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India: The announcement last week that 11 Indian cement producers face a combined US$1.1bn penalty for a price-fixing cartel will cast a long shadow over the country's increasingly vulnerable-looking cement industry.

For years the Indian cement industry has been beset by suspicions of over-capacity despite a constant stream of new capacity. Now the Competition Commission of India (CCI) thinks that it has got to the heart of the paradox by accusing manufacturers of limiting production amid high demand and colluding to artificially raise prices.

The amount that the CCI has fined the companies, 50% of their net profits for the two fiscal years to 31 March 2011, is quite astonishing. If enforced in its entirety the fine effectively negates a large portion of the sector's profits for an entire fiscal year. This is clearly not a slap-on-the-wrist from the CCI.

In the 1990s and early 2000s a similar cartel case involving European (and specifically German) cement producers led to fines in the order of hundreds of thousands of US Dollars. The industry has since cleaned up its act considerably as a result. Indian producers would be foolish not to follow suit. What are the likely effects in the Indian case?

Removing the cartel that the CCI purports to have found would reduce prices, which are inflated by an oft-quoted 25% median in a cartel. This is clearly good news for consumers and potentially the development of the Indian economy in general. The obvious losers in this situation would be the producers, which would see a reduction in profitability. Some of the smaller producers would find such a situation very challenging, with the risk of going bust or being absorbed into larger companies.

Another possibility is that the accusations will spread along the value chain. Shortly after the announcement of the fine, the Builders' Association of India (BAI), announced that it wants the fine increased to accommodate compensation claims from contractors and consumers that it feels are out-of-pocket as a result of the cartel. Many will feel aggrieved now that they 'know' the cement companies were profiteering - sorting out claims from affected parties could be a long and costly exercise.

The effects of the fine could also extend to outside of India. Indian cement producers, very good customers of the Chinese and European cement plant manufacturers in recent years, will have to deal with lower revenues. This will clearly dampen their enthusiasm to contract further capacity and may cause knock-on-effects for Sinoma, KHD, Polysuis and other major suppliers. The cement industries of neighbouring countries, like Pakistan, may also be affected.

Whatever happens in the Indian cement industry as a result of the CCI's fine, the authority, only formed in 2009, has shown that it is serious about taking on corruption in India. In the long run that can only help develop the potential of the country.

"The first thing for any new competition regulator is to go out and find the cement cartel. My experience of this subject is, it is always there, somewhere," wrote Richard Whish, a Professor of Law at King's College London in 2001. "The only countries in which I had been unable to find the cement cartel is where there is a national state-owned monopoly for cement."

Germany: Dipl.-Ing. Otto Jung will retire from Gebr. Pfeiffer SE on 30 June 2012 after nearly 40 years with the company. Dr.-Ing. Robert Schnatz will take over Jung's technical responsibilities on the executive board.

Jung started his career as a development and project engineer. In 1988, he became head of the projects and sales department processing and then in 1996 he was appointed to the Executive Board of Gebr. Pfeiffer SE, a position he held for 16 years. During this time a number of innovateive new projects were launched for the cement industry.

Turkey: Nuryol Çimento has decided to use Loesche GmbH as the supplier of all mills for its new 4000t/day cement plant project in Karasu, around 150km east of Istanbul. Loesche will supply mills for coal grinding, cement raw material grinding and clinker grinding. The complete project execution and coordination will be done by Sintek Mining Machinery 
Industry Construction, which is based in Ankara.

Loesche will supply one Loesche mill type LM 46.4 to grind cement raw material at a rate of 330t/hr to a fineness of 12% R90u and a Loesche mill type LM 28.2 D to grind coal. The design capacity of the coal mill is 30t/hr, to a fineness of 3% R90u.

For cement grinding Nuryol has purchased a Loesche mill type LM 63.3+3, including process filter and fan. The mill is designed to grind OPC cement with a capacity of 240t/hr to a fineness of 3800cm2/g according to Blaine. This Loesche mill represents the largest vertical roller mill for cement grinding in Turkey as well as in the whole of Europe. It will have a table diameter of 6.3m and will be driven by a motor with a rated capacity of 7200kW.

Loesche's innovative Compact Plant design for cement grinding plants was an important factor that Nuryol says led it to choose a Loesche vertical roller mill for cement grinding. Compact Plant design eliminates the need for a large and expensive mill building, leading to massive savings in the required plant plot, in cost for structural steelworks and civil works as well as in erection time.

France: On 22 June 2012 Lafarge announced that it expected to cut a further 97 jobs in France as part of a plan to merge its three French divisions, based around its different product lines, into one national unit to be headquartered in the Paris region.

The move came just a week after the cement maker unveiled plans to cut costs by Euro1.3bn and boost profits over the next four years as it seeks to cut its debt and regain an investment-grade rating. At the start of 2012 the group, which employs a total of 68,000 people around the globe, said that it would cut 460 jobs worldwide, including 90 in France, as part of corporate reshuffling.

UK: MP for Rushcliffe and UK Government Cabinet member Ken Clarke has visited Lafarge Cement UK's Barnstone cement blending plant in Nottinghamshire to officially open a new state-of-the-art cement packer at the site. As well as significantly increasing the plant's output, the packer will also secure the future of some 60 local jobs and provide a boost to the local economy.

Supplying the local market with a range of 26 ready-to-use cements, Barnstone also exports specialist cements to 27 countries. Over recent years Lafarge has invested Euro8.5m at Barnstone, expanding production facilities, refurbishing offices and improving safety.

Clarke said, "I was very impressed by the professionalism of all (those that) I met at the plant. Lafarge should be congratulated for its most recent investment in the area and I'm proud the company has this site in my constituency."

The Barnstone plant manager Chris Stephens said, "While the (UK) construction industry currently faces real challenges, our new sophisticated packer will support new secured business and provide capacity and flexibility for future business."

Canada: Lafarge Canada is planning to develop a community outreach plan as part of the plant expansion and modernisation project set to begin at its Exshaw plant in Alberta in the autumn of 2012. The Canadian unit of French cement giant Lafarge is looking to build a new kiln line on the western side of the current facility and intends to increase production by 60%. It will do this by replacing outdated technology at the 107-year-old cement facility.

The company submitted its development permit application at the start of June 2012 in order to begin constructing the necessary foundations to support the new equipment, including a five-stage preheater, precalciner tower and a new rotary kiln. The Alberta government has already given Lafarge permission to proceed with the project.

On 19 June 2012 Exshaw plant manager Heinze Knopfel said that the community outreach plan would address how Lafarge intends to keep residents informed and address the negative effects of constructing a large industrial plant could have on Bow Valley communities, specifically Exshaw.

"Over the next three years during the construction phase we anticipate that there is going to be additional traffic and extra contractors on site. We will be sharing regular updates with the community and will continue to respond as quickly as possible to complaints," said Knopfel. "Our neighbours are really important to us. We recognise it is a partnership. We meet regularly with the surrounding communities. We want to understand how they feel about their operations and what we can do to improve their life or lifestyle."

Lafarge expects that the construction will take approximately three years with the foundation work beginning in the autumn of 2012. Knopfel said that he expects that this first phase would not have a significant effect on traffic or noise as the number of contractors working on site would be low with only cement trucks and the drilling contractor coming to the site. Two cranes will also be working to move equipment stored on the project site.

Construction on the kiln line itself will likely begin in 2013 with the peak of activity seen in 2014. At that point, Knopfel said he expects there could be 200-350 contractors at the site. He added that the plant's expansion and modernisation project would also provide a good opportunity to improve traffic flows at the plant. Instead of having resource and product trucks enter the plant at the same point, which is what currently occurs, trucks will leave the plant through the current main entrance and enter through a new gate to the west of the plant.

"Instead of the entrance, which is a real bottleneck, we're going to streamline the flow of traffic, which we know will mitigate a lot of the concerns of the community," he said. The upgrade will also increase the amount of cement leaving the plant by rail.

Overall, Knopfel said that he expects the project to have a positive effect in the Bow Valley, environmentally, socially and economically. "I expect the plant expansion will provide tremendous benefits for the community."

Environmentally the standards will be raised beyond the new Alberta requirements. "We're consciously aware of where we are relocating equipment and we're trying to relocate the equipment as far away as possible from the community," Knopfel said. "(The new kiln) is going to be state of the art as far as technology is concerned. It is going to be the newest and the best technology on the market," he said.

The Municipal Planning Commission for the MD of Bighorn is scheduled to review Lafarge's municipal development permit application on 18 July 2012.

Mexico: Cemex has introduced a new 'Ecoperating' seal that will identify the products and services from its portfolio of building solutions that have an outstanding sustainability performance. Ecoperating is a seal that was developed through a rigorous internal process that measured the environmental or social impact of a wide range of building solutions that Cemex offers, from low-CO₂ cement and other building materials to services such as paperless invoicing. Among the most relevant criteria for a product or service to qualify for the Ecoperating seal are sustainable attributes, like thermal insulation, use of recycled raw material and contribution to a reduction in CO₂ Footprint.

"Cemex is well known for a number of services and initiatives that significantly reduce environmental impacts or have a highly positive effect on society," said Vicente Saiso, Cemex's sustainability director. "The Ecoperating seal will help our clients identify Cemex's initiative to foster its sustainable development through the building solutions Cemex provides to the markets it serves."

The Ecoperating seal is being introduced around the world gradually. In June 2012 in a number of Cemex's cement and concrete products were given the seal in Croatia and the seal will reach Egypt, the Philippines, Colombia, Costa Rica and Mexico during the third quarter of 2012. Countries in northern Europe, South America and the Caribbean and the remainder of Asia will be given the seal in the fourth quarter of 2012 and the first half of 2013.

Saudi Arabia: Southern Province Cement Company has estimated that its net profit for the second quarter of 2012 will be 9.6% higher than the comparable period in 2011 at US$69.9m compared to US$63.7m.

Its estimated gross profit during the second quarter was US$71.9m compared to US$67.2m, a year-on-year increase of 7.1%. The company estimated its operating profit during the second quarter as US$69.8m compared to US$63.7m for the corresponding quarter of 2011, an increase of 9.6%.

Over the course of the six months to 30 June 2012, Southern Province estimates that its net profit will be in the region of US$154.6m compared to US$124.0m and that its operating profit will be US$146.7m compared to US$125.1m in the corresponding period of 2011.

Southern Province said that the rise in net profit for the second quarter and for the six month period was due to operation of the second production line at its Tahama plant, which had no unforeseen stoppages. There was also an increase in demand for cement in the local market.

The company noted that its second quarter 2012 net profit was marginally weaker than that of the first quarter of 2012 due to industry-wide pressure from the Ministry of Commerce to reduce cement prices.

India: Having welcomed the Competition Commission of India's (CCI) decision to impose a record US$1.1bn penalty on 11 cement companies, the Builders' Association of India (BAI) has asked the competition watchdog to review the size of penalty.

The BAI has urged the CCI to, "review the quantum of the penalty and also to conduct an inquiry into the losses incurred by contractors due to such profiteering by cement manufacturers and to consider reimbursing the losses to the contractors."

D L Desai, a trustee of the BAI, said that it had urged the CCI to impose a fixed percentage of the penalty as a deposit with the CCI in case the cement manufacturers approach the Appellate Authority in an attempt to challenge the fine.

"We are happy that the CCI has taken action to penalise the cement companies. It (will) give a boost to the construction industry, leading to the revival of our economy, which is currently going through a difficult phase," said BAI Secretary Anand Gupta.

"The construction industry is a major driver of the Indian economy and any unfair practices as indulged in by the cement companies have adverse impact not only on this industry but the overall economy," he added.

Portugal: The Brazilian industrial conglomerate Camargo Corrêa has completed its takeover of Portugal's Cimpor on 20 June 2012 and now controls 94.8% of the cement-maker.

The success of the move was largely expected by analysts who will now look at the terms in which the company's assets will be split between Camargo and its Brazilian rival Votorantim. The deal includes an asset swap with Votorantim, Cimpor's second largest shareholder.

Camargo will integrate its South American and Angolan cement operations into Cimpor. Votorantim will then have the opportunity to buy Cimpor's operations in China, India, Morocco, Tunisia, Turkey and Peru and part of its Spanish business at a set price defined by independent auditing companies.

Camargo, which was already the largest single shareholder in Cimpor with a 33% stake, launched a Euro2.5bn bid for the rest of the company in March 2012. Portugal's state-owned bank CGD, investor Manuel Fino and Millennium BCP's pension fund all accepted Camargo's Euro5.50/share offer.

The Portuguese government has said a Cimpor deal will help CGD deleverage and defended Camargo's bid from suggestions that it was against the national interest. Cimpor has been one of Portugal's most successful and internationally-diversified companies.