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Written by Global Cement staff
24 October 2014
Tanzania: The chairman and president of Dangote Group, Alhaji Aliko Dangote, is set to invest in developing the Mbinga Coal Mine in west Tanzania to power the Mtwara cement plant. The sale of excess coal will be used to finance cement exports from Tanzania.
According to reports, Dangote Cement plans to take advantage of the surge in local demand for cement amidst increased construction activity in the region using its 3Mt/yr capacity Mtwara cement plant when it is completed. Dangote Cement expects cement demand in Tanzania to surge in the near future due to the country's improving economic performance.
South Africa: On 23 October 2014 PPC confirmed the resignation of Richard Tomes, joint managing director of PPC's South African business and one of the business's key sales and marketing personnel.
The resignation of Tomes comes a month after Ketso Gordhan resigned as CEO and the company's board subsequently plunged into a tussle with group shareholders seeking a new board. PPC said that Tomes, who joined the firm in 1998 and who shared the job as head of domestic operations with Johann Claassen, had resigned effective Thursday to 'pursue other opportunities.'
With his departure, Claassen will lead PPC's South African cement business, while Pepe Meijer remains managing director of PPC's international business. While PPC has lost an experienced managing director in Tomes, it sought to assure investors that its South African business remained under strong leadership: "Johan is a professional engineer who joined PPC in 1989 and has served as executive of cement operations and of lime," said PPC. "He has also held various other senior and general management roles across the cement and lime divisions."
Mexico: Cemex has announced that its consolidated net sales reached approximately US$4.1bn during the third quarter of 2014, an increase of 4% on a like-to-like basis for the ongoing operations and adjusting for currency fluctuations, versus the comparable period in 2013. On a like-for-like basis, operating earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 3% during the quarter to US$767m versus the same period in 2013. The increase in consolidated net sales on a like-for-like basis was due to higher volumes in Mexico, the US and the South, Central America and the Caribbean and Asia regions, as well as higher prices of its products in most operations.
Net operating earnings before other expenses in the third quarter increased by 5% to US$491m. Operating EBITDA increased, on a like-for-like basis, by 3% during the quarter to US$767m. Cemex reported a narrower controlling interest net loss of US$106m during the third quarter of 2014, from a loss of US$155m in the same period of 2013.
"We are pleased with the year-to-date trends in our consolidated volumes and prices, despite the more challenging economic conditions during the quarter, especially in Europe," said Fernando A González, CEO. "We continue to see favorable medium-term growth prospects for our regions, especially in the Americas, where we expect most of our mid-term EBITDA growth. We are comfortable with the steps taken so far towards attaining an investment-grade capital structure target both on the financial and operating side."
Net sales in Mexico increased by 4% in the third quarter of 2014 to US$803m compared with US$776m in the third quarter of 2013. Operating EBITDA decreased by 1% to US$245m versus the same period of 2013.
Cemex's operations in the US reported net sales of approximately US$1.0bn in the third quarter of 2014, up by 13% from the same period in 2013. Operating EBITDA increased by 74% to US$136m in the quarter versus US$78m in the same quarter of 2013.
In Northern Europe net sales for the third quarter of 2014 decreased by 3% to approximately US$1.1bn, compared with approximately US$1.2bn in the third quarter of 2013. Operating EBITDA was US$144m for the quarter, 11% lower than the same period of 2013.
Third-quarter net sales in the Mediterranean region were US$400m, 7% higher compared with US$375m during the third quarter of 2013. Operating EBITDA increased by 4% to US$81m for the quarter versus the comparable period in 2013.
Cemex's operations in South, Central America and the Caribbean reported net sales of US$585m during the third quarter of 2014, representing a decrease of 2% over the same period of 2013. Operating EBITDA decreased by 6% to US$199m in the third quarter of 2014, from US$210m in the third quarter of 2013.
Its operations in Asia reported a 9% increase in net sales for the third quarter of 2014 to US$151m, versus the third quarter of 2013 and operating EBITDA for the quarter was US$40m, up by 11% from the same period of 2013.
Written by Global Cement staff
23 October 2014
South Korea: According to local media, Korea's cement firms have received US$127m from the Japanese government for three years from 2011 to 2013 for bringing in Japanese coal that is thought to have been contaminated with radioactivity.
According to data submitted by the Environment Ministry to Lee In-young of the main opposition New Politics Alliance for Democracy, who is also a member of the National Assembly's environment labour committee, four domestic cement firms (Ssangyong Cement Industrial, Tongyang Cement and Energy, Lafarge Halla Cement and Hanil Cement) brought in 3.69Mt of coal from Japan from 2011, when the Fukushima nuclear accident occurred, until 2013. In return, they received a total of US$127m for waste disposal.
This is the first time that the amount of money Korea's cement firms received from importing Japanese coal has been revealed. Japanese coal imported to Korea stood at 1.11Mt, worth US$39.9m in 2011, 1.23Mt or US$45.5m in 2012 and 1.35Mt or US$42.2m in 2013. The amount has continued to increase over the past three years.
"The problem is that 20-73Bq/kg of radioactive cesium was detected in the Japanese coal," said Lee. "Though this level is lower than the safety threshold (370Bq), there is the possibility of cesium exposure in everyday life, given that coal is used in cement as well as other construction and industrial materials." If the level of cesium that is radioactive exceeds the safety threshold and permeates into body, it can cause osteomyelitis or thyroid cancer, among others.
Written by Global Cement staff
23 October 2014
South Africa: PPC is in discussions with the joint managing director of its South African business, Richard Tomes, who is considering resigning from the company, according to anonymous sources. Tomes and Johan Claassen are in charge of PPC's core South African business in the face of growing competition and a slowing economy, while the company embarks on an ambitious expansion strategy in Africa.
Tomes' possible resignation comes amid a shareholder plan to replace the PPC board, which a month ago accepted the resignation of CEO Ketso Gordhan. Tomes has put forward a resignation but he and the company are still discussing the decision.
Foord Asset Management said that it and Visio Capital Management jointly held the required 10% of PPC shares to call for a special shareholders meeting to vote on replacing the PPC board, which it felt lacked cement industry experience. With recommendations from other investors, the activist shareholders have compiled a list of candidates for a new board, which included Gordhan as well as four existing PPC board members, partly in the interests of continuity. However, PPC said that the four members would not be available for re-election to a new board.
Corporate governance expert Mervyn King said that, "Shareholders of 10% or more are entitled to call for an extraordinary general meeting (EGM) and can ask for the removal of the entire board." However, King warned that this could result in 'very poor governance' due to a lack of continuity of knowledge on the new board.
Since Gordhan's resignation PPC has added to the rest-of-Africa experience on its board. The company has appointed experienced mining executive Darryll Castle as an independent non-executive director. "Darryll's extensive experience and knowledge of various countries in Africa and emerging markets, as well as the deep relationships that he has built over the years, will add great value to PPC," said Sibiya.