Displaying items by tag: Peru
Sales grow for UNACEM in 2023
12 March 2024Peru: UNACEM reported sales of US$1.69bn in 2023, up by 6.6% year-on-year, despite a ‘significant downturn’ in the construction market. Its net profit dropped by 22% to US$139m.
Business News Americas has reported that the Peruvian Cement Producers’ Association (ASOCEM) recorded 9% month-on-month growth in domestic cement consumption in January 2024. Scotiabank forecasts 5% year-on-year growth in consumption in the first quarter of 2024, and a 3.7% expansion in the construction market in the full year 2024, following an 8% contraction in full-year 2023.
Peru: Cementos Pacasmayo recorded an 8% year-on-year drop in its full-year sales in 2023. Group sales volumes of cement and concrete fell by 14%. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) also dropped, by 2% to US$125m, influenced by a US$9.47m impairment due to the replacement of its former vertical kilns with a new kiln. The producer further attributed the decline to low construction activity in the private and public sectors, as well the effects of Cyclone Yaku in early 2023.
Update on Chile, February 2024
14 February 2024A few news stories from Chile give us the opportunity to take at look at the local cement market this week. Firstly, Freehill Mining was keen to promote a new order it has obtained from Cementos Melón. The Australia-based company operates magnetite mineral concessions at Yerbas Buenas, about 500km north of Santiago. The US$180,000 deal starts in March 2024 but the raw material supplier says it is currently negotiating a longer-term supply contract with Melón for larger volumes in the future.
A large order for raw materials is not unusual, although the public nature of the Freehill Mining one suggests that the mining company is promoting itself. The story also highlights the importance of the mining sector in Chile. However, a wider view of the Chilean cement sector could be glimpsed recently from the latest cement despatch data from La Cámara Chilena de la Construcción (CCHC). Despatches fell by 11% year-on-year to 5.2Mt in 2023 from 5.9Mt in 2022. As can be seen in Graph 1, despatches recovered in 2021 following the first year of the Covid-19 pandemic but they have declined since then.
Graph 1: Cement despatches in Chile, 2018 – 2023. Source: La Cámara Chilena de la Construcción.
Two of the three larger cement producers have reacted to these market conditions in the last couple of years by cutting costs. Cementos Melón started a restructuring process in late 2022 whereupon it closed down a concrete plant at Penalolen near Santiago and embarked on a spending review. Its income fell by 4% year-on-year to US$182m in the first nine months of 2023, from US$189m in the same period in 2022. Cemento Polpaico followed suit in November 2023 by closing two concrete plants in the Santiago Metropolitan Region and temporarily suspending operations at its Quilicura cement grinding plant with work shifted to the integrated Cerro Blanco plant instead. In June 2023 it reported that its income had risen slightly year-on-year for the first half of 2023, but it noted a loss compared to a profit previously. Cbb (formerly Cementos Bío Bío) managed to avoid the fate of its peers mainly through the performance of its lime division. Its cement and concrete shipments fell by 9% and 15% year-on-year to 775,000t and 750,000m3 respectively in the first nine months of 2023. It blamed the falling sales volumes on a decline in economic activity that dragged upon investment in infrastructure and housing. However, lime shipments grew by 2% following tough trading conditions in 2022 due to high fuel costs, amongst other reasons. Altogether this meant that the company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 54% to US$44.3m from US$28.8m.
Finally, a third news story this week illustrated one reaction to the poor construction market in Chile, when Unacem Chile announced that it was buying two concrete plants, at San Antonio and Talca. Once the US$1m deal completes, the subsidiary of Peru-based Unión Andina de Cementos (UNACEM) will hold 12 concrete plants in the country. This follows its entry into the market in 2018 when it acquired Hormigones Independencia from Cementos Polpaico. In December 2023 Grupo Gloria subsidiary Cal y Cementos Sur (Calcesur) said that it was preparing to strengthen its presence supplying lime to the mining sector both at home in Peru and in neighbouring countries including Chile. While this isn’t a cement story, Grupo Gloria does operate the integrated Yura plant near Arequipa in southern Peru and this resonates with both the mining and lime sectors.
Chile’s cement market is suffering as the general construction market contracts. Yet as the stories from Freehill Mining and Calcesur show, the mining sector remains a key part of the national economy and this links to the cement industry. Another related story, for example, is a US$39m deal that Denmark-based FLSmidth signed in mid-2023 to supply equipment for a copper mine. Chile’s northern neighbour Peru has a cement sector that is nearly twice as large based on production capacity and some of its producers look internationally for expansion opportunities, as in the example of Unacem Chile. The CHHC didn’t hold back in mid-January 2024 when it said that it forecast that 2024 would be the worst year for investment and construction spending since the late 2010s. Yet it also expects the decline in the construction sector to slow as gains from government infrastructure spending continue to almost counteract falls in the private sector. Until the situation improves, it continues to lobby for economic reforms.
For more information on cement markets in South America read the feature in the February 2024 issue of Global Cement Magazine
George Conners Delgado appointed as Sales Manager Americas – Pyro & Grinding Technologies at FLSmidth
10 January 2024US: Denmark-based FLSmidth has appointed George Conners Delgado as Sales Manager Americas – Pyro & Grinding Technologies. This follows his previous roles at the company based in Peru, where he became Sales Manager - Pyro-process Division - South & Central America in 2022. Before this, Delgado worked for ThyssenKrupp as a Service Sales Engineer in Peru and as a Project Engineer for Relansa in Venezuela.
Peru: Cementos Pacasmayo’s sales fell by 9.1% year-on-year to US$371m during the first nine months of 2023. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell less sharply, by 2.9% to US$93.6m. The producer stated that lower costs partially offset the drop in sales. Its net income was US$34.4m, down by 3.6%.
Yura announces Arequipa expansion
29 September 2023Peru: Cemento Yura has announced plans to expand its cement plant in Arequipa. Luis Diaz, vice-president of the Cement, Concrete and Lime Division of Gloria Group, the parent company of Cemento Yura, announced the plans during the Perumin 36 Mining Convention, which also took place in Arequipa on 26 - 29 September 2023.
Speaking to the Gestión newspaper, Diaz revealed that Yura is finalising a project to double its capacity. The plant currently has a capacity of 3Mt/yr, most of which is produced by its largest line, Line 3. The new line will cost US$132m and have a capacity of 3Mt/yr.
Diaz reported that engineering studies were complete and that environmental impact permits were in the process of being acquired. No additional area will be required for the new line, which is expected to be operational in 2027.
Peruvian cement demand to decline in 2023
21 September 2023Peru: The Central Reserve Bank of Peru expects national cement consumption to fall by 3.7% in 2023. The Gestión newspaper has reported that demand declined month-on-month over seven successive months up to August 2023. It fell by a double-digit figure year-on-year in the first half of 2023. In August 2023, imports of cement declined by 95% month-on-month, to 2000t from 38,000t.
Peruvian Chamber of Construction executive director Guido Valdivia said "The first factor to consider is El Niño. If it starts in November 2023, it will affect construction output in 2023; if it is postponed to 2024, we expect a drop of only 3.3% in 2023.″ The Peruvian Property Developers’ Association (ASEI) forecast a 4% drop in construction output in 2023, followed by growth of 3.2% in 2024.
Grupo Gloria’s vice president, cement, concrete and lime, Luis Díaz told investors that the gap between Peruvian cement production and consumption will close ‘substantially’ during the remaining months of 2023, due to raised demand from infrastructure projects.
Maerz to supply lime kiln for UNACEM
30 August 2023Peru: Switzerland-based Maerz has received an order from UNACEM (Unión Andina de Cementos) to supply a 600t/day PFR lime kiln. The kiln will be built and operated jointly at Tarma by UNACEM and Mexico-based lime producer Calidra Group. UNACEM already runs its integrated Condorcocha cement plant in Tarma. The supplier says that the kiln will be ready to install future CO2 capture technologies due to airtight sealed charging and discharging systems. It will also save up to 20% of electrical energy compared to conventional rotary piston blowers by using high-pressure fans to provide the process air.
Planning is underway for the project and is expected to be completed by the end of 2023. Maerz’ scope of supply will include the petroleum coke firing system, skip winch, charging and discharging systems, high-pressure fans, hydraulic unit and control system. According to the schedule, commissioning should take place in the first half of 2025.
Peru: Cementos Pacasmayo's consolidated sales declined by 12% year-on-year in the first half of 2023. The company recorded a general decline in its cement and concrete volumes of 18%. It said that its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 5.9% to US$64.8m.
Cementos Inka commissions Pisco grinding plant
10 July 2023Peru: Cementos Inka has announced the successful commissioning of its new 800,000t/yr Pisco grinding plant. The new plant is equipped with Christian Pfeiffer grinding and separation equipment. El Comercio News has reported that the producer invested US$55m in the plant. This exceeded previous budgets by 15 - 22%, due to coronavirus-related costs rises. This latest commissioning triples Cementos Inka's installed capacity to 1.2Mt/yr. General manager Carlos Choy estimated that the producer's market share has risen to 10% from 3.9%.
Choy said that the producer's next project will be the construction of a 1 - 1.5Mt/yr kiln line to produce clinker at the site.