Displaying items by tag: data
Ukraine: Data from the State Statistics Service shows that cement production grew by 23% year-on-year to 1.53Mt in the first quarter of 2019. Production accelerated in March 2019, according to the Ukrainian News Agency. Annual cement production fell by 1% to 8.93Mt in 2018.
Cemex Colombia‘s long road to Maceo
17 April 2019Good news for Cemex Colombia this week with an agreement reached to open its Maceo cement plant in Antioquia. Local media was reporting that the cement producer has struck a government-brokered deal with CI Calizas y Minerales to lease the land it built its plant on. Finally, the new(ish) US$350m integrated plant can start operation.
For those unfamiliar with the debacle, Cemex has been fighting the fallout publicly since 2016, following a dodgy land deal at the site. The 1Mt/yr integrated Maceo plant was originally announced in 2014 with full operation scheduled for late 2016. Then, in October 2016 Cemex fired several senior staff members in relation to the project and its subsidiary’s chief executive resigned. This followed an internal audit and investigation into payments worth around US$20m made to a non-government third party in connection with the acquisition of the land, mining rights and benefits of the tax free zone for the project. Other irregularities are also alleged to be linked to the project. As well as the Colombian authorities being involved, the US Department of Justice is also running its own investigation into the affair with wider implications for Cemex’s operations in other Latin American countries. Some of the sacked staff members and others have since been investigated on corruption charges.
Graph 1: Cement production in Colombia, 2010 – 2018. Source: DANE.
Looking at the wider Colombian market though, it does make one wonder whether the long-delayed plant is really necessary. As Graph 1 shows, cement production rose steadily year-on-year to 2015 before it hit a downturn. It reached a high of 13Mt in 2015 before declining. Production in 2018 grew slightly compared to 2017 but not at the same rate seen previously. In Antioquia specifically despatches increased by 1.3% in 2018, above the national average of 0.2%. Despatches now appear to have continued into January and February 2019.
Cemex Colombia started to benefit from an improved fourth quarter in 2018 as the general economy picked up. Despite this its overall net sales and operating earnings fell in 2018. However, it did flag its earnings margin as a concern with higher freight and energy costs in the fourth quarter of 2018, although it partially offset this with higher prices. Cementos Argos, the other big producer in Colombia, reported a similar picture to Cemex, although in a better position. Its cement volumes fell slightly for the year in 2018 but picked up fast in the fourth quarter. Annual revenue was down slightly, as were adjusted earnings. In its opinion the construction industry improved in the second half of 2018 due to an improved housing market and infrastructure projects.
Given the downturn in production since 2015 the thought does occur whether the opening of the Maceo plant being delayed accidentally helped Cemex or not. It has probably been losing money by not running the plant but if, for example, the company had some sort of insurance to protect it against unexpected delays it might still benefit. However, if evidence of serious wider misconduct in both Colombia and other Latin American countries are found by the US authorities, then things could get expensive. This would be unfortunate, particularly in Colombia, given that the market looks set to recover.
Polish cement production grew by 12% to 18.9Mt in 2019
17 April 2019Poland: Data from the Cement Producers Association (SPC) shows that cement production grew by 12% year-on-year to 18.9Mt in 2019. Concrete production rose by 6.8% to 25.3Mm3. This was attributed to a growing construction sector, according to the Polish News Bulletin. Both cement and concrete production is expected to continue growing in 2019 to 19Mt and 26.2Mm3 respectively.
Brazil: Data from the National Union of Cement Industry (SNIC) shows that cement sales rose slightly to 12.7Mt in the first quarter of 2019 compared to 12.6Mt in the same period in 2018. Regional sales fell slightly to 6Mt in the southeast of the country including the major markets of Minas Gerais, São Paulo and Rio de Janeiro. However, most of the other regions reported growth, particularly the centre-west. SNIC president Paulo Camillo Penna said that March 2019’s performance was better than expected and that it was forecasting growth of 3% in 2019.
Pakistan: Cement despatches fell by 9% year-on-year to 34.6Mt in the nine months to the end of March 2019 from 34.8Mt in the same period to March 2018. Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that despatches and exports fell in both the north of the country but that despatches fell and exports rose in the south. Exports more than doubled in the south to 3.14Mt. This was due to a reported start in seabourne clinker sales in the 2018 – 2019 year. Otherwise, overall cement exports to Afghanistan and India declined.
The Gambia: Bai Lamin Jobe, the Minister of Trade, says that the country has a cement capacity utilisation rate of 23%. Local producers have a capacity of 1.9Mt/yr but national demand is only around 0.4Mt, according to the Foroyaa newspaper. He added that the country imported 0.39Mt in 2018 in answers to members of the National Assembly.
It was also revealed that Jah Multi Industries is building new silos at its import terminal. Jah Cement is also planning to upgrade its terminal into a grinding plant. Construction work started in 2018 and it is expected to be completed by late 2019.
US cement shipments grow by 2.3% to 97.7Mt in 2018
03 April 2019US: Data from the United States Geological Survey (USGS) shows that national shipments of Ordinary Portland Cement (OPC) and blended cement rose by 1.3% year-on-year to 85.3Mt in 2018 from 84.2Mt in 2017. Imports rose by 10% to 12.4Mt from 11.3Mt. Overall, shipments rose by 2.3% to 97.6Mt. The top clinker producing regions in 2018 were Texas, California, Missouri and Florida. The country imported 15.1Mt of cement and clinker from, in order of descending volume, Canada, Turkey, China, Greece and Mexico.
Afghanistan/Pakistan: The share of exports of cement from Pakistan to Afghanistan fell to 24% in the first eight months of the current 2019 Pakistan financial year compared to 48% in the 2018 period. The Cement Manufacturers And Export Association has blamed this on Afghanistan opening its market to imports from other countries including Iran, according to the Frontier Star newspaper. It has urged the government to take measures to cut local production costs and force anti-dumping tariffs on Iranian cement imports.
The association said that the cement industry in Punjab and Khyber Pakhtunkhwa has been most affected by the decline in exports to Afghanistan. Exports from these regions fell by 16% year-on-year in the first nine months of the current Pakistan financial year to February 2019.
Nepalese cement producers warn of new investment
01 April 2019Nepal: Dhruba Raj Thapa, president of Cement Manufacturer Association of Nepal (CMAN), has warned that the industry is worried about new investments in cement production given that the country has become self sufficient in the commodity. Clinker imports have stopped due to increased domestic production, according to the Republica newspaper. He added that cement produced locally is sufficient to meet local demand until 2029. He then warned that if investment in the sector continues producers might have to reduce their production capacity by half.
Data from the Department of Industries shows that 114 cement factories, both government-owned and private, have been registered so far with an estimated investment of over US$1.8bn. However, Tara Prasad Pokharel, the general secretary of CMAN, said that only 68 registered industries are currently in operation.
China in 2018
27 March 2019Cement price rises by the major Chinese cement producers boosted sales revenue and profits in 2018. This is quite a trick, given that overall cement sales in the country have fallen by 11% year-on-year to 2.17Bnt in 2018 from a high of 2.45Bnt in 2014.
Graph 1: Cement sales in China, 2009 – 2018. Source: National Bureau of Statistics China.
On the corporate side most of the major Chinese producers issued positive profit alerts towards the end of 2018 and this has been followed up by (mostly) glowing financial reports. Data from the National Development and Reform Commission in February 2019 showed that the profits of local cement companies more than doubled to US$64bn in 2018 compared to 2017. As mentioned above, this has been fueled by price rises. In December 2018 the average price of cement was 10.6% higher than in December 2017.
This has translated into a 19% year-on-year rise in sales revenue at China National Building Material Company (CNBM) to US$32.6bn in 2018 from US$27.4bn in 2017 and its profit grew by 44% to US$2.09bn from US$1.46bn. Anhui Conch’s performance was even better. Its revenue grew by 70.5% to US$19.1bn from US$11.2bn. However, differences emerge between the two companies in terms of cement sales volumes. CNBM’s sales volumes fell by 2.4% to 323Mt. However, Anhui Conch’s sales volumes increased by 25% to 368Mt. This may not be in line with the government’s plans to scale down production but it does fit the industry consolidation model, as the company acquired Guangdong Qingyuan Cement in 2018. The results from other producers such as China Shanshui Cement, West China Cement, Tianrui Cement and China Resources Cement all tell similar tales.
If the figures from the National Bureau of Statistics China (NBS) above are accurate then this is a drop of over 300Mt of cement sales over four years. This is more than the cement sales of every other country except India. Indeed, it’s more cement than some continents make! It marks the deceleration of the Chinese industry since 2014 and represents a major achievement. However, whether it is enough remains to be seen. After all, sales of over 1500kg/capita are still way above the consumption curve for developed Western-style economies. Yet, imports of cement to China from Vietnam rose in 2018, suggesting that the price rises are being driven by shortages of cement!
China is undoubtedly an exceptional case, as its economic star has blossomed in the last few decades and it has literally built itself into history. Yet one might expect its consumption to be around 1Bnt/yr, a per-capita level more similar to Spain and Italy prior to the financial crash. In other words, even if the recently observed 5% year-on-year contraction is maintained, the Chinese industry would only reach this (still very high) level by the mid 2030s. However, continued national development, mega-infrastructure projects, a shift to more exports and China’s unique market could hold the consumption per capita figure higher.
Meanwhile, Chinese producers are commissioning more and more projects outside of China. Notably, CNBM saw its cement sales everywhere except for the Middle East and China. Success abroad is not guaranteed. The story in the years to come will be the balance between projects at home and those abroad.