Displaying items by tag: Sales

Argentina: Data from the Asociación de Fabricantes de Cemento Portland (AFCP) shows that cement shipments fell by 11.1% year-on-year to 9.87Mt in 2020 from 11.1Mt in 2019. They fell significantly in the first half of the year but subsequently recovered. Overall shipments - including local sales, imports and exports – last rose in 2017. Despite this, exports rose by 31% to 0.13Mt in 2020 from 0.10Mt in 2019.

Brazil: Cement producers sold 60Mt of cement in 2020, up by 11% year-on-year. The Valor Econômico newspaper has reported that residential and commercial renovations and new projects contributed to the increase. The National Cement Industry Association (SNIC) has forecast that growth will not exceed 1% in 2021. It said that this will be due to an economic downturn and the end of the government’s emergency aid programme.

Vietnam: The Vietnam National Cement Corporation (VICEM) aims to increase cement production by 1% year-on-year to 22Mt in 2021. The Viet Nam News newspaper has reported that the company is targeting a sales increase of 7% to US$1.5bn and a profit increase of 13% to US$99m. The company says that it expects domestic cement consumption to rise by 5% to 30Mt.

The group has set out six solutions by which to achieve its goals: continue to ‘optimise and improve production capacity’ through promoting research and application of advanced science and technology, focus on ‘investment in depth,’ reduce consumption, use resources economically and reduce environmental impacts throughout the supply chain.

VICEM chair Bui Hong Minh said, “Implementing the comprehensive restructuring project of the corporation in the period of 2019 - 2025 approved by the Ministry of Construction, VICEM is focussing on promoting innovation and creativity to bring new development space and motivation to the Bim Son Cement unit in particular and the cement industry in general.”

In 2020 VICEM increased its full-year profit by US$30m.

Vietnam: Vietnamese cement export growth is forecast to slow in 2021. The Viet Nam News newspaper has reported on research by SSI Research that expected exports to remain stable due to high infrastructure spending in China, but that growth is unlikely due to the full recovery of Chinese domestic cement supply in 2020. SSI Research forecasts a total 2021 cement and clinker sales growth of 2% year-on-year to 104Mt from 102Mt. It predicts a 5% - 7% increase in domestic sales. The country’s installed cement production capacity is due to rise by 7% or 7Mt in early 2021.

Syria: The General Company for Cement and Building Materials in Hama central province (Hama Cement) recorded cement sales in excess of 1Mt in 2020. Clinker sales were 0.7Mt. Syrian Arab News Agency (SANA) has reported that the total value of sales was US$96m. The year included the beginning of concrete paving slab production at the company’s plant.

The company said that 2021’s tasks consisted of improving the technical specifications of the product and producing new cement types, modernising equipment, developing workers’ skills and diversifying investments.

Saudi Arabia: Domestic cement sales in November 2020 were 4.8Mt, up by 17% year-on-year from November 2019. Mubasher News has reported that Saudi cement exports fell by 6% to 179,000t from 192,000t. Clinker exports rose by 85% to 490,000t. The national clinker inventory fell for a seventh consecutive month, to 38Mt.

In November 2020 Saudi Arabia produced 5.0Mt of cement and 4.3Mt of clinker.

Brazil: The National Cement Industry Association (SNIC) has predicted cement sales in 2020 to rise by 10% year-on-year to 60Mt. Valor International News has reported that president Paulo Camillo Penna said, “If in 2021 we maintain the 60Mt we expect to reach this year, or have some progress beyond this volume, it will be a very satisfactory result considering the high uncertainties ahead."

Argentina: Cement producers in Argentina shipped 1.13Mt of cement in November 2020, up by 28% year-on-year from 0.88Mt in November 2019 and by 4% month-on-month from 1.09Mt in October 2020. The Economista newspaper has reported that the figure is a high-water mark for monthly production since September 2017. Consumption also rose to 1.09Mt, up by 25% year-on-year from 0.87Mt and 2% month-on-month from 1.07Mt.

Cameroon: Dangote Cement’s subsidiary in Cameroon estimates that it had a market share of 39% in the first nine months of 2020. It reckons the total cement market in the country was over 2.6Mt in the same period and that it sold around 1Mt, according to the Ecofin Agency. It said that the market was mainly driven by individual construction projects and public housing estates. In February 2020 the subsidiary of the Nigeria-based company said it planned to do better business in 2020 by focusing on the construction sites of stadiums, roads, hotels and other construction projects in preparation for the 2021 Africa Cup of Nations, postponed to 2022.

The cement producer operates a 1.5Mt/yr cement grinding plant in Douala, with a dedicated jetty for offloading clinker that opened in 2015.

Last week’s financial results from Çimsa contained a glimmer of hope for the Turkish cement market. Its net sales grew by 27% year-on-year to Euro175m in the first nine months of 2020 and operating profit more than doubled. Crucially, the balance between domestic and export sales tilted back a little toward the local market at a 55/45 ratio rather than 40/60 for the same period in 2019. Oyak Cement, another of the larger local producers, reported a similar rise in sales also. Akçansa Çimento, the joint venture between Sabancı Holding and HeidelbergCement, saw its sales fall slightly so far in 2020 but its profit grew. These financial results are all surprising given the currency and debt crisis the country faced in 2018 and now coronavirus in 2020.

Graph 1: Domestic and export cement sales in Turkey, January – July 2017 – 2020. Source: Turkish Cement Manufacturers’ Association (TÇMB)

Graph 1 above shows the general picture of the Turkish cement industry for the first seven months of each year to put the data so far in 2020 into context. The general Turkish economy faced problems in the middle of the year when the value of the Turkish Lira dropped sharply in mid-2018 and interest rates rose sharply. Subsequently, annual cement sales fell by over 20% year-on-year to 56.5Mt in 2019. A couple of weeks ago the Turkish Cement Manufacturers’ Association (TÇMB) said that the sector started 2020 optimistically with a recovery in January 2020. Coronavirus then hit, causing a contraction in the domestic market for the next four months. However, the construction market picked up again in June 2020 and this is expected to have continued into August 2020.

The cement sector previously pivoted to exports strongly with nearly a 50% bump up in exports to 11Mt in 2019. 2020 has been similar so far for the export market with a 40% rise year-on-year from January to July 2020 to around 9Mt. Much of these exports have gone to the US with local media and the Turkish Statistical Institute (TurkStat) reporting that the North American country took 18% of Turkey’s Euro840m cement exports from January to September 2020. Focusing on international trade has not come without a price though. In September 2020 the Ukrainian government started an investigation into alleged dumping of cement by Turkish producers. Following a complaint by local producers, the Interdepartmental Commission for International Trade (ICIT) determined that: “imports were made to an extent and under conditions such that they may cause material injury to the domestic producer.” The results of the investigation remain to be seen, but Ukraine had no qualms in 2019 about slapping tariffs onto cement imports from Russia, Belarus and Moldova.

All of this leaves the Turkish cement producers relying, much as previously, on the export market to hold up sales while the domestic market recovers to 2018 levels. This is becoming riskier, given the growing number of rivals exporting cement around the world, particularly from around the Mediterranean, and with more countries like Egypt hoping to do likewise. Yet as long as favourite destinations like the US and Israel keep buying, Turkey should be okay. At home, the question remains whether the growth seen post-coronavirus measures in the spring is a sign of economic recovery or merely pent up demand. The country’s initial coronavirus response was praised internationally but signs of a second wave are present. Meanwhile the International Monetary Fund (IMF) confirmed in October 2020 its earlier forecast of a 5% drop in gross domestic product (GDP) for Turkey in 2020. Much of the rest of the world is facing similar contractions in output or worse in 2020 but starting the year from a poor economic position is not enviable.