Kenya: Lafarge has appointed two directors to the board of East African Portland Cement Company (EAPCC) following the exit of Titus Naikuni after eight years with the company. EAPCC said that the terms for ex-Capital Markets Authority chairman Kung'u Gatabaki and Sarone Sena, chairman of Eldoret University council, are effective immediately. Bill Lay was reappointed as EAPCC chairman for a three year period, effective from 7 November 2014, by president Uhuru Kenyatta.

South Africa: PPC has named a mining industry veteran as CEO, ending a three-month leadership vacuum that has hit its share price. Darryll Castle will take over as CEO from 12 January 2014. Castle previously worked as chief operating officer (COO) at base metal miner Metorex, which has since been acquired by China's Jinchuan Group. A chartered financial analyst, he has been CEO of Trafigura Mining Group and Anvil Mining. Castle's experience includes projects in Zambia, Angola and Tanzania.

For the last issue of Global Cement Weekly before the Christmas and New Year break we're following our tradition of reviewing some of the major industry news stories of the year. Remember this is just one view of the year's events. If you think we've missed anything important let us know via LinkedIn, Twitter or This email address is being protected from spambots. You need JavaScript enabled to view it..

Lafarge and Holcim merger
The year has been dominated by one story: the merger of the two largest European-based cement producers, Lafarge and Holcim. The implications are massive. At a stroke the new company can dispose of less profitable units, clear debts and benefit from new mega-economies of scale. As Europe emerges from the recession, LafargeHolcim will be ready. Worldwide it is a rebuff to the consolidating Chinese cement producers who are poised, if they wish, to emerge from China and dominate international markets. The process has appeared surprisingly smooth so far with considerable forward planning. This week the European Commission has approved the proposed merger.

Lafarge CEO Bruno Lafont described the deal as 'a merger of equals'. What he didn't say is that the merger will leave LafargeHolcim with no equal. However, one question remains. Once the merger is complete will the new company be profitable?

China heads abroad
State planners in Hebei Province revealed plans to move excess cement production capacity outside of China in their usual sparse style. The quiet tone of the announcement failed to match its intentions to move 30Mt of capacity abroad by 2023. It is the next step after becoming the world's biggest cement producer, capturing swathes of the equipment market and consolidating its many local producers. How Chinese cement producers will fare in the wider global market remains to be seen. Yet while its economy remains strong the gobbling up of European utilities by Chinese companies suggests that, if all else fails, money talks.

Coal for India
If you can't fire-up your kiln you can't make clinker. With Indian cement producers reporting falling profits in 2014 the squabbling over coal allocation in the country summed up some of the input cost and infrastructure problems facing the country's cement industry. The coal blocks are due to be auctioned off from January 2015. Meanwhile analysts predict that Indian cement demand is unlikely to grow until 2016.

Sub-Saharan scares and skirmishes
The creation of Lafarge Africa means that three producers are now in a skirmish in Sub-Saharan Africa: Lafarge, Dangote and PPC. All three companies are present in multiple countries and expanding fast. This week, for example, PPC announced proposed merger plans with AfriSam. Given the low cement consumption per capita in this region the benefits of getting in early are immense. Unfortunately, there are many speed bumps along this road to development. One is the on-going Ebola epidemic. Left unchecked it could cause untold economic damage.

ASEAN set to open up
The Association of Southeast Asian Nations (ASEAN) is set to drop import tariffs in 2015 as it establishes a common market. Already in preparation cement producers have started to change their strategies, thinking regionally instead of nationally. Holcim Philippines, for example, announced in February 2014 that it was considering delaying building a new plant as it analysed the situation. The region, including high-growth countries like Indonesia and Thailand, could see its cement industry go into overdrive. However, the benefits may not be uniform as countries like the Philippines may lose out.

The US, fracking and falling oil prices
Of the western economies recovering from the 2007 recession, the US cement industry has rebounded the fastest, due in part to fracking which has brought down the cost of energy. The Brent Crude price hit a low of US$60 per barrel this week and this has consequences for everybody in the cement industry as fuel procurement strategies adapt.

For starters, cement producers gain a fuel bill cut as the cost of fuels fall. Producers in Egypt who have been frenziedly converting kilns from gas to coal may suddenly find their margins improve. Low energy prices also take away financial motivation to co-process alternative fuels in cement kilns. Finally, what of the giant infrastructure projects in Organisation of the Petroleum Exporting Countries (OPEC) like Saudi Arabia? Take away the petrodollars propping up these builds and cement demand may evaporate.

For more a more detailed look at trends in the cement industry check out the Global Cement Top 100 Report.

Global Cement Weekly will return on 7 January 2015. Enjoy the festive break!

Saudi Arabia: Mohammed Aba al-Ala has resigned from Najran Cement effective of 31 December 2014. Without disclosing the reasons for the resignation, Najran Cement explained that Aba al-Ala will remain with the company as board chairman. Badr Jawhar has been appointed CEO as of 1 January 2015.

US: Ash Grove Cement Company has announced Alan C Finch as the new plant manager of its Chanute works in Kansas, USA, effective immediately.

"We are pleased that Alan will assume the leadership role of our Chanute plant," said Mike Hrizuk, senior vice president of manufacturing. "This plant opened in 1908 and is the longest running plant in our fleet of eight plants in the USA. We are eager to introduce Alan to the employees and community."

Finch has a 17-year career in the cement industry and comes to Chanute from Ash Grove's Durkee plant in Oregon, where he has been production manager for the past nine years. He previously held the production superintendent position at the same plant for three years.

Spain: Loesche Latinoamericana, part of the Loesche Group, has appointed Vicente Fernández to take up the position of Sales Director (Spain), with effect from 1 December 2014.

Fernández, aged 39 years, has been working with Loesche Latinoamericana since 2006. Prior to his new appointment as Sales Director, Fernández has been actively involved in various functions within the Sales and Procurement departments. Previously he worked at the Procurement Department at Loesche GmbH in Düsseldorf, Germany. He holds a bachelor's degree in Industrial and Mechanical Engineering and an Executive MBA, backed by his extensive management and organisational skills.

Fernández will take over responsibility for all long-term clients, development of ongoing and future projects within Loesche Latinoamericana and the acquisition of new potential within the market. He will focus on serving the different industries in cooperation with sales forces within the group, in addition to strengthening Loesche Latinoamericana's customer service.

Spain: Waste treatment multinational Masias Recycling has hired Frederico Contente as its Key Account Manager for the cement sector. His main tasks will be to focus the company's sales on the international market of the cement industry. An industrial engineer with a Master's degree in international business, Contente has worked for several years with sector leaders in Finland.

Masias Recycling predicts that the use of alternative fuels by cement firms will grow 'significantly' over the next few years, as energy represents 30% of cement companies' operational costs. In 2012, it was estimated that the percentage of traditional fuels replaced by alternative fuels ranged from 5 and 10%, a figure predicted to reach 37% by the year 2050.

This week we heard news of two potential bidders for Lafarge and Holcim divestments. However, for a change it was where they will not be bidding that was of interest: Brazil. India's UltraTech Cement and Colombia's Cementos Argos now seem to have no interest in developing their positions in South America's largest cement market, having both previously stated their interest.

The Brazilian assets to be sold are three integrated cement plants and two grinding plants that share a capacity of 3.6Mt/yr (as well as a one ready-mix plant). Cementos Argos came out and said that it would not be bidding. UltraTech's position is more of a rumour, given by 'a source close to the company' that was not revealed by local media. However, both stories suggest that Brazil is currently not a good place for cement producers to buy up assets.

The reasons for these decisions are related to the state of the Brazilian economy, which has seen sub 2% growth in the last 11 quarters. The economy actually contracted by 0.9% in the second quarter of 2014 and by 0.25% in the third quarter of 2014. A 0.2% rise in the fourth quarter will be negated by a fall of 0.28% in the first quarter of 2015. Over the course of 2015 the IMF forecasts growth of 1.4%.

Although Brazilian cement production has risen from around 40Mt/yr in 2006 to around 70Mt/yr in 2013, it has been growing by lower and lower amounts each year. In 2013, it rose by 1.5% year-on-year, down from a 6.7% rise in 2012, an 8.3% rise in 2011 and a near 16% rise in 2010. Taken along with the IMF's GDP growth forecast, there is a genuine chance that Brazilian cement sales could plateau in 2014 or 2015. There will certainly be better places to try to sell cement over the next couple of years, hence the eagerness with which Cementos Argos declared its position.

One country that Cementos Argos has said it's looking at Lafarge and Holcim assets in is Mexico. Its economy is anticipated to grow by 3.5% in 2015, more than twice as quickly as Brazil and far more than the Americas as a whole (2.2%). Another anticipated strong performer in 2015 will be the US (3.1%), where Cementos Argos acquired assets in 2013. This week also saw the news that the Portland Cement Association's 8.1% cement consumption forecast for 2014 will be met.

Taking this all together, it appears that economic growth, and hence cement demand growth, will return to North America in earnest in 2015. Meanwhile South America's largest market is starting to lag behind. How will the rest of the two continents fare in 2015 and beyond?

Switzerland: Holcim Group has announced that Jacques Bourgon, its current head of occupational health and safety, senior advisor to the CEO and senior manager has decided to resign from the group to pursue challenges outside Holcim. He will leave on 31 December 2014. Holcim thanked Jacques Bourgon for his valuable contributions over his 24 years at the company.

China has admitted once again that its cement industry is plagued by over-capacity. State news agency Xinhua came clean this week as it reported that 103 production lines have been closed for the winter months.

The principal reason given for the winter shutdown was prevention of air pollution with resolution of overcapacity presented as a handy secondary. With long term plans in place to reduce overcapacity through industry mergers, demolitions and bans on new plants this is one more offshoot from the very public problems that smog and industrial pollution has given the Chinese government.

The policy follows a similar shutdown in China's far-western state of Xinjian that has been implemented since 1 November 2014. Xinjian is away from China's main cement production heartland in the south and east of the country. The idea here is to stagger winter production from cement kilns that use coal to avoid flue gas emissions rising when coal consumption for heating also rises. Since cement consumption by the construction industry is lower in the winter, a stoppage at this time of year should affect the cement producers less. Proposals have also been made to include Inner Mongolia and Hebei into the scheme.

The three provinces in question now - Heilongjiang, Liaoning and Jilin – represent 80Mt/yr or 6% of China's total cement production capacity from 28 cement plants, according to the Global Cement Directory 2014. This is broadly in line with the proportion of national population the three provinces hold.

Back in 2012 the National Development and Reform Commission suggested that national cement capacity utilisation was 69%. Local media in China have been reporting that currently Xinjian uses 60%. Western commentators reckon that China uses only 50% of the cement industry's total production capacity. By contrast India, the world's second biggest cement producer after China, has been lamenting this year that capacity utilisation had fallen below 70%. Worldwide, excluding China, capacity utilisation rates have been estimated to be just below 70% in 2014.

Plummeting particulate matter counts are great for Beijing's cyclists and their continued goodwill towards the government. However, the implications are bad for the producers who are affected and the associated industries. As one Chinese equipment manufacturer commented on Global Cement's LinkedIn Group, "...many small manufacturers of cement plants in China will go bankrupt." Unfortunately this too is also in line with the country's strategy to reign in its cement industry through industry consolidation. It may yet turn out sunny for the state planners... once the smog clears.