Displaying items by tag: Infrastructure

India: Government plans to increase spending on infrastructure projects will benefit LafargeHolcim according to Moody's Investor Service. The second largest cement producer in India will gain from uneven regional demand, with a much larger scale and more prominent operations in northern India, where it sells almost 42% of its local cement volume.

LafargeHolcim and other European cement manufacturers with a presence in India are likely to benefit if the Indian government's plans to ramp up infrastructure spending happen in the next 12 to 18 months. The 2016 Union Budget contained plans to hike public infrastructure spending, especially on roads, which could revive stagnant cement demand in the country.

According to the government's 12th Five Year Plan (2012 - 17) investment in infrastructure should increase from 7.6% of gross domestic product (GDP) in 2014 to 9% in 2017. However, cement demand for government-funded projects has been weak in the last four years with many construction schemes delayed or put on hold. As a result, while infrastructure investment will be a key growth driver, the timing of such investment remains uncertain.

However, Moody’s also noted that European multinational cement producers based in the south of the country with limited geographical spread would be more exposed to local overcapacity in this region. This included HeidelbergCement, Italcementi and CRH.

Norway: Norcem, the Norwegian subsidiary of HeidelbergCement, and Acciona Ghella JV have signed an agreement for the cement supplies to the Follo Line Project in Oslo. The supply of 280,000t of cement over a three-year period is Norcem’s largest contract ever.

“This is a milestone for HeidelbergCement in Norway and will put great demands on both production and logistics,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement. “Our subsidiary Norcem made the best offer and it has the necessary production capacities and logistics to supply the required volumes to this outstanding project in Norway.” The cement supplies will start in mid to late April 2016.

The Follo Line Project is currently the largest transport project in Norway and includes the country’s longest double track railway tunnel at 20 km. The new railway track runs between Oslo Central Station and the new station in the municipality of Ski in the Follo district, south of Oslo. It will enable a 50% reduction in journey time between Oslo and Ski.The project is scheduled to be finalised at the end of 2021.

St Helena/Namibia: Ohorongo Cement has supplied 24,604t of cement towards the construction of the first-ever airport at St Helena island in the South Atlantic Ocean. It will continue to supply cement until the project is finished. The US$419m project is being developed by Basil Read and covers construction of the St Helena Airport and Permanent Wharf. Completion is planned by February 2016, according to local media.

Other projects the Namibian cement producer is supplying include the Husab Mine, Neckertal Dam, Walvis Bay Namport Harbour Project, an acid plant at Tsumeb and construction projects in Zambia and Democratic Republic of the Congo.

The company enjoys infant industry protection awarded by the Namibian government in 2013 for eight years. It recently announced that the Development Bank of Namibia had increased its stake to 11.72%.

India: The Indian government has published a list of 36 companies committed to supplying 9.5Mt of cement in 2015 for road building. The cement will be sold at a price below market rates with a fixed upper limit of US$2.70/bag. The Ministry has decided to build concrete cement roads in place of traditional bitumen roads as it views them as cost-effective and requiring less maintenance.

"After taking consent of the manufacturers we have put the list on a dedicated website, which any company or government agency can access to book their orders. Since the factories are spread all over the country, they can make the best choice. As per the contract, manufacturers can only reduce the price and increase their commitment to supply more cement," said road transport minister Nitin Gadkari. "Once the reduced price is out, it will have effect on other manufacturers and prices across companies may fall," he added.

Pakistan: The inauguration of the Dasu dam has reinforced optimism in the local cement industry, which has been banking on the continuous increase in local demand owing to mega construction projects.

The Dasu dam, one of the mega dam projects, is expected to increase cement demand in Pakistan by 1Mt/yr for the next five years. The 4320MW dam will be completed in two phases at an estimated cost of US$4.8bn. Since the Dasu dam is located in the north, the cement for the project will most likely be procured from nearby cement plants. Cement companies like Maple Leaf, Fecto, Bestway, Cherat, DG Khan, Fauji are the most likely to benefit from the dam construction.

Analysts say the construction of big dams like Dasu and Basha will supplement the already improving cement demand in Pakistan. "Dasu dam will add an additional 1Mt/yr of cement demand, which will be significant for the local industries," said BMA Capital analyst Sajjad Hussain. "It will increase the already escalating cement demand in the country."

"The launch of the Dasu dam is important for the cement industry in northern region of the country," said Standard Capital Securities analyst Saad Hashmi. "Other major infrastructure projects that are expected to start soon will further increase cement demand and it may jump 5% in fiscal year 2015."

Philippines: Cement sales rose by 8.6% in the first quarter of 2014. The surge was largely driven by rebuilding following the destruction wrought by typhoon Haiyan in November 2013, according to the Cement Manufacturers Association of the Philippines (CEMAP). Cement producers sold 5.2Mt of cement in the first quarter of 2014 compared to 4.8Mt in the same period in 2013.

"The increase was primarily due to reconstruction efforts following super-typhoon Haiyan," said CEMAP president Ernesto Ordoñez in a phone interview with local media. He added that rebuilding is likely to drive cement sales for 'more than a year' and that private sector confidence was also helping sales.

Following typhoon Haiyan the government of the Philippines raised its budget for infrastructure in 2014 by 37% to US$9bn from US$6.6bn in 2013 to provide for rehabilitation and reconstruction in areas affected by the typhoon. In 2013 sales by the local cement industry grew by 6% to 19.4Mt/yr from 18.4Mt/yr in 2012.

Nepal: The Nepalese Ministry of Industry (MoI) has allocated US$3.3m towards providing electricity connections to nine cement factories under its infrastructural development programme for manufacturing industries.

According to the Kathmandu Post, the cement plants chosen for the grant are Shivan Cement, Dang Cement, Laxmi Cement, Rolpa Cement, Ghorahi Cement, United Cement, Maruti Cement, Sarbottam Cement and CG Cement.

"A total of 23 cement factories have been selected for the infrastructure development programme for the current fiscal year, out of which nine will receive funds for electricity connectivity while another 14, including the nine, also will get incentives to construct access roads," said Industry Secretary Krishna Gyanwali.

The allocation follows the announcement in July 2013 of government plans to spend US$4m on building access roads to 14 cement plants as part of a wider US$11.3m infrastructure development scheme for the local cement industry. Cement plants that produce clinker using local limestone are eligible for the scheme.

Nepal: The Nepalese government has released plans to spend US$4m on building access roads to 14 cement plants. According to the Katmandu Post it is part of a US$12.5m industrial promotion policy to build roads, electricity transmission lines and sub-stations for cement plants across the country.

"Only those cement factories that produce clinker by using local limestone will receive the facility," said Industry Secretary Krishna Gyanwali. The government plans to complete construction of access roads for five cement factories - Ghorahi Cement, Rolpa Cement, United Cement, Shivam Cement and Nigale Cement - within the current fiscal year.

Atmaram Murarka, president of the Cement Manufacturers' Association, commented that previous government infrastructure development upgrades had not occurred. The government originally announced the scheme in the 2008 – 09 fiscal year.

Nigeria: Lafarge Cement WAPCO has called on the Nigerian government to explore more ways of using cement, especially in the construction of roads. Joe Hudson, managing director of the Lafarge subsidiary, made the call at the Lagos International Trade Fair.

"The federal government must be commended for successfully implementing the cement backward integration policy, which has seen cement output in Nigeria soar to unprecedented levels, making the country fully independent in cement production and supply," said Hudson. "Following this great achievement, the next step is for all stakeholders to begin to create more value by seeking other applications for the essential commodity." He added that the Nigerian cement industry is now capable of producing far more cement than the country consumes.