Displaying items by tag: Yamama

Saudi Arabia: Yamama Cement’s sales grew by 64% year-on-year to US$214m in 2019 from US$139m in 2018. Its net profit after zakat and tax was US$68.3 following a loss of US$13.8m.

Saudi Arabia: In a report on 17 Saudi cement companies including itself, Yamama Cement recorded a year-on-year increase of 24% in sales volumes to 4.27Mt in November 2019 from 3.45Mt the previous November. The volume produced was 4.30Mt, up by 22% from 3.54Mt in November 2018. Mubasher has reported that the country has 1.22Mt of cement in inventory, 3.8% more than the 1.18Mt it held at the end of November 2018. Southern Province Cement Company (SPCC) led the month’s sales, with 0.61Mt.

Saudi Arabia: Yamama Cement achieved a US$12.2m third quarter net profit in 2019. This compares with losses of US$12.3m in the corresponding three months of 2018. The company reported a 73% leap in revenues year-on-year to US$49.7m from US$28.7m.

No overarching theme this week but rather four changes of note in different markets. The first is Lehigh Hanson’s agreement to buy the integrated Bath plant in Pennsylvania, US, from Giant Cement, a subsidiary of Mexico’s Elementia. Lehigh Hanson, a subsidiary of Germany’s HeidelbergCement, plans to pay US$151m for the 1.1Mt/yr unit giving it a cost of US$137/t of cement capacity. That’s a similar price that Elementia paid when it acquired Giant Cement in 2016. The Mexican conglomerate paid US$220m for a 55% stake in 2016 for three cement plants with a combined production capacity of 2.8Mt/yr or US$143/t.

The purchase by HeidelbergCement draws a line following problems selling its business activities in Ukraine. The group blamed a drop in profit in the first half of 2019 on this. Since then though it has been linked to a takeover of UltraTech’s stake in Emirates Cement, the owner of the 0.5Mt/yr Emirates grinding plant in Dhaka, Bangladesh. Buying a cement plant in North America, its second most lucrative region after Western and Southern Europe, looks set to be a wise investment.

The timing here is interesting given that Elementia, the building materials company partly-owned by ‘Mexico’s richest man,’ Carlos Slim, has been steadily expanding in recent years. As stated above it only acquired Giant Cement in 2016. However, its net sales and earnings fell in the second quarter of 2019 caused by a market contraction in Mexico affecting all of its businesses. Sales from its cement businesses in the US and Central America grew but they fell by 6% at home in Mexico. Elementia said that proceeds from the sale of the Bath plant will be used for debt repayment and ‘general’ corporate purposes. Notably, Ricardo Naya Barba, the president of Cemex Mexico, has also described the local market as ‘difficult’ this week, in comments reported upon by local media.

Meanwhile in Africa, China’s Huaxin Cement purchased Maweni Limestone from Athi River Mining (ARM) Cement in Tanzania as part of the latter’s on-going administration process. Local press reported the transaction as costing US$116m and subject to regulatory approval. This one’s interesting because it shows a major Chinese cement producer buying related assets outside of China. This is likely part of the country’s Belt and Road Initiative to develop industry and infrastructure around the world and to give its overproducing industries new markets. Perhaps the surprise here is that Huaxin Cement hasn’t gone after the rest of Kenya’s ARM Cement… yet.

The other African news story of note this week was the confirmation that Singapore’s International Cement Group (ICG)’s intended purchase of Schwenk Namibia had failed. This deal was announced in March 2019 but it later ran into trouble when the Singapore Exchange blocked the proposed acquisition in June 2019 on the grounds that ICG didn’t appear to have the money to pay for it.

Lastly, Yamama Cement announced that it wants to sell its Production Lines 1-5, which have a daily clinker production capacity of 5600t/day. The producer previously temporarily shut down the lines in 2017 and it has been planning to build a new cement plant. Since then though it has faced shrinking sales and profits in the tough Saudi Arabian market.

The takeaway from all of this is that, despite the doom and gloom of a world producing too much clinker, some cement companies are targeting growth in specific territories. Sometimes these schemes succeed, as in the case of HeidelbergCement and Huaxin Cement, and sometimes they don’t, as ICG has found out. Heavy building materials like cement are costly to move around so a plant or assets in the right place at the right time can make a fortune.

Saudi Arabia: Yamama Cement plans to sell its production lines 1 – 5 as part of a move to a new site. The old lines have a combined clinker production capacity of 5600t/day. The lines were ‘temporarily’ shut down in early 2017 due to poor market conditions.

Saudi Arabia: Yamama Cement’s sales fell by 30% year-on-year to US$139m in 2018 from US$199m in 2017. Its profit decreased by 82% to US$9m from US$51m. The cement producer blamed its performance on falling demand for cement and ‘fierce’ competition.

Saudi Arabia: Cement sales of companies operating in Saudi Arabia recorded an increase of 11.5% in July 2017. Sales rose to 3.49Mt in July 2017, compared to 3.13Mt during July 2016. Cement production in Saudi Arabia grew by 5% year-on-year to 3.37Mt in July 2017 from 3.2Mt, according to Yamama Cement Company.

Southern Province Cement topped the sales list with 409,000t sold in July 2017, although this was 5.32% less than the 432,000t that it sold in July 2016. Yamama Cement was the second most prolific seller, with a year-on-year sales growth of 17.5% to 369,000t from 314,000t in July 2016. Meanwhile, Tabuk Cement registered the lowest sales of 61,000t in July 2017, a 17.6% fall from 74,000t in the year-ago period.

In June 2017 cement companies’ sales in Saudi Arabia dropped by 40.6% year-on-year to 2.08Mt from 3.5Mt in June 2016. This is likely due to the earlier timing of Ramadan combined with temperatures of up to 45°C (113°F), both of which will have significantly reduced demand for building materials.

Saudi Arabia: Cement sales have fallen by 19% year-on-year to 22.6Mt/yr in the first five months of 2017. Clinker production decreased by 11.3%, according to a market report by Al Rajhi Capital. Northern Cement and Najran Cement recorded the highest declines in the period at 50% and 43% respectively. The report does not expect demand to pick up in the remainder of 2017. Overall it forecasts a 14% fall in sales volumes to around 47Mt in the year. Saudi Cement, Yamama Cement, Yanbu Cement and Najran Cement hold 50% of the total inventory in the sector at 4.9Mt, 4Mt, 3Mt and 2.8Mt respectively.

Saudi Arabia: Yamama Cement’s net profit fell by 66% year-on-year to US$13.5m in the first quarter of 2017. Its revenue fell by 41% to US$59m. according to Trade Arabia. The cement producer’s cement sales fell by 25% to 1.24Mt. The result has been blamed on low cement sales and prices.

Saudi Arabia: Yamama Cement has temporarily shut down five of its production lines. The lines have a joint clinker production capacity of 5600t/day. The decision was made due to poor market conditions, low demand for cement and high inventory.