
Displaying items by tag: GCW79
Cement from a land down under?
12 December 2012As 2012 draws to a close the challenges posed by the Australian carbon tax to the Australian cement industry are starting to show. First, Holcim Australia announced it was to lay off 150 staff. Then Boral released the news that it was planning to cut 90 jobs at its Waurn Ponds cement plant.
Following years of debate the Gillard government introduced the Clean Energy Act in July 2012. Heavy polluters were initially charged US$23/t of CO2 emitted, more than twice the cost of similar schemes in Europe where it is US$10/t. A key criticism of the scheme was that it would damage the Australian domestic cement industry with cheap imports. However the Australian government cushioned the move with compensation packages for major polluters, including cement producers, currently set to last five years.
Although the Australian cement industry hasn't totally collapsed, with the loss of 1800 jobs as the Australian Federal Opposition warned of in 2011, imports have been favoured in recent months. Boral's suspension of clinker production at Waurn Ponds will increase imports. The change will result in 25-30% of Boral's clinker being imported. It's worth noting that Boral pointed out in its press release that this was 'in-line' with the Australian industry.
Adelaide Brighton, the country's third biggest producer after Holcim and Boral, may not have laid anybody off but it has secured a 10-year supply of foreign clinker. On 5 December 2012 the building materials producer announced that it was going to a buy a 30% stake in Malaysian white clinker and white cement producer, Aalborg Portland Malaysia. In the accompanying press statement the company's chief financial officer explicitly blamed the carbon tax as one of the reasons for the acquisition.
Whether the job losses at Boral and Holcim can be totally blamed on the carbon tax remains to be seen. Boral's second-half profit for the year ending 30 June 2012 suffered a fall of 59% to US$35.7m. Holcim noted weaker demand outside of mining regions for the third quarter of 2012. By contrast, Adelaide Brighton reported steady gains in its half-year report for 2012 although cement sales only increased 'marginally'. Elsewhere in its report Adelaide Brighton stated that it would cope with the impact of the carbon tax by reducing reliance on domestic manufacturing. These can hardly be comforting words for the Australian cement industry.
New board member for Monarch Cement
12 December 2012US: On 7 December 2012, The Monarch Cement Company elected Steve Sloan to serve on the board effective immediately to fill the unexpired term of independent director Richard N Nixon, whose resignation was effective 31 October 2012.
Sloan, aged 51, moves to the board of the cement firm with 17 of years experience in the aggregate and ready-mixed concrete industry. He has served for many years as the President and CEO of Midwest Minerals, Inc, headquartered in Pittsburg, Kansas. His current responsibilities include oversight of the financial, production, sales and regulatory affairs of Midwest Minerals' ready-mixed concrete plant and 19 aggregate quarry operations.
Monarch said that Sloan has the experience and skills to provide exceptional insight and judgment relative to corporate governance, corporate strategy, budgeting, banking, financial reporting, administrative functions and risk management.
Sloan will be a non-employee member of the board and will participate in the board's compensation policy and practices for non-employee directors. His term as an independent Class I Director will expire at the Annual Meeting of Shareholders on 9 April 2014.
Lafarge to sell South Korean unit
12 December 2012South Korea: French cement maker Lafarge is looking to sell its controlling stake in its South Korean subsidiary Lafarge Halla Cement Co, according to South Korean online media Edaily. The French company, which controls about 90% of its Seoul-based unit, expects to raise around US$651m in proceeds from the divestment, for which it has picked Lazard and HSBC's South Korean arm.
Lafarge, which has been offloading non-strategic assets in a drive to push its debt below US$13bn from US$16bn, has not commented on the report. The move follows the announcement in November 2012 that Lafarge and Anglo American would sell a portfolio of its UK operations to Mittal Investments for US$439m, and the sale of two of Lafarge's cement plants in North America to Eagle Materials for US$446m in September 2012.
Has MACT been sent for review?
12 December 2012US: The US Environmental Protection Agency (EPA) has sent final revisions to its Portland cement sector air toxics and criteria pollutant emissions rulemaking for White House Office of Management and Budget (OMB) pre-publication review, according to industry sources. This could indicate that the agency might meet a looming 20 December 2012 consent decree deadline for issuing the proposal.
Industry sources say that the rule, which will revise EPA's 2010 maximum achievable control technology (MACT) standards for air toxics emissions and a related new source performance standard to cut criteria pollutants, was received at OMB either on 4 or 5 December 2012, although an EPA spokeswoman declined to say whether the rule has been sent for OMB review. She only said that the agency was, "Working on the rule and (plans) to finalise by 20 December 2012."
The 20 December 2012 deadline stems from a settlement with the Portland Cement Association (PCA) and others in the industry to propose a revision to the rules, a response in part to industry petitions for reconsideration. Cement manufacturers claimed that the 2010 rules' particulate matter (PM) limits were not achievable, among other concerns.
In addition to addressing the reconsideration petitions and other aspects of the settlement, the rule will also respond to the US Court of Appeals for the District of Columbia Circuit's December 2011 ruling in PCA v EPA remanding the rule to the agency. The court found that EPA had failed to reconsider how a related incinerator air rule may potentially alter the cement rule's emission limits and that the agency failed to give 'sufficient notice' of its final standards for open clinker storage piles.
In the 22 June 2012 proposed revisions to the rule, the EPA proposed to weaken the particulate matter (PM) limit for existing kilns from 18.14g/t (0.04lb/t) of clinker to 31.75g/t (0.07lb/t) of clinker and the limit for new kilns from 4.5g/t (0.01lb/t) of clinker to 9.0g/t (0.02lb/t) of clinker. The EPA also proposed to extend the MACT's compliance deadline to 9 September 2015, saying, "We believe that this date would require compliance 'as expeditiously as practicable'" as required by the Clean Air Act.
Several environmental groups have argued that the revisions are unlawful, both exceeding the changes required by the DC Circuit's narrow ruling and watering down the cement standards for 'unknown reasons.' In comments made on 17 August 2012 regarding the proposed reconsideration the Natural Resources Defense Council, Earthjustice and other environmental groups said that the compliance delay is arbitrary and capricious given that EPA failed to adequately justify it. They added that the delay, "Will greatly exacerbate the harm that EPA already has caused and the suffering that ordinary Americans have had to endure," given that the EPA was supposed to update the cement MACT in 1997.
Update: The White House Office of Management and Budget (OMB) website shows that the OMB received the revised EPA MACT standards on 6 December 2012.
Misr Beni Suef writes to President over fuel
12 December 2012Egypt: Production at Misr Beni Suef's cement plants was stopped for the second time in two months on 6 December 2012 due to shortage in natural gas supply. The company has reported that the lack of fuel has led to a loss of approximately US$16.5m and that it may lead to the dismissal of some of its workforce if continued.
Misr Beni Suef's managing director Farouk Moustafa said that the company had sent a letter to the Egyptian President Mohamed Mursi seeking a solution to the gas supply cut but that no response had yet been received.
Siam City to fire up closed kiln
12 December 2012Thailand/Cambodia: Owing to strong demand for cement in the country and the wider Far East region, Siam City Cement (SCCC) has announced plans to re-open one of the two clinker lines that it shut down in 2008, according to local press.
With the re-opening of the clinker factory in October 2013, SCCC's production capacity will rise by at least 1.4Mt/yr, or 10% of its current capacity, according to the company's managing director Philippe Arto.
SCCC shut down the two plants, which had total capacity of 2.25Mt/yr in 2008 because of an increase in production costs and a decline in demand for cement. However, the company has recently seen strong growth in demand. In 2013 it targets year-on-year growth of at least 5%, following an increase in both public and private sector projects.
Meanwhile, the company's board of directors has said that it will consider a plan to invest in Cambodia early in 2013. The company has been working on the plan since 2010. "Our board of directors will make a decision on this plan in 2013. This would be our first investment outside Thailand," said Arto.
If the plan is approved, SCCC will set up a cement plant in Cambodia via a joint venture with a local partner. "We are interested in investing in Cambodia because we have a more-than 40% share in the cement market in the country," said Arto.
SCCC's sales in the first nine months of 2012 climbed by 10.8% to US$653.8m from US$590.5m in the same period of 2011 due to growing demand. However, its net profit dropped by 5.3% to US$94.1m from US$99.3m due to rising energy costs.
APCMA: Coal delivery strike to hit cement production
12 December 2012Pakistan: The cement industry has faced a shortage of raw material since Friday 7 December 2012 because truck owners have stopped picking up coal consignments for factories from Port Qasim, according to the All Pakistan Cement Manufacturers Association (APCMA). They are observing a strike against increased incidences of theft, extortion and the charges from the motorway police. The Pakistan cement industry consumes around 4.5Mt/yr of coal.
Coal and various other raw materials are not currently being transported to any cement producer from Port Qasim, which is likely to hurt production in the coming days.
Aside from the thefts and extortion by criminals, the truck owners and drivers say that motorway police have imposed impractical restrictions on truck loading. Truck owners said that the load restriction of 58.5t including 28t from the trucks themselves, is too low. This requirement severely limits the coal-carrying capacity of many trucks, making the transportation cost per tonne unrealistically high.
The APCMA has demanded the government to resolve the issues of goods carrier at the earliest hence the supplies are made regular in order to continue uninterrupted cement production.
Jaypee nears end of Gujarat asset sale
12 December 2012India: The talks between Jaypee Group and Aditya Birla Group regarding the sale of the former's Gujarat based cement units have finally moved to the final stages, according to local media. It was reported that valuations of the deal, which had already resulted in failed acquisition attempts by others, have continued to cause delays.
Birla has been negotiating the cost of Jaypee's Gujarat cement units with the aim of paying a total of US$800m. The reports say that Birla had offered to purchase the units at US$160/t of installed capacity. This is significantly lower than the US$200/t paid during deals between Holcim and ACC.
Minister visits Lafarge Cookstown following re-fit
12 December 2012UK: A Lafarge cement plant in Cookstown, County Tyrone, Northern Ireland has invested Euro6m in new equipment and an apprenticeship scheme.
Northern Ireland Enterprise Minister Arlene Foster visited the plant, where she met employees and saw a refurbished electrostatic precipitator that will reduce overall dust emissions. She was also told about the Cement Kiln Dust (CKD) project, which has reduced some 8000t/yr of landfilled waste to almost zero.
Further plans for the Cookstown Works were also showcased, including a future upgrade of a central control room and the apprenticeship scheme, which saw two new apprentices join the works team in 2012. A further two apprentices will join the team in 2013.
The minister said that Lafarge's investment demonstrates its confidence in its workforce. "This is a difficult time for the construction industry and it is therefore particularly pleasing to see that the company is investing in its future by upgrading its current facilities and creating opportunities for apprenticeships," said Foster.
The investment in the Cookstown Works comes at a time when Lafarge is merging its UK building materials business interests with those of Tarmac Buxton. This has necessitated the sale of the French giant's Hope Works in Derbyshire, England.
Iranian cement production up again
10 December 2012Iran: Iranian cement production surpassed 49.14Mt in the first eight months of the current Iranian calendar year which began on 20 March 2012. The figure is 6% higher than in the same period of 2011, according to the IRIB News Agency. Iran also exported over 9.38Mt of cement and clinker over the same period, a 30% increase compared to the same period of 2011.
Some 8.25Mt of cement and 1.14Mt of clinker were exported during the same period. Iraq, central Asian countries, the United Arab Emirates and Afghanistan were its main customers.
Iran's cement production capacity currently stands at 86Mt/yr, according to the Iranian president Mahmoud Ahmadinejad. He said that the country currently produces some 76Mt/yr.
"Six year ago Iran was dependent on importing cement and nobody would believe that one day the country could become an exporter in the field. However, as we see today, Iran has become one of the world's greatest cement producers and exporters," said Ahmadinejad.
In August 2012 Iran's Industry, Mine and Trade Minister Mehdi Ghazanfari said that the country's cement production capacity would reach 110Mt/yr by 2015.