Displaying items by tag: Uzbekistan

Uzbekistan: Uzbekistan plans to increase cement production from 7.5Mt/yr in 2014 to 7.9Mt/yr in 2015. Production is expected to reach 8.9Mt/yr by 2019. Within a programme of measures on structural reforms, modernisation and diversification of cement plants will take place in 2015 – 2019. Kyzylkumcement will invest US$30.7m to update equipment, while Bekabadcement will invest US$5.5m to modernise its milling technology.

Uzbekistan/Turkey: The Turkish Dal Engineering Group plans to commission a new 1.5Mt/yr cement plant in Surkhandarya by late 2017. A Turkish company and Almalyk Mining and Metallurgical Combine (AMMC) have signed a memorandum on cooperation for the construction of the cement plant.

The US$225m cement plant will potentially be financed by a US$90m loan from the Fund for Reconstruction and Development of Uzbekistan, commercial banks loans totalling US$110m and the equity of AMMC, worth US$24.4m.

Uzbekistan currently has six cement plants with a total installed capacity of more than 7Mt/yr. The largest of them are Kyzylkumcement (3.08Mt/yr), Akhangarancement (1.74Mt/yr) and JSC Kuvasaycement (920,000t/yr). Cement production in Uzbekistan in 2014 increased by 5.1% to 7.35Mt.

Uzbekistan: The Higher Economic Court of Uzbekistan has upheld a penalty tax on excess profit of Ahangarancement JSC (a subsidiary of Russian Eurocement Group JSC) from 2009 to 2014 and penalties for its late payment.

Ahagarancement stated that it would appeal the decision because it calculated the excess profit tax in accordance with the laws of the country. It added that the calculation had been confirmed as correct by the ministry of finance and the expert council at the State Tax Committee.

"The decision significantly changes the legal practice on issues of the formation of profits of cement companies, significantly encumbers the plant with an additional tax burden, leads to a reduction of investment opportunities of the enterprise and jeopardises the implementation of the project of modernisation of the enterprise," said the company in a press release.

The tax authorities of Uzbekistan have not commented on the situation.

Uzbekistan: Ahangarancement, which is owned by Russia's Eurocement Group, achieved record production figures in August 2015. The company said that it produced 164,000t of cement from 127,205t of clinker in August, rises of 2.5% and 12.2% compared to the same month of 2014. The enterprise shipped 164,863t of cement to consumers in August 2015, a 1.2% year-on-year rise.

The past few weeks have been notable for the high number of cement plant projects announced. Aside from further Dangote developments in Africa, (which doesn't seem to be able to go a week without announcing some 'milestone' or another,) a growing number have been in 'new' markets, especially in Central Asia.

The list from the past month or so is impressive. In east Asia Myanmar's Ait Thit Man group has announced that it will double its capacity from 5000t/day to 10,000t/day. In the south, Shree Cement wants to build another new facility in India. In west Asia, Pakistan, a country that has not seen significant cement capacity investment in the past few years, will be getting a new plant in Salt Range courtesy of China's Yantai Yantai Baoqiao Jinhong.

Turkmenistan looks set to build a 1Mt/yr plant as part of a massive government industrial stimulus package. China's Jilong Group wants to build a 0.8Mt/yr plant in Issyk Kul, Krygyzstan. Another Chinese producer, Xinjiang Tianshan will be bringing a 1.2Mt/yr plant to Georgia. Even today (Wednesday 30 September 2015), we have heard that there will be further Chinese investment, this time by Shangfeng Cement. It has announced financing for two new plants: in Tajikistan and Uzbekistan. Both are set to be 1.2Mt/yr facilities.

Two trends are clear from this. 1. Land-locked Central Asian and other relatively undeveloped countries elsewhere in Asia are finally coming to the cement plant party. 2. It is the Chinese producers that have the upper hand in these markets. This is based partly on cultural, political, geographical and historic links between China and these former Soviet nations. It is partly due to the lower 'face value' cost of Chinese equipment compared to European manufacturers. (The efficiency with which the lower cost equipment is installed and its running costs remain potential pitfalls, according to the Europeans.) Finally, it has a lot to do with the collapse of domestic demand for cement plants in China itself, where the economy continues to teeter on the brink.

The steady rise of the Central Asian cement sector and the increasing international activities of Chinese cement plant manufacturers have been 'on the cards' for years. To date, they have been trends waiting to happen, but 2015 looks to be the year that these factors finally combined and translated into large numbers of projects.

For Central Asian countries the prospects that come with a larger and more dynamic cement industry should enable greater independence, accelerated infrastructure development and economic growth. For the Chinese, setting up cement plants in Central Asia is a natural expansion of its multi-billion dollar activities in the African cement sector, where Sinoma recently signed a massive deal with Dangote Cement. As noted previously in this column, Africa can't continue to add capacity at the current rate forever.

For European manufacturers of cement plants, the other side of this story is not as pretty. AGAB, the large plant manufacturing group of Germany's Verband Deutscher Maschinen- und Anlagenbau (VDMA), has recently released its Status Report 2014/2015, which reports on activities from 2014. AGAB members' cement plant order volume fell by an incredible 63% in 2014 to Euro198m. This is a fall from Euro529m in 2013 and six times lower than the Euro1.2bn peak of 2008. Some of this is domestically driven but the vast majority of it is export markets.

The same report also shows that, for construction of all types of large industrial plants, Chinese producers have increased their global market share from 5% in 2006 to 17% in 2014. Over the same period, Western European producers have seen their share fall from 45% to 33%, although an increase in overall project volumes mean that these producers received roughly the same value of orders in each year. US suppliers, although not a major consideration for the cement sector, saw their share of orders fall from 22% to 20%. Japan also lost a third of its stake over the same period, falling from 15% of sales in 2006 to just 10% in 2014.

While AGAB's report anticipates increased competition from Chinese producers, it is by no means all 'doom and gloom' for Europe's traditional large plant manufacturers. It highlights the fact that Russia, the largest single market for heavy plant in 2014 and a significant consumer of European-made cement equipment, has decided against Chinese equipment in some cases. It also highlighted that the weakness of the Euro helps exports from Germany and the rest of the Eurozone and suggests that the sector should look to increase its service and consultation offering in order to build on its existing reputation for high quality equipment.

Tajikistan/Uzbekistan: Chinese cement producer Shangfeng Cement plans to raise US$240m through a non-public share offering. It will be used to partly fund investments in Central Asia. A total of US$130m will be invested in projects in Tajikistan, US$137m will be invested in projects in Uzbekistan and US$16m will be used to replenish working capital.

The first phase of the Tajik project, with a construction period of 18 months, will be capable of producing 0.96Mt/yr of clinker and 1.2Mt/yr of cement. Its products will be sold in southern and central Tajikistan, Uzbekistan and northern cities in Afganistan.

The Uzbek project will be the same size, with its products sold to eastern Uzbekistan, southern Kyrgyzstan and northern Tajikistan.

Uzbekistan: The State Statistics Committee of the Republic of Uzbekistan said that in January – June 2015 the construction materials industry produced 2.11Mt of goods, 11.3% more than in the same period of 2014. The share of industry in total industrial production was 5.2%, according to UzReport. Compared with the first half of 2014, large enterprises in Uzbekistan have increased their production of Portland cement by 113%, gypsum by 108%, lime by 135%, non-refractory ceramic building bricks by 116% and fibre cement by 118%.

Uzbekistan: Uzbekistan is planning to commission two new cement plants in 2016, according to Islom Arslonov, department head at Uzstroymateriali (Uzbek Construction Materials). A 0.4Mt/yr plant is being built by Karakalpak Cement in Karakalpakstan for launch in 2016. A 2.2Mt/yr plant being built by Surkhoncementinvest in Jarkurgan district of Surkhandarya.

Arslonov noted other cement projects that have been built in Uzbekistan recently including a 0.75Mt/yr plant commissioned in Jizzakh in 2014, the Ferghana Cement 0.15Mt/yr plant in Ferghana, the SingLida 0.12Mt/yr plant in Andijan and the Keer 20,000t/yr plants also in Andijan.

Accoridng to Arslonov, eight cement plants are operating in Uzbekistan with a total production capacity of 8.8Mt/yr.

Uzbekistan: The board of appeals of Tashkent regional economic court has postponed the consideration of the case regarding the privatisation of Eurocement's Ahangarancement plant.
Eurocement officials requested additional time to sign a settlement agreement with defendant, the State Committee of Uzbekistan, for the privatisation, demonopolisation and development of competition, according to local media. The next session of the appeal board of Tashkent regional economic court will be held on 25 September 2014.

Uzbekistan: The Supreme Economic Court of Uzbekistan has received an appeal from the Russian company Eurocement Group asking the court to not annul the privatization of Ahangarancement. The appeal will be considered in the middle of September 2014.

On 21 July 2014, the Uzbek court declared the 2006 privatization of the cement plant invalid. Eurocement, the largest shareholder of the cement plant, dismisses the claims of the Uzbek committee. If the company loses the case, its assets will be nationalised.