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News 2013 in cement

2013 in cement

Written by Global Cement staff 18 December 2013
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As this is the last issue of Global Cement Weekly before the Christmas 2013 break, once again we will look at some of the major news stories of the year. This is a subjective summary of the year so if readers feel we have missed anything major let us know via LinkedIn, Twitter or This email address is being protected from spambots. You need JavaScript enabled to view it..

China tackles pollution and overcapacity
2013 has been the year that China's central planners took action against cement production overcapacity and pollution. Consolidation plans for the industry followed falling profits for cement producers in 2012. However, record air pollution levels in Beijing in early 2013 shut the city down, raised public awareness and gave the government a strong lever to encourage further industry consolidation through environmental controls. By the middle of year profits of major producers were up but production was also up. Finally in December 2013, China started to launch its emissions trading schemes (ETS), led by Guangdong province, to create what will be the second largest carbon market in the world after the EU ETS.

India faces a sticky wicket
Meanwhile, the world's second largest cement producing country has faced poor profits and growth for cement producers blamed on paltry demand, piddling prices and proliferating production costs. Compounding that, the Indian Rupee fell to a historic low relative to the US Dollar in mid-2013, further putting pressure on input costs. Holcim reacted to all of this by releasing plans to simplify its presence in the country between Holcim India, Ambuja and ACC.

Sub-Saharan Africa draws up the battle lines
Competition in sub-Saharan Africa is set to intensify when Nigeria's Dangote Cement opens its first cement plant in South Africa in early 2014. It is the first time Africa's two largest cement producers, Dangote and South Africa's PPC, will produce cement in the same country. Future clashes will follow across the region as each producer increasingly advances toward the other.

The Kingdom needs cement... and workers
Saudi Arabian infrastructure demands have created all sorts of reverberations across the Middle Eastern cement industry and beyond as the nation pushes on to build its six 'economic' cities amongst other projects. Back in April 2013 King Abdullah bin Abdulaziz Al Saud of Saudi Arabia issued an edict ordering the import of 10Mt of cement. Then some producers started to report production line shutdowns in the autumn of 2013 as they buckled under the pressure, although they consoled themselves with solid profit rises. Now, cement sales have fallen following a government crackdown on migrant workers that has hit the construction sector.

Competition concerns in Europe
Europe may be slowly emerging from the economic gloom but anti-trust regulators have remained vigilant. An asset swap between Cemex and Holcim over units in the Czech Republic, Germany and Spain has received attention from the European Commission. In the UK the Competition Commission has decreed that further action is required for the cement sector following the creation of new player Hope Construction Materials in 2012. Lafarge Tarmac may now have to sell another one of its UK cement plants to increase more competition into the market. Elsewhere in Europe, Belgium regulators took action in September 2013 and this week we report on Polish action against cartel-like activity.

Don't forget South-East Asia, Brazil or Russia!
Growth continues to dominate these regions and major sporting tournaments are on the way in Brazil and Russia, further adding to local cement demand. Votorantim may have cancelled its US$4.8bn initial public offering in August 2013 but it is still has the highest cement production capacity in Brazil. Finally, Indonesia may not have had any 'marquee' style story to sum up 2013 but it continues to regularly announce cement plant builds. In July 2013 the Indonesian Cement Association announced that cement sales growth had fallen to 'just' 7.5% for the first half of 2013.

Global Cement Weekly will return on 8 January 2013

Published in Analysis
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