Global Cement Weekly
Issue: GCW67 / Wednesday 19 September 2012
After another year of research and data collection from a variety of cement industry experts, associations and other sources, the Global Cement Directory 2013 will soon be with us. The new edition will feature more cement plants than ever before and shows a number of trends in the global cement industry.
The 2013 edition of the directory has an extra 70+ plants across Asia. This is in part due to the continued rampant demand in these cement-hungry nations, but is also due to the fact that the directory is impossible to keep 100% up-to-date. As one would expect, India sees significant extra entries compared with the 2012 edition, despite valid concerns of overcapacity.
Looking north, there are also new plants and projects in Russia, a major global cement player, with 60 plants listed in 2012 and 69 in 2013. Over the Bering Strait, North America has seen a minor contraction year-on-year, with the section of the directory dedicated to the US showing two fewer plants, 97 rather than 99. There are also an extra seven mothballed facilities in the US, although the vastness of the country means that regions have not been affected equally. Consolidation of older capacity ahead of an uncertain regulatory future is partly to blame for the mothballings and closures, although the fundamentals of the economy in 2012 have been surprisingly resilient.
In South and Central America, an area of strong growth, there are new projects and expansions in Brazil, Ecuador and Peru among others, with gradual expansion a common theme among producers eager to expand as markets develop. Mexico has provided a challenging environment for some, with little change year-on-year in the directory. In the Middle East and north Africa we have carried out significant updates. Despite continuing political challenges, countries here continue to demand cement, something that we highlighted for Egypt last week.
In contrast Europe continues to be a drain on the multinational cement players' balance sheets. The continent has lost 15 plants year-on-year with several others mothballed. Many countries, notably Spain, Greece and Italy, have cement industries much larger than their current needs demand. Considerable further closures are likely to be reflected in the 2014 version of the directory if the Eurozone financial malaise is not resolved, although many plants remain 'open' at the moment.
Also, new for 2013, the directory will expand by over 100 pages with the inclusion of cement industry reviews from various countries around the world, collated from recent issues of Global Cement Magazine.
The inclusion of the reviews will add not just literal weight to the directory, but will also contribute a new angle to the publication's information, adding context to the raw data. Countries with expanded entries include Russia, Brazil, USA as well as leading European and Asian cement producers along with extensive coverage of the Middle East.
US/Switzerland: Holcim US has announced that its president and CEO, Bernard Terver, will join the executive committee of the company's parent Holcim Ltd.
As part of the 'Holcim Leadership Journey,' an initiative which streamlines and strengthens operations, Terver will also assume responsibility for the new group region of North America, comprising Holcim US, Holcim Canada, Aggregate Industries (US) and Aggregate Industries UK. Filiberto Ruiz will serve as deputy chief executive officer of Holcim (US) and Aggregate Industries US. Prior to his promotion, Ruiz was senior vice president of sales and marketing for Holcim US.
"I'm confident that these management changes will reinforce our commitment to customer excellence and to the development of our employees as they become the next generation of leaders," said Bernard Terver, president and CEO of Holcim US. "Filiberto's experience makes him an excellent choice for this new role and I am looking forward to collaborating as the company advances."
"I am honoured to have been appointed to lead US operations," said Filiberto Ruiz, deputy chief executive officer of Holcim (US) and Aggregate Industries US. "Holcim US and Aggregate Industries US are solid organisations and I look forward to continuing to build on the work that has taken place under Bernard's leadership."
Terver has been president and CEO of Holcim US since October 2008 and Aggregate Industries US since 2010. In the same year he also became area manager. He joined Holcim in 1994 when his employer CEDEST was acquired by Holcim France. In 1999, he became chief executive officer of Holcim Colombia and in 2003 was appointed area manager for the Andes nations, Central America and the Caribbean.
Ruiz began his career with the Holcim Group in 1986 as electrical supervisor with Holcim Apasco in Mexico, later becoming plant manager. In 1999 he became regional vice president for manufacturing at Holcim US. He returned to Holcim Apasco as cement operations, vice president and moved back to Holcim US in 2006 as senior vice president for manufacturing. He has been in his current role, senior vice president for sales and marketing, since 2010.
Bulgaria: The Bulgarian unit of Swiss building materials maker Holcim has announced the construction of a new waste recycling installation worth Euro6.5m at its cement production site in the village of Beli Izvor, in the country's northwest. Some Euro1.6m the total investment costs were covered by the EU-funded operational programme Competitiveness, according to Holcim Bulgaria.
The recycling plant for sorted solid household waste will increase the volume of recovered combustible waste by more than 35,000t/yr, which Global Cement infers may be included in the plant's cement kiln as an alternative fuel. With the launch of the waste recycling installation, Holcim Bulgaria completed a six-year investment programme worth Euro80m that targeted technological upgrades, an increase in production capacity and the mitigation of environmental risks.
UAE: Dubai Group plans to sell its 45% stake in a joint venture firm with French cement maker Lafarge to help to repay its debt, which currently stands at US$10bn. Lafarge Emirates Cement is restructuring and needs additional capital to help support the business.
Lafarge Emirates Cement was set up as a joint venture between Lafarge, the largest cement company in the world, Dubai Group, part of conglomerate Dubai Holding, and the Fujairah Emirate in 2005. The company runs a plant in Fujairah with a cement production capacity of 3.2Mt/yr.
Philippines: Cemex has announced that it is planning to expand the cement production capacity of its APO plant in the Philippines by 1.5 Mt/yr. Through an investment of approximately US$65m, the company will increase production and strengthen its distribution network to better serve high-demand areas throughout the country. The increase is expected to be operational by the first quarter of 2014.
With this new investment, Cemex says that it will keep pace with the Filipino market's rapid growth. The country registered a GDP growth of 6.1% in the first half of 2012, according to its National Statistical Coordination Board. The Metropolitan Manila Development Authority has begun multiple infrastructure projects as the country recovers from damage caused by extreme weather conditions.
"Infrastructure development has been one of the constant needs of the country and it has to be addressed with urgency," said Pedro Palomino, president of Cemex in the Philippines. "We are proud to be a part of the development of the Philippines and wish to be a long-term partner on its path to a prosperous, sustainable future."
India: India's infrastructure major, Reliance Infrastructure Ltd (Reliance Infra) has entered the Indian cement market with 'Reliance Cement' via its subsidiary Reliance Cement Company Pvt Ltd.
"The company now commercially enters into the Indian cement market, which has been on a robust growth trajectory for more than a decade, led by buoyancy in sectors like real estate, infrastructure and construction," said a Reliance Infra statement yesterday.
Reliance Infra will manufacture Portland pozzolana cement at its Butibori plant in Maharashtra state and deliver it mainly to the Vidharbha region.
"We will initially cater to the Vidharbha market (in Maharashtra state) focusing on districts like Nagpur, Wardha, Chandrapur, Bhandara, and Amrawati. Later we will expand our marketing and distribution networks to other districts," said Reliance Cement vice chairman, Sumit Banerjee.
Egypt: An Egyptian court has ordered that the sale of Assiut Cement Company to Cemex be annulled. The plant will be returned to the Egyptian government as it was sold for less than its fair value. The court also ruled that all workers forced to retire after the sale may return.
Cemex bought 90% of the state owned factory in 1999 for US$580m in cash and assumed debt and currently owns a 96% stake. Under the court ruling, Cemex would be responsible for all the financial obligations its Egyptian business incurred since 1999. Cemex plans to contest the ruling and appeal the court's decision.
India: Cement producers have suggested that the industry will be unable to 'absorb' increased freight charges caused by a rise in the price of diesel.
Following a US$0.10/l increase in the price of diesel, the All India Motor Transport Congress (AIMTC) increased freight charges across the country by 15%. The truck drivers' organisation claims to have around 8 million vehicles under its control.
"The increased freight charge is not going only to impact on the distribution of finished goods. Generally, it takes 2t of inputs to produce 1t of cement. So, the impact will be on a total of 3t freight. I don't think the industry is now in a position to absorb this," said, JK Lakshmi Cement whole-time director , Shailendra Chouksey.
Commenting on the impact of the rise in diesel prices, a major cement producer, which preferred not to be quoted, said the rise was high and that this would certainly push up the distribution cost for producers.
Currently, the Indian cement industry faces over-capacity with a utilisation of 76% of the total capacity of 330Mt/yr. According to UltraTech in its annual report the situation is unlikely to improve before 2015.
Ethiopia: National Cement SC plans to complete upgrades worth US$99.7m by the start of 2013 according to the company's chief executive, Busa Assefa.
"We will start clinker trial production in October 2012 and cement trial production in November 2012," said Busa. He added that the trial production phase at the compnay's new plant near Bajatu, Kebele, will begin at a 60% clinker and a 70% cement production rate, to become fully operational by the start of 2013.
National Cement SC was formed from a merger between Ethiopia's first cement plant, Dire Dawa, and the National Cement plant that is currently under construction. Dire Dawa has a capacity of 60,000t/yr with further upgrades scheduled. The new National Cement plant will have a capacity of up to 4500t/day. It is being built on a 40ha location in Bajatu, Kebele, within 3km of Dire Dawa.
National Cement SC's upgrades will increase Ethiopia's national capacity, from 18 operational plants, by 1.3Mt to 12.46Mt/yr. The company expects to rely on the eastern Ethiopian market and exports to Djibouti and Somalia. In addition, the city of Dire Dawa has licensed four cement factories with a combined capital of US$277m, of which three are under construction.
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