Displaying items by tag: Egypt
Suez Cement reports 11.5% gain in EBITDA for quarter four of 2014
27 February 2015Egypt: For the fourth quarter of 2014, Suez Cement reported a 2.5% year-on-year increase in revenues and 11.5% year-on-year growth in earnings before interest, tax and depreciation (EBITDA). Its net profit after non-controlling interests increased by 15.2% during the quarter.
For the entirety of 2014, Suez Cement's sales increased by 22%, while recurring EBITDA improved by 8.8% compared to 2013. However, higher corporate income taxes coupled with an absence of foreign exchange gains were responsible for an 8.4% drop in net profit after non-controlling interests. EBITDA gains were also driven by Suez Cement's downstream activities in transportation and ready-mix cements, as well as its paper bags subsidiary, which saw an EBITA increase of 26.5%. Cement activities accounted for a gain of 6.3%.
The strong revenue performance was largely due to cement price increases due to an unprecedented surge in production costs and product shortages. Overall, clinker production decreased as a result of severe energy supply issues that impacted each of Suez Cement's plants and subsidiaries differently. The Tourah plant felt the greatest pressure from expensive clinker imports that were necessary to satisfy Egypt's growing demand.
Suez Cement was also negatively affected by energy costs (gas, mazut and electricity) that rose by 25 - 35% in 2014. It did not let the economic pressures, including a 40% drop in industrial production capacity, impact its employment rates or benefits packages. This was partially due to Suez Cement's commitment to the implementation of energy-efficient processes throughout the five plants, as well as further emphasis and utilisation of alternative fuels, which helped mitigate the drop in production as well as limit the impact from growing clinker imports. Suez Cement will go ahead with the deployment of coal power at all five plants over the next two years, a factor that is also expected to put a stop to some importing activities.
Suez Cement believes that the construction industry's recovery will continue to attract new investment. This is in addition to positive economic growth thanks to Egypt's new-found government stability and the future implementation of several large national projects. However, power cuts and fuel shortages are likely to remain major issues for cement producers. Fuel and energy shortages will also prolong challenges to meeting cement production targets.
The recent closure of the Tourah I plant is one example of Suez Cement's continued commitment to reducing its environmental impact. The company remains focused on investing in energy-efficient initiatives and environmentally-sound programs. This includes developing alternative fuel strategies that incorporate waste-derived fuels and coal, which will shift the company's energy mix and improve its production capabilities by reducing dependence on natural gas and mazut.
Court halts appeal against privatisation of cement plant
20 January 2015Egypt: The Supreme Administrative Court has decided to pause an investigation into the appeal against the privatisation of Beni Suef Cement Company.
The court ordered the reinstatement of workers to the company, but decided to suspend looking into the appeal of the privatisation. The suspension is pending another court decision in a case questioning the constitutionality of a law issued in 2014, which bans third parties from challenging sales or investment contracts signed between the government and investors.
The law in question stipulates that courts must suspend viewing appeals of contracts, even if the cases were brought to court prior to the issuance of the law. The law was approved in April 2014 by former interim president Adli Mansour and was heavily criticised by the Egyptian Centre for Social and Economic Rights (ECESR) for its issuance. The ECESR said that the law 'wastes the rights of citizens and workers from detecting suspicions of corruption' in contracts.
The controversy over Beni Suef Cement is more than a decade old. The plant, which has an annual production capacity of 1.5Mt/yr, was sold in 1999 and was then owned as a joint venture project by Lafarge and Titan. In 2002, Titan acquired the shares owned by Lafarge and has since wholly-owned the plant.
In February 2014, an administrative court ruled in favour of the privatisation but ordered reinstating the workers, as stipulated in the sales contract. The court ruling was appealed by the workers, who want the privatisation to be reversed and by company officials, who do not want to bear the costs of reinstating the workers.
Four killed in scaffold collapse at Sinai Cement plant
07 January 2015Egypt: Four workers were killed and at least 35 others were injured on 27 December 2014 when a scaffold collapsed in the Sinai Cement plant in central Sinai. Sinai Cement denied that it had a connection with the accident in a statement.
Suez Cement to convert two cement plants to run on coal
17 December 2014Egypt: Suez Cement plans to spend US$84m in 2015 to convert its Helwan and Tora 2 cement plants to use coal. The move is a response to Egypt's on-going energy crisis.
The company reported a 40.5% rise year-on-year in third-quarter profit in November 2014 after it managed to pass on higher production costs to consumers. However, its nine month profit fell by 14.6% year-on-year due to severe energy shortages that forced the company to cut output by 40% so far in 2014. Suez Cement was one of the companies affected when the government cut natural gas supplies to factories in January 2014 and has had to import clinker at higher cost.
Titan Cement orders Gebr. Pfeiffer coal mill for Beni Suef plant
28 November 2014Egypt: Titan Cement has ordered a vertical roller mill of the type MPS 2800 BK from Gebr. Pfeiffer SE, to be set up in production line no. 1 at its Beni Suef plant. The mill is designed for a finished product rate of 40t/hr and will grind coal with a Hardgrove grindability index of 45 to a product fineness of 12% residue 90µm, while simultaneously drying it from a maximum 12% feed moisture to a maximum 1% residual moisture by using hot gases from the cement process.
Loesche supplies the first two vertical roller mills for cement grinding to El Arish Cement
24 November 2014Egypt: El Arish Cement is extending the clinker production capacity of its existing cement plant and will add two new lines with a clinker production capacity of 5500t/day.
El Arish Cement already operates two Loesche vertical roller mills, type LM 56.4, for cement raw material grinding within its existing two lines. The new type LM 56.4 mills will have 450t/hr of grinding capacity and a product fineness of 12% R90μm. As the new mills are of the same type as the existing ones, common spare parts can be used, keeping the spare parts demand to a minimum.
For cement grinding, El Arish Cement has also selected Loesche vertical roller mills of type LM 63.3+3. The table diameter of the mills is 6.3m and will be driven by a drive system with a rated capacity of 6800kW. The mills will grind various cement types, with capacities of up to 305t/hr.
Egypt/Brazil: Egypt's Arabian Cement has entered a joint venture for a cement grinding plant with Brazil's Cementos La Union. The project is worth US$28.8m.
Arabian Cement's board of directors approved the venture with Cementos Relampago, an affiliate of Cementos La Union, 'to establish a cement grinding plant in Northwest Brazil with a total capacity of 230,000t/yr.' The US$28.8m investment cost will be financed 50% through debt and equity. Arabian Cement's contribution would be US$8.76m, representing 60% of the total paid-in capital.
Egypt: Suez Cement has started trial production using coal at its Kattameya plant, with commercial production expected to start in November 2014, according to its chairman. Preparations for coal usage at the company's Suez plant are expected to be completed before the end of 2014.
Misr Beni Suef Cement to build coal mill
22 October 2014Egypt: Misr Beni Suef Cement has reached an agreement to build a coal mill worth US$27.9m in 12 months.
"The project will be funded through self-financing and loans," said Misr Beni Suef. The company expects the project to be completed by the end of 2015. Egypt is currently struggling with blackouts and the government has cut natural gas supplies to plants, which has prompted cement companies to switch to coal.
Egypt's natural gas production has been declining for years. Production in January 2014 was down by 10% from January 2013, according to the most recent government figures. In September 2014, the Egyptian government began to allow coal imports despite environmental concerns from the high pollution coal emits.
Egyptian NCCD to build own cement plant
17 October 2014Egypt: Egypt's National Company for Construction and Development (NCCD) plans to build its own cement plant as the price of locally-produced cement is high, according to NCCD's chairman Mahmoud Hegazy. The new plant will cover the cement requirements of NCCD's subsidiaries. The state-run firm is currently evaluating the best timing for the project.