Displaying items by tag: Saudi Arabia
Saudi Arabia: Southern Province Cement has commenced trial operation at the second production line of its Bishah cement plant. The trial operation will continue until the plant reaches a contractual design capacity of 5000t/day of clinker. Once the trial is complete the plant's production capacity from its three lines will reach 33,000t/day of clinker. The company noted in a statement that there are neither expected costs nor financial impact for this trial operation. The date of full operation will be announced later.
Qatar/Saudi Arabia: Saudi Arabia's decision to lift its cement export ban may help to meet Qatar's growing demand ahead of the FIFA World Cup 2022. Official data suggests that the peak demand for cement from Qatar's thriving construction and infrastructure industries is expected to reach 5.7Mt in 2017. Due to its population of around 2.2 million, this represents an incredible 2600kg/capita.
The Saudi government previously imposed a ban on cement exports in 2008 to push prices down and accommodate demand from large government-funded infrastructure projects, although some companies were allowed to export at prices lower than those in the local market.
According to market analysts, strong infrastructure spending by the Qatar government on infrastructure development will continue to boost demand for the cement sector. Huge projects are in the pipeline, including the Doha Metro, World Cup stadiums, roads and flyovers and sanitary works.
Saudi Arabia: ABB has commissioned an electrical infrastructure upgrade for the Eastern Province Cement Company’s (EPCC) two cement production lines at its plant in Al Khursaniya. The project upgraded the existing 75MV Switchgear Panels and integrated the power supply systems with the ABB 800xA automation system already in place. Commissioning was completed in February 2016.
“ABB has completed the final upgrade on site in a record time during the planned maintenance shutdowns of the plant,” said Mohammad Arif Khan, Electrical and Instrumentation Manager at EPCC. “The excellent teamwork between EPCC and ABB engineers made it possible to meet this challenge without affecting the production of the other production lines.”
The scope of supply included the replacement of the 30-year old protection compartment of 75MV (13.8kV and 4.16kV) Switchgear Panels with the latest generation of ABB Relion protection relays, integration via IEC61850 with the 800xA automation system and the delivery of computer and network equipment. ABB also provided project management, engineering, site services and training together with its supplier EcoWatt Projects.
Saudi Arabia: Wärtsilä has signed a contract to supply a 161MW Flexicycle (combined cycle) power plant to Yamama Cement. Wärtsilä will deliver a full engineering, procurement and construction (EPC) project. In addition to the EPC contract, a five-year operation and maintenance management agreement and a 10-year spare parts supply agreement have also been signed. The value of the order is approximately Euro115m.
The power plant includes 10 18-cylinder Wärtsilä 50 dual-fuel engines and a steam turbine. The contract was included in Wärtsilä's order book in the first quarter of 2016. The contract announcement was delayed until June 2016 due to the finalisation of technical-commercial details and the operation and maintenance management agreement. The power plant will be delivered in four phases. The first part is estimated to be delivered by the end of 2017 and the complete plant is scheduled to be handed over during the second quarter of 2019. The delivery is aligned with the construction schedule of a new Yamama cement plant.
This is a dual-fuel power plant operating primarily on natural gas with light fuel oil and crude oil as back up fuels. This will be Wärtsilä's first gas fired Flexicycle power plant in Saudi Arabia. The plant will provide power to run the Yamama facility, which has a production capacity of 20,000t/day of cement. Due to the plants' remote locations, most of the cement industry in Saudi Arabia is powered by captive power plants such as this one.
"Wärtsilä has a reputable track record in Saudi Arabia and they have offered an efficient and reliable solution for a harsh operating environment. We consider this relationship a strategic partnership and hopefully it will be rewarding for both parties," said Jehad Abdul Aziz Al Rasheed, General Manager, Yamama Cement Company.
A Sinoma subsidiary was raking in the big bucks this week with the announcement that it had booked a Euro1.05bn order with the Egyptian government. The order was for six 6000t/day cement production lines plus assorted maintenance contracts from Chengdu Design and Research Institute of Building Materials Industry (CDI).
The order caps a busy month for Sinoma. At the start of June, another subsidiary, CBMI, said that it had picked up deals to build two new lines in Algeria for Groupe des Ciments d’Algérie. Around the same time another project in the country, a joint venture between Lafarge Algeria and Souakri Group, revealed that it had started commissioning its mill. Other assorted cement projects announced so far in 2016 include a waste heat recovery unit for Thai Pride Cement in Thailand, a conversion to coal burning at South Valley Cement in Egypt and various orders for mills via Loesche for Sinoma projects in Vietnam.
The scale of that latest Egyptian order becomes apparent when one looks at Sinoma, or China National Materials Group Corporation’s, annual results. It reported revenue of US$8.08bn in 2015, a slight decrease from US$8.38bn in 2014. Those six lines represent 13% of the group’s entire turnover in 2015. That’s one humongous order. The last time Sinoma signed a cement deal on this magnitude was in August 2015 when Nigerai’s Dangote placed an order at a value of US$1.49bn.
Elsewhere on the balance sheet for 2015, its profit fell markedly by 25% year-on-year to US$150m from US$200m. However, its new order intake grew by 14% to US$5.1bn. Overseas orders accounted for over three quarters of this or US$4.32bn, its highest level on record. This compares to its rival FLSmidth’s new order intake of US$2.8bn in 2015. It declared that it would continue to seek business outside of China in line with the country’s ‘One belt, one road’ policy focusing on Central Asia and South America.
This growth by Chinese engineering companies on the world stage may have been stymied in 2015. The Verband Deutscher Maschinen- und Anlagenbau (VDMA) in Germany reported in April 2016 that the members of its Industrial Plant Manufacturers’ Group (AGAB) had booked orders of Euro19.5bn in 2015, a similar figure to its orders in 2014. This compared to a drop of 63% of large plant orders (not just cement) in 2014 from Euro5.29bn in 2013. AGAB saw opportunity in service industries for its German members as markets stalled in Russia and Brazil, and China’s property market faced its own problems. Research by UBS Evidence Lab, as reported by the Financial Times in May 2016, has taken a different view, suggesting that Chinese construction quarry equipment manufacturers such as Sany, Zoomlion and XCMG were likely to expand their market share outside of China to 15% by 2025. At present the research pegged them at 7%.
Expansion comes with its risks though. In late May 2016 Sinoma International Engineering reported details of a tax dispute it was suffering in Saudi Arabia. The Saudi subsidiary of the company was levelled with a request for unpaid back taxes from 2006 and 2008. At the time it was appealing against a bill of US$18m. In a changing global marketplace some things never change. Global success it seems is taxed.
Saudi Arabia: A lifting of the Saudi Arabian export ban on cement is unlikely to help local cement producers much according to a research report issued by Arqaam Capital. The investment bank has predicted that export volumes are likely to be restricted to 20% of output and possibly subjected to an export tax. This tax, equivalent to fuel subsidies Saudi producers benefit from, and transport costs would reduce the price advantage Saudi producers hold over international competitors.
"The domestic supply situation remains difficult. Sector clinker stocks have not budged since July 2014, remaining at nearly 21Mt as of March 2016 equivalent to four months of output. This, combined with existing capacity of 70Mt, and incoming capacity of 7Mt due in the 2016, equates to total potential capacity of around 100Mt. This suggests a substantial near/medium term surplus of 60%, given stalled domestic contracts and the fact that few export markets are currently viable," said Mohammed Kamal, Executive Director, Equity Research at Arqaam Capital.
Arqaam Capital view Yemen, Egypt, Qatar, Jordan, UAE, Bahrain, East Africa and Iraq as potential export destinations. However, on a Freight On Board (FOB) price basis and by taking export taxes into account, only Yemen, Iraq, and Jordan are seen as viable export destinations. This then narrows the list of potential Saudi cement exporters to Southern Cement, Najran, Tabuk, Al Jouf and Northern Cement.
Saudi Arabia: Saudi Arabia has lifted a ban on exporting cement, the chief executive of Yanbu Cement has said to local press. Ahmed bin Abduh Zugail, who is also the deputy head of the Saudi national committee of cement companies, added that cement companies have welcomed the relaxation of the ban. However, full details of the new regulations are yet to be released by the Ministry of Commerce.
Local press reported in late November 2015 that government bodies were considering cutting the ban on cement exports. The ban was originally introduced in Saudi Arabia to keep prices down and production flowing for large infrastructure projects built using oil revenue.
Saudi Arabia: Yanbu Cement Company has reported an 11.1% year-on-year fall in its net profit to US$49m in the first quarter of 2016 from US$55m in the same period in 2015. The cement producer has blamed the profit loss on a fall in sales and a rise in fuel prices.
South Korea/Saudi Arabia/Morocco: LafargeHolcim has confirmed plans to divest its assets in South Korea and Saudi Arabia and to enlarge its presence its Morocco. The announcement was made as part of the release of its annual results 2015. The sales form part of the group’s Euro3.2bn divestment program
In Morocco, the group signed an agreement with SNI, its partner in the country, at the same time as the Lafarge-Holcim merger to enlarge its joint-venture by merging Lafarge Ciments Maroc and Holcim Maroc to create LafargeHolcim Maroc. LafargeHolcim and SNI would own a 64.7% stake in the new company once the merger is complete. The group expects to gain a synergy savings of Euro41m over two years from the merger.
LafargeHolcim and SNI also agreed to create a common platform in French-speaking Sub-Saharan Africa. The merger is expected to close in the third quarter of 2016 subject to regulatory authorities’ approval, customary closing conditions and the approval of the shareholders of Lafarge Ciments Maroc and Holcim Maroc.
In South Korea, the group has confirmed that it has signed an agreement with a consortium of private equity funds - Glenwood and Baring Asia - for the divestment of Lafarge Halla Cement in South Korea for Euro427m. The sale is expected to complete in the second quarter of 2016. Lafarge Halla Cement runs one 8.3Mt/yr integrated cement plant, a distribution network across the country and has around 500 employees.
In Saudi Arabia the group has signed an agreement for the sale of the Group’s 25% stake in Al Safwa Cement Company to El-Khayyat Group for total proceeds of Euro120m. This transaction is expected to close in the course of the third quarter of 2016.
Saudi Arabia: Eastern Province Cement has started the trial operation of its new cement mill, which is expected to continue for three months until mid-June 2016. Commercial operation of the new mill will begin in the second quarter of 2016, the company said in a bourse statement. It added that the relevant financial impact is difficult to determine at this stage as it depends on market supply and demand.