Displaying items by tag: Sales

Philippines: Cement sales have risen by 10.7% year-on-year to 13.2Mt in the first half of 2016 due to increased government spending on infrastructure and improved private sector involvement in construction. Ernesto Ordoñez, president of the Cement Manufacturers Association of the Philippines, also cited good weather as helping drive up sales, in comments made to the Philippine Daily Inquirer. Private sector construction constitutes 76% of cement sales, while public construction projects use the remaining 24%.

Fiji: Pacific Cement’s sakes volumes of cement have increased by 45% to 150,561t in the last year. 104,000t of cement was sold locally, according to the Fiji Times newspaper. General manager Sowani Tuidrola attributed the boost in sales to growth in the local market. At present Pacific Cement’s plant produces 500t/day of cement. The cement producer exports cement to Vanuatu, Tonga, Samoa, Tarawa, Solomon Islands, Cook Islands, Wallis and Futuna, Papua New Guinea and Timor Leste.

Indonesia: Semen Indonesia’s cement sales volumes rose by 1.2% year-on-year to 12.4Mt in the first half of 2016 compared to the same period in 2015. Local sales rose by 1.6% to 12.2Mt but export volumes fell sharply by 20.1% to 0.19Mt. The decline in export sales was attributed to the Indarung cement plant in Padang province.

Cement consumption for the country as a whole rose by 3.1% to 29.5Mt for the first half of 2016, according to Indonesian Cement Association data. Increases in consumption were noted in most regions, with the exception of Kalimantan, where consumption fell by 16% to 2Mt. Notable increases in consumptions were recorded in Sulawesi, Maluku and West Papua. Overall exports of cement fell by 19.3% to 0.21Mt but clinker exports rose by 380% to 0.42Mt in the period.

Brazil: Jose Otavio Carneiro de Carvalho, president of the National Union of the Cement Industry (SNIC), estimates that the Brazilian domestic market will decrease by 12% in 2016, according to the Folha newspaper. SNIC data shows that cement sales fell by 11% year-on-year to 61Mt/yr for the June 2015 to May 2016 period from 69Mt in the previous year. Sales so far in 2016 have fallen by 14% to 23Mt for the January to May 2016 period from 27Mt from the previous year. SNIC have suggested that demand will only resume from 2017 and that companies may be holding back investment to ensure it.

Philippines: Ernesto Ordoñez, the president Ernesto Ordoñez Cement Manufacturers Association of the Philippines (CEMAP), has said sales in the first three months of 2016 rose by 13% year-on-year to 6.43Mt in the first three months of 2016 from 5.7Mt in the same period in 2015. It was driven by strong construction activity in the country according to the Philippines Star newspaper.

“Demand will continue to be strong, especially with presumptive president Duterte saying that infrastructure will remain a high priority during his administration,” said Ordoñez. He added that the local cement industry benefitted from the higher infrastructure budget being allocated for the Department of Public Works and Highways (DPWH). CEMPA forecast that construction growth in both the pubic and private sectors will remain strong in 2016.

Brazil: Cement sales have fallen by 14.5% year-on-year to 13.9Mt in the first quarter of 2016 from 16.3Mt in the same period in 2015 according to the Sindicato Nacional da Indústria do Cimento (SNIC). Local cement companies estimate that sales and apparent consumption will fall by up to 13% in 2016.

A survey by SNIC shows the sales began falling in mid March 2014 due to problems in the construction industry. However, SNIC president José Otávio de Carvalho said that this is not the worst crisis faced by the cement industry. In 1982 cement consumption fell to 19Mt from 27Mt in 1982.

Pakistan: The Pakistan cement industry has recorded its highest ever dispatches of 3.58Mt in March 2016, an increase of 19% year-on-year from 3Mt in March 2015. Exports have grown by 21% to 0.53Mt from 0.44Mt in March 2016. The All Pakistan Cement Manufacturers Association (APCMA) described the growth as ‘encouraging’ as it enabled the industry to hit a capacity utilisation rate of 95%. However, despite this high rate the APCMA added that it was still being accused of price fixing, according to local press.

For the nine months from July 2015 to March 2016 overall cement despatches rose by 9.95% year-on-year to 28.3Mt. Local despatches in the north and south of the country have both shown growth respectively. However, exports fell by 19% to 4.41Mt from 5.44Mt. The year so far has been poor for exports, only picking up growth from February 2016 onwards.

Vietnam: Total clinker and cement sales rose by 9.8% year-on-year to 15.71Mt in the first quarter of 2016, the Building Material Department under the Ministry of Construction has said. The sales figure represents 20.7% of the country’s target for 2016.

In March 2016, the country’s cement sales rose by 17% year-on-year to 6.27Mt, supported by growing construction projects and the recovery of the real estate market. Clinker and cement exports grew by 115% year-on-year to 1.35Mt March 2015. Total export volumes for the first quarter of 2016 rose by 2% to 3.5Mt.

The Ministry of Construction forecasts that Vietnam's sales of cement and clinker will rise 4 - 7% on year to between 75 – 77 Mt in 2016 despite economic concerns. The country now has 76 cement production lines with a combined production capacity of 82Mt/yr.

Philippines: Cement sales volumes grew by 14.3% to 24.4Mt in 2015 according to the Cement Manufacturer's Association of the Philippines (CEMAP). The sales volume was 21.3Mt in 2014. In the fourth quarter of 2015 cement sales rose by 16.6% year-on-year to 6.1Mt from 5.2Mt in the same period in 2014.

CEMAP president Ernie Ordonez attributed the growth to higher investments in construction of the public sector backed with the private sector's confidence in the government, new housing projects with low interest rates and better weather in 2015.

Last week we promised reasons to be cheerful for the cement industry. We only have one to offer this week but it's a good one. At present three Indian cement companies are on sale: Lafarge India, Reliance Cements and Jaiprakash Associates. If these sales complete then it represents an opportunity for the Indian cement industry to reorganise itself and stride forward when growth recovers.

Lafarge India upped its sales proposal to the Competition Commission of India (CCI) on 6 January 2016 to sell its entire 11Mt/yr portfolio. Originally as part of the LafargeHolcim merger agreements the CCI asked Lafarge to sell 5.2Mt/yr of production capacity in Chhattisgarh and Jharkhand in eastern India. However the deal was reliant on the original buyer, Birla Corporation, securing limestone mining rights. Birla failed to do so. Now Lafarge India has decided to sell everything instead. Naturally, following its Euro8bn spending spree in 2015 CRH has been linked to the sale by Indian media.

Then following press speculation Reliance Infrastructure confirmed to the Bombay Stock Exchange on 11 January 2016 that it was at an 'advanced stage of discussions with potential buyers for divesting the cement business of the company.' Reliance's cement arm, Reliance Cement, holds three cement plants in Maihar in Madhya Pradesh, Kundanganj in Uttar Pradesh and Butibori in Maharashtra with a total production capacity of 5.8Mt/yr. In addition to this, the company is also developing a 5Mt/yr cement plant at Wani in Maharashtra. The Reliance sale has been reported upon since early 2015. The difference this time is that Reliance responded to local press reports that it was about to sell to Birla Corporation or a couple of other private equity firms.

Finally, the third sale concerns Jaiprakash Associates' on-going attempts to sell its remaining cement assets to service its debts. Jaiprakash Associates cement subsidiary, Jaypee Cement, holds eight plants in India with a cement production capacity of 11Mt/yr. In addition it holds six cement grinding plants with a capacity of 10.7Mt/yr. Despite reported attempts to sell the entire division in one Jaypee has actually ended up selling its cement assets in a piecemeal fashion one or two at a time. The most recent sale being announced this week is to sell its Bhilai Jaypee Cement to Shree Cement. This follows other sales to HeidelbergCement and UltraTech in 2015.

None of these sales are new exactly but the combined production capacity of these plants comes to just under 28Mt/yr. This represents 9% of India's total national cement production capacity of 310Mt/yr. Any player somehow able to weasel their way into striking a deal for all of these plants would immediately become one of the country's biggest producers.

It would definitely be a case of buyer beware though. Credit agency ICRA recently reported that it expects that cement demand growth will be a 'modest' 4% in the 2015 - 2016 financial year before picking up in the following year. This follows poor growth in cement demand in the first half of 2015 and even declines in March and April 2015. ICRA also expected the country capacity utilisation to drop to 70% in the 2016 financial year, down from 77% in the 2012 financial year. That 7% drop in the utilisation is awfully close to the 9% of Indian national production capacity that the cement assets currently on sale from Lafarge India, Reliance Cement and Jaypee Cement. Unsurprisingly, the buyers of Indian cement assets have been picking and choosing their plants one-by-one so far.