Displaying items by tag: GCW218
Argentine cement sales set to grow in 2015 despite setbacks
16 September 2015Cement shortages have been reported again in western Argentina this week. The story has been simmering over the summer in Mendoza and San Juan Provinces with local construction firms becoming irate with delays to their projects.
The cause is reported by local media to be a broken raw mill at Holcim Argentina's Capdeville cement plant north of the city of Mendoza. Production has been reduced by 2400t/month of cement from the 0.66Mt/yr capacity plant. Unfortunately, cement plants in neighbouring states have lowered their deliveries. Subsequently prices are estimated to have risen by 8 – 10% in July and August 2015 alone..
To put some perspective on the cement shortage, the Cuyo region of Argentina (comprising Mendoza, San Juan and San Luis Provinces) consumed just over 1Mt of cement in 2014 compared to 11Mt for the entire country. However all three provinces in the region are above the national mean cement consumption of 271kg/capita.
Despite the bottleneck in the provinces, the Asociacion de Fabricantes de Cemento (AFCP) recently revised its cement sales forecast for 2015 upwards to over 12Mt, the highest level on record. It attributed the rise demand to public infrastructure projects, house building and the Argentina Credit Programme (ProCreAr). Total despatches to the end of August 2015 were 7.99Mt, a rise of 8.73% or 641,664t from 7.35Mt in August 2014.
This followed a poor year in 2014 when national cement consumption fell by 3.5% year-on-year according to local press. The AFCP reported a fall in production by 4.1% to 11.4Mt.
Notably for the current news story, San Juan Province saw one of the biggest sales drops in 2014 at 10.5%. As InterCement (through its subsidiary Loma Negra) commented in its annual report, the country suffered both a gross domestic product (GDP) contraction of 1% in 2014 and instability in its financial markets that adversely affected consumption. Both the other major cement producers, Cementos Avellaneda (a subsidiary of Cementos Molins) and Holcim Argentina, also reported poor sales in 2014. Under these conditions it is unsurprising that consumers have angered due to localised cement shortages. There should be lots of cement available!
Into 2015, Holcim reported increased cement volumes in the first half of 2015 due to high demand in the Cordoba Province that neighbours Mendoza Province. By contrast, InterCement forecast in its 2014 annual report that it expected sales to remain lower than the high set in 2013. However it also expected continued demand for cement to reflect a response to the economic situation in Argentina with private investors moving to real estate for security.
InterCement and the rest will be monitoring Argentina's economy very closely for the remainder of 2015. Presidential elections are due in October that may change the current scenario. For the moment though the country remains in recession but it has managed to bring in foreign investment. Regardless of this though, the quicker Holcim Argentina and the others address the shortage in Mendoza the better. Demand may not last forever.
New general director of Kavkazcement
16 September 2015Russia: Igor Nikolenko has been appointed the new General Director of CJSC Kavkazcement, part of Eurocement. A Eurocement statement stated that the new appointment was highly qualified with a 'deep knowledge of Eurocement group's business processes and long experience in the field of construction materials.'
Igor Nikolenko was born in Belgorod in 1965. Having graduated from Belgorod Technological Institute of Building Materials in Mechanical Engineering in 1990, he came to work in the Belgorod cement plant. He worked as a Deputy General Director and Technical Director of Balcem, a General Director at Savinskiy cement plant and Deputy General Director and Technical Director of Eurocement Ukraine. Most recently he was the head of Mikhailovcement plant from 2012 until 2015.
Shonhiwa joins Dangote Group
10 September 2015Nigeria: Former Lafarge Zimbabwe chairman Johnathan Shonhiwa has joined Dangote Group. Shonhiwa, who resigned from Lafarge Zimbabwe recently, was chairman for almost two years after having taken over from Muchadeyi Masunda in January 2014. Prior to that, he was managing director of Lafarge Zimbabwe for six years, finance director for four and a half years and finance manager for two years.
Sengileevsky Cement sends first cement batch by barge
16 September 2015Russia: Sengileevsky Cement Plant has begun sending cement by barge. The company sent its first batch of 1700t of cement to a distribution centre in Cheboksary during the last week of August 2015.
"Our company is developing further opportunities to ship, not only cement in bulk, but also bagged cement by water transport," said Mikhail Skorokhod, President of Eurocement.
The Sengileevsky Cement Plant is situated on the bank of the Volga River, making it easy to transport cement to the Ulyanovsk region and surrounding areas, as well as further afield. Shipping by barge is relatively low cost, which should help to stabilise cement prices.
Zambezi Portland Cement on the backfoot following Dangote launch
16 September 2015Zambia: Zambezi Portland Cement (ZPC) says it has been losing US$2.5/bag (50kg) of cement it has sold since Dangote Cement entered the market. Operations director Daniele Ventriglia said that, despite maintaining its market share, the competition in the cement business was stiff.
Ventriglia said that ZPC would invest US$4m in new state-of-the-art block-making machinery, which will provide a higher proportion of value-added products. "The machines are expected to arrive from Italy in the next three months, before the year ends. Production of blocks will increase by 20%. An additional 25 people will be employed," he said. Ventriglia added that ZPC had remained competitive in block production because its product was of high quality and at an affordable price.
CRH concludes final part of LafargeHolcim acquisition in Philippines
15 September 2015Ireland/Philippines: CRH has completed the Philippines element of its Euro6.5bn acquisition of certain Lafarge-Holcim assets and as such has now completed the entire deal.
On 2 February 2015, CRH announced that it had reached agreement to acquire certain assets from Lafarge and Holcim for a total enterprise value of Euro6.5bn. On 3 August 2015, CRH confirmed that the majority of the transaction was complete, with the exception of the operations in the Philippines. In a press release issued on 15 September 2015, CRH announced that the Philippines element of the transaction is now complete.
Bestway Group announces growth for Bestway Cement and Pakcem
15 September 2015Pakistan: The boards of directors of Bestway Cement and Pakcem have reported that net turnover increased by 5.4% to US$292m for Bestway Cement in the year that ended on 30 June 2015 and by 9.4% to US$53.5m for Pakcem for the six months that ended on 30 June 2015.
In its 2015 fiscal year, Bestway Cement's revenue grew by 4.18% to US$371m, its pre-tax profit grew by 10% to US$121m and its sales volumes grew by 1.2% to 4.42Mt. In the six months that ended on 30 June 2015, Pakcem's revenue grew by 11.5% to US$68.1m, its pre-tax profit grew by 11% to US$15.7m and its sales volumes grew by 8% to 836,000t.
"We are happy to share our annual results for 2014 - 2015 for Bestway Cement and six-month period for Pakcem, with growth in sales of 4.18% for Bestway and 11.5% for Pakcem,' said Zameer Choudrey, chief executive of Bestway Group. "This was a transformative year for us, with multiple major initiatives that will shape Bestway for years to come. We closed the year by becoming the largest cement manufacturer in Pakistan. Construction trends are favourable in Pakistan and I am confident that we are particularly well positioned to succeed and accelerate growth through innovation."
Domestic cement demand grew by 8% year-on-year to 28.2Mt. Exports, however, fell by 12% to 7.2Mt, mainly due to sluggish demand and competitive prices. The year 2014 - 2015 posed fierce competition for cement producers. However, Bestway Cement increased its market share in the north zone from 17% to 21.4% and became the largest cement producer in the country with 8Mt/yr of cement production capacity. Additionally, the company continued to be one of the largest cement exporters to Afghanistan and India.
During the year, Bestway Group further reduced its reliance on the national grid by taking energy-saving initiatives and launched two 6MW and 7.5MW waste heat recovery (WHR) power plants at its Hattar and Farooqia oplants. It also plans to inaugurate another 12MW plant at Pakcem Limited.
"We are confident about 2015 - 2016," said Choudrey. "The outlook for Pakistan's economy is positive, but there are still macroeconomic and geopolitical risks. We will continue to benefit from the positive development trend witnessed in infrastructure projects such as Pakistan China Economic Corridor. The considerable drop in global coal prices and lower interest rates will provide us with additional tailwind. In view of our strong positioning, our excellent product portfolio, our production sites in attractive locations and the commitment of our people, we are well-equipped to achieve our goals."
US: Mitsubishi Materials will likely enjoy a higher-than-expected profit in its North American cement operations in the year that ends in March 2016, due to brisk demand for cement and ready-mix concrete.
The North American cement segment's operating profit is expected to be around US$115m, up by 10% year-on-year. The business accounts for nearly 20% of its consolidated operating profit. North American demand for concrete and cement has increased thanks to the construction of housing and commercial facilities, mainly in southern California, where the company's US headquarters is based. Cement demand in southern California is projected to grow by 10% in 2015 and Mitsubishi Materials expects to raise its prices by a few percent. North American profit is likely to offset rising expenses for truck drivers stemming from labour shortages, beating the forecast the company had made at the start of its fiscal year.
For the April - September 2015 period, the strength in the North American cement business will likely help the company's group operating profit reach US$284m, comparable to the same period of 2014 and roughly in line with its forecast. Riding the brisk demand, Mitsubishi Materials plans to increase its US cement capacity by 150% to about 4Mt/yr in its fiscal 2016 or after.
Cement shortages in Mendoza cause construction complications
15 September 2015Argentina: Cement shortages in Mendoza Province in August 2015 and the beginning of September 2015 has caused complications in terms of house building projects, as well as public and private sector works.
The shortage is linked to a 2400t monthly drop in cement production by Holcim Argentina, as some of its plants are not working properly. Meanwhile, plants in San Juan and San Luis, including Avellaneda, Loma Negra and Minetti, have lowered their deliveries, while investments have not been carried out in accordance with demand, according to construction materials producer Hormiserv. Holcim Argentina's operations in Mendoza are expected to return to normal soon.
Many construction projects will not be completed by 3 October 2015 as planned due to cement shortages, whilst the Procrear housing scheme in Mendoza, which should be receiving 300,000m3 of cement, will only receive 100,000m3, causing delays. In addition, concrete producer Palumbo Hormimac is only operating at 25% of its capacity. Retailers like Materiales Cuyo, which have reported shortages, have estimated that cement prices have grown by 8 – 10% in July - August 2015. Materiales Cuyo, which has not received any cement in September 2015, predicts further price increases in September 2015.
Buzzi Unicem makes binding bid for Sacci units
15 September 2015Italy: Buzzi Unicem has presented a binding offer to buy Sacci's cement and ready-mix concrete units as it pushes ahead with plans to play an active role in the consolidation of the construction materials sector in Italy, according to Reuters. In a statement, Buzzi said that it had offered a provisional price of Euro74m to be financed through liquidity on hand and / or existing credit facilities. A further variable outlay is expected on top of the original commitment, which will be worth no less than Euro25m. This variable outlay is connected to certain future events, most importantly the core earnings, earnings before interest, taxes, depreciation and amortisation (EBITDA), posted in Italy in the next four years.