13 November 2017
HeidelbergCement sells half of its Georgian business 13 November 2017
Georgia: HeidelbergCement has sold 50% of the voting rights in its Georgian business to Cement Invest, an investment company jointly managed and owned by the Georgian Co-Investment Fund (GCF) and Hunnewell Partners. HeidelbergCement and Cement Invest will jointly control the resulting joint venture. The transaction will contribute in total about Euro115m to cutting HeidelbergCement’s net debt.
“The joint venture’s competitiveness will be improved with the modernisation of the Kaspi cement plant, where the construction of a modern dry kiln line already started in 2016 and is expected to be finalised by the end of 2018. The disposal is part of our portfolio review and optimisation with the goal to generate additional cash flow in order to support our disciplined growth and increase shareholder returns,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement.
HeidelbergCement started operating in Georgia in 2006. The new joint venture operates three integrated cement plants, a cement grinding facility and a cement terminal on the Black Sea coast. The cement production capacity exceeds 2Mt/yr. A network of 13 ready-mixed concrete plants and two aggregate quarries supports the cement business.
Cement producers cross about Indian tax classification 13 November 2017
India: The Cement Manufacturers Association (CMA) says it is disappointed for the entire industry following the Goods and Services Tax (GST) Council’s decision to retain cement in a higher tax rate. The GST Council has reduced the tax rate on a wide range of commonly used items, from chewing gum to detergents, to 18% from 28%, according to the Press Trust of India. However, cement, along with paints, has remained at the 28% rate, despite the expectations of the cement industry.
"The retention of the cement in the 28% GST bracket, along with luxury items such as washing machines and air conditioners is quite unfortunate," said CMA President Shailendra Chouksey. He added that cutting the tax rate of cement could have hastened the recovery of the industry from a current slow period.
Birla Corporation net profit drops sharply in first half 13 November 2017
India: Birla Corporation’s net profit has fallen by 72% year-on-year to US$6.8m in the first half of its financial year to the end of September 2017 from US$24.4m in the same period in 2016. However, its sales revenue grew steeply by 37% to US$444m from US$325m. Sales volumes grew by 39% to 5.9Mt from 4.3Mt.
The cement producer said that despite ‘challenging’ markets it had increased its sales volumes and benefitted from synergies following its acquisition of Reliance Cement in mid-2016. It added that demand and prices were ‘seriously’ impacted in central India by a prolonged shortage of sand and aggregates, especially in Uttar Pradesh, which constitutes around 35% of the company’s sales. Prices were also down in the northern states of Rajasthan, Haryana and the National Capital Region due to poor demand.
Eagle Cement builds profit on higher sales volumes 13 November 2017
Philippines: Eagle Cement’s net profit rose by 8% year-on-year to US$64.4m in the first nine months of 2017 from US$59.7m in the same period in 2016. It attributed the growth to higher sales volume despite tight competition, according to the Manila Bulletin newspaper. Its net sales revenue grew by 12% to US$219m from US$196m. This was due to over 20% growth in the sales volume of bagged and bulk cement even though the price of cement has fallen, in part because of imports. The cement producer is set to commission a third production line at its Bulacan plant in 2018.
Appeals to Italian competition regulator deferred until June 2018 13 November 2017
Italy: Appeals by Italian cement producers to the judiciary of Lazio against fines imposed by the Italian Competition Authority (AGCM) has been deferred to June 2018. Italcementi, Buzzi Unicem, Colacem, Cementir, Sacci, Holcim, Cementirossi, Barbetti, Cementeria di Monselice, Cementizillo, Calme, Moccia, TSC and the Italian Cement Association (AITEC) were penalised more than Euro184m in July 2017 for allegedly coordinating sales prices and agreeing market share from June 2011 to January 2016, according to the ANSA news agency. The majority of the fine was levied on Italcementi and Buzzi Unicem at around Euro84m and Euro60m respectively. Itacementi started appealing against the sanctions in August 2017.
Adelaide Brighton investigates deliberate underpayments 13 November 2017
Australia: Adelaide Brighton is investigating a series of transactions to a small number of customers who may have underpaid for the products supplied to them. The cement producer says it is investigating the situation ‘fully’ with the aid of the forensic accountants KPMG. It added that it is possible that an employee of the company is involved.
The company believes, that, based on the evidence so far, it appears that there may have been deliberately hidden underpayments by customers over a sustained period. This may have a negative impact on the company’s 2017 earning before interest and taxation (EBIT), currently estimated to be up to US$11m, less the impact of any recoveries that may be made. Adelaide Brighton has reported the situation to its auditors and will co-operate with relevant authorities as the investigation proceeds.
Chinese ambassador denies links with Sinocem Costa Rica 13 November 2017
Costa Rica: Tang Heng, the Chinese Ambassador to Costa Rica, has confirmed that Sinocem China has ended all commercial relations with Sinocem Costa Rica. The statement was made due to an investigation into alleged irregularities and lobbying involving the owner of Sinocem Costa Rica, Juan Carlos Bolanos, and certain officials of state-owned bank Banco de Costa Rica, according to La Nación newspaper. According to Heng, Hangzhou Sinocem Building Materials said in July 2017 that Sinocem China had stopped supplying cement to Sinocem Costa Rica as the latter allegedly purchased cement from other Chinese cement suppliers and continued to use the Sinocem brand on packaging without its permission.