Displaying items by tag: GCW198

Striking news from Libya this week with the announcement that an investor with international backing wants to buy the majority stake in the Libyan Cement Company.

Libya holdings owner Ahmed Ben Halim is in the process of buying out the Austrian Group Asamer that originally bought a majority share for US$145m back in 2008. Most of the remaining share was owned by the Economic and Social Development Fund. Taking over the company now seems bold from a European perspective or Ahmed Ben Halim got a very good price. No financial information regarding the deal has been made public.

Libya has remained politically unstable since the civil war in 2011. According to the Libyan Herald, following the war a strike at the Libyan Cement Company's plants for lost wages stopped production. Since then two of the three cement plants the company runs in east Libya near Benghazi have remained shut due to their proximity to fighting with the Ansar Al-Sharia militia. Before the civil war in 2011 the Libyan Cement Company had a combined cement production capacity of 6Mt/yr almost half the USGS estimated production for the entire country in that year.

The Libyan Cement Company's plants are all located in the east of the country under the nominal control of the Council of Deputies based in Tobruk. Its two plants in Benghazi have remained shut due to their proximity to fighting with the Ansar Al-Sharia militia. A third plant near Derna has also had security issues. Halim told the Financial Times that he was not 'crazy' to be investing at this time. "We have a long-term strategic plan" he said, "that Libya's going to rebuild its infrastructure. And a key element of this is cement." If he can hold out until the rebuilding starts then he may just be right.

Meanwhile across the border in Egypt, Minister of Supply Khaled Hanafy announced this week that cement prices had remained 'stable' for the fifth month in row. Some commentators placed improved energy supply security at the heart of this situation allowing producers to build up inventory. However, given the situation in Libya, it is worth considering what will happen once Libyan demand for cement does pick up both in competition for energy supplies like coal and a keener export market.

Finally, our editorial director Dr Robert McCaffrey was at the IEEE-IAS/PCA Cement Conference in Toronto, Canada this week. Here's his snapshot of PCA economist Ed Sullivan's forecast for future US cement supply and demand.

Ed Sullivan's forecast for future US cement supply and demand, at IEEE in Toronto. pic.twitter.com/RUoT7uHGtg

— Robert McCaffrey (@DrRobMcCaffrey) April 28, 2015

The UK London Underground has 'mind the gap' as its well-known warning phrase to prevent passengers falling between the platform and the trains when boarding. The favourable supply gap Ed Sullivan is talking about in US will be one cement producers will definitely not want to miss.

Ireland: CRH has said that its Group Finance Director - Maeve Carton - will become the company's new Group Transformation Director. The position is a new strategic group function within the company and Carton's new role will start in January 2016.

As Group Transformation Director, she will identify and implement the optimum financial and business model for the group in the years ahead. She will report to, and work closely with CRH's Group CEO Albert Manifold, and will continue to contribute directly to the board as an executive director.

The building materials group said that a search to appoint a new finance director for the group will start shortly. It is hoped that this process will be completed by the end of the year. Carton will continue as finance director until her replacement has been appointed, which will ensure an "effective transition process".

China: Profits made by the cement industry have fallen by 67.6% year-on-year to US$521m for the first quarter of 2015 according to statistics released by the National Development and Reform Commission (NDRC). Cement output fell slightly by 3.4% year-on-year to 428Mt in the same period.

China: Anhui Conch has reported that its net profit fell by 30.7% year-on-year to US$276m for the first quarter of 2015 from US$399m for the same period in 2014. Revenue fell by 11.1% to US$1.81bn from US$2.04bn. The major Chinese cement producer attributed to the fall in profit to a drop in product prices.

India: The Competition Commission of India (CCI) has cleared Ultratech Cement's proposed US$853m deal to buy two cement plants from Jaiprakash Associates in Madhya Pradesh. The acquisition is for a 2.6Mt/yr cement plant in Bela, with a 25MW captive power plant, and a 2.3Mt/yr cement plant in Sidhi with a 155MW captive power plant, according to the Economic Times.

"Looking at the details of the matter, the combination would not have any adverse impact on the market," the CCI order said.

UltraTech's cement production capacity will rise to 65Mt/yr. The company has set a target to reach 71Mt/yr by 2016. Following the sale Jaiprakash Associates, also know as Jaypee Group, will remain the country's third largest cement producer with a production capacity of 22Mt/yr.

Libya: Libya Holdings Group (LHG) is to acquire a majority stake in Libyan Cement Company through a special purpose acquisition vehicle. The LHG sponsored vehicle will acquire a controlling interest in Libyan Cement Company from QuadraCir Group (QuadraCir). It is anticipated that the acquisition will close by 30 April 2015. The transaction will be funded by LHG, using its existing cash resources, together with some of the leading families and industrial companies in the Gulf Cooperation Council region as co-investors.

Libyan Cement Company is the oldest cement company in Libya, has a significant market share in the Libyan cement market, and is the only producer of cement in eastern Libya. Under the terms of the acquisition, LHG and its co-investors intend to invest in the cement producer to stabilise operations and increase cement production capacity to over 3Mt/yr. The investment is targeted to meet the demand for cement in eastern Libya which is reliant on imports.

"We are very pleased to have been able to execute this transaction in a complex environment, retaining operational continuity for the cement company and at the same time securing its long-term growth potential which will benefit the Libyan economy," said Ahmed Ben Halim, Founder and CEO of LHG.

Nigeria: A pozzalana cement pilot plant in Ota, Ogun State is to be commissioned following the installation of the plant. The plant is the first of its kind in Nigeria that can process pozzolana and it is being run by the Nigerian Building and Road Research Institute (NBBRI).

The NBBRI has coordinated with the Director of Building and Road Research in Ghana on the project through exchange programmes. Two pozzalana cement plants are being built in Nigeria, in Ota, Ogun and Bokkos, Plateau respectively.

Bolivia: Itacamba Cemento has announced that it is currently importing large amounts of cement from Brazil to meet local demand in Santa Cruz. The Bolivian cement company will continue to import cement from Brazil until the second half of 2016 when it expects to start its new US$220m cement plant in Yacuses. It estimates to import some 5400t/month of cement, or around 107,000 bags, dependent on market demand.

Costa Rica: Cemex and Holcim have appealed against the Ministry of Finance, Industry and Trade (MEIC) over new certification requirements. Cemex has explained that its cement has been accredited since 2005 and it presented all necessary documentation on 10 April 2015 following a request from the MEIC. Cemex believes that government authorities have made a series of errors in their procedures and asked for the necessary corrections, according to local media.

Holcim Costa Rica has made assurances that it adheres to technical requirements and every year the national technical standards institute (Inteco) certifies its cement. Holcim will appeal against the government decision for new certification. Cement importer Sinocem has not appealed against this resolution, so it will have to present its certification in six months.

Europe: Holcim has adopted an automated dispatch processes and weighing technology in its Eastern Europe plants using logistics software from Schenck Process. Since the start of 2014 the LOGiQ software has automated process and data management relating to dispatch services in the company's 14 locations in the region. In January 2015 the software handled more than 10,000 transport orders. Four other locations are currently in the process of being connected to the dispatch automation system.

"The requirements for such integrated solutions fits in very well with Schenck Process not only because of its know-how in the field of weighing technology, its equipment and machinery but also in the area of software," explains Nino Stölzel, Sales Manager at Schenck Process.