23 July 2014
SCG invests US$400m in Myanmar cement plant 23 July 2014
Myanmar: Thailand's Siam Cement Group (SCG) plans to invest US$400m in the construction of a 1.8Mt/yr capacity cement plant in Myanmar. The plant is expected to be complete in 2016.
"The priority we are focusing is to manufacture cement and later cement related products such as ready-mix concrete and precast concrete blocks," said Kan Trakulhoon, SCG's president and CEO. "Myanmar seems to be developing progressively and infrastructures are needed, so the cement market will be good. The investments made in the industry and housing construction sectors are increasing, especially in major cities like Yangon, Mandalay and Nay Pyi Taw." He added that the cement plant would use waste-derived fuel.
Latin America: Cemex Latam Holdings, Cemex's Latin American subsidiary, has reported net consolidated sales of US$864m during the first half of 2014, representing a year-on-year rise of 6%. Company earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell year-on-year by 8% during the first six months of 2014, reaching US$283m, due to scheduled maintenance works. EBITDA levels are expected to improve during the second half of 2014. Cemex Latam Holdings recorded net profits of US$121.2m in January - June 2014, 14% down on the same period in 2013.
India: Aditya Birla Group's Ultratech Cement Ltd has reported net profits and sales for the first quarter of financial 2015, which was April to June 2014, with regards to both stand-alone and consolidated results. On a consolidated basis, Ultratech's first quarter net profit, after minority interest, was US$104m, whereas the company reported US$111m in the corresponding quarter of 2014. Quarterly net sales and other operating income amounted to US$1.00bn, while the same was at US$880m in the first quarter of the 2014 financial year. Other income stood at US$35.7m in the current fiscal year, up from US$25.4m in the 2014 fiscal year. Combined domestic grey cement and clinker sales volumes were 11.70Mt, up by 16% from 10.08Mt in the same period of 2014.
Tanzania: Tanga Cement Company Limited (TCCL) and Tanzania Electric Supply Company Limited (TANESCO) have signed a power supply agreement that ensures TCCL will receive 40MVA, up from 20MVA, through its substation in Pongwe, Tanga Region. TCCL's managing director, Reinhardt Swart, said that the move aims to revamp the production capacity while expanding the firm's business across the country.
"We are aware that all cement plants uses a lot of power from TANESCO so we have decided to construct our own substation to get direct power from TANESCO and reduce unnecessary interruption during the production and operations process," said Swart. He added that the agreement comes at a time when TCCL is expanding the capacity of its operations, including adding a new second kiln at its plant in Tanga Region.
Egypt: Suez Cement Group of Companies' (SCGC) board of directors has approved the firm's consolidated financial report for the first half of 2014, which ended on 30 June 2014.
SCGC reported a 32% increase in revenues for the second quarter of the year versus the same period in 2013. Earnings before interest, tax and depreciation (EBITDA) jumped by 18%. However, net profits after non-controlling interest fell by 15%, mainly due to higher corporate income taxes.
SCGC's consolidated revenues for the first six months of 2014 increased by 23% year-on-year, while recurring EBITDA was 6% higher versus 2013. Both positive trends were thanks to company-wide efforts to control costs and preserve jobs. However, higher corporate income taxes coupled with an absence of foreign exchange gains were responsible for a 20% drop in net profits after non-controlling interest.
The company reported that cement demand grew by 1% in the first half of 2014 versus the first six months of 2013. During the same period, overall production capacity fell by 55% due to on-going energy supply challenges. In order to meet market demand, SCGC was forced to import clinker, which resulted in a surge in operational costs. A shortage of cement availability also resulted in market-price adjustments.
SCGC believes that the Egyptian construction industry's recovery will attract new investment in Egypt and help to boost economic output. The company also predicts that newfound government stability and the announcement of several large national projects will boost Egyptian demand for cement.
Nigeria: The Standards Organisation of Nigeria (SON) has issued a 60-day ultimatum to cement manufacturers on product labelling and traceability requirements. Primarily, the new guidelines mandate the manufacturers to indicate on product bags the manufacturing and expiry dates, product application information as well as the batch numbers of the products.
Cement manufacturers, including Dangote Cement, Lafarge Nigeria, Unicem, Ibeto Cement, Ashaka Cement and Sokoto Cement, had appealed to the agency to review its initially-proposed 30-day deadline to enable them to implement the changes in their processes. The move, which is expected to enhance traceability in case of product failures, also places a responsibility on cement manufacturers to ensure that their products meet required guidelines and health and safety requirements.
Nigerian cement producers are also expected to submit their advertisements and commercials for pre-approval by the SON before they are sent to the media, while processes should be initiated to ensure that products are properly stored by distributors and retailers to avoid compromising product integrity.
Mika-Cement is rumoured to have a new owner 23 July 2014
Armenia: According to local media, a former Armenian minister of defence, Gagik Melkonyan, has purchased the Mika cement plant.
China: Anhui Conch Cement Company ranks as first in terms of comprehensive strength among Chinese listed cement companies in 2014, according to a latest list released by the China Cement Association. China National Building Materials (CNBM), with a grade of 219.19 and China Resources Cement Holdings, with a grade of 72.72, followed the 239.97-graded Anhui Conch on the list.
The China Cement Association conducted the evaluation among companies matching the following criteria: Chinese mainland-based independent listed company; clinker production capacity of 3Mt/yr or above; main business of cement contributing at least 25% to company's total revenue; listed on Shanghai, Shenzhen or Hong Kong bourse. The assessment indicators included sales of cement (50%), total pre-tax profit (20%), total company assets (10%) and market value (20%).
Lafarge Surma Cement signs deal with Metrocem Cement 23 July 2014
Bangladesh: Lafarge Surma Cement Ltd has signed a toll grinding agreement with Metrocem Cement Ltd. Under the agreement Lafarge Surma Cement will provide clinker from its integrated cement plant in Chhatak town, Sylhet Division, to Metrocem Cement, which will use it to produce a Portland composite cement for Lafarge Surma Cement. Tarek Elba, CEO of Lafarge Surma Cement and Md Shahidullah, managing director of Metrocem Cement, signed the agreement.
Uzbekistan: Eurocement has become the third Russian company to risk losing assets in Uzbekistan after Wimm-Bill-Dann Foods (WDB) and MTS. The president of Eurocement, Mikhail Skorokhod, said that the Tashkent Region's Economic Court has granted a suit brought by Uzbekistan's State Competition Committee to invalidate the privatisation of JSC Akhangarancement, which was based on a decree that was signed in the mid-1990s. Eurocement became a shareholder in Akhangarancement eight years after it was privatised, buying 75% of its shares on the secondary market in 2006.
"We bought Akhangarancement in 2006," said Skorokhod. "We met all of the local legislative requirements, paid taxes and contributed to the solution of social and environmental problems. The enterprise was inspected from time to time, but no serious complaints were made. A few months ago a spot check involving nearly 20 organisations began. Despite the unprecedented scale of the inspection, nothing was found that violated the law. We found out on 16 July 2014 about the State Competition Committee's lawsuit to overturn the decree of 30 August 1994 on the privatisation of Akhangarancement. The Tashkent region's Economic Court accepted the suit on 17 July 2014 and the ruling was made on 21 July 2014 morning, in literally a few hours."
According to Skorokhod, the lawsuit cites items that were not taken into account in the privatisation, but none of them are capital assets (such as seedlings, furniture, enclosures, printers and trailers). Uzstroymaterialy, the state company that oversees the industry and Uzbekistan's Justice Ministry have deemed the lawsuit unfounded, but the court did not take its position into account.
Eurocement has 30 days to file an appeal. If the court upholds the first ruling, this will essentially mean the nationalisation of the asset. The plant is continuing to produce cement as usual. "If we don't get a positive court ruling in Uzbekistan, we will file a lawsuit in the International Centre for Settlement of Investment Disputes (ICSID) at the World Bank in Washington," said Skorokhod.
The attempted nationalisation is particularly troubling to Eurocement in light of the expansion plan it has for the plant. Eurocement has signed a contract with China CAMC Engineering Co Ltd for the provision of equipment, designs, installation supervision and employee training worth Euro95.0m for the construction of a new dry-process cement plant as part of the Akhangarancement plant. The new plant's capacity will be 2.4Mt/yr of cement. The launch is expected in 2016.
The contract includes the provision of the full range of equipment required for cement production, including mechanical equipment, furnaces, cyclone pre-heaters, grinders, mills, electrical and automatic equipment and monitoring and measuring devices.