Displaying items by tag: GCW156

Bad news for both cement workers and local clinker production in Australia and New Zealand this week with the announcement of job cuts and planned closures of clinker plants. Holcim New Zealand has confirmed that around 120 jobs will go when its Westport cement plant closes in 2016 along with the rationalisation of a few management jobs when the company integrates its Australian and New Zealand businesses. Meanwhile, Boral announced that it will cut 28 jobs from its Maldon Cement plant in Australia when it ceases clinker production at the end of 2014.

With these planned closures cement production capacity in the antipodes will shrink by just over 1.5Mt/yr to around 7.5Mt/yr, a reduction of over 15% Alongside the drop in native cement production players are re-focusing on an import market.

The trend is highlighted by the fact that Boral's Maldon site will retain its grinding mill. Earlier in June 2014 it was reported that Vue Australia is planning to convert a brownfield site on Kooragang Island, New South Wales into a cement storage and transfer plant. In February 2014 Cockburn Cement cut 44 jobs at its Munster cement plant as it started to restructure its operation for grinding using imported clinker. Also in February 2014 Cement Australia, the joint-owned company between Holcim and HeidelbergCement, had a US$17m expansion of its cement loading and storage facility for processing at Osborne approved by local authorities.

Following its restructuring in 2013, which has seen clinker production cease at Waurn Ponds and soon to cease at Maldon, Boral reported that its cement revenues grew in its 2012 – 2013 financial year. This is likely to continue when the 2013 – 2014 year is reported in August 2014. Likewise, Adelaide Brighton reported growing revenues in 2013. Cement Australia reported growing cement sales year-on-year in the first quarter of 2014 following reduced sales in 2013.

All in all the local cement industry in Australia and New Zealand has taken quite a knock in recent years. Reasons for this have included a poor recovery for the local building materials market, high-energy costs, the Carbon Tax in Australia, competition concerns and the spectre of cheap clinker imports from East Asia undercutting everything. However the return to revenue and then profit suggest that the worst of the job cuts and clinker production shrinkage is over.

In this business environment, revelations such as a China Resources spending upwards of US$300,000 on golf are unlikely to garner sympathy for any measures that appear to reduce international competiveness for Australian industry. The current Australian government led by Tony Abbott is set to make good on its promise to repeal the Carbon Tax from July 2014. The environmental effects will be unclear given that the tax may have cut emissions from participating companies by 7%, falling from 342Mt in 2011 – 2012 to 321Mt in 2012 – 2013, according to the Investor Group on Climate Change. As is usual with localised carbon taxation or legislation, whether global emissions fell during this period or whether emissions grew in looser jurisdictions to compensate is hard to calculate. The trend towards clinker imports suggests that there may be a significant contribution from the latter.

Kenya/Uganda: Bamburi Cement intends to appoint Bruno Pescheux, the country CEO for Syria, as the CEO of Bamburi Kenya and Daniel Pettersson, the general manager of Hima Cement, as the CEO of Bamburi Uganda. At present the Lafarge subsidiary is run as one unit. The Kenyan business has three subsidiaries - Bamburi Cement, Bamburi Special Products and Lafarge Eco Systems while the Ugandan unit is managed as Hima Cement.

"With a view to improving focus on our markets it has been decided that, starting on 21 July 2014, the Kenya-Uganda cluster will be managed as two separate country organisations each with a country CEO and executive team," said outgoing Bamburi chief executive Hussein Mansi in a staff memo. Pescheux and Pettersson will report to Tom Farrell, group executive vice president.

India: The Cement Manufacturers Association of India has asked the Railway Board to withdraw a 6.5% rise in freight rates that is due to start on 25 June 2014 on the basis that the cement industry cannot absorb the cost. A note to the board said that the increase would further discourage the movement of cement and input materials by rail for an already beleaguered industry.

"In the last two and a half-years, the overall transportation cost of cement has gone up by 40%. With the current 6.5% increase in the freight rates. The cement industry, reeling under tremendous price pressure with around 100Mt of idle excess capacity, cannot absorb this increase," said the note.

Iraq: Lafarge Iraq has launched a new version of Karasta, its multipurpose cement. In order to meet customer expectations and needs the formula of Karasta was revised to iprove its workability, decrease cracking and improve setting time and adhesion properties.

Karasta's new formula meets the Iraq specification 3868 and the international standards EN 197-1:2011 CEM II/A-L 42.5 R, which is similar to Lafarge products in other countries. Karasta is produced at Lafarge's Bazian and Tasluja plants located near Slemani, Kurdistan Region. It has launched in Erbil and is being sold initially in the Kurdistan region of Iraq.

India: India Cements plans to revamp and increase the production capacity of its cement plant in Tamil Nadu with an investment of US$13.3m.

The cement plant will be upgraded, including a new line and optimisation of the existing kiln, increasing capacity to about 1.70Mt/yr from the present 0.6Mt/yr. India Cements is currently seeking environmental clearance and, once this is in place, the project will commence. The total power requirement for the increased capacity will be about 28MW, including about 13MW for the new line.

Spain/Mexico/Argentina: Cementos Molins plans to build its international presence outside of Spain with expansions planned for Mexico and Argentina. The company hopes to generate just 20% of revenues in Spain in 2017. The company reported a profit of Euro6.5m for the first quarter of 2014.

The Spain-based cement producer intends to invest in a Euro147m cement plant project in Veracruz, Mexico in 2015 – 2016 shared with Buzzi Unicem and Mexican company Carso. Cementos Molins also plans to upgrade its existing cement plant in San Luis, Argentina. Other projects include two cement plants at unspecified locations.

Indonesia: Siemens has received an order from ThyssenKrupp Industrial Solutions AG to supply an Integrated Drive System for the expansion of PT Holcim Indonesia's cement plant in Java, Indonesia. The new line will have a capacity of 4000/day. Operation is due to commence in mid-2015.

The supplied Integrated Drive System will comprise low- and medium-voltage motors as well as the associated Sinamics and Sinamics Perfect Harmony drives, including the required converter transformers, starters and compensation systems. The supply package contains 14 single-motor and multi-motor drives, 22 induction motors, one slip ring motor for the raw mill main drive and six gear units.

Siemens previously installed complete drive equipment for the first production line at the Tuban plant. Production commenced in October 2013. "By placing the follow-on contract with Siemens, we want to ensure professional project management and the smooth operation of our plant", said Sidik Darusulistyo, plant manager at PT Holcim Indonesia.

New Zealand: Holcim New Zealand has revealed that a company shake-up will result in four management jobs in Christchurch being axed in the next few months. In addition, the wind-down of the Westport cement plant in 2016 has been confirmed, which will result in the loss of about 120 jobs. It is also considering selling part or all of its lime business.

Holcim New Zealand's managing director, Jeremy Smith, will be made redundant, with Holcim announcing that it will combine its New Zealand and Australian operations. Three other management jobs will also be axed, although the head office in Christchurch will remain open.

"Other than the four senior roles announced as being dis-established in 2015, no other changes are planned in the near future," said Smith. Commenting on the status of other staff numbers once all the plans come into play, Smith said, "That is not known and it is too early to even discuss. The changes to the business model will eventually reduce the scale and scope of the New Zealand business over the coming years and it will require a smaller corporate management operation after 2016." Holcim currently employs 420 staff in New Zealand.

Holcim announced in 2013 that it was halting cement manufacturing in New Zealand and replacing it with bulk importing of cement for the New Zealand market. As such, Holcim has gained final approvals for construction to begin on its two new import cement terminals at Timaru and Auckland. Planning work is already underway on the Timaru project, where two 30,000t cement terminals are to be built. The terminals are part of Holcim's US100m investment in its New Zealand operations.

US: Martin Martietta Materials has announced that it expects to enter an agreement with the US Department of Justice that will resolve all antitrust concerns over its planned US$2.7bn acquisition of Texas Industries.

Martin Marietta said that it believes the agreement will be finalised by 27 June 2014. It anticipates that the agreement will require it to divest its North Troy quarry in Mill Creek, Oklahoma and two rail yards in Dallas and Frisco, Texas. Martin Marietta has also announced that it plans to restructure Texas Industries' debt, offering US$700m in notes due in 2017 and 2024.

Martin Marietta and Texas Industries are both scheduled to hold special shareholder meetings on 30 June 2014 to vote on proposals. With the addition of Texas Industries, Martin Marietta will operate a network of more than 400 quarries, distribution yards and plants in 36 states, Canada, the Bahamas and the Caribbean.

India: The Karnataka State government has granted an extension of two years to Shree Cement to establish its mega-cement plant at Kodla-Benakanalli village, Karnataka State.

Shree Cement was given permission to establish a 3Mt/yr cement plant at an investment of US$241m in January 2010, apart from establishing a captive 150MW power plant. It purchased 5.26km² of land directly from farmers to set up the plant and mine limestone.

While Shree Cement was able to get environmental clearance from the Ministry of Environment and Forests in September 2012, its application with the Karnataka State Pollution Control Board was pending. The company had also applied for permission from the Water Resources Department to draw 1500kL/day of water from the Kagina River.