Displaying items by tag: Sephaku Cement

South Africa: Sephaku Cement has reported a second unexpected kiln stoppage at its integrated Aganang plant in Lichtenburg. It attributed the second delay on the need for a repair to the inside of the kiln. The second stoppage started on 16 October 2021 and was expected to be completed by 26 October 2021. Previously, the kiln was stopped from 30 September 2021 to 6 October 2021 due to preheater refractory material damage caused by a corrosive element in one of the raw materials being used. The producer said that the raw material was subsequently replaced with an alternative option. The subsidiary of Nigeria-based Dangote Cement said that the outages were expected to reduce its sales volumes.

South Africa: Pieter Fourie, the chief executive officer of Sephaku Cement, has died. He passed away on 19 May 2021 following suffering a stroke earlier in the month. He is survived by a wife, three children and five grandchildren.

Fourie became the head of the subsidiary of Nigeria-based Dangote Cement in 2007. He later became a board director of the company in 2009 after its stock market listing. His previous roles included being marketing director of Blue Circle, which was subsequently acquired by Lafarge South Africa, the managing director of the cement business unit of Lafarge South Arica and Strategic Development Director for Africa based at the Lafarge head office in France. Fourie’s role at Blue Circle included sales, distribution and marketing before being promoted to managing director of the cement business. He subsequently accepted the assignment at Lafarge’s head office in a strategic development role to integrate the newly acquired business in Africa into Lafarge’s portfolio.

South Africa: Duan Classen, the Operations Executive of Sephaku Cement, has been appointed as its acting chief executive officer (CEO) following the admission of Pieter Fourie to hospital. The cement producer said that Fourie, its current CEO, had been receiving medical care after suffering a stroke and was responding well to treatment.

Classen has been a member of the executive management in charge of operations since the construction of Sephaku Cement’s plants. He holds a bachelor degree in Metallurgical Engineering from the University of Pretoria, and has previously participated in the Young Managers Development Programme at INSEAD in France and a Management Development Programme at Duke University in the US. Classen completed his graduate engineer training at De Beers before joining Blue Circle Cement in 1997, where he was involved in Blue Circle Cement's integration into Lafarge in 1998. He subsequently worked for PPC before being appointed to DCSA in early 2008.

South Africa: The board of Sephaku Holdings, owner of Sephaku Cement and 36% owner of Nigeria-based Dangote Cement, has re-elected Kenneth Capes as chief executive officer (CEO) of Métier Mixed Concrete. The board also re-elected Capes as an executive director of Sephaku Holdings, a position he first attained in 2013. He co-founded Métier in 2007.

There have been rumours in the press this week that LafargeHolcim is weighing up its options in South Africa. Reports in the local press allege that the building materials company has tasked Credit Suisse Group with finding a buyer for its business. This may or may not be true, only time will tell, but South Africa certainly feels like a market where LafargeHolcim should be considering its future.

As a prominent but smaller producer in the country, Lafarge South Africa is behind PPC and AfriSam in terms of clinker production capacity. InterCement’s subsidiary Natal Portland Cement and Dangote’s subsidiary Sephaku Cement have a similar production base with an integrated plant each and one or two grinding plants. Halfway through 2019 LafargeHolcim was describing market conditions as ‘difficult’ in the country with it being the sole Sub-Saharan market holding back regional growth for the group. By the third quarter the situation had reportedly improved but net sales and cement sales volumes were flat for the year to date. A clearer picture should emerge when LafargeHolcim publishes its fourth quarter results at the end of February 2020.

PPC provided its view of the market in its half-year results to 30 September 2019. Its estimate was that the South African cement industry declined by 10 - 15% for the period, creating a competitive environment. It added that the situation had been, ‘exacerbated by imports and blender activity.’ Both its revenue and earnings fell year-on-year, although a 30% rise in fuel costs didn’t help either. Sephaku Cement suffered a similar time of it, with a 19% fall in cement sales volumes during the first half, although it reported improvement in the subsequent quarter. Overall, it blamed falling infrastructure investment for pressurising the market and allowing blending activity to mount. Sephaku Cement was also wary of the local carbon tax that started in June 2019 warning of a potential US$2.8m/yr bill.

PPC noted that cement imports had risen by 5% to 0.85Mt in the year to August 2019. This followed a lobbying effort by The Concrete Institute (TCI) in mid-2019 to implore the International Trade Administration Commission (ITAC) to look into rising imports levels. At the time the TCI’s managing director Brian Perrie expressed incomprehension that a country with six different cement production companies with an over-capacity rate of 30% could be facing this problem. This latest broadside tails South Africa’s previous attempt to fend off imports when it instituted anti-dumping duties of 17 – 70% against importers from Pakistan in 2015. Imports duly fell in 2016 but rose again in 2017 and 2018, mainly from Vietnam and China.

All of this sounds familiar following LafargeHolcim’s departure from the ‘hyper-competitive’ South-East Asian countries in 2019. Those countries also suffered from competition and raging imports. Bloomberg pointed out in a report on the local industry in 2016 that PPC’s, AfriSam’s and LafargeHolcim’s kilns had an average age of 32 years, suggesting that efficiency and maintenance were going to be concerns in the future. Also of note is LargeHolcim’s decision to move its South African operations from one subsidiary, Lafarge Africa, to another, Caricement, in mid-2019.

Some level of market consolidation would certainly help local overcapacity. Plus, surely, LafargeHolcim’s mix of inland integrated capacity and a grinding plant near the coast could prove enticing to some of the Asian companies pumping out all of those imports. The thought on the minds of potential buyers everywhere must be, if LafargeHolcim chief Jan Jenisch was bold enough to sell up in South-East Asia, how can he not in South Africa?!”

South Africa: Sephaku Cement estimates it will have to pay up to US$2.8m/yr as part of South Africa’s new carbon tax. The new tax started in June 2019. The subsidiary of Nigeria’s Dangote Cement said that it would apply the tax on its products based on the proportion of clinker per tonne. This would work out at between a 1.5% and 2.5% price increases on lower strength and high strength cement respectively.

In a financial report to 31 March 2019 the cement producer said that its cement sales volumes fell by 6.4% year-on-year due to low cement demand was exacerbated by increases in value added tax (VAT) and fuel prices during the first and last quarter of its financial year. Its sales revenue fell by 3.1% to US$162m and its net profit rose to US$9.08m but only due to a tax credit.

South Africa: Sephaku Cement’s revenue fell by 3.1% year-on-year to US$161m in 2018 from US$167m in 2017. Its net profit dropped by 19% to US$3.3m from US$4.07m. The subsidiary of Nigeria’s Dangote Cement said that the general poor economy in the country led to an estimate 5 – 10% decline in industry sales volumes. It blamed ‘intense’ competition between clinker grinding plants, producers and importers. Its sales volumes of cement fell by 6.4%.

South Africa: Sephaku Holding’s revenue rose by 5% to US$32.1m in the six months to 30 September 2018 from US$30.7m in the same period in 2017. Its profit nearly doubled to US$1.8m. The subsidiary of Nigeria’s Dangote Cement said that cement prices had increased in most markets. It added that competition from cement importers and grinding plants had placed pressure on its cement sales volumes in the Kwa-Zulu Natal province in the latest quarter.

South Africa: Sephaku Cement says that its earnings for its 2018 financial year that ended on 31 March 2018 are expected to fall by up to 40% to US$3m. It has blamed this on a poor start to the year from its cement business, the impact of one-off income from a closure agreement with Sinoma regarding the opening of a new cement plant on the previous year’s results and poor results from its concrete business.

South Africa: Sephaku Holdings has said that bagged cement market continues to perform better than that of bulk cement as large construction projects dwindle. The market continues to be characterised by price competition but appears to be stabilising following the implementation of price increases by all producers in the third quarter. Sephaku Holdings, which owns a minority stake in Sephaku Cement, made the comments in its half-year financial results that covered events until 30 September 2016. Investments of up to US$1.2m have been earmarked to improve raw material handling efficiency.

The company also said that imports of cement have ‘significantly’ declined on a year-on-year basis, particularly from Pakistan. By the end of June 2016 approximately 0.16Mt had been imported compared to 0.5Mt in the previous period, with 75% of the volume from China.