13 April 2018

India: The Supreme Court has blocked an out-of-court offer by UltraTech Cement for Binani Cement. Banks had offered conditional support to UltraTech’s bid, seeking indemnity from Binani Industries, the owner of Binani Cement, against any potential legal action, according to the Economic Times newspaper. A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. However, UltraTech Cement then made a direct bid to Binani Cement a few weeks later.

Binani Industries had deposited US$115m with HDFC Bank to show its commitment to the deal with UltraTech, along with a bank guarantee for nearly US$1bn. However, Dalmia Bharat had sent letters to all the banks involved saying that any settlement initiated by them would be a breach of trust as they had entered into a contract with Dalmia.

India: Heidelberg Cement India has been certified as over six times net water positive by TOV SOD, an independent certifying agency. During the 2016 – 2017 financial year the company’s cement plants withdrew 1.09kL of water from various sources but they harvested 6.97kL of water. This implies that the company collected more water from sustainable sources, such as rainfall, than it used. The company's multidimensional approach includes diverting rainwater to
reservoirs, installing water harvesting systems, reviving of bore wells, controlling seepage and educating its staff on water conservation.

Chile: Cementos Bío Bío is considering expansion plans in Argentina and Peru, according to the El Mercurio newspaper. The plans are part of its 2021 strategy. It also wants to consolidate its leadership in its local market.

Kenya: East African Portland Cement plans to build a railway terminal at Athi River near its integrated cement plant. The depot will be used to help deliver raw materials by train on the Standard Gauge Railway to the plant, according to the Business Daily newspaper. Managing director Simon Peter ole Nkeri said that his company relies ‘heavily’ on imported clinker. The cement producer is holding discussions with the government about the project.

Saudi Arabia: Cement sales fell by 11% year-on-year to 11.8Mt in the first quarter of 2018 due to a continued slowdown in the construction industry. Weak demand and high inventory levels has forced cement producers to sell their cement in other parts of the country and export to other countries, according to a report by Al Rajhi Capital. The report cited Yanbu Cement's export agreement although it said that its low production costs gives the company the advantage to export at lower prices than its competitors.

Increased competition within Saudi Arabia has led to a price war. The report marked the central region as an attractive region for northern region cement companies due to the relatively bigger market. The sales market share for northern cement companies increased in the last six months. On the other hand, central region companies' market share decreased slightly during the same period.

Yanbu Cement signed a one-year agreement to export 1Mt of clinker and 0.5Mt of cement from April 2018. It is estimated that the deal with Yanbu Cement US$26.6m in extra sales revenue in 2018. Al Rajhi Capital reckoned that the cement producer would be likely to renew the export deal in 2019 as its low margins are unlikely to aid earnings.

Poland: Cement sales rose by 7% year-on-year to around 18Mt in 2017, according to the Polish Cement Association. The country has a cement production capacity of 24Mt/yr and the capacity utilisation rate is approximately 75%. The Institute of Economic Forecasting and Analysis forecasts that sales will grow by 8% in 2018 to 17.9Mt.

Dominican Republic: Cement sales fell slightly by 1.5% year-on-year to 4.18Mt in 2017 from 4.24Mt in 2018. Adocem, the Dominican Portland Cement Producers Association, blamed the slowdown on a slowdown of the general economy. It also reported that exports grew in 2017 to 20.1% of production from 17.3% in 2016.