Displaying items by tag: Plant

Bosnia & Herzegovina: Coal producer Banovici plans to build a 1.1Mt/yr cement plant for Euro250m. It has already obtained the necessary documents and secured an environmental permit. Work on the plant is planned to begin in 2019, according to Ekapija. The company said that a strategic partner would provide the funds and ‘may’ build the plant or choose the contractor for its construction. Cement from the plant will be used locally and exported to Serbia, Montenegro and Croatia.

Kazakhstan: Gezhouba Shieli Cement plans to commission its 1Mt/yr plant in the Kyzylorda region in December 2018. The US$188m unit will be used to produce oil well cement, according to Interfax. The project is a joint venture majority owned by Chinese investors with a minority stake from a local cement company. The plant is being built by China Triumph International Engineering.

Mozambique: Singapore’s Compact Metal Industries plans to buy a 51% stake in a partially built cement plant at Salamanga, Bela Vista in Maputo Province. Construction of the 5000t/day plant started in 2012 and it has been ‘substantially’ completed, according in a financial filing by Compact Metal Industries. The unit is owned by CIF-MOZ, a joint venture owned by SPI (54%) and Guhava (45%). Compact Metal Industries intends to buy 34% from SPI and 17% from Guhava. As part of the deal it will settle any existing debts to suppliers and then complete the plant. Completion of the plant is expected to take around eight months.

South African cement producer PPC reported this week that its annual profits rose due to ‘strong’ performance in Rwanda and Zimbabwe. Unfortunately it had no such luck in the Democratic Republic of the Congo (DRC) where its new plant near Kimpese in Kongo Central province has suffered from political instability, lower cement demand and subdued selling prices.

As the group went on to describe the local market as ‘challenging’ with production capacity above market demand. Research from the International Finance Corporation (IFC) suggests that the country will only reach a cement supply deficit by 2022. On top of this the country’s elections have been delayed from December 2017 to December 2018, creating uncertainty in the construction market and delaying infrastructure projects. Following an impairment assessment PPC took an impairment cost of US$14m on the unit. Or in other words it concluded that the value it might gain from selling its new 1.2Mt/yr plant was less than the estimated US$280m it cost to build it.

This outcome is depressing given that the plant was only commissioned during the last quarter of 2017 and the fundamental need for development in the DRC. The unit is run by local subsidiary PPC Barnet DRC, a joint venture 69% owned by PPC, 21% owned by Barnet Group, with the remaining 10% owned by the IFC. The plant was 60% debt funded by the IFC and Eastern and Southern African Trade and Development Bank. In January 2018 PPC agreed with its lenders to reschedule debts from the project until 2020. Then in April 2018 it was reported that PPC was in talks with China National Materials (Sinoma) over selling its stake in the plant. PPC chief executive officer (CEO) Johann Claassen said that the deal was dependent on the price and the on going merger between Sinoma and China National Building Material (CNBM).

With the merger between the Chinese cement giants close but yet to be confirmed, PPC remains stuck with a cement plant it’s losing money on. No doubt also the Chinese producers will aim for a bargain on the unit, especially since Sinoma built the plant. This also raises one potential method how the merged Sinoma-CNBM might expand internationally by scooping up plants it builds that have subsequently gotten into financial trouble.

All in all it’s a cautionary tale about how fast cement companies are able to expand in Sub-Saharan Africa. The demographics are enticing to investors but if the market isn’t there or if competitors get there first then building cement plants can go wrong. A 1.8Mt/yr joint-venture plant run by Lucky Cement started up in late 2016 also in the Kongo Central province. On top of this neighbouring countries have targeted DRC for exports. A local ban on imports of cement was implemented in mid-2017 and reportedly renewed in the west of the country for another six months in February 2018. However, Nigeria's Dangote Cement said in its first quarter results for 2018 that its operations in the Republic of Congo were targeting exports at the DRC. As PPC has discovered, investing in Sub-Saharan African has its risks.

Bolivia: Empresa Publica Productiva Cementos de Bolivia’s (ECEBOL) new 1.3Mt/yr plant at Caracollo in Oruro is scheduled to start operations in the first half of 2019. A consortium of Sacyr, Imasa and Polysius are working on the US$244m project, according to the La Patria newspaper. A US$2m electrical sub-station is also being built to support the plant.

Egypt: Helwan Cement has received several preliminary non-bidding offers for its white cement plant located in Minya Governorate. The subsidiary of Suez Cement and HeidelbergCement is now conducting financial, legal and technical due-diligence on the offers, according to Reuters. No values or timescale for the sale have been disclosed.

Namibia: Ohorongo Cement’s captive 5MWAC solar plant is preparing to start commercial operation by the end of June 2018. The unit is equipped with approximately 20,000 crystalline silicon modules mounted on a tracking system and an installed capacity of 6.5MWDC for an output of 5MWAC, according to the Daily Observer newspaper. Once it starts commercial operation it will provide an estimated 14GWhr/yr to the cement plant.

Investors have reached financial close in the project. The site has been developed and built by Germany’s SunEQ and its local partner Hungileni. Local financial partners also include Namibia Infrastructure Finance. Gildemeister Energy Solutions also worked on the project.

Spain: Cementos Molins has allocated Euro200m towards dismantling old production lines at its Sant Vicenç dels Horts plant near Barcelona. Kilns, towers, silos and obsolete buildings will be removed as part of the project, according to the La Vanguardia newspaper. The plant operates a single 1.4Mt/yr production line that was commissioned in 2010.

Nigeria: BUA Group is ready to commission a new 1.5Mt/yr cement production line at its Sokoto Cement plant in the northwest of the country. The upgrade will increase production at the unit to 0.5Mt/yr, according to the Vanguard newspaper. The company exports cement from the plant to neighbouring Niger. The new line will run on coal and natural gas. The cement producer also operates a 3.5Mt/yr plant at Okpella & Obu in Edo state in the mid-west of the country.

China: Austria’s Semperit has closed its Sempertrans Best (Shandong) Belting plant in Shandong. The decision was made as part of review of the group’s production footprint. The plant had a higher margin than other sites. The closure is also expected to reduce the complexity of operations at the group level. 120 employees will be affected and the shutdown is expected to burden the group’s earnings before interest and taxation (EBIT) by Euro10m in 2018.

The groups subsidiary in Shandong was founded by Semperit as a joint venture with the state-owned energy company Wang Chao Coal & Electricity Group in 2010. The Chinese partner currently holds a 16.1% stake. The production site manufactures textile and steel cord belts and has served the export markets and the Chinese market so far.