
August 2025
Levelling the playing field? 08 February 2012
The news that China is considering more stringent NOx emission regulations for cement plants is encouraging – and not just for the environment. Other cement industries, such as those in western Europe, have been subject to the most stringent environmental regulations on the planet for many decades now. Elsewhere, the US cement industry is currently locked in battle with the Environmental Protection Agency over stringent new emissions targets. Now it looks like China, with a cement capacity of ~2000Mt/yr and the highest share of CO2 emissions in the world, might be accelerating its progress down the 'green' route.
The new Chinese NOx regulations could reportedly see a third wiped off the cement industry's massive net profits by 2015 and cause 'huge pressure' for the industry according to the Chinese Vice Minister of Environment Protection. With most industries in China currently operating outside meaningful environmental limits, the move towards lower emissions in China is likely to be unpleasantly costly. Indeed China has already said that it is committed to closing the least efficient 33% of its cement capacity by 2015.
If new regulations go ahead and are effectively enforced, they will prompt Chinese producers to act locally while they close or improve their plants, diverting attention away from exports and expansion overseas. In the short to medium term, this will dampen the competitiveness of the Chinese industry and allow neighbouring countries some respite against Chinese exports. The move to clean up China's cement industry (and industries in general) will also require environmental know-how, something that established European and US-based companies are well placed to provide.
Another notable story this week comes from the US, where a concrete producer has recently been given the go-ahead to set up a captive cement plant. Ozinga Bros. Inc. says that if and when concrete demand returns to the US, it wants to be able to secure its own cement supplies. In the last boom it had to import cement from the Far East to fulfil its contracts, with crippling transport costs. Company owner Martin Ozinga IV described the plans as 'a survival move' – perhaps going against the grain is the only way for the company to survive.
People in the cement industry 07 February 2012
Romania: The Romanian unit of Lafarge has appointed Sonia Artinian as its new country CEO. She is in charge of the French group's cement, aggregates and concrete business in Romania. Artinian replaces Philippe Questiaux, who had managed Lafarge's cement activity in Romania since 2002.
Russia: Vladimir Petrov has been appointed as General Director of Pikalevskiy Cement, a part of Russia's Eurocement Group.
Ukraine: The Balakleya-based Eurocement-Ukraine company dismissed its director general Demis Halchev on 31 January 2011 after a tenure of around three years in the post. According to a report, the position is now vacant.
Gunpoint negotiation 01 February 2012
Spare a thought for your fellow cement workers this week as reports emerge of plant employees being forced back to work at gunpoint in Kenya and Chinese workers being kidnapped in Egypt.
The news that workers have been coerced with bullets is just one horror story from the ongoing soap opera that is the East African Portland Cement Company. Since the Kenyan government dismissed the directors in December 2011, over allegations of alleged mismanagement, progressively more murky disclosures have emerged. Although the latest reports suggest that all the 1200 permanent employees have now returned to work, the situation remains volatile. Anyone who thought that a judge could simply order the plant back to work because he said so has underestimated the situation.
On one side sit the directors who have already been sacked and reinstated by the government following accusations of non-competitive tenders and rampant expenses claims in December 2011. Running scared of their own employees, they now have to face the Maasai elders who supporting the directors by ordering the closure of the gypsum, limestone and pozzolana mines. On the other side is the Kenyan government which was legally forced to return the directors they dismissed. In the middle remain the workers, at work for now but for who knows how much longer.
By contrast the 25 mostly Chinese cement factory workers who have been kidnapped in Egypt's Sinai Peninsula may have had the best management in the world. Yet working internationally can bring risks such as political instability that are hard to predict.
Elsewhere in this issue of Global Cement Weekly, you can read about new plant plans in Indonesia, rampant overcapacity in Vietnam, soaring profits in Saudi Arabia and the news that Italcementi is likely to have to sack 7.5% of its workforce.
Lafarge Malayan appoints new CEO and executive director 31 January 2012
Malaysia: Lafarge Malayan has appointed Bradley Peter Mulroney as its president and chief executive officer and Malaysian Chen Theng Aik as its executive director.
Mulroney, aged 49, is a British national. He holds a Bachelor of Arts from the University of London and he initially started his career with Redland plc, where he rose to the rank of a general manager. Redland was acquired by Lafarge SA in 1996.
Aik, aged 45 is a Malaysian who was previously the senior vice-president, finance and chief financial officer of Lafarge Malayan.
Indian cement industry sending out mixed signals 25 January 2012
This week has seen the start of what is likely to become a string of positive financial results from the Indian cement industry. UltraTech Cement, Shree Cement and Hyderabad Industries have already seen massive improvements in their profits for the final quarter of 2011, up in one case by over 100% compared to 2010.
On the face of it such results do not chime with a recent report by Fitch Ratings, which predicts a 'negative outlook' for the Indian cement industry in 2012. Fitch's report says that based on expected growth of 2-5%, overcapacity and an increase in interest rates will prey on margins in 2012, making any mini-boom short-lived. The impressive profits may well evaporate come the end of March.
India's capacity utilisation rate dropped to just 65% in the last quarter of 2011. This is not a statistic indicative of a booming cement industry and, coupled to reports of increased profits from the sector, indicates that higher prices are being used to maintain margins.
With even more capacity being added every week and the prospect of increased input costs as the year develops, how long will this strategy work? Will the topic of cartelisation be raised again in India? The new head of the Cement Manufacturers' Association has a lot to consider as he takes up his role.
Elsewhere in this issue of Global Cement Weekly, we have the news that the German BDZ and VDZ are to fully merge, plant projects in Russia and Saudi Arabia and the latest on the developing situation in Kenya, where East Africa Portland Cement Company (EAPCC) is still in dispute with its workers. EAPCC and the government's expectation that work can resume on 26 January 2012 appears to be ill-founded considering continued resentment shown by the workforce.
New head for CMA 25 January 2012
Mr M A M R Muthiah, the current managing director of the Chettinad Cement Corporation has taken over as president of the Cement Manufacturers' Association (CMA). Muthiah said that the association acts as a bridge between the industry and the Government with an objective to promote the cement sector's growth, protect consumer interests and collaborate with international counterparts outside of India.
Mr O P Puranmalka, a whole-time Director of Ultratech Cement, has taken over as the CMA's new vice-president.
Lafarge France gets new general director 25 January 2012
Pascal Casanova has become the general director of Lafarge France, a unit of the French cement giant Lafarge. Casanova was born in 1968 and joined Lafarge in 1999 after having been employed by a number of different construction firms. He served as Lafarge's research and development director since 2008.
Holcim profit shock - The tip of the iceberg? 18 January 2012
Holcim announced yesterday a shock profits warning after it included Euro641m in one-off charges in its 2011 accounts. Over half of this amount, a massive Euro343m, came from writedowns at its former South African subsidiary AfriSam, which has been unable to deal with poor trading conditions there. Writedowns in the US and parts of Europe made up the rest of the one-off costs. The move has prompted fears from analysts that other cement manufacturers may follow suit, taking the sector into unknown territory. What other skeletons are hiding in the cupboards of the big multinationals?
Meanwhile, an old cement industry problem that is not unfamiliar to AfriSam, cartelisation, has reared its ugly head again. After five Spanish producers were ordered to pay a combined Euro11.1m over an alleged cartel in northern Spain, authorities in Pakistan searched the offices of its national cement association, the APCMA, on Monday. They were following a tip-off that cement companies have been monitoring each others' dispatches, a practice deemed illegal in previous investigations. A previous cartel case from 2009-2010 is still pending in Pakistan so any action against producers will likely to take years to be brought.
Elsewhere, the situation has gone from bad to worse at the East Africa Portland Cement Company in Kenya, with protests over the re-instatement of previously-fired board members turning violent on Monday. With one worker hospitalised after being shot by an over-zealous security guard, it is hard to see how the current situation can be resolved without the removal of the current management. The government has assured the workers that it is working on the problem.
At the same time in Kenya, National Cement Company's (NCC) plans to build a quarry and clinker plant south of Nairobi have been slammed by local Massai groups, environmental NGOs and even the state-owned Kenya Wildlife Service. NCC plans to 'buy-off' the Massai with a jobs scheme, but this doesn't address the conservation issues. Global Cement urges NCC to re-examine its plans and the location of its proposed plant, and to work closely with the Kenya Wildlife Service.
Cementos Portland Valderrivas appoints new board members 18 January 2012
The Spanish cement producer Cementos Portland Valderrivas has approved the nominations of Juan Bejar and Jose Manuel Burgos as board members. Bejar currently occupies the post of executive chairman at domestic motorway operator Globalvia and Burgos is a vice-chairman at the real estate firm GMP. They will replace Rafael Martinez-Ynzenga Canovas del Castillo and Feliciano Fuster.
FLSmidth appoints Ben Guren as Group Chief Financial Officer 11 January 2012
Ben Guren will be appointed as the new Group Chief Financial Officer of FLSmidth and a member of the Group Executive Management. Guren is expected to take up his new position no later than 1 July 2012.
Guren, aged 51, is a Norwegian citizen who since 2007 been Group Vice President Finance, IT & Legal of Jotun Group, Norway. From 2006 to 2007 Guren was acting as Chief Financial Officer of Helly Hansen Group, Norway and from 1989 to 2006 he was partner in KPMG, Norway. Guren is a state-authorised public accountant, graduated from the Norwegian School of Economics & Business Administration in Bergen.
Guren replaces Poul Erik Tofte who has been the Group Chief Financial Officer at FLSmidth since 2003.