Displaying items by tag: election

Bangladesh: The Bangladesh Cement Manufacturers Association (BCMA) has re-elected Alamgir Kabir as its president. Kabir is the vice-chairman of MI Cement Factory, which operates the Crown Cement band, according to the Daily Star newspaper. Md Shahidullah, the managing director of Metorcem Cement and chairman of Metrocem Group, and Zahir Uddin Ahmed, managing director of Confidence Cement, have also been re-elected as the first and second vice-president of the association respectively. The elections were held at the 20th annual general meeting of the BCMA in late October 2021.

India: A reduction in government spending and delays to the release of state funds ahead of India’s general election led to a slowdown in Indian cement demand growth in April and May 2019. Growth in cement consumption is expected to fall to a seven quarter low in the quarter to 30 June 2019.

“Pan-India cement demand will post muted 3-5% growth in the current quarter (the first quarter of the 2020 Fiscal Year), with states in the East (Bihar, Odisha) and South (Andhra Pradesh and Telangana and Tamil Nadu) moving at a snail's pace of 2-4%," said Hetal Gandhi, director at Crisil Research. However, Crisil expects demand to pick up in the second half of the 2020 fiscal year, with growth 6.0-7.5% for the 12 months to 31 March 2020 as a whole.

ARM Cement’s declining fortunes this week may signal the end of the current growth cycle in the Kenyan cement industry. The cement producer posted a 20% year-on-year drop in its sales revenue to US$52m for the first half of 2017. Its financial returns have been turbulent since 2015. However, inward investment from the UK’s CDC Group in 2016 had appeared to help the company enabling it to pay of debts and even consider an upgrade project to the grinding capacity at its Athi River plant.

Graph 1: Cement production in Kenya for first half of year, 2013 - 2017. Source: Kenya National Bureau of Statistics.

Graph 2: Cement consumption in Kenya for first five months of year, 2013 - 2017. Source: Kenya National Bureau of Statistics.

Unfortunately it now appears that the Kenyan cement market may have peaked in 2016. As can be seen from Kenya National Bureau of Statistics figures in Graph 1 and 2, production hit a high of 3.31Mt in the first half of 2016 and it has fallen to 3.18Mt for the same period in 2017. Consumption too has fallen, to 2.5Mt for the first five months of 2017. At the same time the value of building plans approved by the Nairobi City Council dropped by 12% to US$1.02bn for the first five months of 2017 with falls in both residential and non-residential applications although the decline in residential was more pronounced. One of the country’s larger infrastructure projects, the Standard Gauge Railway from Mombasa to Nairobi entered its final stage of construction towards the end of 2016 with the completion of track laying.

Bamburi Cement has also reported falling revenue and profit so far in 2017. Its turnover fell by 8% to US$170 and its profit decreased by 36% to US$18m for the half year. Bamburi blamed it on a contracting market, low private sector investment leading to residential sector issues, delays in some infrastructure projects and droughts. The drought also hit the company’s operating profit via higher energy costs. On the plus side though Bamburi’s subsidiary in neighbouring Uganda did record a good performance.

It’s likely that the general election in Kenya in early August 2017 has slowed down the construction industry through uncertainty about infrastructure investment and general fears about political unrest. Thankfully these latter concerns have appeared unfounded so far but the memory of the disorder following the poll in 2007, where over 1000 people died, remains acute. And of course the 2017 election is not over yet following the intervention of the Supreme Court to nullify the result of the first ballot and call for a second. A longer election period with the impending rerun will further add to the pressure on the construction and cement industries.

An industry report on East Africa in February 2017 by the Dyer & Blair Investment Bank fleshes out much of the situation in the region. One particular point it makes though is that, as it stands at present, building materials may be too expensive to grow the market fully. Dyer & Blair suggest that lower construction costs and more affordable home ownership methods might be the key to driving low end housing demands and in turn this might grow cement consumption.

With lots of new production capacity coming online both locally and in neighbouring countries such as Uganda and Ethiopia, the Kenyan cement market faces the dilemma of trying to balance the medium to long-term demographics with the picture on the ground. Low per capita cement consumption suggests growing markets but if the demand isn’t present in the short term then the impetus for cement producers to expand shrivels especially with aggressive imports, rising energy costs and growing local competition. Once the election period finishes the picture will be clearer but the boom times may have abated for now.

UK: Diana Montgomery, the chief executive of the Construction Products Association (CPA) has expressed frustration about the political deadlock that has resulted from the UK general election that took place on 8 June 2017. “From a business perspective, this is frustrating. We need certainty and clarity in order to address the serious challenges and opportunities facing UK construction over the next few years,” she said. She raised concerns over the delivery of the government’s National Infrastructure and Construction Pipeline, the government procurement process and its policy levers to address skills and housing shortages and the costs of energy and business rates to business. She added that she feared that the industry was facing a, “…period of greater instability at a critical time for our industry.”