Somalia: Pejman Bahrami, the deputy head of Qeshm Free Zone Organisation for maritime transport and port affairs, says that 14,500t of cement will be exported to Somalia. It will be transported on a Tanzanian ship, the AMINA-H, that is currently being loaded, according to the Fars News Agency. The Iranian cement industry has a production capacity of 80Mt/yr. It sends its exports to countries including Iraq, Azerbaijan, Turkmenistan, Afghanistan, Russia, Kazakhstan, Kuwait, Pakistan, Qatar, Turkey, the UAE, Georgia, Oman, India, Somalia and China.

Tanzania: Tanga Cement says it expects to reduce its losses by around 50% in 2018. It said that the local cement market improved notably in 2018 and that the cement producer improved its trading results and profitability, according to the Daily News newspaper. In 2017 the company reported a loss of US$11.5m due to local competition.

Namibia: Whale Rock Cement says it plans to start exporting cement to countries in Africa following the accreditation of its Cheetah Cement products with the Namibia Standards Institute and the South African Bureau of Standards. It hopes to send its exports to Mozambique, Congo and Ivory Coast, according to the Namibian Sun newspaper. The cement producer started producing clinker at its 1.2Mt/yr integrated plant near Otjiwarongo in late 2018. Prior to this it was importing clinker from Egypt.

Trinidad & Tobago: The council of trade ministers in the Caribbean Community (CARICOM) has agreed to the classification of Rock Hard Cement’s products in Trinidad. Rock Hard Cement has faced legal action from its competitor Arawak Cement about the designation of its products and the tariffs they incur, according to the Barbados Today newspaper. The matter will be referred to the Caribbean Court of Justice (CCJ) in June 2019 for final arbitration.

Trinidad Cement, the owner of Arawak Cement, took legal action against Rock Hard Cement in the CCJ alleging that the cement importer was misclassifying its products as ‘other hydraulic cement’ instead of ‘Portland cement-building cement grey’ leading to a lower import duty. However, the World Customs Organisation and CARICOM’s Council for Trade and Economic Development (COTED) have both ruled in favour of Rock Hard Cement. As such it only incurs a tariff of up to 5%. Rock Hard Cement said that it expects the CCJ to uphold COTED’s ruling in June 2019.

Australia: Kirkland Lake Gold plans to build a US$28m cement plant at its Fosterville Gold Mine in Victoria. The unit will be used to manufacture products to fill underground voids left over by the mining process, according to the Bendigo Advertiser newspaper. This in turn will allow ore yields to increase by mining adjacent to the former voids. The new cement plant is expected to be operational in the second half of 2019. The decision to build a cement plant at the mine follows an announcement that gold yields at the site are expected to double in 2019.

China: Starlinger Plastics Machinery Taicang, the Chinese branch of Austria’s Starlinger, has reached the milestone of building 10,000 circular looms. It reached this target in November 2018. The plant was established in 2005 and started manufacturing looms in 2006. It produces around 1000 looms/yr. Omega 6 and Omega 1000 model looms were first produced at Starlinger Taicang. This was then followed by the RX series, which is produced exclusively in China.

All the major multinational cement producers reported growing sales in 2018. Yet, the big growth was found outside of Europe, with China Resources Cement (CRC), Ultratech Cement and Dangote Cement all posting sales revenue growth of above 10%. Similarly, cement sales volumes continued to rise. CRC and Ultratech Cement were the standouts here, with the latter benefitting from its acquisitions including, most recently, Binani Cement. Concrete sales volumes were the same, rising for all the companies with the exception of Buzzi Unicem. It suffered market issues in Italy and Germany.

Graph 1: Sales revenue from selected multinational cement producers in 2017 and 2018 (Euro billions). Source: Company financial reports.

Graph 2: Cement sales volumes from selected multinational cement producers in 2017 and 2018 (Mt). Source: Company financial reports.

Graph 3: Ready-mixed concrete sales volumes from selected multinational concrete producers in 2017 and 2018 (Mm³). Source: Company financial reports.

With the major Chinese producers, including CNBM and Anhui Conch, yet to release their annual results for 2018, CRC is included in this roundup to give an idea of how that market is performing. Both CNBM and Anhui Conch have released profit alerts anticipating bumper results in 2018 though. This is likely due to boosted local cement prices.

The major story for the European-based producers was one of asset sales and debt reduction. LafargeHolcim returned to positive income in 2018 with a focus on its Strategy 2022 programme. HeidelbergCement’s earnings were hit by poor weather in the US and insufficient divestments. Cemex, although based in Mexico, retains a significant European presence and so it included here. It suffered from poor sales outside of its base in Mexico and the US. CRH continued on its trajectory as the world’s biggest building materials company with solid sales and earnings growth. Interestingly though given its expansion strategy in recent years CRH’s debt to earnings before interest, taxation, depreciation and amortisation (EBTIDA) ratio remains better than the other three majors above, even after its purchase of Ash Grove Cement in mid-2018 taken into account. Although other financial comparisons are worth considering, such as EBITDA margin.

Despite Cemex’s relatively high net debt compared to its peers it has been cutting its debt the fastest, at 8% to US$10.4bn in 2018. Its current plan is to reach an ‘investment-grade’ balance sheet by 2020. LafargeHolcim and HeidelbergCement are in ‘cuts’ mode leading to all sorts of speculation about where they might sell next. The wilder rumours in the press include preparations by LafargeHolcim to sell its entire operation in the Middle East and Africa. Similar tales about a sale in the Philippines are more credible but remain unconfirmed. HeidelbergCement is keeping its cards closer to its chest but poor performing territories that might be up for sale include some of its Italian plants and parts of Africa.

Of the larger producers without a European presence, Ultratech Cement has been negatively effected by energy costs during the nine months to the end of 2018 with its income and EBITDA down. Dangote Cement’s performance in 2018 was driven by sales at home in Nigeria although earnings elsewhere continued to grow.

With all of this in mind the scene appears set for a breakout by a major Chinese producer to buy a big bolt-on acquisition or expansion by regional or national players along the lines of that seen by Semen Indonesia or UltraTech Cement. Taiwan Cement has been ahead here with its purchase of a 40% stake in Turkey’s Oyak Cement but what we’re really waiting for is a majority position within a country or territory. At which point CNBM and the like will have earned its place in the 2019 version of this article. Perhaps the age of truly multinational cement producer is coming to an end as regional players become more prominent.

Brazil: InterCement has appointed Flavio Aidar as its chief executive officer (CEO). He succeeds Paul Nigo, who took the role in early 2018. Aidar has worked in the financial services sector including for Goldman Sachs, where he left as managing director in 2017. He then moved on to Mover Participações, formerly known as Camargo Corrêa and the controlling shareholder of InterCement, as a member of its advisory board.

Russia: M Goncharov has been appointed as the chief executive officer (CEO) of LafargeHolcim Russia. He took up the role at the start of March 2019. G Brusco, the previous CEO, has been transferred to a role at LafargeHolcim’s headquarters in Switzerland, according to the AK&M Information Agency. E Molodtsova has separately been named as the subsidiary’s commercial director.

Zambia: The board chairman of Lafarge Zambia, a member of LafargeHolcim, has announced that Jimmy Khan has become the company’s new CEO, with immediate effect.
Khan holds a Bachelor of Science in Business with a major in Accounting and Information System from Virginia Tech University in the US. His 14-year career with Lafarge / LafargeHolcim has included appointments in Mauritius, Seychelles, Nigeria, France and North America.