Displaying items by tag: GCW126

The third quarter results are in and signs of a recovery in the construction industry are present. Generally for the European producers, volumes of cement sold in the third quarter of 2013 have improved year-on-year compared to the figures for the first nine months of 2013. Although many of these third quarter sales changes are still negative it seems like the industry has turned a corner.

Lafarge reported that cement sales fell by 4% year-on-year to 102Mt for the first nine months in 2013. In the third quarter of 2013 sales remained stable year–on-year at 36.7Mt. Holcim saw its nine month sales fall by 3% to 104Mt while its third quarter sales remained stable at 36Mt. HeidelbergCement saw its nine month sales rise by 1% to 67.7Mt while its third quarter sales rose by 4% to 25.3Mt. Italcementi saw its nine month sales fall by 6% to 32.6Mt while its third quarter sales fell by 2% to 10.8Mt.

By region some of the differences between the European-based multinational cement producers have been telling. Lafarge, for example, is still down year-on-year on cement volumes sold in North America, denting the perceived wisdom of a strong North American recovery. However, profit indicators such as earnings before interest, taxes, depreciation and amortisation (EBITDA) have risen in that region, increasingly in the third quarter. Cemex and Holcim have done better in this region.

Notably, the unstable political situation in Egypt has also impacted the balance sheets for Lafarge and Italcementi. Lafarge reported that cement sales volumes fell by 27% for the first nine months of 2013, principally due to gas shortages, and 19% for the third quarter as the company started to substitute other fuels. Similarly, Italcementi saw overall cement and clinker sales drop by 11.2% in the nine months and 14% in the third quarter.

Meanwhile in China, Anhui Conch produced 86.2Mt for the nine months, a year-on-year increase of 12.1%. Overall revenues in China seem to have risen after decreases in 2012. Anhui Conch reported that its operating revenue rose by 15% to US$6.08bn for the first nine months and US$2.20bn for the third quarter of 2013. Analysts have pinned the return to profit to building in the country's eastern and southern provinces and the effects of government-led industry consolidation. Bucking this trend though, China National Building Materials (CNBM) saw its revenue rise by 37% to US$13.5bn for the first nine months of 2013 but its profit fell by 8.1% to US$542m.

Anhui Conch, Lafarge, Holcim, CNBM, Italcementi and HeidelbergCement all feature at the top of Global Cement's list of the 'Top 75 global cement companies' to be published in the December 2013 issue of Global Cement Magazine. Ahead of final publication we want to know whether readers agree with the rankings. Download our list (registration required) and let us know your comments by 1 December 2013.

Germany: Reinhold Festge, Managing Partner of Haver & Boecker, has been elected as the new president of the German Engineering Federation (VDMA) at a gathering of its members in Stuttgart on 18 October 2013. He succeeds Thomas Lindner of the Groz-Beckert KG in Albstadt who served as president of the VDMA since 2010. Karl Haeusgen and Carl Martin Welcker were elected as vice presidents.

Festge, born in 1945, originally trained as a doctor before he majored in Business Administration and then became managing director of Haver & Beumer Latinoamericana in Brazil. From 1985 to 1987 he served as the managing director of Haver Filling Systems in the US. In 1987 he became a partner of Haver & Boecker.

Festge is a member of the restricted board and sits on the main board of the VDMA. From 1998 to 2004 he was chairman of the VDMA professional association for construction and building material machinery. He was chairman of the VDMA state federation of North Rhine Westphalia from 2005 to 2011.

China: The board of directors of Anhui Conch has announced that Ji Qinying tendered his resignation as an executive director on 1 November 2013. A new executive director will be elected and appointed in due course.

Italy: Italcementi's revenue has dropped by 3.2% year-on-year to Euro1.06bn for the third quarter of 2013 from Euro1.10bn in the same period in 2012. However, earnings before income and taxes (EBIT) fell by 36% year-on-year to Euro108m for the third quarter of 2013 from Euro168m in 2012. The Italy-based multinational cement producer attributed the low revenue decline as a sign of slowing decline in Europe.

"Despite the stagnation in demand on the European markets, over the last four quarters, with the exception of March 2013, which was severely affected by the impact of bad weather on construction operations, the Italcementi Group has reported a positive trend in results for its industrial operations," said Giovanni Ferrario, Group Chief Operating Officer. He added that the group efficiency plan had helped the result despite the strong impact of the rise in energy prices in Egypt.

Sales of cement and clinker fell by 2.4% year-on-year in the third quarter of 2013 to 10.8Mt. By region sales fell in Europe, North Africa and the Middle East in the third quarter of 2013. Cement and clinker sales rose in North America and Asia. This trend was mirrored for the first nine months of 2013 also.

Italy: Buzzi Unicem has reported that its net sales have fallen by 3% year-on-year to Euro2.08bn for the first nine months in 2013. Cement sales volumes fared better with a 1.2% drop to 20.6Mt. For the third quarter of 2013 the Italy-based cement producer reported drops in sales volumes in Mexico, Italy and Eastern Europe.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 10% to Euro336m. Buzzi Unicem expects recurring operating results to fall by 5 – 10% for the whole of 2013 compared to 2012.

Tanzania/ Kenya: Athi River Mining (ARM) will spend over US$400m on the construction of new cement plants in Tanzania and Kenya.

Pradeep Paunrana, the company's chief executive, said a new plant in Tanga, Tanzania, would have a capacity of 1.2Mt/yr and will be completed within five months. "The entire Tanga project coupled with the Dar es Salaam grinding plant that has been in operation since 2012 has cost US$150m," he said. ARM aims to increase its market share in Tanzania from 17% to 25% by the end of 2014.

In 2014 ARM will embark on the construction of a US$250m clinker factory in Kenya to boost its cement production capacity to 5Mt/yr.

"We are looking at doubling our cement production in Kenya within a four-year period from 2.5Mt in 2012," said Paunrana. He added that ARM expect immense growth in the Kenyan cement industry in the second half of 2013 due to the thriving real estate industry.

According to a 2013 Kenyan market update report by CW Group, a US-based cement consultancy company, despite the low rates reported in 2012, cement demand is projected to increase by 10%/yr and exceed 6.3Mt/yr by 2017. Kenya's cement consumption per capita is also forecast to reach an important milestone in 2014 when it will surpass, for the first time in its history, 100kg per inhabitant.

Canada: A new report by the Winnipeg-based International Institute for Sustainable Development (IISD) on the implications of climate change on Canada's infrastructure has been published with the support of the Cement Association of Canada.

'Climate Change Adaptation and Canadian Infrastructure' summarises current literature dealing with the challenge of adapting to climate change in Canada. Intended to serve as stimulus for further discussion around planned adaptation to climate change in Canada, the report explored climate impacts and risks to key infrastructure by region and by type. The report also introduced a number of key policy, regulatory, and financial tools for consideration.

"The cement and concrete industry is committed to being a proactive partner in addressing the challenges of mitigating and adapting to climate change," said Michael McSweeney, President and CEO of the Cement Association of Canada. "We are in an age of massive re-investment in our basic infrastructure in Canada, and this presents an enormous opportunity to both mitigate climate change through reduced CO₂ emissions as well as prepare ourselves for the changes in our climate that are already underway."

US: Lawyers for the Environmental Protection Agency (EPA) and ESSROC are in talks to settle a legal dispute pending before the Environmental Appeals Board (EAB). The EAB had scheduled the case for 7 November 2013 but on 6 November 2013 EAB Judge Leslye Fraser stayed the case until 20 February 2014 to allow time for settlement talks. The order requires ESSROC and EPA's Region V to report to the EAB on the status of negotiations by 9 January 2014.

The case began 8 July 2013 when the ESSROC Cement Corporation petitioned the EAB to review Region V's decision requiring an SSRA at ESSROC's hazardous waste combustor facility in Logansport, IN, during the 2012 renewal of the facility's Resource Conservation and Recovery Act (RCRA) permit. In a 25 September 2013 order, the EAB granted oral argument in the case, and asked that during the proceedings the two sides revisit arguments from industry's past challenge to a 2005 EPA rule setting maximum achievable control technology (MACT) standards under the Clean Air Act for the combustion facilities.

Tajikistan: A Lafarge Pakistan (LP) delegation, led by CEO Amr Ali Redahas, met with the Ministry of Energy and Industry (MoEI) to discuss trade and economic cooperation. They agreed that the cement production issue would be tabled to the agendas of the commission's sessions. While in Tajikistan, the LP representatives intended to meet with senior representatives of Tajikistan's largest cement producers Tojikcement (Dushanbe cement plant) and Huaxin Gayur Cement.

A 1Mt/yr Greenfield cement plant, built by Huaxin Gayur Cement in Yovon, Tajikistan, started operation in August 2012. Cement demand in Tajikistan is currently well ahead of production levels and imports continue to play an important role. However, the Tajikstan government has attracted foreign investment to expand its cement production base.

Saudi Arabia: Saudi cement producer Southern Province Cement (SPC) has signed a US$190.1m contract for the installation of a second production line at its plant in Bisha.

The contract will be executed over a period of 20 months. SPC said it will use a combination of Islamic financing and its own funds to finance the project.

In May 2012 the Saudi firm signed a US$188.5m turnkey contract with China's Sinoma for a third production line at SPC's plant in Tuhama. The project is expected to take 24 months to complete.