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The battle for Brazil: Camargo Corrêa versus Votarantim
10 April 2013Camargo Corrêa came out fighting this week when it announced plans to invest US$1.5bn into the Brazilian market. The move represents the serious readjustment to the Brazilian cement industry that's been shadowed ever since the government approved the Cimpor takeover in 2012.
To show how high the stakes are, in October 2012 Votarantim, the Brazilian cement market leader, released early plans to invest US$160m for a 0.75Mt/yr plant in the Treinta y Tres region of Uruguay to meet demand for the 2016 Rio de Janeiro Olympic Games. At these prices the Camargo Corrêa spend could represent projects creating up to 7Mt of cement production capacity in Brazil. This is close to the current capacity gap between Camargo Corrêa (15Mt/yr) and market-leader Votarantim (23Mt/yr)! It's no killer blow for Camargo Corrêa but it does put the two producers in the same 'weight' category.
Although SNIC, the Brazilian cement industry association, recently downgraded estimates for growth in the market to 5.5% in 2013, this still represents very strong demand growth. A previous estimate by Research & Markets put the figure at 9%/yr until 2016. Either way that puts Brazilian capacity at between 87Mt/yr and 100Mt/yr in 2016 with Camargo Corrêa poised to snare a hefty chunk all for itself.
Yet before onlookers count Votorantim out, the company filed for an Initial Public Offering on 9 April 2013. No amounts were revealed but Dow Jones reported a figure of US$2.95bn in mid-January 2013 for expansion both inside and outside of Brazil. Also, the sale of shares must be approved by the Brazilian Securities and Exchange Commission. The industry heavyweight isn't going down without a fight! International companies have also shown interest with Lafarge's announcement in January 2013 that it would invest US$500m in the country, just one of many such moves on the way. Whatever happens, the Brazilian cement market is shaping up for one hell of a scrap.
For more information see our article on the Brazilian cement industry in the February 2013 issue of Global Cement Magazine. In early 2014 Global Cement will hold the first Global Cement CemBrazil Conference and Exhibition. Dates are to be confirmed.
Adriano Greco joins Gebr. Pfeiffer Inc
10 April 2013South America: Gebr. Pfeiffer, Inc., the US-based subsidiary of Germany's vertical roller mill manufacturer Gebr. Pfeiffer SE, is pleased to announce the recent appointment of Adriano Greco as Sales Director of the South American market.
Greco has gained extensive, world-wide industry experience through his numerous years in various management positions at GRECO Burners Company in Brazil, Austria, China and Spain. More recently, he served as General Director of ATEC GRECO in Brazil and GRECO Combustion Systems Europe GmbH in Austria.
In 2005, he was instrumental in creating the Brazilian Cement and Lime Conference. He is fluent in Portuguese, Spanish, English, Italian and French.
South Korea: The South Korean Fair Trade Commission has started an investigation into major cement companies including Ssangyong Cement Industrial and Hanil Cement for suspected price fixing. The companies had notified ready-mixed concrete operators that they would raise their cement prices by 9-10% in 2012.
On 9 April 2013 the commission sent investigators on a two day probe to seven cement producers: Ssangyong Cement Industrial, Hanil Cement, Tongyang Cement, Sungshin Cement, Lafarge Halla, Asia Cement and Hyundai Cement.
An industry source said, "Lately cement producers and ready-mixed concrete operators are at loggerheads over cement prices. It appears that the Fair Trade Commission is looking closely into the matter. In 2003, the commission had imposed penalties of US$22.5m for restricting the supply of cement to ready-mixed concrete makers in order to prevent them to use slag powder in place of cement."
Slovenia: Lafarge Cement plans to try again to obtain an environmental permit for a highly disputed waste-burning furnace at its Trbovlje plant, local media has reported. The move follows the second time Lafarge's request was rejected by Slovenia's Environment Agency in March 2013.
JK Lakshmi Cement plant in Chhattisgarh set on fire
10 April 2013India: Local villagers have been accused of setting fire to the JK Lakshmi Cement plant at Malpuri Khurd in Durg district on 4 April 2013. Police arrested 50 people following the disturbance.
Villagers of Malpuri Khurd, located around 50km from the state capital, were staging demonstrations in demand for jobs at the cement plant in exchange for their farmland. According to police reports the protest turned violent as around 200 protesters set fire to infrastructure including the cement plant, cars and tractors on the on the 80-acre site.
A company official for JK Lakshmi Cement estimated the loss in the fire to be around US$92m to US$128m, stating that almost 50% of the plant was gutted in the fire. The plant 's employees and officers also alleged that they were attacked by the mob.
However, villagers claim they did not set fire to the plant. Some villagers have been reported as having left their homes fearing police retaliation and local media has reported claims of intimidation by the plant management.
Chettinad plans 100MW captive power plant as part of its cement project in Maharashtra
10 April 2013India: Chettinad Cement has proposed setting up a 100MW captive power plant (CPP) as a part of its 4Mt/yr cement plant in Solapur district in Maharashtra.
The proposed CPP, comprising two units of 50MW each, would require 600,000t/yr of coal. Of the total requirement, 70% would be imported coal and the remaining 30% would be indigenous coal procured from the open market. Until the 100MW CPP is commissioned, the 34.4MW power requirement of the cement plant will be met by the Maharashtra State Electricity Board (MSEB).
The US$121m project is has been conceived by Chettinad Cement with a view to entering the western and central markets of the country and in turn have a pan-Indian presence.
Jaiprakash Associates asks to start land acquisition
10 April 2013India: Jaiprakash Associates has asked the Himachal Pradesh government for permission to start land acquisition for its cement plant in the state, according to the Industries Minister Mukesh Agnihotri. He said that the company required 212 hectares, including 158 hectares of forest land, for the plant at Malokhar in Bilaspur district. "The company has now sought permission to start acquisition of 172 hectares," said Agnihotri.
The memorandum of understanding (MoU) between the government and the company for the project was signed on 18 August 2010. The forest clearance for the project was given by the state on 10 October 2011.
Henan Tongli expects up to 99.6% profit slide
10 April 2013China: Following a recent trend for declining profits in the Chinese cement sector, Henan Tongli Cement Co Ltd has announced that it expects to record a poor performance for the first quarter of 2013. It says that its net profit will drop by 88.5-99.6% year-on-year to between US$16,100 and US$484,000 in the first quarter of 2013.
Pakistan: A memorandum of understanding (MoU) has been signed between Lafarge Pakistan Ltd and the All Pakistan Cement Manufacturers Association (APCMA) for provision of health and safety training and awareness to all its members. Amr Reda, CEO of Lafarge Pakistan observed, "The cement industry operates in an environment with multiple types of hazards, making it our priority to ensure the safety of all people, working directly and indirectly, in it."
The APCMA welcomed the initiative and is encouraging all of its members to not only study and apply these safety standards and take the initiative to share the best practices across their organisations. Aizaz Sheikh, CEO of Kohat Cement and Chairman of APCMA stated, "APCMA is thankful to Lafarge Pakistan for coming forward with the idea and are happy to embrace this initiative. The proposal was unanimously approved by the council and the APCMA looks forward to further initiatives under this MoU".
Amr Reda expressed his delight on the APCMA agreement, saying, "We are happy to share our learning and best practices with other companies through the platform of the APCMA. As part of our long-term commitment to health and safety, Lafarge Pakistan will continue to impart knowledge and awareness on this subject to other industrial establishments in Pakistan."
Thatta Cement signs lease for Sri Lankan grinder
10 April 2013Sri Lanka: Pakistan's Thatta Cement is proceeding towards the construction of a US$15m grinding plant in Sri Lanka after signing a 25-year lease agreement with the island's port agency in the week ending 5 April 2013.
The plant, with a capacity of 0.3Mt/yr, will be located at the Hambantota port in the southern Sri Lankan region of Hambantota District. It is expected to grind 0.1Mt of cement in the first year, catering to the domestic market. It will gradually increase its output to 0.3Mt/yr. A second stage expansion is expected to take capacity up to 1Mt/yr.
"The team at Sri Lanka Ports Authority (SLPA) were all supportive," said Thatta's chief financial officer, Muhamad Taha Hamdani. "At the last meeting with SLPA chairman, he was very supportive. There was a certain issue (but this) was solved within 15 to 20 minutes."
Thatta Cement chief executive Fazlullah Shariff said the firm had been exporting more than 0.1Mt/yr of cement to Sri Lanka since 2011 and that the firm had acceptance among constructors in the country. He said the grinding plant would not be limited to clinker from Pakistan but would also accept clinker from other countries depending on the international movement of prices.