Displaying items by tag: Sales

FLSmidth revealed this week that Cooperativa Boliviana de Cemento, Industrias y Servicios (COBOCE) has ordered a cement mill for its Irpa Irpa plant near Cochabamba. The Danish engineering firm was pleased to note that with the sale it has now delivered mills to three of the country’s five producers. Other recent orders include supplying an OK 36-4 mill to Sociedad Boliviana de Cemento’s (SOBOCE) Viacha cement plant, announced in early 2016, and a sale of a complete integrated production line at Sucre to Fábrica Nacional de Cemento (FANCESA) in late 2016.

These order reveal slow but steady growth in the local industry in recent years. However, a slowdown so far in 2017 suggests that the market is changing. National Institute of Statistics of Bolivia (INE) data shows that sales in the local market broke down in 2016 into a 42% sales share for SOBOCE, 25% for FANCESA, 19% for COBOCE, 8% for Yura and 6% for Itacamba. This changed somewhat in the first quarter of 2017 with a reduction in the sales of SOBOCE and Yura. Sales in the country are concentrated in the departments of Chuquisca, La Paz and Cochabamba, which held 70% of cement sales in 2016.

Graph 1: Cement production and sales in Bolivia, 2012 – 2017. Source: National Institute of Statistics of Bolivia.

Annual cement sales in Bolivia have been growing consistently since 2001. Financial services company Pacific Credit Rating placed average annual sales growth at 7.72% from 1998 to 2016. In 2016 sales reached 3.7Mt. Graph 1 shows a continuation of this trend although the first half of 2017 has been weaker than 2016. COBOCE blamed the reverse in 2017 on reduced local government spending on infrastructure projects and poor weather. The producer was expecting sales to grow by 6 – 8% as a whole for 2017. However, on the basis of the figures for July and August 2017 this is not looking likely. Sales for the two months dropped by 2.5% year-on-year to 0.64Mt. A representative of FANCESA later blamed the market change on a reduction in sales supporting the construction of tall buildings in the country’s key markets as customers switched to buying ‘random’ volumes.

Sure enough local producers have started to complain about foreign exporters damaging their trade. A union head in Chuquisaca called for cement and clinker imports by Yura from Peru to be banned and concerns have been raised about concessions offered to Itacamba, a joint venture between Spain’s Cementos Molins, Brazil’s Votorantim Cement and Camba Cement. President Evo Morales inaugurated this company’s new plant in Yacuses, Santa Cruz in early 2017. The niggles about foreign exports to Bolivia seem counter-intuitive given that the country is landlocked and it has the world’s highest capital city above sea level. Usually, markets with nearby ports are most at risk from clinker and cement imports. Yet, Itacamba was planning exports to Argentina in November so the import and export markets via road and river links can’t be discounted.

Cement sales may be down so far in 2017 but overall the wider economy appears to be in rude health. After a strong decade of growth the national Gross Domestic Product (GDP) growth rate has fallen each year since 2014, but it was still 4.3% in 2016, one of the highest in South America. If that kind of growth persists it seems unlikely that the cement industry will have trouble for long.

Peru: A total of 925,000t of cement was sold in Peru in October 2017, an increase of 12.1% compared with sales in October 2016 and 3.3% above sales in September 2017, according to data from Asocem. Cement production stood at 922,000t, 6.3% higher than October 2016 and 4.4% higher than September 2017. Domestic sales stood at 873,000t, 5.8% higher than in October 2016 and 4.4% compared to September 2017. Cement production hit 8.19Mt in the first 10 months of 2017, 2.1% down year-on-year. Domestic cement sales reached 7.85Mt in the first 10 months of 2017, 1.5% down year-on-year. Total sales, including exports, reached 8.15Mt in the first 10 months of 2017, 1.9% down year-on-year.

Uzbekistan: Akhangarancement produced 1.44Mt of cement and 1.04Mt of clinker in the first nine months of 2017. This is 1.8% (25,449t) and 2.9% (29,147t) more than in the same period of 2016. The company also increased cement shipments to final customers by 2.6% to 11.46Mt.

"The plant has consistently increased its production since the beginning of the year. Excellent results were achieved thanks to the well-coordinated work of the whole team, the effective operation of technological equipment and quality repairs," said Gennady Kulikov, Chief Executive Officer (CEO) of Akhangarancement. "Further implementation of measures to improve competitiveness is needed. This includes improving product quality, introducing best solutions and practices, improving labour productivity and minimising costs to reduce product prices."

Brazil: Sales of cement have fallen by 7.6% year-on-year to 40.5Mt in the first nine months of 2017 from 43.8Mt in the same period of 2016. The data from the Brazilian cement association SNIC showed that cement sales had fallen in all regions of the country with particular decreases in the North and North-East areas. SNIC president Paulo Camillo Penna commented that the rate of decline was slowing compared to 2016 and that further progress was expected in 2018. He added that fruther government infrastructure investment was necessary to encourage this trend.

Vietnam: Vietnam sold 59.3Mt of cement in the first nine months of 2017, a rise of 6% compared to the same period of 2016. The country has now fulfilled 74.1% of its whole-year plan, according to the Ministry of Construction. 45.3Mt of cement was sold domestically, a 4% rise year-on-year, while 14.0Mt of cement was exported.

In September 2017, the country’s cement sales rose by 9.4% compared to August 2017 to 6.7Mt, comprising 5.2Mt of domestic sales and 1.5Mt of exports. As of September 2017, Vietnam had 3.0Mt of cement and clinker inventory, most of which is clinker.

At present, Vietnam’s cement capacity is 86Mt/yr but domestic demand is estimated at 60Mt/yr, a surplus of 26Mt/yr, according to the Vietnam National Cement Association (VCNA).

Paraguay: Industria Nacional del Cemento (INC) sold 9.85 million bags of cement in the first nine months of 2017, representing 74.6% of its total sales in 2016. The aim is to achieve sales of at least 13.5 million bags in 2017, up from 13.2 million bags sold in 2016.

INC’s sales were boosted by a new mill and a new dryer in Villeta. The firm will also be able to use alternative fuels in its kiln from late 2017. The plant will increase its capacity by 45% and will shortly issue a US$500,000 tender for a new cement packing plant at its plant in Villeta to achieve this.

Vietnam: The Vietnam Building Material Association estimates cement sales rose by 5% year-on-year to 59Mt in the first nine months of 2017. This represented 74% of its annual target, according to the Việt Nam News newspaper. 45Mt of cement was sold domestically, an increase of 4%, and 14Mt was exported. Cement production capacity is 86Mt/yr but demand is estimated at 60Mt/yr. The country is predicted to face a surplus of 26Mt in 2017, according to the Vietnam Cement Association.

Poland: A shortage of truck drivers may negatively affect cement sales. Vacancies for drivers have grown to the extent that even migrant workers from the Ukraine are unable to meet demand, according to the Polish News Bulletin newspaper. The exodus of drivers from the Ukraine has also reportedly impacted upon that country’s cement market. Industry sources say that railway transport is unlikely to help the situation due to a lack of loading facilities. Cement production rose by 7% year-on-year to 9.4Mt in 2017. Cement sales are expected to reach 16.5Mt in 2017 and 17.5Mt in 2018.

Czechia: Cement production in Czechia grew by 4.1% year-on-year to 3.94Mt in 2016 as consumption rose by 3.9% from 3.82Mt, according to data from the Association of Cement Producers. The production figure was 17% lower than the country’s record of 4.77Mt that it made in 2007.

Speaking to the Czech News Agency the association's secretary, Jan Gemrich, said, "In 2016, one of the dominant areas was the extension of the transport network, chiefly the reconstruction of the D1 motorway, which is to last until about 2020. Another important area, though stagnating at present, is new housing construction for young families." For 2017 Gemrich expects cement consumption to record annual growth of around 3%.

Cement exports increased by 8.5% year-on-year to 585,000t, accounting for about 15% of national output. Imports grew by 7.7% to 463,000t.

Malaysia: Cahya Mata Sarawak's (CMS) net profit jumped more than eight times to US$15.2m in the second quarter of 2017, from US$1.8m in the same quarter of 2016. The positive result was mainly due to lower handling costs, cheaper imported clinker and lower clinker production costs brought about by stable production and lower coal prices. The net profit for the six-month period was also higher by more than nine times at US$20.5m from US$2.1m in the first half of 2016. Total first half revenue decreased by 10% year-on-year to US$157.1m from US$174.7m.