Displaying items by tag: Eurocement
New plant for Eurocement in North Caucasus
05 August 2014Russia: Eurocement Group will invest Euro167 m in the construction of a cement plant in the Karachay-Cherkess Republic in the North Caucasus. The new plant based on dry process technology will produce up to 4Mt/yr of clinker.
Uzbekistan: Eurocement has become the third Russian company to risk losing assets in Uzbekistan after Wimm-Bill-Dann Foods (WDB) and MTS. The president of Eurocement, Mikhail Skorokhod, said that the Tashkent Region's Economic Court has granted a suit brought by Uzbekistan's State Competition Committee to invalidate the privatisation of JSC Akhangarancement, which was based on a decree that was signed in the mid-1990s. Eurocement became a shareholder in Akhangarancement eight years after it was privatised, buying 75% of its shares on the secondary market in 2006.
"We bought Akhangarancement in 2006," said Skorokhod. "We met all of the local legislative requirements, paid taxes and contributed to the solution of social and environmental problems. The enterprise was inspected from time to time, but no serious complaints were made. A few months ago a spot check involving nearly 20 organisations began. Despite the unprecedented scale of the inspection, nothing was found that violated the law. We found out on 16 July 2014 about the State Competition Committee's lawsuit to overturn the decree of 30 August 1994 on the privatisation of Akhangarancement. The Tashkent region's Economic Court accepted the suit on 17 July 2014 and the ruling was made on 21 July 2014 morning, in literally a few hours."
According to Skorokhod, the lawsuit cites items that were not taken into account in the privatisation, but none of them are capital assets (such as seedlings, furniture, enclosures, printers and trailers). Uzstroymaterialy, the state company that oversees the industry and Uzbekistan's Justice Ministry have deemed the lawsuit unfounded, but the court did not take its position into account.
Eurocement has 30 days to file an appeal. If the court upholds the first ruling, this will essentially mean the nationalisation of the asset. The plant is continuing to produce cement as usual. "If we don't get a positive court ruling in Uzbekistan, we will file a lawsuit in the International Centre for Settlement of Investment Disputes (ICSID) at the World Bank in Washington," said Skorokhod.
The attempted nationalisation is particularly troubling to Eurocement in light of the expansion plan it has for the plant. Eurocement has signed a contract with China CAMC Engineering Co Ltd for the provision of equipment, designs, installation supervision and employee training worth Euro95.0m for the construction of a new dry-process cement plant as part of the Akhangarancement plant. The new plant's capacity will be 2.4Mt/yr of cement. The launch is expected in 2016.
The contract includes the provision of the full range of equipment required for cement production, including mechanical equipment, furnaces, cyclone pre-heaters, grinders, mills, electrical and automatic equipment and monitoring and measuring devices.
Central Asia cement roundup
02 July 2014A group of news stories from Central Asia and Azerbaijan this week present a good opportunity to look at the cement industry in this part of the world.
Uzbekistan
Eurocement has announced that it plans to build a 2.4Mt/yr cement plant near to Tashkent. Chinese contractors have been signed for the work in line with the Russia-based cement producer's other plant builds in 2014. Eurocement also operate a subsidiary in the country, the 1.6Mt/yr Akhangarancement cement plant, that reported a criminal investigation and financial audit following various misdemeanours in April 2014.
Also in April 2014 the Almalyk Mining-Metallurgical Combine (AMMC) proposed building a 1.5Mt/yr cement plant in the south of the country and then commissioning of a white cement plant in the central Jizzakh Province. Both the Eurocement and AMMC projects show that organisations are investing in the local market of the region's most populous country at around 30m.
Turkmenistan
In neighbouring Turkmenistan the TurkmenCement Production Association has issued a tender this week for the construction of a 1Mt/yr clinker plant in the central-south of the country in the Baharly District of the Akhal Region. If realised, the new plant will raise Turkemistan's cement production capacity to 4Mt/yr. Currently the country has three state-operated plants. The most recent, the 1.4Mt/yr Garlyk plant, was commissioned in February 2013.
Kazakhstan
An investor has stepped forward to finance the completion of the delayed Khantau cement plant in Zhambyl region in southern Kazakhstan. The 0.5Mt/yr plant was originally started in 2007 before being mothballed part-way through construction.
The reignition of this project follows a couple of stories from Kazakhstan including a report on testing at the HeidelbergCement Caspi cement plant in Mangistau region and the start of operation on Line 5 of Steppe Cement's Karaganda Cement. Kazakhstan has more western international cement producers, unlike the generally state-run companies in Uzbekistan and Turkmenistan. HeidelbergCement will join plants run by Italcementi and Vicat.
Azerbaijan
Finally, on the other side of the Caspian Sea, Azerbaijani local media has reported that cement production for the first half of 2014 has risen by 40% year-on-year to 1.1Mt. Following the opening of the Gazakh cement plant in mid-2013 the country has three cement plants with a combined cement production capacity of nearly 5Mt/yr.
Uzbekistan: Eurocement plans to build a new 2.4Mt/yr cement plant in Uzbekistan worth US$128m. Commissioning is expected in 2016. The company has signed a contract with China CAMC Engineering Co Ltd for the supply of equipment, design, installation supervision and training for construction of the cement plant in the Tashkent Region.
Sustainable expansion for Semen Indonesia
28 May 2014One of the ideas aired by several speakers at last week's 6th Brazilian Cement Congress was that using cement as a construction material is inherently a sustainable option.
The reasons for this included the durability of cement's construction products and the role cement plays in improving the living standards of a country. For example, under the onslaught of extreme weather like hurricanes, concrete structures are more likely to remain standing. Or, for a country like Brazil with sections of society living in long-term 'temporary' buildings in its favelas or shanty towns, providing affordable cement to help the country build better housing for its inhabitants is the only sustainable future that could be considered.
Perhaps in line with this concept of cement-as-sustainable-construction-material we see Semen Indonesia this week announcing expansion plans in three countries in South and Southeast Asia.
In West Sumatra a Semen Indonesia subsidiary has started building a 3Mt/yr cement plant in Padang. Then in Bangladesh Semen Indonesia revealed its intention to buy a 1Mt/yr plant. Finally, the state-owned Indonesian cement producer said that its Semen Gresik subsidiary was planning to build a new cement plant in Central Java at Rembang in June 2014. From previous press releases we can see that both new plants are FLSmidth builds. Both orders were announced in early 2014. Each has a capacity of 8000t/day.
The plans to expand outside of Indonesia echo reports that Semen Indonesia was set to buy a minority share in a Myanmar cement producer. Although the producer was unnamed as of early May 2014, Semen Indonesia CEO Dwi Soetjipto valued the stake at US$30m and the producer's production capacity at 1.5Mt/yr in comments to the Jakarta Globe.
Altogether the two new plants in Indonesia will place Semen Indonesia's total cement production capacity at 40Mt/yr by 2017 according to company figures. This would be enough to place the company within the top 20 of the world's largest cement producers by production capacity following the research from Global Cement's 'Top 75 global cement companies'.
In a nice coincidence, the company with a production capacity of 40Mt/yr on that list was Eurocement. Last week the Russian cement producer announced that it had signed contracts worth Euro387m with Chinese companies - including Sinoma, CNB, Sinomach and CAMC Engineering Co - to add 17Mt/yr cement production capacity across six plants in Russia. Another six or seven more construction agreements for cement plants are also expected to be signed in the coming months.
Certainly for the countries Semen Indonesia is focusing on – Indonesia, Bangladesh and Myanmar, with low gross domestic product per capita – providing the raw material for stronger and more durable buildings covers some of the sustainability bases. Yet if all these new plants only use fossil fuels and are subject to few environmental restrictions then that undermines some of this. However, whether all this expansion is sustainable or not, the cement industry never remains stationary.
Russia: Sberbank and Eurocement signed a cooperation agreement at the XVIII St Petersburg International Economic Forum to secure funding for expansion by the Russian cement producer. Herman Gref, the bank's CEO and Chairman of the Board, signed the agreement for Sberbank and Filaret Galchev, the Chairman of the Board of Directors, signed for Eurocement, according to SKRIN Newswire.
The agreement also stipulates that the two parties will cooperate on a whole range of issues, from settlement and cash services to the provision of investment and banking products (via Sberbank CIB1) and other financial services, both for Eurocement group itself and for its affiliates and dependent companies.
"The signing of the agreement with Sberbank will serve as a guarantee that the Holding company's investment programme will receive sufficient funding until 2018 and that the transition to the active phase of the construction of new cement manufacturing facilities will be made. The implementation of this project will give a significant boost to growth in Russia's construction sector as a whole, by providing high-quality cement for infrastructural and residential projects in the country," said Filaret Galchev, the Chairman of the Board of Directors at Eurocement.
Russia: Eurocement Group has signed contracts with Chinese companies for equipment supplies, engineering, installation supervision and employee training totalling Euro387m.
"The contracts, which were signed on 20 May 2014, include the delivery of a complete set of equipment necessary for the construction of new cement dry-production lines," said Eurocement. The contracted supplies include mechanical equipment, furnaces, cyclone heat exchangers, crushers, and mills.
The equipment will be used for the construction of new cement plants with a total cement production capacity of 17Mt/yr in six regions of Russia: Leningrad, Ryazan, Bryansk, Arkhangelsk, Ulyanovsk and Samara regions. Eurocement currently operates 16 cement plants with 40Mt/yr of production capacity.
Ukraine: Eurocement Ukraine finished 2013 with a loss of Euro1.31m, down from a profit of Euro2.32m in 2012. In 2013 the company saw its net revenue fall by 7.21% to Euro65.3m.
Criminal investigation at Akhangarancement
29 April 2014Uzbekistan: Uzbek media has reported the launch of a criminal investigation and financial audit of Akhangarancement, a cement plant that is 84% owned by Russia's Eurocement in Akhangaran, Tashkent province.
State investigators are focused on alleged tax evasion, theft of assets, reporting irregularities and illegal activities of managers. Akhangarancement's general director Denis Dotsenko has reportedly left the country.
According to local media, the investigation was motivated by illegal cement exports for the construction of the Rogun hydroelectric power plant and associated dam in neighbouring Tajikistan. The Rogun plant would significantly reduce water supply from the Syrdarya River, which is of vital importance for Uzbekistan's cotton production, its major export earner.
Cement industry development in Uzbekistan
02 April 2014Our spotlight is on Uzbekistan this week following an update on the Almalyk Mining and Metallurgical Combine's (AMMC) plans to build a new cement plant in the south of the country. The news emerged in the wake of the completion of the AMMC's cement grinding plant, in the Jizzakh region, which was finished in late March 2014. Meanwhile, Eurocement announced that its subsidiary in Uzbekistan, the Akhangarancement plant, had received a limestone and marl quarrying licence.
Previous to the new AMMC grinding plant, Uzbekistan had five cement plants with a total cement production capacity of nearly 6Mt/yr. Only one of these was a dry production process plant, the 2.5Mt/yr Krzylkumcement plant, in the south-western Bukhara province. Cement consumption in the country was estimated to be around the same, also at 6Mt/yr.
Back in 2011 the government of Uzbekistan planned to invest US$6.94bn to develop infrastructure, transport and communication construction from 2011 - 2015. This investment has now been followed up with a direct financial injection into the cement industry.
In late February 2014, local building materials company JSC Uzbuildmaterials announced government plans to invest US$49.1m into the local cement industry. The programme includes nine projects for the three largest cement plants in the country: the Kyzylkumcement plant, the Ahangarancement plant and the Bekabadcement plant. Kyzylkumcement will receive the majority of the investment, US$39.6m to spend over three years on a new cement mill, upgrades to the clinker production lines and construction of a 220/10kV main substation. Ahangarantcement and Bekabadcement will replace 'out-dated' equipment and will upgrade their production lines.
Mineral-rich Uzbekistan is relatively undeveloped but this is changing. Its Gross Domestic Product (GDP) was reported to be US$51bn in 2012 by the World Bank, having seen steady growth since 2002, and its population was just over 30m in 2013. Its cement consumption is 300kg/capita, a figure below the global average (estimated at 536kg/capita in a forthcoming Global Cement Magazine report on 'Cement consumption versus Gross Domestic Product'). This places Uzbekistan in a favourable position for future development on a graph of GDP per capita against cement consumption per capita. The latest investment programme suggests that the Uzbek government are hoping that this is the case.