Displaying items by tag: Sales

Vietnam: Cement producers sold 45.7Mt of cement and clinker in the first half of 2020, down by 3% year-on-year from 47.1Mt in the first half of 2019. Exports grew by 1% to 15.6Mt from 15.4Mt. The Vietnamese National Cement Association (VNCA) says that producers retain a total of 0.8Mt of cement and 4.2Mt of clinker in inventory.

Senegal: The Chambre des Mines du Sénégal (CMS) has reported a 5% year-on-year increase in domestic sales and a 0.6% year-on-year increase in cement production in the first half of 2020. The Le Journal de l'Economie Sénégalaise newspaper has reported that exports fell by 13%.

Data is starting to emerge from South American countries for the first half of 2020 and it’s not necessarily what one might expect. Countries had different trends in play before the coronavirus pandemic established itself and then governments acted in their own ways with mixed results. Here’s a brief summary of the situation in the key territories.

Graph 1: Cement sales in selected South American countries in first half of year, 2018 – 2020. Source: Local cement associations and national statistics offices. Note: Colombian data is for January – May for each year.

Brazil’s cement sector looked set to become the big loser as global events seemed poised to dent the recovery of cement sales since a low in 2018. This didn’t happen. The Brazilian national cement industry union’s (SNIC) preliminary data for the first six months of 2020 shows that sales grew by 3.7% year-on-year to 26.9Mt. This is above the growth rate of 3% originally expected. Indeed, the monthly year-on-year growth rate in June 2020 was 24.5%. SNIC is not wrong in describing this kind of pace as being ‘Chinese.’ All this growth has been attributed to the home improvement market as people used their lockdown time to renovate their homes, renovations and maintenance in commercial buildings during lockdown and growing work on real estate projects. The government’s decision to implement weak lockdown measures clearly helped the sector but this may have cost lives in the process.

SNIC’s president Paulo Camillo Penna pointed out that producing and selling cement could co-exist with fighting coronavirus. However, trends such as a slowing real estate sector, less large construction projects and mounting input costs are all seen as potential risks in the second half of 2020. What SNIC didn’t link to the wider fortunes of the local cement industry was the economic consequences of coronavirus. The World Bank, for example, has forecast an 8% fall in gross domestic product in Brazil in 2020 due to its coronavirus, “mitigation measures, plunging investment and soft global commodity prices.”

Peru, in contrast to Brazil, implemented a strong lockdown early in March 2020. Unfortunately, it didn’t seem to work as well as hoped possibly due to informal and structural issues such as reliance on markets, the informal economy and residential overcrowding. This means that production and sales of cement are significantly down without any public health benefit. Both production and despatches fell by about 40% to around 2.9Mt in the first half of 2020 with close to total stoppages in April 2020. In terms of coronavirus, Peru is at the time of writing in the top 10 worldwide for both total cases and deaths, behind only Brazil in South America. It should be pointed out though that Peru’s testing rate is reportedly high for the region and this may be making its response look dire in the short term. All of this is particularly sad from an industrial perspective given that Peru was one of the continent’s strongest performers prior to 2020. One consolation though is that the economy is expected to recover more quickly compared to its neighbours.

Argentina started 2020 with a downward trend in its local market. Cement sales had been falling since 2017, roughly following a recession in the wider economy. Throw in a strong lockdown and sales more than halved at its peak in April 2020. So far this has led to a drop of 31% to 3.83Mt for the first half of 2020 compared to 5.51Mt in the same period in 2019. Unfortunately, a recent spike in cases in Buenos Aires has led to renewed lockdowns in the capital. Due to this unwelcome development and the general economic situation Fitch Ratings has forecast an overall decline in cement sales volumes of 25% for 2020 as a whole.

Finally, Colombia’s cement production fell by 24% year-on-year to 3.90Mt in the first five months of 2020 from 5.14Mt in the same period in 2019. April 2020 was the worst month affected. The country’s lockdown ended on 13 April 2020 for infrastructure projects and on 27 April 2020 for cement production and residential and commercial construction. On 5 May 2020 Cementos Argos said that domestic demand was at 50% of pre-lockdown levels. Data from DANE, the Colombian statistics authority, shows that local sales fell by around a third year-on-year to 0.71Mt in May 2020 from 1.06Mt in May 2019.

Most of the countries examined above follow the pattern of reduced cement production and sales in relation to the severity of the lockdown imposed and the resulting intensity of the coronavirus outbreak. Stronger lockdowns suppressed cement production and sales in the region of 20 – 40% in the first half of the year as governments shut down totally and then released industry and commerce incrementally. The exception is Peru, which has suffered the worst of both worlds: a severe lockdown and a severe health crisis. Local trends have continued around this, like the recovery in Brazil in the construction industry and the general recession in Argentina.

SNIC’s president has said that making and selling cement needn’t be exclusive with public health measures. He’s right but Brazil’s surging case load is an outlier compared with most of its continental neighbours and the rest of the world. Cement sectors in countries with growing economies like Peru and Colombia are expected to bounce back quicker than those with stagnant ones like Argentina. The risk for Brazil is what its government health strategy will do to the construction sector in the second half of 2020.

Brazil: The National Cement Industry Union (SNIC) has estimated a 3.7% year-on-year increase in total cement sales to 26.9Mt in the first half of 2020 from 25.9Mt in the corresponding six months of 2019. Export sales rose by 56% to 84,000t from 54,000t. Sales increased by 7.7% month-on-month in June 2020, however SNIC president Paulo Camillo Penna expressed worries about demand going forward into the second half of 2020.

“The cement industry is responsible for more than 70,000 jobs, generates an income US$4.94bn and an annual net collection of US$562m. We are very sensitive to the macroeconomic scenario and government stimuli. For this reason, the cement industry is anxiously awaiting the launch of the new government housing project, ’Casa Verde Amarela,’ which is expected to leverage the real estate and renovation market more strongly, and restarting works on 100,000 housing units,” said Penna.

Peru: Domestic cement sales were 500,000t in June 2020, down by 59% year-on-year from 984,000t in June 2019. La República newspaper has reported that sales were nonetheless at their highest since the start of the coronavirus lockdown, up by 45% month-on-month from 343,000t in May 2020 and by 4100% from 12,000t in April 2020. Phase two of post-lockdown economic reactivation began in 2020, with the start of works related to public investment and public-private partnerships.

Colombia: Cementos Argos says that 70% of its total cement orders between 1 January 2020 and 9 July 2020 were placed online via its Argos One automated booking, order management and delivery monitoring platform. The platform handled 81% of orders of cement in the Dominican Republic, 39% in the US, 34% in Honduras and 19% in Panama. The company said, “Argos One has become even more relevant in the current context and will continue to evolve in function to continue its purpose of providing extraordinary solutions to clients.”

Belarus: Belarusian Cement Company (BCC) sold 1.85Mt of cement over the first five months of 2020, up by 12% year-on-year from 1.65Mt in the corresponding period of 2019. The Belarusian Architecture and Construction Ministry has reported that, of BCC’s three subsidiaries, Krichevtsementnoshifer recorded the largest sales growth in the period, of 9.6% to 465,000t. Belarusian Cement Mill sold 657,000t, up by 3.6%, including 249,000t to Russia, and Krasnoselskstroymaterialy sold 568,000t, up by 0.2%.

Argentina: Producers sold 649,000t of cement in May 2020, down by 33% year-on-year from 965,000t in May 2019. Data from the Asociación de Fabricantes de Cemento Portland (AFCP) shows that the sharpest decline, of 80%, was in Buenos Aires. Total sales nonetheless grew by 61% month-on-month from 404,000t in April 2020. Five-month sales to 31 May 2020 fell by 35% year-on-year.

Indonesia: Thailand-based Siam Cement Group (SCG) and PT Marindo Inticor have announced the launch of PT Renos Marketplace Indonesia, a digital marketplace to connect Indonesian customers with SCG’s products. Online Stock Business News has reported that ownership of the company is shared 51:49 between SCG subsidiary Better Bee Marketplace Company Limited and PT Marindo Inticor. The joint venture has registered capital of US$1.26m.

Philippines: LafargeHolcim subsidiary Holcim Philippines has said that digital innovations enabled it to continue serving its customer base throughout the coronavirus lockdown. The company said that utilisation of its customer service platform grew to 91% year-on-year in May 2020 from 56% in May 2019.

Through its information sharing platform E-Konekta, the company has hosted 40 events covering fields from Holcim Philippines’ corporate vision and health and safety to business networking. Holcim Philippines sales senior vice president William Sumalinog said, “Particularly in times of crisis, a customer’s interaction with a company can trigger an immediate and lingering effect on his or her sense of trust and loyalty. It is vital for us to keep our warm ties with customers so they continue to feel being part of the Holcim family.”