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The Philippines has been messing up the balance sheets of cement producers so far in 2017. Over the last week Holcim Philippines, CRH and Cemex have each reported lacklustre first quarter results dragged down by poor performance in the country. CRH’s chief executive officer Albert Manifold seemed to receive the worst kicking when analysts in a conference call refused to let it pass that the company’s sales had dropped by 12% year-on-year in Asia. Although to be fair to him the group’s Asian division only represented 2% of global sales at Euro0.5bn…

CRH’s quarterly financial reports tend to be in the form of sparse trading updates. So this lack of detail and CRH’s plans to invest over Euro300m in the market may have prompted Manifold’s grilling. According to the Irish Times he blamed the situation on cheap imports from south-east Asia pulling down the price. He then defended the investment on the grounds that local producers would have an advantage as they increase production capacity due to constant production and ‘guaranteed’ regulation and certification.

CRH isn’t the only organisation that has been burned by the Philippines. Before Christmas this column was praising the local industry for being in a boom. Cement sales had risen by 10.1% year-on-year to 20.1Mt according to CEMAP data in the first nine months of 2016 and the Duterte Infrastructure Plan was starting to target hundreds of billions of US dollars towards infrastructure spending. In the end cement sales rose by 6.6% to 26Mt for the full year in 2016 and this was a solid performance despite being brought down by the fourth quarter.

From the cement producers mentioned above, Cemex reported that its Ordinary Portland Cement sales volumes fell by 9% in the first quarter. It blamed the fall on bad weather and a tough quarter to compare against in 2015. Holcim Philippines said that its net sales fell by 12% to US$176m and it attributed it to lower public infrastructure spending, tighter industry competition and higher production expenses. Eagle Cement meanwhile, the fourth of the country’s major producers, is preparing to float on the local stock market in May 2017 to fund an expansion drive. The poor results of the other three cement producers may dent its proceeds from the initial public offering (IPO).

The words CRH’s Albert Manifold used in his defence were that, “Brand matters over there.” Funnily enough the other big Philippines cement industry news story that has been rumbling away for the last few months is an investigation by the Philippine Competition Commission (PCC) into the conduct of the Cement Manufacturers Association of the Philippines (CEMAP) and some of the leading cement producers. Naturally this includes CRH’s joint venture Republic Cement. The enquiry was prompted in mid-2016 by the accusation of anti-competitive agreements by a former trade official. He also made direct allegations against Ernesto Ordonez, the head of CEMAP. The investigation is on-going and perhaps it will find out exactly how much ‘brand matters’ in the Philippines.

Germany: Klaus Paul has been appointed as the Technical Managing Director of Schade Lagertechnik. His appointment is in response to the impending retirement of Karl-Heinz Fiegenbaum on 30 June 2017. Fiegenbaum has been Managing Director of the company since July 2011. He will be replaced by Christoph Seifert, who moves across to this position after having started with Schade as Technical Managing Director in February 2015.

Paul started his career in 1977 with Friedrich Uhde where he started working as a draughtsman at the age of 16. Following the competition of an engineering degree he stayed with the company, which eventually became part of ThyssenKrupp Group. From 2012, he was with Uhde OOO, a subsidiary of ThyssenKrupp in Russia, first as Director of Project and Site Management, and later as one of the Managing Directors of Uhde / OOO ThyssenKrupp Industrial Solutions Russia.

Switzerland: LafargeHolcim’s net sales rose by 5.3% year-on-year to Euro5.21bn in the first quarter of 2017 due to higher prices and rising aggregate volumes. Its results were presented on a like-for-like basis adjusted for the group’s divestments in 2016. Operating earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 8.8% to Euro652m. However, cement sales volumes remained flat at 48.1Mt for the period and even this was bolstered by a strong performance in March 2017.

“Continued pricing strength, improving volume momentum and synergies underpinned our results across the portfolio. Our Middle East Africa region performed particularly well with a recovering Nigeria making a notable contribution to earnings growth. India showed encouraging signs in the quarter with the impact of demonetisation now behind us while our US business was robust despite tough prior year comparisons on the back of mild weather in the first three months of 2016,” commented the group’s outgoing chief executive officer Eric Olsen.

By region the group reported falling cement sales volumes on a like-for-like basis in Latin America, Middle East Africa and North America. In Asia Pacific cement sales volumes were stagnant but it reported ‘challenging’ market conditions in Indonesia and Malaysia, and a slowing market in Philippines. However, it said that the impact of demonetisation in India had abated in the period and was now ‘fully’ behind the business.

France: Improvements in its French market have led to modest gains for Vicat in the first quarter of 2017. The group’s consolidated cement sales rose by 4.5% on an adjusted basis to Euro283m compared to the same period in 2016. Overall its sales rose by 1.4% on an adjusted basis to Euro554m. Its cement sales volumes rose by 1.2% year-on-year to 4.8Mt from 4.83Mt.

“France continued its progressive recovery, while the US posted further growth in its business. In Asia, a firm performance in India partly helped to make up for the business downturn in Kazakhstan and Turkey, where very difficult weather conditions took their toll. In the Africa and Middle East region, Egypt posted a strong top-line increase at constant scope and exchange rates, which made up for the decline in West Africa,” said group chairman and chief executive chairman Guy Sidos.

Tanzania: Tanga Cement’s revenue dropped by 20% year-on-year to US$75m in 2016 from US$94m in 2015 due to competition and lower government spending on infrastructure. However, despite falling net profits it managed to increase its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$17m from US$13m following cost cutting. The cement producer commissioned its second integrated production line in August 2016, increasing its production capacity to 1.25Mt/yr.

Oman: Iran’s Hormozgan Cement has entered into a shareholder’s agreement with Al Anwar Holdings to build a 1Mt/yr cement grinding plant in the Duqm special economic zone. The project is expected to have an investment of US$27m and commissioning of the project is subject to receiving approvals from relevant regulatory authorities and required funding from banking institutions in Oman.

Poland: The Polish Cement Association (Stowarzyszenie Producentów Cementu) forecasts that local cement sales will rise by 2.5% to 16.1Mt in 2017 and to 17Mt in 2018 due to growing investment in residential housing and infrastructure. The association also warned that the future of the European Union's Emission Trading Scheme (ETS) could have major implications for the local industry. It supported the European Parliament’s amendments to the scheme in March 2017 and reinforced the high level of thermal substitution rates used in the local industry.

India: Ambuja Cement says it has ‘largely’ put demonetisation behind it as its net sales rose by 5% year-on-year to US$395m in the first quarter of 2017 from US$375m in the same period of 2016. Its cement sales volumes rose by 3% to 6.02Mt from 5.86Mt. However, the subsidiary of LafargeHolcim’s operating earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 13% to US$61m from US$70m due to higher petcoke and imported coal prices.

“Improving sales volumes, combined with favourable pricing, contributed to a positive quarter despite rising costs. With demonetisation largely behind us, we are well placed to serve both small and large customers,” said Ajay Kapir, managing director and chief executive officer of Ambuja Cement.

Nigeria: Dangote Cement’s sales revenue and earnings rose in the first quarter of 2017 due to higher prices despite a significant fall in cement sales volumes in its home country. Its sales revenue increased by 48.1% year-on-year to US$682m from US$460m in the same period of 2016 and its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 42.3% to US$337m from US$237m. However, its cement sales volumes fell by 6.4% to 6.03Mt from 6.44Mt caused by a drop of 16.5% in Nigeria.

“Dangote Cement produced record financial results in the first three months of 2017. Despite lower group volumes, we delivered significantly higher revenues and EBITDA after realigning prices late in 2016. Our new pricing strategy meant every tonne worked harder for us in Nigeria, delivering 78.4% more EBITDA/t than the same quarter last year,” said chief executive officer Onne van der Wijde. He added the group has started sourcing coal from Nigerian mines run by its parent company, Dangote Industries, and that this had improved margins, reduced its need for foreign coal and the foreign currency required to buy it.

The group has continued to grow its operations outside of Africa to the extent that they represent 28% of its revenue. It reported a ‘good’ start for a new import and bagging facility in Sierra Leone that began operations in January 2017 and stated that it expects to start a 1.5Mt/yr plant in Congo in May 2017.

China: China National Building Material Company’s (CNBM)’s operating revenue grew by 10% year-on-year to US$3.03bn in the first quarter of 2017 from US$2.75bn in the same period in 2016. Its net profit grew by 50% to US$41m from US$27.6m. The result represents a turnaround in the company’s performance following stagnant growth in 2016.