Displaying items by tag: Import

When we think about ‘up and coming’ regions for the global cement sector, Africa is high on many people’s lists. This is unsurprising given that Africa is the youngest continent on Earth, with a population set to boom to 2.5 billion by 2050 – or 1 in 4 of the global population for that year, according to the UN. This population, 1 billion higher than today, will drive rapid urbanisation. Cement capacities, currently around 350Mt/yr across the continent, will have to rise substantially to meet demand.

Filling part of this rise will be Amsons Group. This week it announced plans for a US$320m investment in a 1.6Mt/yr greenfield cement plant in Tanzania. It also promised a whopping US$400m to revamp Bamburi Cement in Kenya, should its existing US$180m bid for the Holcim subsidiary be accepted. Based on the numbers for Tanzania, this investment might be enough to take Bamburi Cement from 1.1Mt/yr to around 3Mt/yr, assuming similar project scope and equipment suppliers.

So, what is Amsons Group? Founded in 2000, Amsons is a Tanzania-based conglomerate with interests in construction, transport, flour, container depots, cement and concrete. It already operates Camel Cement, a grinding plant, in the Mbagala suburb of Dar es Salaam and it owns a 65% stake in the 1.1Mt/yr integrated Mbeya Cement plant, which it bought from Holcim in September 2023. The group’s website states that it emphasises local production of materials to reduce the nation’s reliance on imports. A greenfield cement plant fits right into that philosophy.

Looking at recent market trends, we see some positive news for Amsons. In Tanzania, cement production rose by 6.2% to 8Mt in 2023, according to the country’s Ministry of Industry. This followed a 9.7% rise in the prior year. Data is so far lacking for 2024. To the north, cement consumption ramped up strongly in Kenya in the second half of 2023, following a less than stellar start to the year. Thanks to a particularly strong June to September period, consumption finally ended 2023 around 0.8% higher than the previous year, at 9.6Mt. However, consumption tailed off in the final quarter. Worse, the first four months of 2024 - the most recent data available from the Kenya National Bureau of Statistics - saw a 10% decline in cement consumption relative to the same period of 2023, falling to 2.6Mt/yr.

As Africa lacks cement capacity compared to other regions, it is important to highlight that Amsons’ new plants will have to take on not just existing capacity in East Africa, but countries that export to the continent too. Indeed, this week Pakistan, a long-time agitator of South African cement producers, reported a year-on-year rise in exports for October 2024. Exports rose to 4.36Mt, a 9% increase compared to 4Mt in October 2023. This news comes amid precipitously falling domestic demand within Pakistan, with September 2024 shipments down by 22% year-on-year. It is also worth noting that Tanzania itself exported around 1.1Mt of cement to Rwanda, Burundi, Malawi, the DRC and Zambia in 2023. This figure will likely be higher in 2024, given the February 2024 launch of Huaxin Cement Tanzania Maweni Company’s 1.3Mt/yr plant in Mavini, which has a focus on exports.

This apparent abundance of existing capacity, plus exposure to imports, would appear to give an investor like Amsons Group pause for thought. However, it has committed to a total investment of US$900m. This is not small change. If we add in the money it paid for Mbeya Cement in September 2023 – the amount was not disclosed – Amsons will likely shell out more than US$1bn in just a few years. It is going ‘all in’ to become, in the words of its Managing Director Edha Nahdi, “one of the largest cement manufacturers in Kenya and Tanzania by 2030.” It will be very interesting to follow it on its journey.

Philippines: The Department of Trade and Industry (DTI) has launched a safeguard measures investigation on cement imports to counter the ‘persistent influx’ affecting the Philippine market, according to the Manila Standard. This investigation has been praised by the Cement Manufacturers’ Association of the Philippines (CeMAP), and aims to support local producers who are reportedly facing competition, despite the country’s production capacity of 50Mt/yr exceeding national demand, which is currently around 35Mt/yr.

Executive director of CeMAP Renato Baja said that imported cement from countries like Vietnam, where domestic demand is low and exports are high, affects local manufacturers. Vietnam contributes 93% of the Philippine’s cement imports, followed by China and Indonesia. According to Baja, local production currently operates at only 55- 60% of its installed capacity, which has increased production costs and forced temporary shutdowns of some plants. The DTI has invited cement manufacturers to submit their views on the imposition of safeguard measures. According to The Philippine Star, the DTI will conduct a preliminary investigation to decide if safeguard measures on cement imports are necessary. This is in line with Republic Act 8800, which allows the imposition of temporary safeguards or increased tariffs to protect domestic industries from an increase in imports.

Zimbabwe: The government is looking at consolidating limestone deposits as part of the new Zimbabwe Industrial Reconstruction and Growth Plan. This plan aims to increase domestic clinker production so that ‘costly’ clinker imports are reduced, according to The Zimbabwean newspaper. The government hopes that the consolidation plan will stabilise the raw material supply chain, providing cement manufacturers with a steady source of limestone to meet demand without production interruptions. Zimbabwe’s cement industry reportedly has an installed capacity of 2.6Mt/yr, but only produces 1.65Mt/yr, with imports exceeding US$59m in 2023. The national demand is estimated at 1.8Mt/yr.

In order to support domestic production, the plan recommends increasing the cement import licence fee from US$100 to US$500 per 30t and reducing the electricity tariff from US$0.16/kWh to US$0.10/kWh.

Peru: National cement dispatch fell by 2% year-on-year to 1.06Mt in September 2024, according to a report by ASOCEM, the cement manufacturers’ association of Peru. Cement production rose slightly by 0.2% year-on-year to 997,000t, while clinker production dropped by 19% to 661,000t. Cement exports declined by 1% year-on-year to 11,500t, and clinker exports decreased by 45% to 37,400t. However, cement imports increased by 0.5% compared to September 2023 to 21,000t, and clinker imports rose by 34% to 84,000t.

Kazakhstan: Steppe Cement has published its nine-month trading update for 2024, showing a drop in sales of 2% year-on-year in nine months up to 30 September 2024, to US$63m. Sales volumes remained level year-on-year at 1.34Mt. Regulatory News Service has reported that Steppe Cement attributed medium-term increases in production and the stabilisation of costs to capacity expansions and other capital expenditure investments since 2022. Nine-month domestic cement consumption was 9.1Mt, in line with nine-month 2023 levels. Imports accounted for 319,000t (4%) of total consumption. Meanwhile, exports totalled 720,000t.

Regarding results for the third quarter of 2024, CEO Javier del Ser Perez said "We recovered both volumes and pricing in the third quarter of 2024, following a price adjustment in the second quarter. While competition remains strong, our plant has continued to enhance its capacity and productivity, enabling us to offset the impact of past inflation. We remain focused on driving higher volumes and cash generation.”

Philippines: The Department of Trade and Industry (DTI) of the Philippines government has welcomed Thailand-based Shera’s upcoming US$50.4m Mabalacat fibre cement board plant in Pampanga. The DTI expects the plant to help to reduce the Philippines' reliance on imported fibre cement boards from 100%. The Manila Bulletin newspaper has reported that the plant, scheduled for commissioning in early 2025, is also expected to create 300 new jobs.

The Philippines’ trade secretary Cristina Roque said "This investment aligns perfectly with our strategic goals of becoming a global hub for manufacturing. By leveraging state-of-the-art technologies such as AI and Internet of Things, Shera is setting a new standard for innovation in the Philippines.”

Colombia: Ultracem's general manager, Julián Vásquez, has announced plans to establish a clinker kiln in the municipality of Galapa with an investment of US$100m. This new facility aims to eliminate the need to import clinker, which is currently sourced from Turkey, Vietnam, and Spain. The kiln is expected to be operational within two years.

Vásquez said "This will give us competitive advantages and will involve increasing the workforce from the 1200 direct and indirect jobs we generate today by 20%."

Vietnam: The Philippines, Bangladesh and Taiwan were the leading importers of Vietnamese cement and clinker in the first eight months of 2024, reports the General Department of Vietnam Customs. The Philippines imported 5.35Mt valued at US$214.3m, seeing a decline of 1.8% in volume and 12.97% in value year-on-year. Bangladesh followed, purchasing 4.18Mt worth US$133.9m, up by 5.2% in volume but down 11.4% in value compared to the previous year. Taiwan ranked third, importing 994,735t valued at US$35.5m, with decreases of 17.2% in volume and 24.5% in value year-on-year.

From January to August 2024, Vietnam's total earnings from cement and clinker exports reached US$788.8m from over 20.5Mt, marking a decrease of 3.2% in volume and 14.5% in value year-on-year.

Kyrgyzstan: MP Alisher Kozuyev has called for the removal of the ban on importing Uzbek cement, stating during a parliamentary committee meeting on 24 September 2024 that it would reduce prices and enhance quality for Kyrgyz consumers by increasing market competition. He argued that the current ban supports local monopolies and raises domestic cement prices. The ban was introduced three months ago and is designed to protect local manufacturers, according to officials. Nonetheless, deputy minister of economy and commerce, Choro Seyitov, warned that cheaper Uzbek cement could threaten local industries, especially in the Osh region, and risk jobs and tax revenue. Seyitov also noted that some Uzbek cement does not meet Kyrgyz standards and certification requirements, and accused Uzbek exporters of price dumping.

Poland: The Polish cement industry is under threat from increasing Ukrainian cement imports, which have risen by 106% year-on-year in the first half of 2024, according to Warsaw Business Journal. These imports, making up 91% of all cement imports into Poland, could exceed 500,000t by the end of 2024. Despite a projected 3.6% rise in domestic production to 17.2Mt, the competition from lower-cost Ukrainian cement, not subject to EU climate regulations, threatens Poland's economy and job market.