Displaying items by tag: Sales

Mexico: Jaime Rocha Font, the president of the National Cement Chamber (CANACEM), says that cement sales fell by 2% year-on-year in the first half of 2020 due to low demand from construction companies and the private sector. He added that sales fell by 6.3% year-on-year in the second quarter of 2020, according the El Financiero newspaper. Annual sales were 43Mt in 2018 and 40Mt in 2019.

There’s no single theme this week, just a few news stories of note that may have wider significance.

Firstly comes the news that Semen Indonesia subsidiary Semen Padang has been exporting 25,000t of cement to Australia. This follows a consignment of 35,000t of clinker to Bangladesh. The company is hoping to hit a cement and clinker export target of 1.58Mt in 2020 in spite of the on-going coronavirus pandemic. It reached 1.09Mt (about 70%) of this by mid-September 2020 through exports to Bangladesh, Myanmar, Philippines, Australia, Sri Lanka and Maldives.

The wider picture here is that local sales in Indonesia fell by 7.7% year-on-year to 27.2Mt in the first half of 2020 from 29.4Mt in the same period in 2019, according to data from the Indonesian Cement Association (ASI). Cement and clinker exports are up by 32.8% to 3.7Mt from 2.8Mt. Semen Indonesia’s revenue is down but it has managed to hold its earnings up so far. During press rounds in late August 2020 its marketing and supply chain director, Adi Munandir, told local press that he expected domestic demand to fall by up to 15% in 2020 due to effects of coronavirus on private construction and government infrastructure plans. Analysts reckon that the worst of the demand slump hit in the second quarter of 2020 when government-related coronavirus restrictions were implemented, so Semen Indonesia’s third quarter results will closely scrutinised.

One of Semen Padang export targets is the Maldives. This chimes with another story this week because Oman-based Raysut Cement has just bought a majority stake in a cement terminal from Lafarge Maldives for US$8m. The 9000t capacity Thilafusi cement terminal is located on the island of Thilafusi, Kaafu and was expanded in 2015. Raysut Cement has tended to stick to markets in the southern Arabian Peninsula and the east coast of Africa, with projects planned in Madagascar and Somaliland. Yet expansion plans in places further away such as India and Georgia have also been mentioned publicly. A greater presence in the Maldives is a solid step towards Raysut heading eastwards. This would also mirror the plans of the country’s gypsum sector to dominate African and Asian markets and a general longer term shift in global markets from west to east.

One place west that has been doing well in cement though is Brazil. National Cement Industry Union (SNIC) data for September 2020 show a 21% year-on-year boom in cement sales to 5.8Mt and a 9.4% year-on-year increase to 44.6Mt for the first nine months of 2020. Earlier in the year the country’s limited coronavirus suppression methods were attributed for letting the recovering cement sector grow. Now, SNIC has directly thanked government support for civil construction. However, Paulo Camillo Penna, the president of SNIC said. “The results are surprising so far, but that doesn't give us security in the long run,” due to a bubble of real estate and commercial activity that already appears to be declining. Given the slump in cement demand from 2015 to 2018 it’s understandable that SNIC is taking the recovery cautiously.

And to finish we have two connected stories about Cemex. Following the release of its resilience strategy in September 2020, the company has now declared that its integrated Rüdersdorf cement plant in Germany will be the centrepiece of its CO2 reduction plans as part of ‘Vision Rüdersdorf.’ Details are light at present but we expect some kind of carbon capture and storage or usage project. An addendum to this – or perhaps it’s the other way round (!) – is that Cemex has also just announced further credit amendments but with sustainability-linked metrics. Cemex’s chief financial officer (CFO) Maher Al-Haffar said, “We are especially proud that this transaction represents one of the largest sustainability-linked loans in the world.” The teeth of this arrangement remain to be seen but the integration of finance and sustainability has serious implications generally.

Watch out for a research and development themed interview with Cemex and Synhelion in the December 2020 issue of Global Cement Magazine

Brazil: Cement sales rose by 21% year-on-year to 5.8Mt in September 2020 from 4.8Mt in September 2019. Data from the National Cement Industry Union (SNIC) shows that sales increased by 9.4% year-on-year to 44.6Mt in the first nine months of 2020 from 40.8Mt in the same period in 2019. Particular gains for the year to date were noted in the North-East and Central-West regions. SNIC has attributed the sales growth to government support for civil construction.

“The results are surprising so far, but that doesn't give us security in the long run,” said Paulo Camillo Penna, president of SNIC. “Sales are being sustained, in the great majority, by real estate construction, the maintenance of the pace of works and small residential reforms and also in the commercial activity that already presents a decline in consumption due to its operation,” However he also noted that activity had been, “subjected to a huge and unexpected pressure of demand, especially since June 2020.” As such SNIC has called for resumption of infrastructure work to stabilise demand.

Argentina: The Asociación de Fabricantes de Cemento Portland (AFCP) has reported a 10% year-on-year increase in cement shipments to 1.04Mt in September 2020 from 948,000t in September 2019. Clarín News has reported that this corresponds to month-on-month growth of 13% from 924,000t in August 2020, signalling the start of a recovery from the economic effects of the coronavirus lockdown.

Chamber of Construction president Iván Szczech said, “There are beginning to be positive indices, such as these cement sales. The sector has been working with the government in different lines to encourage both public and private works while waiting for all projects to be completed.” Szczech attributed the longer-term increase in sales to streamlined business models.

Pakistan: Cement producers sold a record 5.21Mt of cement in September 2020, up by 22% year-on-year from 4.27Mt in September 2019. Exports were 1.12Mt, up by 41% from 790,000Mt. The Pakistan Observer has reported that domestic cement dispatches rose by 27% in northern Pakistan to 565,000t from 446,000t and by 16% in southern Pakistan to 3.52Mt from 3.03Mt.

Uzbekistan: Producers sold 15.0Mt of cement in the first eight months of 2020, up by 105% year-on-year from 7.33Mt over the corresponding period of 2019. Sales fell by 44% in value to US$67.6m from US$120m due to deflated demand, according to Trend News.

Uzpromstroymaterialy head Botir Khuzhabekov said, “In 2019 cement production amounted to 11.0Mt. By the end of 2020, it is planned to bring production to 20.0Mt of cement of grades 400, 500, and 600.”

Pakistan: Cement dispatches increased by 5% year-on-year to 3.52Mt in August 2020 from 3.35Mt in August 2019. Domestic sales rose by 4.8% to 2.79Mt from 2.67Mt, while exports rose by 5.8% to 0.73Mt from 0.69Mt. Plants in northern Pakistan produced 2.49Mt of cement (52% of total production), while those in the South produced 2.35Mt (48%).

Denmark: FLSmidth has announced the reinstatement of its 2020 guidance. The guidance predicts full-year sales of Euro2.28bn, down by 18% year-on-year from Euro2.77bn. Earnings before taxation, interest, depreciation and amortisation (EBITDA) margin is expected to decline to 6.0% from 8.1%. The company said that the guidance is “subject to higher uncertainty than usual” and conditional upon “no further escalation of Covid-19, no further extensive lockdowns or travel restrictions occurring before year-end, a gradual improvement in business sentiment for the remainder of 2020, and business improvement implementation of around Euro28.2m, of which Euro18.8m relate to the previously communicated improvement activities and around Euro9.40m relate to further improvement activities in cement.” It added, “The cement industry has been severely impacted, and the timing and extent of a rebound remain uncertain. Our goal for the cement business is to generate more stable, higher-margin earnings.”

Australia: Adelaide Brighton has recorded a net profit of US$21.1m in the first half of 2020, compared to a US$13.0m loss in the first half of 2019. Revenues fell by 7.3% to US$508m from US$548m due to a 12% construction decline over the period, according to the company. Residential construction fell by 16%, however mining and infrastructure activity remained consistent with levels in the first half of 2019. Adelaide Brighton said, “Cement demand is likely to continue to benefit from a strong production outlook for gold, nickel, and iron ore in particular, and stable demand from the alumina sector.”

Pakistan: Lucky Cement’s profit for the 2020 financial year ended 30 June 2020 was US$19.9m, down by 68% year-on-year from US$62.4m in the 2019 financial year. The company recorded a 13% sales drop to US$249m from US$285m, which it said was due to the impacts of the coronavirus pandemic.