Displaying items by tag: Peru
Focus on Peru
19 April 2017Data from the Peruvian cement association (ASOCEM) presents a potential bounce in the fortunes of the local industry in March 2017. Cement production rose slightly year-on-year to 0.79Mt. This is the first monthly rise since July 2016. The first quarter of 2017 as a whole is down by 4.5% year-on-year to 2.35Mt but any fillip is surely welcome.
Graph 1: Cement production in Peru, 2012 – 2016. Source: ASOCEM.
Graph 1 shows that production peaked in 2014. Although it has fallen since then it is still above the level in 2012. Cementos Pacasmayo blamed the overall fall in 2016 on a strong end to 2015 associated with El Niño prevention investments although, given that its production volumes also fell in 2015, albeit slightly, it may be being optimistic in its analysis. It also blamed the widening fallout from the Brazilian Petrobras corruption scandal for delaying investment by the Peruvian government on an infrastructure drive.
Graph 2: Cement and clinker imports to Peru, 2014 – 2016. Source: ASOCEM/SUNAT.
Another point to examine in ASOCEM’s latest release is the import figures as can be seen in Graph 2. Overall cement and clinker import volumes have hovered around 10 – 15% of local production but the ratios have changed since 2014, with a focus on ground cement. Cementos Pacasmayo provided one possible reason in its fourth quarter report for 2016 with the news that it had started replacing imported clinker with its own clinker as it increased production at its new Piura plant. Most of this cement has been coming from Vietnam through 2015 and 2016. Coincidentally, Vietnam’s General Department of Vietnam Customs has reported this week that local exports of cement and clinker are up by 11% to 4.82Mt for the first quarter of 2017 and that Peru is one of the top destinations. Also of note in February 2017 was a significant cement import of 30,800t from China following no imports from that country in 2016 and most of 2015.
Recent production and import trends aside, the Peruvian cement industry’s industry base hasn’t changed much since last time this column coved it (GCW183, January 2015). The country has three main producers – UNACEM, Cementos Pacasmayo and Grupo Gloria – who operate 49%, 43% and 8% respectively of the local 11.4Mt/yr production capacity. They each operate production units in north-south geographical bands in the country with Pacasmayo in the north, UNACEM in the central coastal region near to Lima and Gloria’s subsidiaries in the south.
As mentioned above, Cementos Pacasmayo has been increasing production at its newer Piura plant since mid-2015. Gloria Group purchased Cementos Otorongo, a project to build a cement plant in the south, from Votorantim in mid-2016 and Cemex was reported as having gained government approval for a grinding plant project in Lima in early 2016. On the financial side, UNACEM’s income fell by 4% to US$573m in 2016. Cementos Pacasmayo’s sales fell slightly to US$381m and its earnings before interest, taxation, depreciation and amortisation (EBITDA) for its cement operations fell by 4.6% to US$118m.
Like lots of African countries the outlook for the construction industry in Peru is good in the medium term with plenty of scope for development and a growing economy despite a contraction of 6% in the construction industry in 2016. The Gross Domestic Product (GDP) growth rate hit a low of 2.4% in 2014 but it has since started to pick up again. Once or if the Kuczynski administration starts spending on infrastructure then all the signs should point to growth in the cement industry. Given the amount of clinker sloshing around the world if any producers actually start opening terminals or grinding plants this would suggest they are confident of a return on investment.
Peru: Peru’s cement production fell slightly to 2.35Mt in the first quarter of 2017 from 2.47Mt in the same period in 2016, according to data from ASOCEM, the Peruvian cement association. However, production in March 2017 rose slightly, after a period of falling monthly production figures since mid-2016. Despite this, total despatches fell by 6% to 2.3Mt in the first quarter. Exports of cement and clinker fell in the period, but imports of cement grew by 41% to 0.13Mt and imports of clinker grew by 2% to 0.13Mt.
Gloria Group buys Cementos Otorongo from Votorantim
17 August 2016Peru: Consorcio Cementero del Sur (CCS), a subsidiary of Gloria Group, has signed a contract to buy all of Brazil’s Votorantim’s shares in Cementos Otorongo for US$4m and those of Votorantim’s subsidiary Corporación Noroeste. Cementos Otorongo is planning to build a cement plant in southern Peru for US$125m, according to the Gestión newspaper. Cementos Otorongo submitted an environmental impact study on the project in 2011 for proposed sites in La Joya, Arequipa and Mollendo, Islay. The planned plant will have a production capacity of 0.65Mt/yr.
This story was corrected on 18 August 2016 following clarification from Votorantim.
Peru: Cementos Yura’s income has risen by 10% year-on-year to US$141m in the first half of 2016 from US$127m in the same period of 2015. Its net income rose by 21% to US$29m from US$24m.
The Peruvian cement producer’s sales volumes grew by 11% to 608,923t of cement in the second quarter of 2016 mainly due to a rise in local demand. Clinker sales volumes remained stable. Yura increased its market share to 22.4% in the quarter from 20.4% in the same period in 2015. Peru's total domestic cement sales remained table at 2.33Mt.
Cementos Pacasmayo’s profit rises by 12.1% to US$60.4m in 2015
17 February 2016Peru: Cementos Pacasmayo’s net income rose by 12.1% year-on-year to US$60.4m in 2015 from US$53.8m in 2014. Its revenue fell slightly to US$351m from US$354m. Its cement production volumes fell slightly by 0.7% to 2.3Mt from 2.35Mt.
The cement producer attributed its profit growth to cost savings despite a ‘challenging’ operating environment. It managed to hold its cement production volumes at a stable level due to the ramping up of its Piura cement plant in the fourth quarter of 2015 despite falling volumes at its Pacasmayo and Rioja cement plants.
UNACEM’s profit falls by half in 2015
03 February 2016Peru: UNACEM has reported that its profit fell by over 50% to US$40m in 2015 from US$83m in 2014. The Peruvian cement producer blamed lower output, rising costs and a foreign exchange loss in a report to a regulator.
Sales rose by 3.4% to US$429m in 2015. However, cement production fell by 2.7% to 5.57Mt. Clinker output fell by 7.3% to 5.72Mt. The company attributed this to delays in infrastructure projects such as Line No. 2 of the Lima metro and a decline in homebuilding. Exports dropped by 5.2% to 0.97Mt.
UNACEM said that its domestic market share slipped to 49.6% in 2015 from 49.9% the previous year. Peru's cement production fell 2.5% to 10.4Mt in 2015, according to the cement producers' association Asocem. National exports increased to 0.36Mt from 0.31Mt.
Peru: The Peruvian division of Mexican cement company Cemex has received approval from the Ministry of Production for the environmental impact assessment (EIA) requested for the development of a cement grinding and packaging plant in Ventanilla, Callao.
Mexichem to acquire another Peruvian company in 2016
09 December 2015Peru: Mexico's Mexichem has announced plans to acquire a Peruvian company in 2016 in order to participate in a new sector, diversifying its operations to achieve further growth. This will be Mexichem's fourth acquisition in Peru, as it has already purchased Plastisur, Interquimica and Comindustrias del Peru.
Mexichem's national operations are mainly focused on the infrastructure and construction sectors, in which it offers comprehensive solutions via its Plastisur and Pavco brands. Mexichem will also compete within the telecommunications and gas markets in 2016 and it plans to enter the cement industry with the company's existing product portfolio.
The aim in the cement sector is to import and sell fluorite. There is potential in the market as Peruvian companies use a different substance and fluorite can help to improve the mineralisation of cement, as well as reduce fusion temperatures. Mexichem is in talks with several local cement companies and progress is being made with respective tests for the use of this product.
Peru: UNACEM's net income grew by 16.2% in the first nine months of 2015 due to higher prices and lower costs.
UNACEM posted a US$55m profit as its sales rose by 5.5% to US$419m in the first nine months of 2015. The company cut its operating costs by 5.7% and its sales costs by 0.6%. Unacem's cement production rose by 6.4% to 1.43Mt in the third quarter of 2015, while its clinker output increased by 7% to 1.32Mt.
UNACEM, which competes in Peru with companies like Cementos Pacasmayo and Cementos Yura, said that it increased its domestic market share to 50.8% in the third quarter of 2015 from 50.3% in the previous three months. Its capital expenditure totalled US$63.6m in the first nine months of 2015, including investments at its Condorcocha and Atocongo plants and the Carpapata 3 hydroelectric project.
UNACEM, which sold US$625mn in 2021 bonds in October 2014 to finance its expansion projects, has an installed cement production capacity of 7.6Mt/yr. Peru's cement production rose by 1.4% to 10.7Mt in 2014, according to cement producers association Asocem. Exports climbed by 37.4% to 306,277t. Construction and cement companies are anticipating that a government drive to award public-private partnership concessions for more than US$20bn, in addition to projected infrastructure repairs after the approaching El Niño phenomenon, will drive industry growth.
Cementos Pacasmayo starts commercial cement production from Piura plant
18 September 2015Peru: Cementos Pacasmayo has begun commercial production from its new Piura cement plant. According to the company, the Piura plant will be the most modern cement plant in Latin America and features a multi-fuel kiln. Its final capacity will be 1.6Mt/yr of cement and 1Mt/yr of clinker.
"I am delighted to announce the beginning of commercial operations at the Piura plant, an important milestone for Cementos Pacasmayo and the Peruvian cement industry," said Humberto Nadal, CEO of Cementos Pacasmayo. "Piura will offer our clients high-quality cement, with improved logistics, while simultaneously lowering our cost of production. We continue to execute this project on time and under budget, demonstrating our expertise in large-scale, advanced facilities. We look forward to moving the plant along its production curve, creating value for all stakeholders."