Displaying items by tag: Sephaku Cement

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.

South Africa: According to Business Day, Sephaku Cement is ramping up production towards a steady state at both its Delmas and Aganang plants.

In the first three months of 2015 to 31 March 2015, Sephaku Cement's revenue increased by 36%, while its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 39% to US$11.3m. Its operating profit grew by 44% to US$8.87m and its profit after tax grew by 57% to US$3.83m. Sales revenues came mainly from the Delmas plant, which reached steady state production in November 2014. Clinker and cement production at Aganang started in August 2014 and October 2014, respectively.

"We are pleased to have commenced clinker production at Aganang because it has improved our cost efficiencies and enabled Sephaku to remain highly competitive," said CEO Lelau Mohuba.

Sephaku Cement's market penetration continued, as reflected by 29% higher quarterly sales of about US$42.4m. "Our main focus going forward is to sweat the assets and increase free cash flows in preparation for the distribution of dividends," added Mohuba. Sephaku said that the operating environment remained highly competitive, as overall cement demand remained flat and the number of producers had increased. Subdued demand from South Africa's construction industry also resulted in prices remaining flat on a year-on-year basis.

South Africa: Sephaku Cement, an associate of Sephaku Holdings, has completed the commissioning of the Aganang clinker plant in Lichtenburg, North West Province and is ready to commence production. Lelau Mohuba, the chief executive of Sephaku Holdings, said that the first consignment of clinker would be delivered to Sephaku Holdings' Delmas grinding plant by the end of August 2014. The Aganang plant also has a cement production capacity of 1.1Mt/yr.

Commercial production at the Delmas grinding plant commenced in January 2014 following a successful commissioning phase. Once it is operating at full capacity, it will be capable of producing 1.4Mt/yr of cement. About US$312m has been invested in establishing these new cement plants, which will have a total annual capacity of 2.2Mt/yr once they are fully operational.

Sephaku Holdings has a 36% stake in Sephaku Cement, with the remaining 64% owned by Dangote Cement. Mohuba said that the production of its own clinker was an important step for Sephaku Cement in enabling it to become a fully-integrated producer of cement. Mohuba said that Sephaku Cement had to date been purchasing clinker to grind at Delmas, where the company had achieved more than 60% capacity utilisation. He said this had enabled Sephaku Cement to enter the market while strengthening its sales function in preparation for increasing volumes.

South Africa: Costs relating to Sephaku Holdings' new cement business Sephaku Cement dragged the group to a loss in the year that ended in March 2014, though management has said that indications are positive for its cement venture.

Sephaku Holdings has a 36% share of Sephaku Cement, which in January 2014 completed the construction of two plants in North West Province and Mpumalanga. Nigeria's Dangote Cement is the majority shareholder in Sephaku Cement. Sephaku Holdings reported a post-tax loss of US$260,300 in the period under review, largely due to a loss from Sephaku Cement of US$1.37m.

Sephaku Holdings' latest results include little revenue from the cement business, as one of the plants began producing only in January 2014 and the other is due to begin production in July 2014. The South African cement market is currently oversupplied and is likely to remain that way for some time, but Sephaku and another newcomer, Mamba Cement, are banking on healthy demand growth and cost-efficiency advantages from their modern plants. Mamba has a plant under construction near Northam in Limpopo.