Analysis

Holcim seems to be back on track with its beleaguered Weston plant, with the news of a port deal for an undisclosed amount.

Since the plant was proposed in 2007 a string of delays have occurred. In July 2011 it had been asking contractors to register interest in the project. As reported in October 2011 Holcim put its New Zealand project on hold due to the 'global economic downturn'. Then in November 2011 Holcim reported a staggering 32% drop in income in the third quarter and blamed it on the strong Swiss franc: ideal for a little overseas spending. Even in the current global economic gloom there may be some benefits.

Back in Africa we have a third 'reality' from the local industry of a much more familiar nature: corruption.

With the former board of the East African Portland Cement Company (EAPCC) going to court against the Kenyan government over allegations of corruption and counter-allegations of government strong-arm tactics it puts into perspective why EAPCC might have changed its clinker supplier last week. With current price rises of 25% in Nigeria and even two positive stories from South Africa this week, the gains may be high but so are the risks.

The East Africa Portland Cement Company's (EAPCC) decision to change clinker supplier highlights two of the realities of the industry in Africa.

Firstly in the wake of the on-going East African production boom opportunity abounds. As reported in Global Cement Weekly #27, Kenya and Tanzania are leading an investment boom in East African capacity with surges in consumption of 12% and 18% respectively. Although it's not all good news as the on-going debacle with AfriSam's debts show.

Secondly, it exposes the hangover from state-ownership that much of the key players are still suffering. Certainly as our Vietnam story shows this week there is less room for uncompetitive legislation with producers outside the region lying in wait to secure sales. Indeed such is the growing optimism for cement in the continent as a whole that the Nigerian president described the cement industry as 'critical' to making his nation's economy more diverse.

Elsewhere this week we present some optimism with new contracts for FLSmidth in Brazil, expansion in Saudi Arabia and encouraging research on US infrastructure spending. Despite recent tough times the US retains its position as the third largest cement consumer globally. If Kenya, Tanzania or Nigeria ever overtake the US on consumption then we'll know that the world has changed.