Displaying items by tag: LafargeHolcim Bangladesh

Bangladesh: LafargeHolcim Bangladesh has posted a 56% year-on-year increase in profit to US$20.5m in 2019 from US$13.1m in 2018. Sales rose by 100% to US$210m from US$105m in 2018. New Nation Independent Daily News has reported that LafargeHolcim Bangladesh CEO Rajesh Surana said, "2019 was a challenging year for the cement industry. The impact of increased raw material costs and taxes was significant. Despite this, LafargeHolcim demonstrated a strong performance trend. Our focus on improving operational efficiencies, driving commercial innovation and cost optimisation continues to be effective. We are determined to build on this thrust and further increase value to our stakeholders."

Bangladesh: Switzerland-based LafargeHolcim’s subsidiary LafargeHolcim Bangladesh announced its intended expansion from cement production into building materials solutions provision at an event marking one year since the completion of its merger with Holcim Cement (Bangladesh). LafargeHolcim Bangladesh CEO Rajesh Surana said, “We will build on strengths of these two most premium and globally reputed companies and provide customers with multiple products and solutions under one umbrella rather than being a mere cement producer.” The Financial Express has reported that the company has a total capacity of 4.2Mt/yr of Supercrete and Holcim brand cement.

Bangladesh: The Institute of Cost and Management Accountants of Bangladesh (ICMAB) has presented its Best Corporate Awards 2019 to 34 companies across 12 categories. The cement award winner was LafargeHolcim Bangladesh for its ‘excellent corporate governance.’ HeidelbergCement Bangladesh came second and Premier Cement Mills third.

Bangladesh: LafargeHolcim Bangladesh has replaced the belt of a 17km conveyor that transports limestone from a quarry in Meghalaya in India to its Surma cement plant in Bangladesh. The upgrade project was carried out in two phases with the latest finished in mid-April 2018, according to the Daily Star newspaper. The belt was replaced to reduce noise from the system. It was first built in 2004.

Bangladesh/India: Lafarge Umiam Mining has won the Outstanding Achievement Award from the Indian Bureau of Mines. The subsidiary of LafargeHolcim was cited as a role model for other mining operators in India's north-eastern region, according to the Financial Express newspaper. It also picked up an award for health and safety. Lafarge Umiam Mining operates a mine in Meghalaya in India that provides raw materials to LafargeHolcim Bangladesh’s integrated plant at Chhatak in Sylhet.

Bangladesh: Lafarge Surma Cement has officially changed its name to LafargeHolcim Bangladesh following approval by its board of directors. The change takes place from 1 March 2018.

As readers in colder climes will understand: nobody likes a gas bill. Save some pity for LafargeHolcim Bangladesh then this week, as it faces attempts to hike the price it’s paying.

As reported by local press the government-run Jalalabad Gas Transmission and Distribution Systems (JGTDS) is trying to raise the rate for natural gas to the cement producer. Allegedly, LafargeHolcim Bangladesh is paying a lower unit cost for gas supplied to a power plant at its Chhatak cement plant than the fixed amount set by the country’s energy regulator. LafargeHolcim Bangladesh says the rate was set in a gas sales agreement (GSA) signed between JGTDS and its predecessor, Lafarge Surma Cement, in January 2003. The state body meanwhile has referred the issue up the chain of command to the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources.

JGTDS says that the plant is consuming around 450,000m3/day of gas. Of this, about a quarter is used to run the power plant and the remainder is used to power the cement plant’s kiln. The plot thickens though as LafargeHolcim Bangladesh is actually paying above the industry tariff for gas of US$0.09/m3. Commentators reckon the price of gas is set to rise in the future. Naturally the cement producer wants to stick to the pre-agreed price for the economic viability of the country’s main integrated cement plant. The Spanish embassy, representing Cementos Molins one of the owners of the company along with LafargeHolcim, has even gone as far as intervening in the argument.

The pressure is on LafargeHolcim Bangladesh because its sales revenue fell slightly year-on-year in 2016 but its fuel costs rose by 12%. As the country’s sole clinker producer it suffered from falling international clinker prices in a nation full of grinding plants. So far in the first nine months of 2017 its sales revenues have risen a little yet its profit has more than halved. Any change to its fuel costs would seem likely to damage the company at a delicate moment.

Energy costs for cement plants are nothing trivial as the graph above shows. It uses data from the German cement industry but the key takeaways are that the calorific ratios of the different types of energy cement production uses don’t directly correlate to the cost. Hence, in Bangladesh and other countries where the electricity grid might be unreliable or expensives, running one’s own captive power plant makes sense both for cost and supply reasons. As an aside that may not be applicable to Bangladesh right now, the stark disparity between the energy produced by alternative fuels and their cost proportion is a great reason to use them if the necessary supply chains can be organised. LafargeHolcim launched local operations for its waste management wing Geocycle in December 2017 so this point has not been lost the company.

The situation in Bangladesh is reminiscent of the bind Dangote Cement found itself in towards the end of 2016 in Tanzania. A dispute over gas prices for its Mtwara plant led to company boss Aliko Dangote negotiating personally with President John Magufuli to protect his investment. Governments want inward spending in the form of new industrial plants and multinationals want assurances on some of their costs, like fuel supplies, before they reach for the chequebook. However, if one side is seen to be getting too good a deal then the relationship can break down. LafargeHolcim Bangladesh may have bagged itself a scandalously low gas deal and the Bangladesh government may also be breaking an agreement. Bear in mind though, that with sales of nearly US$28bn in 2016, LafargeHolcim took in revenue nearly one tenth of Bangladesh’s gross domestic product. If the two parties don’t reach an accord, the consequences for both parties could be negative.

Bangladesh: LafargeHolcim Bangladesh has entered into a dispute with the government-run Jalalabad Gas Transmission and Distribution Systems (JGTDS) over the price of natural gas for a captive power plant at its Chhatak cement plant. JGTDS has argued that the cement producer is paying less than the rate fixed by the country's energy regulator, according to the Financial Express newspaper. However, LafargeHolcim claims that it is paying a tariff set by a gas sales agreement (GSA) signed between JGTDSL and Lafarge Surma Cement in January 2003. The row has been referred to the Energy and Mineral Resources Division (EMRD) of the Ministry of Power, Energy and Mineral Resources for clarification.