26 May 2016
India Cements revenue falls by 5% to US$636m 26 May 2016
India: India Cements revenue has fallen by 5% year-on-year to US$636m for the financial year that ended on 31 March 2016 from US$663m in the same period in 2015 - 2016. Its net profit rose to US$20.5m from US$4.39m.
In the notes provided with its annual financial results the Indian cement producer reported that its was appealing against a provisional attachment order under the Prevention of Money Laundering Act (PMLA), 2002 attaching certain assets of the company for a value of US$17.9m. It also noted that according to the condition imposed by Board of Cricket Control in India, India Cements provided a guarantee for the purpose of guaranteeing performance and compliance by Chennai Super Kings of the obligations of the franchise under the agreement. The Chennai Super Kings cricket team was suspended for two years in mid 2015 due to a corruption scandal.
Russia: Filaret Galchev, the owner of Eurocement, expects that demand for cement in Russia will fall by 8% - 10% in 2016 after falling 12% in 2015. The cement producer will sell about 20Mt of cement in Russia and about 3.5Mt in other regions including Uzbekistan and Ukraine in 2016. He added that average production costs at the group will produce cement at around US$25/t.
In an interview with Rossiya 24 television reported upon by Interfax, Galchev also described Eurocement’s sale of its 6.1% stake in LafargeHolcim in February 2016 as ‘unexpected’. The Russian cement producer sold its share in LafargeHolcim after they lost nearly half of their value in six months.
"No, I did not expect it. We analysed the situation for a long time, but that is the decision that was made," said Galchev. He added that he had no issues with Sberbank, the Russian bank that restructured Eurocement’s debt after the sale of the shares in LafargeHolcim.
Originally Eurocement was a shareholder in Holcim and it received a stake in LafargeHolcim after that company was formed in a merger. The stake was subsequently transferred to Sberbank of Russia in January 2016 after the shares, which Galchev had acquired with financing from Bank of America, lost over 40% of their value in half a year. At the beginning of February 2016, Sberbank sold the 6.12% LafargeHolcim stake to investors from the UK, Switzerland, the US and other countries.
Russian Federal Antimonopoly Service leads discussion on cement pricing and mandatory certification 26 May 2016
Russia: The Federal Antimonopoly Service (FAS) has held a meeting to discuss cement pricing and mandatory certification. Representatives of FAS, cement producers, industry associations and government authorities - including the Ministry of Economic Development, the Federal Accreditation Service, the Federal Agency on Technical Regulation and Metrology, the Ministry of Construction and the Ministry of Industry and Trade - took part in the event on 17 May 2016.
Attendees reported that the pricing of bulk cement to industrial customers had increased slightly due to seasonal demand. FAS had received a growing number of complaints about rising prices from purchasers of bagged cement. To counter this, FAS has proposed using points of sale for bagged cement with the intention to remove intermediaries from the supply chain and cut costs.
On mandatory cement certification the Federal Agency on Technical Regulation and Metrology and the Ministry of Economic Development reported that over 50 cement plants in Russia and several Belarusian cement producers have certified their products. However, some cement importers have experienced difficulties with certification. FAS agreed to coordinate the forwarding of issues importers and other producers have experienced to the supervising body. It will also draft proposals on amendments to the certification. Mandatory cement certification came into force on 7 March 2016 due to No. 930 Decree of the Government of the Russian Federation.