Global Cement News

US: The board of directors of Rockwell Automation has elected president and chief executive officer (CEO) Blake D Moret as its chairman with effect from 1 January 2018. Moret, aged 54 years, succeeds Keith D Nosbusch, who has served as chairman since 2005 and remains as a director. The company will continue to have an independent lead director.

Moret began his career in 1985 as a sales trainee, and subsequently served in senior positions across the organisation, including international assignments in Europe and Canada. He was promoted to senior vice president of Control Products & Solutions, one of the company’s two business segments, in 2011, and to president and chief executive officer in July 2016.

He holds a bachelor’s degree in mechanical engineering from Georgia Institute of Technology. He serves on the National Association of Manufacturers’ (NAM) Board of Directors and Executive Committee and on the boards of other industry and civic organizations and is a member of the Business Roundtable.

Sweden: SKF has appointed Kent Viitanen as its President of Bearing Operation. He was previously Senior Vice President, Group People, Communication and Quality.

Viitanen joined SKF in 1988 and has held a number of business unit and factory management roles in Sweden and internationally. The Group Quality function will also be integrated into Bearing Operations. He succeeds Luc Graux, who will take up a new role within Bearing Operations. Carina Bergfelt, in addition to her role as General Counsel and Senior Vice President, Legal and Sustainability, will take on the responsibility for People and Communication.

US: Jon R Tabor has been appointed as the chairman of Allied Mineral Products. He succeeds Jon K Tabor who becomes Chairman Emeritus of the refractory producer. Paul Jamieson, Corporate Vice President of Steel and Domestic Foundry, has been promoted to President.

In the role of chairman and chief executive officer (CEO), Jon R Tabor will retain responsibility for international and affiliate operations, Research and Development, Strategy, Finance, and the global scope of all other departments. Jamieson will take over Columbus-based Domestic Sales, Domestic Operations and Human Resources and report to Tabor.

Allied Mineral Products acquired the monolithic refractory and precast shapes producer Pryor Giggey in early 2017. It also plans to open a production plant in Russia.

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.

Vietnam: The Vietnam Cement Industry Corporation (Vicem) has appointed Bui Hong Minh as its general director. He was previously the deputy general director of the company, according to the Viet Nam News newspaper. He replaces Tran Viet Thang who has been relieved from the role following allegations of business malpractice.

Minh, aged 46 years, has held the position of deputy general director at Vicem since 2013. Prior to that, he worked at the But Son and Ha Tien cement companies.