced at the start of 2011. Cemex said that it hopes to generate USD 400m in additional cash flow by the end of 2012 by cutting costs and improving underperforming business units.

Cemex has been struggling with its debt load after buying Australian rival Rinker just before the US housing crisis began. The company reported a wider-than-expected first-quarter loss in the first quarter of 2011, but said that increased sales were a sign of a slow recovery.

Spain: French cement group Lafarge has announced that it has acquired a 35% stake in the cement plant of Spanish construction and property development group Lubasa at the port of Castellon.

Under the agreement, the facility will receive clinker supplies from Lafarge cement plants. The company declined to reveal financial details of the deal.

Pakistan: All Pakistan Cement Manufacturers Association (APCMA) has appealed to the government to rescue the ailing cement industry, which has suffered net accumulated losses of USD16.3m during the first nine months of the current fiscal year (which ends 30 June 2011).

A spokesman for the APCMA said that the cement industry suffered losses mainly due to rapid increase in input prices like coal, furnace oil, electricity, paper bags, interest rate, diesel and transportation. He said that prevailing market cement prices were inadequate to meet the increased cost of production.

In the first nine months only three cement units earned a profit. The spokesman said that this lopsided performance of the sector is mainly due to stagnant domestic demand and a steep decline in exports of 12.52%. The units located in the northern part of the country had lost export viability due to higher transportation costs between their production sites and the coast.

Industry experts fear a total collapse of the sector if immediate remedial steps are not taken and that the decline in domestic sales of cement is a direct reflection of subdued economic activities. However, as the global economy shows signs of recovery, the decline in cement exports should be a matter of grave concern for the economic managers of the country.

Saudi Arabia: Cement companies in Saudi Arabia recorded a 16% increase in sales in April 2011, the highest in more than a year. Domestic cement sales grew to 4.2Mt in April 2011, compared with 3.6Mt in the same period of 2010. Private projects, notably those for housing and schools boosted demand for the material.

"In 2010 people were very wary. The last thing they wanted to do was commit money, but now the outlook is looking brighter," said Farouk Miah, an analyst at NCB Capital in Riyadh. "There is also a lot of activity for plans to develop the rest of the country, in Makkah, Madina and Jeddah," he added.

Saudi Arabia is expected to need two million more homes by 2014 to keep up with the demands of a population that has quadrupled in 40 years. Shares of cement companies have already had a decent run in 2011, up an average of 24% over the same period of 2010.

It is expected that Saudi Cement, Southern Province Cement and Yamama Cement should benefit from the demand because they have the largest volume. Smaller cement companies, which are already running at full capacity, will be less well positioned to benefit.