Global Cement Weekly
Issue: gcw100 / 15 May 2013
Headlines
Congratulations to Cemex for their work on alternative fuels in Germany. In April 2013 Cemex reached an alternative fuels substitution rate of over 80% at its German cement plants, with the Kollenbach plant beating 90%. Impressive stuff.
The German cement industry as a whole is already one of the leaders in the industry for alternative fuels use, reaching levels above 60% in 2010. This compares favourably with, for example, the UK's (high) rate of 40% in 2011 and the Cembureau average rate of 28% for its 27 European member states in 2009.
To show how fast the change in alternative fuels usage has been in Germany, in 2000 the rate was around 25%. For Cembureau members it was about 10.5% in 2000. Cemex's achievement at Kollenbach even surpasses HeidelbergCement's alternative fuels rate of 85% that it achieved across the border in 2011, at its Eerste Nederlandse Cement Industrie (ENCI) plant in the Netherlands.
Globally, Cemex seems likely to meet its 2015 target of 35% alternative fuels substitution rate. The other large multinational cement producers have similar plans in place. For example, Lafarge intends to reach 50% usage by 2020.
For more information on the German cement industry, read our feature 'Germany: A modern force in cement' in the May 2013 issue of Global Cement Magazine.
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China: China Tianrui Group Cement has said that Yu Yagang tendered his resignation as an executive director and chief financial officer with effect from 11 May 2013 for reasons of personal development. Yu will remain as the chief accountant of Tianrui Cement, a wholly owned subsidiary of China Tianrui.
Yang Yongzheng has been appointed as an executive director, authorised representative and a member of the nomination committee. Yang will remain as the general manager of Tianrui Cement. Xu Wuxue has been appointed as an executive director, chief financial officer and a member of the remuneration committee. Xu will remain as the chief financial officer of Tianrui Cement. Wang Delong has been appointed as an executive director and deputy chief executive officer.
Spain: Spanish association of cement producers Oficemen has appointed Isidoro Miranda as its new chairman. Miranda, the managing director of Lafarge Cementos, will replace the former chairman of Cementos Portland Valderrivas and current CEO of builder FCC, Juan Bejar. Oficemen also named Jaime Ruiz de Haro, Jose Maria Aracama, Feliciano Gonzalez and Jorge Wagner as vice presidents.
India: Lafarge has signed an agreement to sell a 14% minority stake in its Indian subsidiary, Lafarge India, for Euro200m to Baring Private Equity Asia. The transaction, which is subject to the approval of local regulatory authorities, is intended to accelerate Lafarge's growth plans in India in all its product lines, inlcuding cement, aggregates and concrete.
Greece: Titan Cement has reported a net loss of Euro27.1m for the first three months of 2013, an increase from a net loss of Euro19.4m year-on-year. The Greek cement producer pointed out in a statement that Greece's 'unparalleled' slump in building activity had continued and that there were weak economies in many other countries where it operates.
Titan's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 29.4% to Euro24.3m from Euro34.4m. Turnover fell to Euro243m from Euro225m.
In its outlook for the remainder of 2013, Titan anticipated that demand would continue to decline in Greece for the first half of 2013. Markets in southeast Europe will continue to be affected by the Euro-zone crisis with demand for building materials not expected to recover substantially in 2013. In Egypt, political and economic woes appear to be escalating and uncertainty is high. The severe and extended winter period in 2013 across the Balkans, Turkey and Greece significantly affected building activity. Titan said that building activity in the US has entered the recovery phase, particularly as a result of the strong momentum of the housing market, and demand for building materials is growing substantially.
Germany: Cemex achieved an alternative fuels substitution rate of 82.6% for its cement plants in Germany in April 2012. According to a press release, this is the first country that the Mexico-based multinational cement producer operates in to reach this level. Its Kollenbach cement plant in Beckum, Germany, averaged a 90.9% substitution rate for the month.
"Beyond significantly reducing fuel costs, our expanding use of alternative fuels fosters the sustainable management of our earth's natural resources," said Eric Wittman, president of Cemex in Germany. "In April 2012, our Kollenbach plant replaced 12,000t of coal with refuse-derived fuel, bone meal and old tires."
In 2012, Cemex reached an alternative fuel substitution rate of 27.1%. Overall, the company's alternative fuel strategy enabled it to avoid the use of 2.3Mt of coal and the emission of 1.8Mt of CO2.
Saudi Arabia: Najran Cement has said in a bourse filing that it has awarded a contract to Chinese firm CEIC, for the installation and maintenance of a third production line. The new production line will have a cement production capacity of 7000t/day and is expected to start trial operations in the third quarter of 2013. No financial details were made available.
Poland: Cement production in Poland has fallen by 33.5% to 2.69Mt for the first four months of 2013, according to the Polish Cement Association. January to April 2013 sales fell by 31.1% to 2.82Mt. In April 2013, production dropped by 33.8% year-on-year to 1.04Mt and sales dropped by 24.1% to 1.19Mt.
India: Sanghi Industries has posted a 234% increase in net profit to US$7.65m for the third quarter of its 2012 – 2013 financial year, compared to US$2.28m for the same period in 2011 – 2012. Net sales remained stable at US$54.4m.
For the financial year to date, profit after tax rose to US$14.9m in 2012 – 2013 from a loss of US$3.98m in 2011 – 2012. Net sales rose by 17.3% to US$146m from US$124m.
Commenting on the financial performance of the company, director Alok Sanghi said that the company's strategy of diversifying sales to markets in Maharashtra and Rajasthan outside of its core market of Gujarat had begun to pay off as the company operated at near full capacity. Additional cost saving measures such as debt reduction, higher captive power generation and increasing utilisation of cheaper sea route for transport of cement had further boosted profit margins.
European Bank for Reconstruction and Development lends US$20m for Mongolian cement plant build
15 May 2013Mongolia: The European Bank for Reconstruction and Development (EBRD) has signed an agreement to provide a US$20m equity investment to Senj Sant, which will build and operate a 1Mt/yr green-field cement plant in Mongolia. This equity investment is part of a financing package that also includes a loan of up to US$130m. Half of the loan will be syndicated to other lenders.
"This investment marks a milestone in our activities in Mongolia. Not only is the volume of funds we are providing significant but it also signifies an important step in the diversification of the local economy," said EBRD First Vice President Phil Bennett.
Mongolia's economy grew by 17% in 2011. The new Senj Sant plant will be located in southern Mongolia about 450km from the capital Ulaanbaatar in a strategic location to supply cement and clinker to nearby large mining projects. Mongolia's Monpolymet Group owns Senj Sant.
Colombia: Cementos Argos has raised US$750m from the preferred shares-issuance in the local and international markets, according to a letter to the Colombian financial services watchdog Superfinanciera. The share-issuance was oversubscribed, with demand amounting to US$1.18bn from more than 14,000 Colombian and international investors.
Of the interested investors, 65% were local investors and 35% were from abroad. Additionally, 58% of the interested parties were institutions and 42% were individuals. The proceeds from the transaction will be used by the company to support its growth in the cement and concrete industry.
Ghana: Stanbic Bank Ghana has closed a US$20.2m loan deal with Western Diamond Cement Limited, a company in the West African Cement SA (WACEM) Group, to build a 1Mt/yr cement plant in Egyam Bokro, near Takoradi. Production will start in 2014.
WACEM has two associate companies currently operating in Ghana, namely, Savanna Diamond Cement Limited (SDCL) in the Northern Region, and Diamond Cement Ghana Limited (DCGL) in the Volta Region. Stanbic Bank's relationship with the WACEM Group started in 2011. WACEM has cement plants in West Africa including Niger and Burkina Faso, and with project stage plants in Nigeria and Cote d'Ivoire. It has recently commissioned a plant in Mali.
The current cement production capacity in Ghana is 5.2Mt/yr. The project raises the number of cement plants Ghana to four, with the addition of a bagging plant that processes imported cement.
Equatorial Guinea: FLSmidth has been awarded an order worth approximately Euro68m from Grupo Abayak AKOGA Cemento for the supply of a 3000t/day green field cement plant at Akoga in Equatorial Guinea. The contract includes supply of plant engineering and all main equipment, including jaw crusher, cone crusher, ATOX® raw mill, OK cement mill, pyroline with cross bar cooler, dosing systems, filters, packing plant and automation control system.
"Equatorial Guinea and the surrounding region have been relying on imported cement - thereby suffering from high prices and constraints. This plant will be serving the local market as well as neighbouring countries," said group executive vice president Per Mejnert Kristensen in a statement.
Grupo Abayak AKOGA Cemento is a newcomer to the cement industry but has been involved in multiple infrastructure projects in Equatorial Guinea. The order will be booked by the FLSmidth's cement division and contribute beneficially to the cement plant manufacturer's earnings until 2016.
Tajikistan: Tojikcement, Tajikistan's largest cement plant, has been accused of failing to replay US$2.5m to the Export Guarantee and Insurance Corporation (EGAP), a Czech state-owned credit insurance company. However, the Tajikistan Ministry of Energy and Industries has announced that a Chinese firm has started preparations for a major upgrade costing US$7.73m.
Hana Hikelova, chair of the EGAP PR department, made the accusation and has been quoted by Asia Plus news agency. According to Hikelova, EGAP in insured a loan provided by the Czech Export Bank to Tojikcement for modernisation of the Dushanbe cement plant in 2006. According to a statement released by the Czech Embassy in Tashkent in February 2013, "The main problem of further development of Czech exports is the unsettled debt of Tojikcement."
Meanwhile, on 10 May 2013 the Ministry of Energy and Industries (MoEI) Secretariat announced that Beijing Uni-Construction Group had started preparations works at Tojikcement, to install a coal-fired rotary kiln. Eleven Chinese specialists are reportedly working in the plant in Dushanbe. The coal-firing kiln is expected to be delivered to Dushanbe in mid-June 2013 and the installation work is expected to be completed by mid-September 2013, an official source at a MoEI said. The total cost of the upgrade is US$7.73m, with US$150,000 provided by Tojikcement and the remainder by Beijing Uni-Construction Group.
Tojikcement, which has a cement production capacity of 1.1Mt/yr, is the largest cement producer in Tajikistan. The plant has not been operational since the beginning of 2013 due to a lack of natural gas supplies. Currently there are five cement plants operational in Tajikistan with a combined cement capacity of 1.3Mt/yr. In 2012, Tajikistan produced 235,000t, including 203,000t produced by Tojikcement.
Indonesia: Cement plant projects for operation in 2014 are being planned by four companies in the Lebak regency of Banten province in Java, according to the district office of a local investment board. PT Gamma is in the final phase of construction for its 4Mt/yr cement plant. PT Siam, PT Tri Utama and PT Pos Perdi are still in the process of seeking licenses and procuring land. The plants are to be built in the sub-districts of Muncang, Sajira, Cibeber, Bayah and Cilograng.
Philippines: Holcim Philippines plans to construct a 2.5Mt/yr cement plant in Bulacan costing US$550m. Holcim Philippines chief executive Ed Sahagun said in a news briefing that the company had obtained first phase approval from its parent company Holcim.
The approval will allow the cement producer to obtain quotations, organise a project team and proceed with securing permit requirements. Final approval will be discussed in September 2013. Holcim Philippines plans to have the new plant on stream by 2016. Sahagun said that he expected demand for cement to further improve, once the public-private partnership projects were implemented.
Holcim Philippines' net income in the first quarter of 2013 grew by 77.2% to US$35.1m from US$19.8m in the same period in 2012, due to increased demand and higher cement prices.
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