October 2025

FLSmidth revealed this week that Cooperativa Boliviana de Cemento, Industrias y Servicios (COBOCE) has ordered a cement mill for its Irpa Irpa plant near Cochabamba. The Danish engineering firm was pleased to note that with the sale it has now delivered mills to three of the country’s five producers. Other recent orders include supplying an OK 36-4 mill to Sociedad Boliviana de Cemento’s (SOBOCE) Viacha cement plant, announced in early 2016, and a sale of a complete integrated production line at Sucre to Fábrica Nacional de Cemento (FANCESA) in late 2016.

These order reveal slow but steady growth in the local industry in recent years. However, a slowdown so far in 2017 suggests that the market is changing. National Institute of Statistics of Bolivia (INE) data shows that sales in the local market broke down in 2016 into a 42% sales share for SOBOCE, 25% for FANCESA, 19% for COBOCE, 8% for Yura and 6% for Itacamba. This changed somewhat in the first quarter of 2017 with a reduction in the sales of SOBOCE and Yura. Sales in the country are concentrated in the departments of Chuquisca, La Paz and Cochabamba, which held 70% of cement sales in 2016.

Graph 1: Cement production and sales in Bolivia, 2012 – 2017. Source: National Institute of Statistics of Bolivia.

Annual cement sales in Bolivia have been growing consistently since 2001. Financial services company Pacific Credit Rating placed average annual sales growth at 7.72% from 1998 to 2016. In 2016 sales reached 3.7Mt. Graph 1 shows a continuation of this trend although the first half of 2017 has been weaker than 2016. COBOCE blamed the reverse in 2017 on reduced local government spending on infrastructure projects and poor weather. The producer was expecting sales to grow by 6 – 8% as a whole for 2017. However, on the basis of the figures for July and August 2017 this is not looking likely. Sales for the two months dropped by 2.5% year-on-year to 0.64Mt. A representative of FANCESA later blamed the market change on a reduction in sales supporting the construction of tall buildings in the country’s key markets as customers switched to buying ‘random’ volumes.

Sure enough local producers have started to complain about foreign exporters damaging their trade. A union head in Chuquisaca called for cement and clinker imports by Yura from Peru to be banned and concerns have been raised about concessions offered to Itacamba, a joint venture between Spain’s Cementos Molins, Brazil’s Votorantim Cement and Camba Cement. President Evo Morales inaugurated this company’s new plant in Yacuses, Santa Cruz in early 2017. The niggles about foreign exports to Bolivia seem counter-intuitive given that the country is landlocked and it has the world’s highest capital city above sea level. Usually, markets with nearby ports are most at risk from clinker and cement imports. Yet, Itacamba was planning exports to Argentina in November so the import and export markets via road and river links can’t be discounted.

Cement sales may be down so far in 2017 but overall the wider economy appears to be in rude health. After a strong decade of growth the national Gross Domestic Product (GDP) growth rate has fallen each year since 2014, but it was still 4.3% in 2016, one of the highest in South America. If that kind of growth persists it seems unlikely that the cement industry will have trouble for long.

China: Xu Weibing has been appointed as the supervisor and chairman of supervisory committee at China National Building Material (CNBM) following shareholder approval. Her term will last until the end of May 2019. She replaces Wu Jiwei.

Xu, aged 58 years, holds over 30 years of experience in financial accounting and capital operation. She has worked as the chief accountant of CNBM since May 2017 and was its deputy general manager prior to that. She graduated from Liaoning Finance and Economics Institute in 1983 with a bachelor’s degree, majoring in finance, and is a senior accountant.

Chile: Cementos Bío Bío has appointed Katia Trusich as director and member of the Directors Committee. Her appointment follows the resignation of André Roberto Leitão. Trusich has held of number of private and public sector roles, including working as the Under Secretary of Economics for the Chilean government between 2014 and 2016. Most recently she has been the Corporate Affairs Manager for CGE.

There are two significant cement producers around the world up for sale at the moment. Last week we dealt with India’s Binani Cement, which has so far attracted 15 separate bids from a number of international and domestic players. Now, we turn our attention to South Africa, where PPC remains the target of approaches by LafargeHolcim and CRH.

This week PPC rejected a partial offer from Canada’s Fairfax Holdings, which it considered neither fair nor reasonable. Like a mutual friend at a party that insists two people ‘really are perfect for each other,’ Fairfax had stipulated in its terms that PPC should merge with AfriSam to create a South African super-producer. It does not appear that this idea went down well and that particular combination now seems further away than ever.

When the news broke that it had rejected Fairfax, we thought that PPC’s stance seemed a little ‘too cool.’ However, looking just at the oversized and import-addled South African market does not give the full picture of what’s happening for PPC at the moment. It has significant and growing activities in the rest of Africa too.

Later this week PPC released its results for the first half of its 2018 fiscal year. Suddenly, its handling of the Fairfax offer made more sense. Over the six months to 30 September 2017, PPC nearly tripled its profit to US$21.1m. Crucially, sales from outside South Africa grew far more rapidly than those at home. While domestic earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 4%, EBITDA from elsewhere increased by 25%. These results bode well for a potential bidding war that now favours PPC.

Even from this greatly enhanced position, PPC was not finished with its announcements for the week. Today it revealed that it plans to build a new ‘mega-factory’ in the Western Cape. Johan Claassen, the interim chief executive of PPC, said there would probably be a formal announcement about new capacity in the Western Cape in 2018. He said that PPC had decided to conduct a feasibility study into a possible replacement for its Riebeeck plant. An Environmental Impact Assessment (EIA) is in progress and the plant is reported to be ‘semi-brownfield.’ Claassen said that the new facility would use around 25% of the current Riebeeck equipment and cost US$200/t of installed capacity.

The news of its results and announcement of the new plant represent a good PR move by PPC given the difficulties faced by the wider South African market. The new information will certainly give cause for CRH and LafargeHolcim to think again about the values of their offers, should PPC also be of the view that these also undervalue the company.

Oman: Raysut Cement has appointed Joey Ghose as its new CEO, effective 1 December 2017. Ahmed bin Yousuf bin Alawi Al Ibrahim, the chairman of Raysut Cement’s board, said in a statement to the Muscat bourse that Ghose has extensive experience of managing cement industry companies.

Azerbaijan: Frederic Guimbal was appointed director general of Holcim Azerbaijan OJSC. Guimbal took up his duties in October, replaced Rossen Papazov in this post. Prior to this role, Guimbal served as CEO of Holcim India.

India’s Economic Times (ET) has run a story today that really illustrates the heart of the current oversupply issues surrounding the cement sector in India. It reports that Binani Cement, one of the country’s many medium-sized domestic players, is circling the drain ahead of full bankruptcy proceedings. According to ‘senior officials,’ who spoke on the condition of anonymity, the company has already attracted interest from LafargeHolcim, HeidelbergCement and CRH, as well as a plethora of domestic players. There are a total of 15 interested parties so far: the three multinationals, nine domestic cement producers and three investment firms.

With 11.3Mt/yr of capacity, Binani Cement is not a small player by international standards. Unusually for an Indian producer, it even has capacity elsewhere, in China and Dubai. It is part of the larger BRAJ Binani Group, which is involved in glass fibre, energy, IT and more. The fact that the cement company is now up for sale really underscores the extent to which India doesn’t need the 100Mt/yr of extra capacity that was highlighted by the Cement Manufacturers Association in September 2017. India could lose 10 Binani Cements overnight and still have enough capacity to meet domestic demand!

Binani’s issues are, at least in part, geographic. It has assets exclusively in the north of India, which has seen weakened homebuilding and infrastructure activities since the implementation of the government’s demonetisation policy, as well as the highest impacts from rising imported fossil fuel prices. The implementation of India’s new Goods and Services Tax (GST), which has increased cement prices, has not helped. The bulk of Binani’s operations are in Rajasthan and Uttar Pradesh, both states far from the coast. When even UltraTech Cement’s profit is down, the squeeze for some smaller producers is becoming too much. On its own Binani cannot handle the heat, but its assets would certainly make a nice addition for a larger player.

In this way, the consolidating Indian cement sector represents a microcosm of the global situation. Binani’s troubles highlight how much better large companies are at spreading the risks of operating in different markets. As discussed in our forthcoming December 2017 issue, the advantages of being a multinational player with a large number of geographical markets appears to be gradually returning once again, with smaller regional players once again suffering from geographical disadvantages.

Of course, in an environment ripe for consolidation it is very interesting to note that CRH is among the international players linked to Binani. It clearly wants the benefits of being a fully-fledged multinational and is going full-steam ahead to get there. It has spent Euro1.34bn on 27 acquisitions of various sizes in 2017, most notably the on-going purchase of Ash Grove Cement in the US. It is making a strong case to purchase PPC in Africa and a larger Indian base makes sense for the company in the longer term. It lost out on Lafarge India’s assets to Nirma in 2016.

We can be sure that the pace of mergers and acquisitions will continue to grow in the rest of 2017 and into 2018 in India and elsewhere. Would you bet against CRH pulling off an Ash Grove, PPC and Binani ‘triple?’ With the group finance director Senan Murphy stating that there was additional room for expansion in 2018, its intent certainly can’t be faulted.

US: Bud Biggs, the long-term plant manager of the Mitsubishi Cement plant in Lucerne Valley, California, died at the age of 77 on 18 November 2017. It is thought that he suffered a heart attack. Biggs, who only retired in February 2017, had been manager of the plant since 1986.

Bud Biggs began his career at Kaiser Cement in Cupertino, California in 1962, first working in quality control and in concrete research. He obtained a bachelor’s degree in chemistry in 1980 while working for the company. After a period working in Texas, he returned to California in 1986 to work at Kaiser Cement’s Lucerne Valley plant. Initially working as production manager, he was promoted to plant manager shortly afterwards, retaining his role when Mitsubishi Cement acquired Kaiser Cement.

Over the years Biggs made great contributions to the local community. In 2005 he and Mitsubishi Cement’s Senior Vice President Mike Jasberg formed the Mitsubishi Cement Corporation Educational Foundation (MCCEF), which provides additional funding for local schools and scholarships for students. Biggs was also on the boards of several other local educational and professional institutes.

Forget the news stories about poor markets in Colombia and Brazil. Argentina is riding a construction boom right now. Local producer Loma Negra recently ran an initial public offering and it picked a good time to do it. It aimed to generate up to US$800m from the flotation and in the end it raised over US$1bn. Good news for its Brazilian owner InterCement no doubt, which was last reported as aiming to sell a 32% stake in the company in order to cover its debts. More cheer must have followed from Loma Negra’s third quarter results this week. Its cement sales volumes rose by 9% in the latest quarter to 1.72Mt due to expanding local construction activity.

Graph 1: Cement production and consumption in Argentina Q1 – 3, 2008 – 2017. Source: Asociación de Fabricantes de Cemento Portland (AFCP).

As Graph 1 shows its experience mirrors the wider industry. Cement production rose by almost the same rate for the industry as whole, by 10% year-on-year to 3.19Mt for the quarter, according to Asociación de Fabricantes de Cemento Portland (AFCP) data. For the nine months as a whole production has also risen by 9% to 8.7Mt. This figure is the third highest in the last decade since 2008. Production peaked in 2015 before dropping a major 10Mt following a subdued construction industry in the wake of devaluation of the Argentinean Peso in late 2015 and early 2016. At the time LafargeHolcim, the operator of Holcim Argentina, also blamed the negative influence of neighbouring Brazil’s own financial woes. The economy has bounced back giving the country’s its highest nine month cement consumption figure, 8.8Mt, in the last decade.

Earlier in the year LafargeHolcim said it was importing 0.25Mt of cement into Argentina between May 2017 and April 2018 because it couldn’t meet local demand from its own plants. Given the over-abundance of clinker in the world one might be forgiven for being sceptical about this claim. Bolivia’s Itacamba announced it was also exporting cement to Argentina this week. However, the other point to note from the graph is that consumption has been about 90,500t higher than production so far in 2017. This is an envious position for local producers to be in. One more striking feature that sticks out from the graph above is the undulating curve than both production and consumption has. The Argentinean economy has been through the ringer in recent years and this shows in the ups and downs of the figures.

From the perspective of the three major domestic producers, Loma Negra’s sales revenue rose by 53.9% year-on-year to US$620m in the first nine months of 2017. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by a whopping 73% to US$157m. Cementos Avellaneda, owned by Spain Cementos Mollins and Brazil’s Votorantim, reported similar good news with its overall results boosted by the Argentine market. Its sales revenue in the country rose by 28.3% to Euro130m and its EBITDA rose by 59.5% to Euro32.4m. Although Mollins did make the point that inflation had been particular problem in Argentina, although its impact had been ‘greatly’ outweighed by price rises. LafargeHolcim has had its problems globally so far in 2017 but Argentina hasn’t been one of them. Its operations in the country have been propping up the group’s Latin American results each quarter so far in 2017. Despite being one of its smaller regions by sales revenues, its sales and earnings delivered some of the group’s highest growth in the third quarter of 2017.

In this kind of environment new production capacity can’t be far away. Sure enough Cementos Avellaneda plans to increases the capacity of its San Luís cement grinding plant by 0.7Mt to 1Mt/yr by the second quarter of 2019. US$200m has been earmarked for the project.

So, great news for Argentina and proof that poor markets can turn around. The Brazilian cement association SNIC reckoned in October 2017 that the rate decline of cement sales was slowing, suggesting that the bottom of the downturn was in sight. On the evidence of the current situation in Argentina once the market does revive, South America will be the place to watch.

US: Refractory manufacturer HarbisonWalker International (HWI) has announced two new members of its senior leadership team. Ross Wilkin has joined as chief financial officer (CFO) and corporate treasurer, and Michael Werner has joined as senior vice president, Commercial and corporate officer.

Wilkin joins HWI from Universal Stainless & Alloy Products, where he served as CFO. Before his role at Universal Stainless, he was CFO at Dynamics. Much of Wilkin’s career has been spent with HJ Heinz Company where he eventually became the became the vice president and CFO for the company’s Australia and New Zealand organisation. He began his finance career at KPMG, serving both in Toronto, Canada and in Cleveland, Ohio. A graduate of Carlton University with a Bachelor of Commerce degree in Accounting and Finance, Wilkin is a certified public accountant in both Canada and the US.

Werner previously led global commercial operations for Loparex. Prior to this he spent 20 years at GE Plastics and Sabic in numerous domestic and global roles, where he progressed to become Product General Manager. He began his career at Monsanto as an engineer in Technical Development and as a manager of Business Development in the thermoplastic elastomer business. Werner holds a Bachelor of Science degree in Polymer Science from the Pennsylvania State University.