Global Cement News
Search Cement News
Written by Global Cement staff
30 January 2015
Saudi Arabia: The combined net profit of the Saudi cement firms rose by 6% in 2014 to reach US$1.56bn compared with US$1.48bn recorded in 2013. The profit during the October - December quarter grew by 31% to US$383m compared with US$293m during the same period in the previous year.
The net profits of seven firms, out of 14 listed companies, grew. The profits of six companies dropped in 2014 and one company, Um Al-Qura, registered a net loss.
Arabian Cement Company (ACC) registered the biggest profit, with its profits reaching US$172m compared to US$51.0m in 2013, an increase of 236%. The company attributed the surge in profits to a growth in sales, which reached US$457m in 2014, compared with US$361.6m in 2013.
ACC was followed by Hail Cement Company (HCC), which was the second biggest booster for the sector. Its profits reached US$39.1m in 2014 compared to US$13.3m in 2013, increasing by 191%.
The profits of six companies dropped in 2014 and this negatively affected the sector's profit growth for the year. The profits of Yamama Cement Company (YCC) fell by 23%, followed by Saudi Cement Company (SCC), the profit of which fell by 8% year-on-year.
Philippines: Cement industry sales in 2014 increased by 9.6% year-on-year, according to the Cement Manufacturers' Association of the Philippines (CeMAP) president Ernesto M Ordoñez.
Ordoñez said that local market sales reached 21.3Mt in 2014, compared to 19.4Mt in 2013. Sales for the fourth quarter of 2014 jumped by 15.7% to 5.2Mt, up from 4.5Mt in 2013. The increase in sales of cement producers was supported by the continuous growth of construction projects. Data from the Philippine Statistics Authority (PSA) showed that construction activities in January - September 2014 amounted to US$6.17bn, 39% higher than the US$4.45bn in the same period of 2013. Non-residential projects had the largest amount of construction projects at US$3.25bn, while residential projects were pegged at US$2.45bn in the first nine months of 2014.
Thailand: Siam Cement Group (SCG) has posted a smaller net profit for 2014 than 2013, although it expects earnings to rise substantially in 2015, largely due to cement demand from the government's planned infrastructure projects, said president and chief executive Kan Trakulhoon.
SCG's net profit in the fourth quarter of 2014 was US$271m, up by 11% from the same quarter in 2013, as greater margins for petrochemicals helped offset losses incurred from high inventories. However, for the entirety of 2014, SCG's net profit was down by 8% at US$1.03bn.
Trakulhoon said that cement demand would rise by an estimated 6% to 42Mt in 2015. "Our forecast is based on GDP growth of around 4% in 2015 and we expect demand for cement to start rising in the second half of the year," said Trakulhoon. With greater demand at home in 2015, SCG sees cement exports to other Asean countries falling to 4Mt, down from 4.4Mt in 2014.
SCG plans to issue up to US$91.9m in bond debt in April 2015. The bond issue will be separated into two tranches, worth US$45.9m each, of three- and four-year bonds. "The money raised by the bonds is expected to be used up by the company's investment plans in 2015," said SCG. It also aims to raise the ceiling of its bond issuance by US$1.53bn to US$7.66bn, with the funds used to finance expansion in Thailand and throughout Southeast Asia.
According to its five-year plan for 2013 - 2018, SCG has set aside US$6.13 – 7.66bn in its budget for investment expansion such as mergers and acquisitions. More than US$1.53bn is to be spent in 2015 on investment in mostly Asean countries. "We will still focus on cement and construction material products, as we see a great opportunity in 2015 when the Asean market becomes a single and bigger market," said Trakulhoon. SCG spent US$1.38bn on investment in 2014, down slightly from US$1.53bn in 2013.
Written by Global Cement staff
29 January 2015
India: Jaiprakash Associates (Jaypee Group) has announced that it will sell two cement plants in Madhya Pradesh State to UltraTech Cement. The assets comprise cement plants and grinding facilities in Bela and Sidhi with a total capacity of 4.9Mt/yr, along with an associated 180MW power plant to supply them.
UltraTech will pay US$740m in non-convertible debentures (loan certificates) and shares worth US$16m for the facilities. It will also assume a net debt and negative working capital of US$128m associated with the businesses. This puts the overall value of the transaction at US$628m.
The sale is part of Jaypee's programme to pay-down debt. It has sold assets worth US$3.6bn in pursuit of this aim. This includes some US$1.6bn of assets in its cement business. However, it said that it remains India's third-largest cement producer, with a capacity of 22Mt/yr.
Jaypee's largest previous cement divestment was also to UltraTech. In 2014, it sold a 2.4Mt/yr cement plant in Kutch and a 2.4Mt/yr grinding plant in Wanakbori, both in Gujarat State, for US$620m. The deal was closed in June 2014. In September 2014, Jaypee announced the US$60m sale of its 1.5Mt/yr grinding plant in Panipat to Shree Cement. It also sold its 74% stake in Bokaro Jaypee Cement Limited, a cement joint venture with the Steel Authority of India (SAIL) to Dalmia Cement for US$115m.
Canada: Austria's Radex-Heraklith Industriebeteiligungs (RHI) has received a US$11.6m order from Lafarge in Canada. RHI will deliver materials for the expansion of Lafarge's cement plant in Exshaw, Alberta. The cement industry comprises 12% of RHI's sales.