Global Cement News

Russia: The Russian cement market remains unable to match its performance in 2007-2008. Although output grew by 15% year-on-year in the first quarter of 2012, Russian companies produced 'just' 9.61Mt of cement. Meanwhile cement prices continue to increase in the country but they are not expected to reach the pre-crisis levels before 2019.

In the first quarter of 2012 production climbed by 15% year-on-year to 9.61Mt according to an estimate made by CMPro Ltd, a Moscow-based company. By comparison in the first quarters of 2007and 2008, production exceeded 11Mt.

According to the President of Lafarge Cement, production in 2012 will rise by 10% against the 2011 level of 56.2Mt, as the market restores due to new construction and infrastructure projects. 2011 was a record year since 2007 as 63.2 million m2 of housing was commissioned. In line with this view Siberian Cement expects cement prices to increase by 12-15% in the summer of 2012 and the CEO of Sukholozhsktsementa Maksim Sotnikov believes that the annual price growth will reach 10%.

Less optimistically, the general director of Basecement Vyacheslav Shmatov said that cement imports are curbing the growth of prices on the domestic market. According to CMPro Ltd, in the first quarter of 2012 imports doubled year-on-year to 340,000t.

India: Growth in the Indian cement industry for March 2012 was 12%, the lowest figure since November 2011, causing some analysts to fear that there may be a slowdown ahead.

Despatches for the four main Indian companies, namely ACC, Ambuja, UltraTech and JP Associates, peaked at 21% in November 2011. Subsequent growth has averaged out at 13% for the December 2011 to February 2012 period. The high growth since November 2011 has been attributed to an increase in demand during the Uttar Pradesh legislative assembly elections and an addition of new capacity. Subsequently, industry growth estimates for 2013 were increased from 7-8% to 10%. However, with March 2012 witnessing the lowest growth in five months, a few analysts are cautious about this. The industry growth is now expected to be around 6.5%.

Pinakin Parekh and Neha Manpuria, JP Morgan analysts, commented, "The big four companies have seen a year-on-year growth come to an average 12%, among the lowest over the last five months." They added that growth slowdown in March 2012 could be due to decline in despatches by JP Associates.

An analyst from a domestic brokerage said, "A good amount of capacity was added by these players in 2011. The rise in demand growth rates in November 2011 and its slowing down in March 2012 could be due to this. Some of these months are being compared with months a year ago when these capacities were still being commissioned." The analyst expects demand growth for the rest of 2012 to average 6-7% with a high possibility of an upside.

However, a few have turned bullish on the sector. Anand Agarwal and Rahul Kumar, analysts with international brokerage Jefferies, said, "Strong despatches by major cement companies in March confirm our belief of a revival of cement demand and we expect overall industry despatches to clock a double-digit growth for a fifth consecutive month in March 2012. We expect the strong demand momentum to sustain throughout 2012." Mihir Jhaveri, Prateek Kumar and Suhas Harinarayan from Religare Research see a 9-10% despatch growth for the 2013 fiscal year.

India: Keralan cement dealers have condemned attacks on cement shops and cement vehicles allegedly carried out by workers attached to the railway goods sheds in the towns of West Hill and Kallai. They have warned they will retaliate if the attacks continue. The Kerala Vyapari Vyavasayi Ekopana Samithi (KVVES) has declared support to the dealers, organised under the banner of the Kerala Cement Dealers Association.

T Naziruddin, KVVES president, inaugurating the general body meeting of the Kerala Cement Dealers Association's Kozhikode unit, demanded the intervention of the authorities to settle the issue. District president of the association MV Sakeer Hussain, who presided over the meeting, called for an immediate end to the attacks, which he said were being carried out to press for higher unloading charges for cement at railway goods sheds.

The association has alleged that the workers were insisting that cement should be brought to the city only by trains and that vehicles bringing cement by road were being attacked to create an artificial scarcity of cement. He said that this in turn would cause hardships to those who depended on the construction sector for livelihood.

Iran: Exports of cement and clinker from Iran have increased by 17.4% to 10.12Mt in the 2011 Iranian year finishing on 19 March 2012. 8.66Mt of this total was composed of cement exports and 1.46Mt was clinker. National cement production increased by 8% in 2011 reaching 66.46Mt, and clinker production increased by 12% reaching 67.64Mt.

In December 2011, Iranian President Mahmoud Ahmadinejad inaugurated a major cement production project in the country's central province of Qom. The plant has a capacity of 1Mt/yr with an investment of US$130m, mainly provided by Iran's Bank Melli and the government's Foreign Currency Reserve Fund.

Peru: Cementos Lima, the largest cement producer in Peru, has announced that it is considering a merger with Cemento Andino, which produces cement in the central mountain region of the country.

Cementos Lima said in a note sent to the Peruvian securities regulatory agency that it has hired Citigroup Global Markets Inc. to carry out an independent valuation of both companies. It said the valuation could be used should the board of directors decide to propose a merger between the two companies.