Thursday, July 7, 2011

Ireland: CRH ramps up acquisitions


CRH has busy with its expansion program lately, participating in 21 acquisition and investment initiatives over the six months, spending almost €200 million in the process, the Irish Times reported.


Next stop for CRH is the acquisition of Belgian business VVM Group. If approved, the VVM Group acquisition will put CRH’s total spending to almost €300 million.


The European materials division will gain in the process two cement grinding mills with a combined capacity of 1.5 million tonnes in Belgium and two readymixed concrete plants in Belgium and France.


"The first six months of 2011 saw development activity continue across all six operating segments, strengthening our existing market positions and adding valuable and well-located aggregates reserves," said CRH chief executive Myles Lee.

Brazil: Votorantim Cement plant set


The public hearing for the application of Votorantim Cement to mine limestone and put up a cement factory in the State of Para’ has been set on September 2 at the municipal Gymnasium in Dr. Almir Gabriel, BP 446, 1 km, Cardosão neighborhood.


The Secretary of State for the Environment (SEMA) published the announced in the Official Gazette.


The state and federal prosecutors, federal, state and municipal public and private agencies, governmental and nongovernmental institutions, and the general public are invited by Sema to be present at the hearing.


It is the venue to inform the public of the potential environmental impacts project for the extraction of limestone and cement factory, to meet the legal provisions on public participation in environmental decisions, to enable discussion and debate on the environmental Impact Report (RIMA) and still support the technical opinion to be issued by the Sema, with purpose of environmental licensing.


The Report on Environmental Impact (RIMA), Project Spring / Votorantim, presented to the Sema for environmental licensing and obtaining Preliminary License (LP) provides a built area of ​​56 hectares for the cement factory and 331 ha for the limestone mine.


The method of operation will be to open-pit mining, with mechanical excavation. Estimates of annual production of 1,550,000 tons of raw ore and 1,200,000 tons of cement, with a mine life of 55 years. The start-up of the project is scheduled for the end of 2012.

Wednesday, July 6, 2011

ZAMBIA: Dangote to start work on US$400m Zambian cement plant

Dangote, Nigeria’s largest cement maker, expects to start building a US$400m plant in Zambia this month, Zambia’s commerce, trade and industry minister said on Monday.

"We are expecting a team of construction experts from Dangote to arrive in Zambia either today or tomorrow and the building of the plant should be launched this month," Felix Mutati told Reuters in an interview.

Mutati said the plant, one of Zambia’s largest investments outside mining, is expected to produce 1.5Mta of cement when it reaches full capacity by 2013.

"They are positioning themselves to capture the regional cement market, in particular Congo DR and we hope their presence will also help give Zambia the prominence that it craves for," he said.

Dangote’s new plant would also bring competition, which was expected to result in a higher quality of product and lower prices, Mutati said.

The project would create more than 1500 direct and indirect jobs during the construction and operational phases, he said.

Dangote plans to set up plants and import terminals in other countries, including Cameroon, Ethiopia, Ghana, Ivory Coast and Senegal, to bring its production capacity across the continent up to 46Mta in five years’ time with 30Mt of it in Nigeria.

Ukraine to increase production of cement by 30% this year

Total capacity of Ukrainian cement plants is expected to grow by 30% to 30Mta by 2015, according to the latest forecast by Ukrcement, the Ukrainian association of cement producers.

According to Peter Lopatyev, CEO of the Ukrcement, current production capacity stands at 23Mta for cement and 20Mta Total capacity of Ukrainian cement plants is expected to grow by 30% to 30Mta by 2015, according to the latest forecast by Ukrcement, the Ukrainian association of cement producers.

According to Peter Lopatyev, CEO of the Ukrcement, current production capacity stands at 23Mta for cement and 20Mta for clinker, rising to 29-30Mta and 25Mta, respectively, by 2015.

This will be mainly due to ongoing modernisation of leading Ukrainian cement plants such as Podolsky Cement and Volyn Cement, as well as the construction of a new plant, known as Alttsem, in Crimea.

For the first five months of the current year total production of cement in Ukraine amounted to 3.23Mt.

Most of the Ukraine’s cement (27%) is sold in the northern region of the country. The consumption of the southern region is estimated at 23.3%, 21.7% in the Western region, and 13.8% in the Eastern region.

So far, HeidelbergCement Group remains the largest supplier of cement in the Ukrainian market with a 21% share of total output. The second place is taken by Dyckerhoff Ukraine 18.3% and in third place is Eurocement Group-Ukraine with 18.2%.

At present the Ukrainian cement industry employ more than 6000 people, with the average wage estimated at UAH3548 (US$443) per month.

In 2010 the average per capita cement consumption in Ukraine, amounted to 195.5kg, compared to 205kg in 2009, and 302kg in 2007.

South Africa: 2011 cement volumes to replicate 2010

Lafarge Cement CEO, Thierry Legrand, noted that although sales in South Africa had decreased by 2.8% since the beginning of the year, "We have recently started to see an increase on the daily sales. In April it went up by 6.7% and rose 2% in May. If this trend continues we can expect 2011 volumes to be similar to 2010."

Lafarge Cement operates a 2.4Mta clinker facility at its main Lichtenburg site in the North West Province, South Africa.

The group invested ZAR1.2bn (US$117.6m) to increase its cement capacity, particularly at its Randfontein site. The factory in Randfontein came on-stream at the end of 2009. It has the capability of producing 1Mta, or 4800tpd, at full capacity.

"We are currently using around two-thirds of our capacity," Legrand said to BusinessLive. To offset the market slowdown, the CEO said that Lafarge worked at effectively reducing costs while intensifying its presence in the market. "More than ever we endeavour to support our customers’ needs while promoting the Lafarge brand. An example of this is our Roadcem, a product extremely well adapted to address road stabilisation needs," he said.

"There are some positive signs on daily cement sales. Residential building plans are going up. We think the market could end this year at the same level as 2010, the coming months will confirm. We hope for a more serious recovery in 2012 and more growth in infrastructure," he concluded.

Cement sales in South Africa moved 2.8% lower YoY in May to 912,585t, from 939,318t in May 2010, data from the Cement and Concrete Institute showed.

Sales were 816,338t in April. Domestic sales on a YtD basis declined 2.1% to 4.2Mt, from 4.291Mt for the same period in 2010. The moving annual total in South Africa was down 4.8% YoY in May to 10.779Mt from 11.325Mt in May 2010.

POLAND: HeidelbergCement opens modernized kiln in cement plant Górazdze

HeidelbergCement today celebrates the opening of a modernized kiln line at its Polish cement plant in Górazdze. The expansion of the clinker capacity to 6,000 tonnes per day had already been completed on schedule at the beginning of April and was commissioned shortly thereafter.

"Modernising the kiln line No 2 in our Górazdze cement plant has enabled us to successfully complete another project as part of our investment programme in attractive growth markets," explains Dr. Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. "By deploying state-of-the-art technology, we reduce specific energy consumption and CO2 emissions per tonne of cement and create the premise for the increased use of alternative fuels. With this capacity expansion, we are able to better meet the increasing demand for building materials in Poland, while continuing to strengthen our position as market leader."

Górazdze is HeidelbergCement's largest, most advanced cement plant in all of Europe. Already in 2003, the kiln line No 1 had been modernized and its clinker capacity extended. The current capacity expansion is realised in two phases. In the first phase, the clinker capacity of kiln line 2 was increased from 3,500 to 6,000 tonnes per day. In the second phase, the construction of a new cement mill is intended to expand the grinding capacity for cement in line with the new clinker capacity. This second phase is scheduled for completion in mid-2012. Once the project is fully implemented, cement capacity will increase by 1.2 million tonnes per year.

Euroconstruct, the European construction business research group, anticipates in its latest forecast for Poland a rise in cement consumption of 15% and 5% for 2011 and 2012. Domestic demand will increase, in particular, as a result of the further development of transport infrastructure and the growing demand in residential construction.

Monday, July 4, 2011

AFRICA: NIGERIA: Dangote crashes cement price

Dangote Cement Plc has announced a significant reduction in the factory price of its product to N1,350 per bag.

While briefing cement distributors, Friday, the company’s Executive Director in charge of sales and marketing, Mr. Ekanem Etim, said the reduction was in line with the company’s declared policy to make cement affordable to Nigerians as it expands its local capacity in the country.

Etim also informed the distributors at the meeting that the country will be self-sufficient in cement production this year, especially with the commissioning of Ibeshe Plant before the end of the year, with an installed capacity of six million metric tons of cement per annum.

Reacting to the significant price reduction by the Dangote Group, Executive Secretary of Cement Manufacturers Association of Nigeria, CMAN, Mr. James Salako, said the group has done so well by bringing its prices down for the benefit of the masses in line with the objectives of CMAN.

While assuring Nigerians that the country will soon become self-sufficient in cement production and even commence exportation of the product to other African countries, he assured that the price of the product will further crash.

SAUDI ARABIA: Saudi cement sector outlook remains ‘strongest since ’07

Cement prices in Saudi Arabia should remain robust, the NCB Capital said in a new sectoral report, noting that the recent spike "is temporary and focused on the western region." 
It said growth demand remains strong, but there is sufficient supply to meet this in the short-to-medium term.

The price targets of most cement companies has increased by around 5-15 percent off the back of an improved demand outlook coupled with excess capacity level enabling them to meet any potentially higher demand easily. This is coupled with reduced costs for many cement companies, the report further said.

NCB Capital noted that a key positive of the sector remains the high dividends, with expected yields for 2011 around the 6-7 percent mark.

Updating the bank’s six covered cement stocks based on the latest monthly data and recent financial results, Farouk Miah, acting head of Equity Research at NCB Capital, said "we believe the outlook for the listed companies is stronger than in our last sector update in March 2011, largely due to a strong pickup in construction activities which in turn is supporting demand/pricing of cement." 

"However, in part, we believe the strong pick-up in demand and prices in April/May 2011 is due to one-off reasons and will not be sustained through to the end of 2011. Additionally, we believe the recent stock outperformance of most companies has already priced in the stronger outlook scenario," he added. The outlook for the cement sector remains the strongest since 2007, with "much of this is priced in with the cement sector outperforming the TASI by 26 percent YTD."

Total sales volumes in the Kingdom cement sector increased by 8 percent YoY to 12,596 million tons in 1Q11. For the nine listed stocks, total volumes increased by 9 percent to 9,967 million tons; sales volumes increased by 6 percent to 2,629 million tons for the four private cement companies in the Kingdom. From the listed companies, Southern recorded the best growth at 27 percent and Qassim reporting the weakest, down by 6 percent.

Yamamah Cement remains the bank’s only overweight in the sector. "Although we also like Saudi and Southern, we believe their current prices factor in their positive outlook. Prospects for Eastern and Qassim remain muted, and thus we remain Neutral on these stocks. We downgrade Yanbu to Underweight off the back of an unjustified premium in valuation against peers," added Miah.

NCB Capital said the second quarter of 2011 will be another strong quarter for the cement sector. For the six covered stocks, the bank expects revenues to come in at SR2,095 million, up 12.9 percent YoY, with gross profit at SR1,165 million, up 17.7 percent YoY with net income expected to come in at SR1,057 million, up 14.8 percent YoY. Prices are set to remain stable YoY at SR240 per ton, but up 4 percent QoQ. The slower growth in net income is due to volatility in the other income, and hence we should ideally look at gross/operating income to have a better understanding of core earnings."In the backdrop of increasing construction activities, we expect KSA cement sales volumes to increase by around 16 percent YoY in 2Q10 and 13 percent for 2011," added Farouk Miah. 
"Overall sales (local and export sales of cement and clinker) are expected to increase by 8 percent in 2Q11 and 7 percent in 2011. Looking at the rest of 2011, July and August are expected to be slower due to the impact of summer and Ramadan when construction activity slows in Saudi Arabia. Additionally, the start of November will also see a dip down in activity due to the Hajj festival. Thus, we believe the sales volumes in April/May will not be repeated for the next few months."

In terms of the spike in cement prices, NCB Capital said the sharp increase was focused on bagged cement in the western region. "The temporary production shutdown at Yanbu due to fuel issues was largely behind the spike in prices seen in the western region," said Miah. "In other areas, we believe prices increases have been more moderate (1-2 percent higher QoQ) due to cement players limiting discounts. Over the long term, given the stronger demand outlook and lower levels of excess supply, our estimates for the price of cement have increased by SR1-3 per ton."

INDIA: Birla Corporation to expand cement capacity to 10.8 million tons

Birla Corporation Limited is poised to expand its cement production capacity to 9.30 million tons after the completion of its expansion programmes, including the 1.20 million tons proposed capacity increase at Chanderia (Rajasthan) and the 0.60 million tons proposed increase in Durgapur (West Bengal).

The company has also applied to the Ministry of Environment and Forests at New Delhi for further increase in the capacity at Chanderia by another 1.5 million tons and all necessary monitoring activities as per the statutory regulations are in progress. This will take company's total cement capacity to 10.8 million tons and the capacity at Chanderia to more than 5 million tons.

All the debottlenecking projects undertaken at the clinker manufacturing units of the company at Satna (Madhya Pradesh) and Chanderia (Rajasthan) have been completed. Operations at the units concerned have been stabilized and its full benefit will be seen in the current financial year. The cement capacity of the company currently stands at 7.5 million tons.

The stock was trading at Rs.332. The stock hit an intraday high of Rs.337 and low of Rs.328.

The total traded quantity was 1870 compared to 2 week average of 6330.


AFRICA: KENYA: Cement firm with lofty aims plans to become the largest in the region



The ground-breaking ceremony for the National Cement Company took place in September 2008. Three years down the line, the company is in full production and expanding, as attested to by the launch of one of its brands, ‘Simba Cement’. Following is what the Devki Group of Companies chairman, Mr Narendra Raval Guru, had to say:

‘We have invested more than Sh2 billion in this state of the art world-class cement plant technology.

By financing this project, our bankers, Kenya Commercial Bank, have shown their faith and confidence in me and my company.

The opening of our world-class cement plant is a giant step towards achieving self-sufficiency in cement production.

Currently, the company produces 400,000 metric tonnes of cement every year, and we plan to expand our capacity to 2.5 million metric tonnes by 2012, by investing extra Sh13 billion.

This will make us the single largest producer of cement in East and Central Africa, and is a step towards the government’s policy of industrialisation by the year 2030.

This expansion of cement manufacture will make the Devki Group the biggest producer of construction materials in this region by 2012.

The quality and strength of Simba Cement is the highest in the market. This brand has been presented with “the Diamond Mark of Quality” by the Kenya Bureau of Standards.

Our expansion will reduce the estimated foreign exchange loss Kenya incurs to Sh12 billion per year. Our entry into the market has made it possible to reduce prices by almost 10 per cent.

During the recent financial statement by the Minister for Finance, the government imposed a 10 per cent duty on galvanised wire through Tariff No. 7217.20.00.

We are the largest galvanised wire producer in East Africa, employing 300 Kenyans in this section alone and producing 1000 metric tonnes per month against the East African capacity of 1500 metric tonnes.

This galvanised wire is used to produce barbed wire, chain link, chicken wire and farm fencing. The 10 per cent duty will directly affect farmers, for it may increase prices by almost Sh500 per roll.

It is our humble request to the government that this duty be removed for the benefit of farmers and this industry.

Vision 2030 cannot be achieved without supporting the core steel industry. Kenya has very limited iron ore reserves and we wish to put up a proposal for a project worth US$500 million, which will employ 20,000 people.

Iron ore is a core raw material for the steel industry, and we must stop its further export for the benefit of the country. Investors should be supported to put up integrated steel plant, leading to true industrialisation.

Kenya has the biggest economy in this region and we expect favourable tariffs on core raw materials like iron ore and galvanised industrial wire.

Devki is the largest construction steel producer in the region, employing 3,000 workers, while Maisha Mabati Mills Ltd at Ruiru has 500 workers.

National Cement employs 300 people, and with the expansion, we expect to increase employment by another 700, which will bring the total to 4500 Kenyans.

On corporate social responsibility, Devki Group is running a children’s home in Athi river. We also support schools like Machakos Girls, Mavoko Secondary, Athi River Primary, and many more.

We sponsor many students to university as well. At the same time, we are supporting Ruiru Sub-district Hospital and many other medical facilities in this region.

The rising food prices are really affecting common wananchi, who find it difficult to meet day-to-day needs. The only solution to this problem is job-creation and industrialisation.’

CHINA: Taiwan Cement and Asia Cement to Raise Output in China

Driven by the promising cement market in China, Taiwan`s two leading producers—Taiwan Cement Corp. and Asia Cement Corp.—have announced to start heavy investments in China. 

With annual output of 50 million metric tons in China that will surge to 60 million in 2012, Taiwan Cement`s annual output in China will double to 100 million metric tons in five years to become one of China`s three-largest cement conglomerates; while Asia Cement will set up new plants in Hebei province to achieve annual output of 50 million metric tons in four years. 

To continually boost capacity in China, Taiwan Cement will increase paid-in capital by 50% to NT$60 billion. The maker has also developed conductive concrete to tap Hunan and Shanghai markets. 

Asia Cement chairman Douglas Hsu said capacity will be raised by 10 million metric tons to 30 million metric tons in China. By the end of the third quarter, the company will set up four cement kilns in Hebei province to raise annual output by 10 million metric tons in China. Hsu noted the maker aims to invest over US$1 billion in the next four years to boost capacity to 50 million metric tons in China. 

With the 95% anti-dumping tax on imported cement from China, Hsu predicted the maker will sell 12.5 million metric tons in Taiwan and export price of cement will increase by 10% this year.