August 2025

South Africa: Bheki Lindinkosi Sibiya retired as Chairman of the Board of PPC on 25 January 2016 following the company's annual general meeting. He held the post since 2008. No successor has yet been announced.

PPC acknowledged that Sibiya had overseen the successful conversion of the company's mining rights and the initiation of its African expansion strategy during his tenure. It also mentioned his role in ensuring board continuity and preservation of corporate expertise during a 'challenging phase' in the company's history.

Other retirements announced include Mangalani Peter Malungani, who has served as Non-Executive Director of PPC since February 2009, and Zibusiso Kganyago, who has been a member of the board since October 2007.

Salukazi Dakile-Hlongwane has been elected as a Non-Executive Director of the Board. Dakile-Hlongwane is currently the Chairperson and co-founder of Nozala Investments Pty Limited. Her career includes posts at Lesotho National Development Corporation, African Development Bank (Abidjan-Cote d'Ivoire), the Development Bank of Southern Africa, FirstCorp Merchant Bank and BOE Specialised Finance. She holds a Bachelor's degree in economics and statistics from the National University of Lesotho and a Master's degree in development economics from Williams College in Massachusetts, USA.

US: Steve Rowley will retire as president and CEO of Eagle Materials on 31 March 2016. Dave Powers, Executive Vice President for Gypsum Wallboard at Eagle since 2005, will succeed Rowley as President and CEO. He will also be appointed to the Board of Directors.

"Steve has positioned Eagle for an exciting future. He has led the doubling of the scale of our cement business and has guided the growth of our gypsum wallboard business in achieving its nation-wide scope. He also has successfully led the company through the longest and most challenging construction market down-cycle in US history," said Larry Hirsch, Chairman of the Board. Health reasons were cited for Rowley's retirement.

Dave Powers, aged 65, holds over 35 years of experience in the building materials industry. He joined Eagle Materials (formerly Centex Construction Products) in 2002 as Executive Vice President, Sales and Marketing. In January 2005, he was promoted to his role as Eagle's Executive Vice President for Gypsum (and President, American Gypsum Company LLC).

Sudan made a rare mention in the cement news this week when state plans to increase production capacity were revealed. Minister of Investment Mudathir Abdul-Ghani commented on a visit to a cement plant in River Nile State that the government wants to increase production capacity from 3Mt/yr to 5Mt/yr.

It's likely that the minister meant cement production as opposed to production capacity and that something was lost in translation from the original source via the Sudan News Agency. Global Cement Directory 2016 data places the country's cement production capacity at just under 7Mt/yr from six plants. ASEC and the United States Geological Survey (USGS) have cited similar figures in recent years too. A Global Cement contact reported in June 2015 that only three of the six cement plants were generally operational. These were Atbara Cement, Alshamal Cement and Al Takamol Cement (ASEC). The last available figures from the Bank of Sudan reported cement production was 2.9Mt in 2013, excluding data from one plant.

Regardless, the focus on Sudan is worth attention. The usual African demographic factors and rebuilding potential following the secession of South Sudan in 2011 suggest that the country is ready for increases in cement consumption. In 2009 per capita cement consumption was placed at 65kg/capita, an extremely low figure. After this point cement production leapt up from 0.6Mt/yr in 2009 to 2.91Mt/yr in 2013. This was due to expansion projects and new plant builds such as the Al Takamol (ASEC) cement plant. Using the current 2015 estimate for population this would still keep the country's per capita consumption below 100kg/capita.

Back in its 2012 annual report ASEC described the Sudanese market as one 'plagued' by oversupply and fuel shortages, creating a difficult environment to operate within. Transportation challenges, political instability, economic sanctions and the separation with South Sudan were all mentioned as problems to the local cement industry, hitting utilisation rates. ASEC's stated plan at the time was to reduce costs to stay in business. This all chimes with direct reports to Global Cement placing the utilisation rate at 50%. Demand for cement reportedly fell in January 2016 due to high inflation rates, at about 35%, and a poor economy.

With these kinds of conditions it would take a brave investor to spend their money in Sudan despite the golden demographic trends. State investment or incentives could be instrumental. This makes the Minister of Investment's comments noteworthy. Despite all the problems ASEC reported a 'marked' rise in sales revenue in 2013 to US$70m for its subsidiary Al-Takamol in Sudan.

Even the Chinese premier doesn't trust his country's GDP figures. Li Keqiang reportedly told a US ambassador this in 2007. He described Chinese GDP figures as 'man-made' and unreliable. Wikileaks then made the diplomatic report public a few years later. This anecdote has been much reported this week due to the latest gloomy economic figures from China. Its economy officially grew by 6.9% in 2015, its slowest rate in 25 years.

So what can a jittery world trust? Keqiang was reported to focus on three data samples to compensate for an unreliable GDP: electricity consumption, rail cargo volume and bank lending. Global Cement Magazine suggests that he should have followed one more: cement. What can cement tell us about the Chinese economy in recent years?

Chinese cement production fell by 4.9% to 2.35Bt/yr in 2015 according to newly published figures by the National Bureau of Statistics of China (NBSC). This is significant. Firstly, whether it is a true reflection of actual production or not, it is an admission by a Chinese state body that cement production is declining. Secondly, it signals the end of the rapid growth of the country's heavy industries through the 1990s and 2000s.

Figure 1 – Chinese cement production by quarter, 2014 – 2015

Figure 1 shows Chinese cement production by quarter in 2014 and 2015 using NBSC data. Two years are insufficient to pick out any major trends other than seasonal trends throughout each year. However, remove the slow winter months in the first quarter of each year and a steady decrease in production throughout 2014 and 2015 is apparent.

Figure 2 – Chinese cement production by year, 2005 – 2015

Figure 2 offers the context that Figure 1 lacked by comparing cement production from 2005 to 2015. Notable trends to point out are a slow down in growth in 2008, around the time of the global financial crash. Then production peaked in 2014 before falling in 2015. This data comes from the United States Geological Survey and then latterly the NBSC.

Figure 3 – Chinese cement production by year and GDP/capita, 2005 – 2015

Figure 3 shows annual growth in cement production against growth in GDP. The similarity of each line here, or the rate of growth, and where they diverge is what is interesting here. Up until the late 2000s the trend is similar until GDP/capita starts to grow faster than cement production. At this point either the Chinese economy has started to acknowledge that it can build all the infrastructure and housing it needs or perhaps the slowing growth in cement production has started to point to slowing GDP/capita growth.

2015 could be a blip if growth resumes in 2016. Yet the other heavy industry metrics suggest otherwise. Electric power and steel production also fell for the first time in 2015. Coal production dropped for the second year in a row. The Chinese housing market started to slow noticeably in 2014, cement production followed by slowing down and now the country's GDP growth has also slowed. Alongside this the industry's capacity reduction programme officially started in late 2013. Cement consumption per capita for China has long suggested that Chinese growth was due to slow. It is reassuring to finally see the official production figures reflect this. The real question though is what happens next.

Last week we promised reasons to be cheerful for the cement industry. We only have one to offer this week but it's a good one. At present three Indian cement companies are on sale: Lafarge India, Reliance Cements and Jaiprakash Associates. If these sales complete then it represents an opportunity for the Indian cement industry to reorganise itself and stride forward when growth recovers.

Lafarge India upped its sales proposal to the Competition Commission of India (CCI) on 6 January 2016 to sell its entire 11Mt/yr portfolio. Originally as part of the LafargeHolcim merger agreements the CCI asked Lafarge to sell 5.2Mt/yr of production capacity in Chhattisgarh and Jharkhand in eastern India. However the deal was reliant on the original buyer, Birla Corporation, securing limestone mining rights. Birla failed to do so. Now Lafarge India has decided to sell everything instead. Naturally, following its Euro8bn spending spree in 2015 CRH has been linked to the sale by Indian media.

Then following press speculation Reliance Infrastructure confirmed to the Bombay Stock Exchange on 11 January 2016 that it was at an 'advanced stage of discussions with potential buyers for divesting the cement business of the company.' Reliance's cement arm, Reliance Cement, holds three cement plants in Maihar in Madhya Pradesh, Kundanganj in Uttar Pradesh and Butibori in Maharashtra with a total production capacity of 5.8Mt/yr. In addition to this, the company is also developing a 5Mt/yr cement plant at Wani in Maharashtra. The Reliance sale has been reported upon since early 2015. The difference this time is that Reliance responded to local press reports that it was about to sell to Birla Corporation or a couple of other private equity firms.

Finally, the third sale concerns Jaiprakash Associates' on-going attempts to sell its remaining cement assets to service its debts. Jaiprakash Associates cement subsidiary, Jaypee Cement, holds eight plants in India with a cement production capacity of 11Mt/yr. In addition it holds six cement grinding plants with a capacity of 10.7Mt/yr. Despite reported attempts to sell the entire division in one Jaypee has actually ended up selling its cement assets in a piecemeal fashion one or two at a time. The most recent sale being announced this week is to sell its Bhilai Jaypee Cement to Shree Cement. This follows other sales to HeidelbergCement and UltraTech in 2015.

None of these sales are new exactly but the combined production capacity of these plants comes to just under 28Mt/yr. This represents 9% of India's total national cement production capacity of 310Mt/yr. Any player somehow able to weasel their way into striking a deal for all of these plants would immediately become one of the country's biggest producers.

It would definitely be a case of buyer beware though. Credit agency ICRA recently reported that it expects that cement demand growth will be a 'modest' 4% in the 2015 - 2016 financial year before picking up in the following year. This follows poor growth in cement demand in the first half of 2015 and even declines in March and April 2015. ICRA also expected the country capacity utilisation to drop to 70% in the 2016 financial year, down from 77% in the 2012 financial year. That 7% drop in the utilisation is awfully close to the 9% of Indian national production capacity that the cement assets currently on sale from Lafarge India, Reliance Cement and Jaypee Cement. Unsurprisingly, the buyers of Indian cement assets have been picking and choosing their plants one-by-one so far.

Ukraine: Dnipropetrovsk-based HeidelbergCement Ukraine has appointed Silvio Thiede as the Board Chairperson, effective from 11 January 2016.

India: Kakatiya Cement Sugar & Industries' Chairman and Managing Director, Shri. P Venkateswarlu, passed away on 11 January 2016.

Caribbean: Caribbean Cement's parent company Trinidad Cement Limited (TCL) has appointed Luis Ali has as Group Finance Manager, effective from 4 January 2016.

We're going to start 2016 with a list of some of the worst things that could happen to the global cement industry this year. The idea is taken from Bloomberg Business who ran 'A Pessimist's Guide to the World in 2016' in mid-December 2015. For some of these suggestions there will be both winners and losers. Remember: forewarned is forearmed.

Continuing low oil prices hit Russia and other petro-propped economies
Cheaper fossil fuels should mean cheaper energy bills for cement producers. However, that saving must be compared to the overall cost to the global cement industry of poor construction markets in Russia and other economies that rely on oil. For example, Russian construction output fell by 4.5% to US$81bn in 2014 according to PMR. It is possible that the fuels bill saving worldwide is greater than the contraction of certain construction markets. If it is though, is this a price that the cement industry is willing to pay?

China enters a recession
The long-expected Chinese 'hard landing' seems closer than ever, as economic growth slows. It hasn't happened yet (according to official figures at least) but the 7% drop in Chinese markets on 4 January 2015 gives observers the jitters. The financial reverberations from a full Chinese financial crash would be felt around the world, derailing emerging economies due to reducing demand for exports and commodities. Naturally, construction markets would suffer. This would add to the woes currently being experienced by Brazil, Russia and South Africa. The other worry for the cement industry specifically might be the complications from a desperate Chinese industry trying to flood the outside world with even more of its products and services, including lots of cement.

Climate change impacts cement plants
Normally when it comes to climate change the cement industry worries about the effects of carbon taxation and pollution controls. However, media reporting about flooding in the UK in late December 2015 and strong El Niño effects elsewhere makes a pessimist wonder about the effects of hotter and wetter weather upon the infrastructure of the industry. The cost to repair the flooded Cemex UK South Ferriby cement plant in 2014 was rumoured to run to Euro14m and production stopped for a whole year. Costs like these are something the industry could do without.

International sanctions remain in place for Iran
Hoping that lifting economic sanctions from Iran will boost the fortunes of multinational cement producers and equipment manufacturers may be wishful thinking. Yet if the sanctions stay in place due to deteriorating relations between Iran and Saudi Arabia then nobody can discover what opportunities there might be in the world's fourth largest cement producing nation. Of course Iran's geographical neighbours across the Gulf (and in Pakistan) might be hoping that the sanctions stay in place for a very long time indeed.

Sub-Saharan Africa builds production capacity too fast
Multinationals and local cement producers alike are scrambling to build cement plants in sub-Saharan Africa. Demand for cement and low per capita consumption suggest that it is a clear investment opportunity as development kicks in. However, we have already reported on scraps between local cement associations and importers from other continents. If the cement producers build capacity faster than these countries develop, then a crash can't be too far fround the corner and everybody loses.

The UK leads an exodus from the European Union
For the cement industry a UK exit, to be voted on later in 2016, from the European Union (EU) isn't necessarily a bad things. What would be negative though is a badly handled exit process as vast swathes of trade legislation is renegotiated. What a 'Brexit' might initiate are further exits from the EU, leading to further trade disruption on a larger scale. None of this would aid Europe's economic recovery in the short term.

US Presidential elections slow the construction market
Irish bookmaker Paddy Power is currently placing odds of 9/2 for Donald Trump to be elected the next US president in late 2016. He's the second favourite candidate after Hillary Clinton despite not even having been nominated as the Republican party's presidential candidate yet. Whoever becomes the next president, the political uncertainty that occurs as the election progresses may impact upon the US construction market. It would be unfortunate to discover that the sector is weaker than expected if, say, the election rhetoric turns nasty.

Next week: reasons to be cheerful.

Happy New Year from Global Cement!

India: UltraTech Cement has appointed K K Maheshwari as Managing Director and Additional Director for a period of four years with effect from 1 April 2016. Maheshwari is a chartered accountant with over 38 years of experience.

The post was previously held by O P Puranmalka, who will cease to be the company's Managing Director on 31 March 2016, but will continue as a Non-executive Director from 1 April 2016.