Displaying items by tag: Nepal

Nepal: The Nepal Bureau of Standards and Metrology (NBSM) has taken action against seven cement producers that have broken its standards in the current financial year that runs to mid-July 2018. The bureau found defects in product declarations made by the industries, according to the Republica newspaper. The sanctioned cement companies were MJP Cement, Ganapati Cement, Hetauda Cement, National Cement, Supreme Cement, Himalayas Cement and Nepal Ambuja Cement. The bureau has suspended the license of MJP Cement and asked the other companies not to sell their products until the quality is restored.

The cement producers were found to be breaking the quality of their products, incorrectly declaring products and failing to meet technical requirements such as the compressive strength grade mandated by the Nepal Standard Regulations. The NBSM has asked all the companies to provide it with written clarification within 15 days of the inspection.

Nepal: Imports of cement fell by 24% year-on-year in the first half of the local financial year. Data from the Trade and Export Promotion Centre (TEPC) shows cement worth US$3.94m was imported in this period compared to US$4.88m in the same period in the pervious year, according to the Republica newspaper. However, imports of clinker grew by 8% to US$102,000 from US$95,000. Most of this material came from India.

Nepal: Palpa Cement Industries has ordered a MVR 3350 C-4 mill from Gebr. Pfeiffer for its plant at Sunwal, in the district of Nawalparasi. The vertical roller mill has a drive power of 2150kW and is designed to grind 130t/hr of cement at 3000 Blaine and 100t/hr of blast-furnace cement at 3800 Blaine. Commissioning of the mill is planned for mid-2019. It is the fourth vertical roller mill order from Nepal for Gebr. Pfeiffer over the last year.

Nepal: Cement producers in the Parsa-Bara industrial corridor have started importing clinker from the Narayanpur railway station in Bihar. The change in the supply chain has followed disruption in clinker imports via the Raxaul- Birgunj border crossing on environmental grounds, according to the Kathmandu Post newspaper. The longer route has raised production costs due to higher transport fees.

Nepal: The Department of Supply Management and Protection of Consumers Interest (DSMPCI) has ordered cement producers to reduce their prices within three days. Following a survey the DSMPCI found that the price of cement had risen by 10 – 16% in recent weeks despite input costs, such as raw materials and transportation costs, only growing by 7 – 9%, according to the Republica newspaper. The department has issued its directive via the Nepal Cement Manufacturers' Association.

Nepal: Production at 13 cement grinding plants have been distrupted by a restriction on Indian clinker imports at Birgunj. Imports at the border town stopped on 22 December 2017 following complaints by local residents about air pollution, according to the Kathmandu Post. Cement plants in the so-called Parsa-Bara industrial corridor have resorted to using inventory supplies or clinker sourced from alternative locations.

Nepal: Investment Board Nepal (IBN) and Huaxin Cement have signed a Project Investment Agreement (PIA) for the Chinese company to build a cement plant. The agreement follows the Department of Mines and Geology’s decision to award a limestone mine in Dhading district to the Chinese cement producer, according to the Xinhua news agency. Huaxin Cement plans to spend US$140m towards building a plant with a cement production capacity of 3000t/day. The deal follows an agreement between the IBN and Hongshi Cement finalised in September 2017 to build a new plant for around US$360m.

Nepal: The Department of Mines and Geology has technically disqualified Nigeria’s Dangote Cement from applying for three limestone mine licences in an open bidding process. The Investment Board Nepal (IBN) had approved the investment in 2013 before passing the application to the mining department, according to the Republica newspaper. Department deputy director general Ram Prasad Ghimire claimed that Dangote's proposals lacked essential documents on the required skilled manpower and it was not considered qualified for the next financial proposal.

Dangote Cement had applied for three mines: two in Dhading and one in Palpa. However, China’s Huaxin and United Cements recently won two limestone mining licences. Previously, Dangote Cement purchased a limestone mine in Makawanpur that was later found to be a substandard. The Nigerian company has also faced opposition from local producers who have described the country as being self-sufficient in cement.

There is plenty to mull over on the Chinese cement market at the moment as the half-year reports for the major cement producers are being published. Anhui Conch revealed this week a glowing balance sheet with a 33% jump in its sales revenue to US$4.79bn. It attributed the boost to a ‘significant’ increase in prices and continued discipline with production and operation costs. Although CNBM is scheduled to release its results at the end of August 2017, Anhui Conch appear to be well ahead of its next largest rivals locally as can be seen in Graph 1.

Graph 1: Sales revenue of major selected Chinese cement producers. Sources: Company financial results.

Beyond the headline figures it is interesting to pinpoint the areas in China where Anhui Conch says it isn’t doing as well. Its South China region, comprising Guangdong and Guangxi provinces, suffered from competition in the form of new production capacity, which also in turn dented prices. Despite this ‘black spot’ in the company’s regional revenue still grew its sales in double-digits by 14%.

The other point to note is the growing number of overseas projects with the completion of a cement grinding plant in Indonesia, new plants being built in Indonesia, Cambodia and Laos, and projects being actively planned in Russia, Laos and Myanmar. The cement producer also opened seven grinding plants at home in China during the reporting period. It’s not there yet but it will mark a serious tipping point when the company starts to open more plants outside of China than within it. With the government still pushing for production capacity reduction it can only be a matter of time. On that last point China Resources Cement (CRC) reckoned in its half-year results that only four new clinker production lines, with a production capacity of 5.1Mt/yr, were opened in China in the first half of 2017.

After a testing year in 2016 CRC’s turnover has picked up so far in the first-half of 2017 as its sales revenue for the period rose by 17% to US$1.67bn. Despite its cement sales volumes falling by 9% to 33.6Mt, its price increased. Given that over two thirds of its cement sales arose from Guangdong and Guangxi it seems likely that CRC suffered from the same competition issues that Anhui Conch complained about.

Graph 2: Chinese cement production by half year, 2014 – 2017. Source: National Bureau of Statistics of China.

Graph 2 adds to the picture of a resurgent local cement industry suggesting that the Chinese government’s response to the overcapacity crisis may be starting to deliver growth again. After cement production hit a high in 2014 in fell in 2015 and started to revive in 2016. So far 2017 seems to be following this trend.

Returning to the foreign ambitions of China’s cement producers brings up another story from this week with news about the Nepalese government’s decision to delay signed an investment agreement with a Chinese joint venture that is currently building a cement plant in the country. With the prime minister visiting India the local press is painting it as a face-saving move by the Nepalese to avoid antagonising either of the country’s main infrastructure partners. This is relevant because the cement industries of both China and India are starting look abroad as they consolidate and rationalise. Once China’s cement producer start building more capacity overseas than at home, conflicts with Indian producers are likely to grow and present more awkward situations for states caught in the middle.