Displaying items by tag: GCW84

Forget Europe! The US cement industry is back in the game and could be looking forward to growth of 8.1% in cement consumption, according to a new forecast from the Portland Cement Association (PCA). This compares to a growth of 6% in consumption the PCA predicted in the autumn of 2012 in the shadow of the US 'fiscal cliff'.

The new forecast is based upon PCA research that estimates that total residential housing starts will reach 954,000 units in 2013. To give an idea of how badly the 2007 financial crisis hit the US residential housing market, according to US Census Bureau data in 2005 a total of 2,068,300 total housing start units were recorded. In 2007 this fell to 1,355,000 units. By 2009 this levelled out at 554,000, the lowest figure since at least 1960. A loose comparison with Spanish cement consumption in 2012 is worth noting here, when it too hit levels not seen since the 1960s.

The PCA's report predicts US cement consumption of 78.5Mt in 2013. As we pointed out in our overview of the US Cement Industry in the May 2012 issue of Global Cement Magazine, in 2006 the cement consumption of the United States was 122Mt. When the financial crisis hit, consumption nearly halved to 67Mt in 2009. The prediction for 2013 is a great improvement but the levels of 2005 are still a long way off. Currently, the Global Cement Directory 2013 places US cement production capacity at 114Mt/yr.

Other encouraging signs for the US cement industry include the sale of two Lafarge plants to Eagle Materials in September 2012 and less industry anxiety over US Environmental Protection Agency (EPA) emissions legislation. Lafarge choosing to sell plants in Missouri and Oklahoma with the US market starting to recover suggests that the French producer may have had its doubts. Yet Eagle Materials certainly thought the plants were worth the price tag of US$446m.

In summary the signs are broadly positive for the US cement industry at the start of 2013 although the dizzy heights of consumption of the early 2000s seem a long way off. US cement producers may take comfort from recent news stories from Beijing about efforts to contain air pollution from a cement plant. Hopefully for them it will be a case of 'been there, done that'.

India: Shree Cements appointed Dr Leena Srivastava as an additional Director of the company. The announcement was made to the Bombay Stock Exchange following a meeting held on 21 January 2013. With induction of Srivastava to the board of the company, the board now holds 10 members, with the number of independent directors in the board has increased to six.

China: Huaxin Cement, a Shanghai-listed cement manufacturer, has plans to acquire a 70% stake in two separate cement companies located in Hubei Province at a combined price of US$83m, according to sources reported by China Business Newswire. Huaxin Cement said that the acquisition will increase its competitiveness in the local cement market.

Turkey: Hacı Ömer Sabancı Holding is discussing potential takeovers with several cement producers in countries near Turkey, according to reports from Bloomberg quoting the Turkish industrial group's president, Mehmet Gocmen. The planned acquisitions are part of the group's goal to double its capacity or at least increase it above 20Mt by the end of 2017. According to Gocmen, Sabancı has the financial strength to buy more than one company at a time.

At present, Sabancı has as much as 13Mt of combined cement production capacity at Çimsa Çimento Sanayi & Ticaret which it owns, and Akçansa Çimento the industrial holding's joint venture with HeidelbergCement. Akçansa and Çimsa seek growth through deals both in Turkey and abroad as Turkish regulations do not allow a single company to hold a slice larger than 25% of the domestic market.

China: China's 12 ministries, including the Ministry of Industry and Information Technology, released a joint restructure plan on 22 January 2013 to promote efficiency in the cement industry.

Under the plan, China's top 10 cement manufacturing enterprises will account for 35% of industrial concentration by 2015. The plan calls for three to four leading cement clinker producers to have a capacity of 100Mt/yr by 2015.

In addition, China will encourage cross-regional and cross-ownership mergers and acquisitions among its major cement manufacturers.

India: Vicat Group, the French multinational cement producer, has announced the first line of commercial dispatch from its 2.75Mt/yr greenfield cement plant in Chatrasala village, Gulbarga district, Karnataka. Cement from the plant will be marketed under the brand name of Bharathi Cement and targeted for domestic consumption in north Andhra Pradesh, north Karnataka and Maharashtra.

The Gulbarga plant is a joint-venture between Vicat and Sagar Cements. Vicat already has a joint venture, Bharathi Cement, in Kadapa, Andhra Pradesh, with a 5Mt/yr capacity which has been in operation since 2009. With the start of production at Gulbarga, Vicat's cement capacity in India has risen to 7.75Mt/yr, making it amongst the top cement producers in the south of India.

Vicat Group has close to 7400 employees working in three core divisions, cement, concrete and aggregates and other products and services, which generated consolidated sales of Euro2.27bn in 2011. The group operates in 11 countries: France, Switzerland, Italy, USA, Turkey, Egypt, Senegal, Mali, Mauritania, Kazakhstan and India.

India: UltraTech Cement, an Aditya Birla Group company, has reported a net profit of US$112m for the last three months of 2012, a drop of 3% compared to US$115m in the same period in 2011. The company blamed subdued demand and higher costs caused by increases in railway freight and diesel prices. Net sales for the quarter rose by 6% to US$904m from US$850m.

During the quarter, UltraTech reported that imported coal cost around US$100/t but that the benefit of this low price was partly offset by the depreciation in the Indian Rupee. New clinker plants at Chhattisgarh and Karnataka are expected to be operational by early 2013-2014 and will add 9.2Mt/yr to UltraTech's capacity. Once completed UltraTech's total capacity will reach 62Mt/yr.

In its outlook, the company said that the surplus scenario in the industry is likely to continue over the next three years. "Input costs are likely to increase in line with general inflation with margins remaining range bound,'' the company said.

India: Dalmia Cement has prepared a US$335m investment plan to ramp up the company's cement manufacturing capacities by the end of 2014. With this expansion the company's total capacity will grow from 17Mt/yr to 21Mt/yr. The move will also help strengthen the company's presence both nationally and in the north east of India.

The company intends to set up a 2.5Mt/yr greenfield unit at Belgaum, Karnataka, for a cost of US$242m and expand its two plants in north-east for US$93m, according to Puneet Dalmia, CEO & managing director of Dalmia Cement. Completion of the proposed expansions is expected to boost the company's bottom line by 10%. The firm, which also owns 45.4% stake in OCL India, will commission its new unit under OCL India by December 2013.

India: Shree Cement has reported a fall in profit for its cement business of 24% to US$34m in the last three months of 2012 from US$45m in the same period in 2011. Total income for the company's cement business fell by 6% to US$207m from US$221m.

Since Shree Cement's previous financial year ending on 30 June 2012 lasted 15 months, figures for the six month period to 31 December 2012 were derived by aggregating the quarters ending 30 September 2011 and 31 December 2012. For the half year to 31 December 2012, Shree Cement reported a gain in income for its cement business of 19% to US$428m in 2012 from US$359m. Profits for the cement business for the half year rose by 24% to US$77m from US$62m.

Overall the Indian cement producer's financial results were bolstered by the company's power business. It reported a rise in net profit of 267% to US$40.5m in the last three months of 2012 from US$11m in the same period in 2011. Its total income increase by 20% to US$271m from US$226m.

Brazil: The chairmen of China Triumph International Engineering (CTIEC) and Votorantim Group have met to discuss working together on future projects. Peng Shou, chairman of CTIEC, visited Raul Calfat, CEO of Votorantim Group. Votorantim is the parent group of Votorantim Cimentos, Brazil's largest cement producer.

In the meeting the two companies exchanged ideas on the cement industry in China and Brazil and reached a consensus on advancing strategic cooperation, starting with cement and cogeneration projects. The companies decided to promote future communication and exchanges of technical information.

Votorantim Group is a conglomerate engaged in industries including power generation, papermaking, food, metal smelting and cement. It achieved business revenues of US$12bn in 2011. Its subsidiary Votorantim Cimento has over 50 cement production lines in countries and regions like Brazil, the US, Canada and Africa and is further expanding production capacity.