Global Cement News

Indonesia: Semen Indonesia has appointed its operational director Suparni as its new CEO. The state-owned company has taken the decision after receiving 69.6% votes from 76.1% its overall shareholders, according to The Jakarta Post. Suparni replaces Dwi Soetjipto, who has joined the oil and gas company Pertamina. The shareholders also appointed Rizkan Chandra to the board of directors.

Nigeria: Dangote Cement has appointed Onne van der Weijde as CEO, effective from 1 February 2015. Van der Weijde, ex-Holcim India head, will take the helm from Dangote Cement's Devakumar Edwin.

South Africa: The board of PPC has been newly-constituted following the company's annual general meeting. Shareholders have elected six new board members. From a reduced list of 10 nominees, shareholders elected former Reserve Bank governor Tito Mboweni, former PPC finance director Peter Nelson, Nicky Goldin, Timothy Leaf-Wright, former Afrisam CEO Charles Naude and Daniel Ufitikirezi. Ufitikirezi is chairperson of PPC's Rwandan business. The appointment of Darryll Castle as CEO was also approved by shareholders and Tryphosa Ramano retained her position as CFO.

On 15 January 2015, the Swiss National Bank (SNB) abandoned the Euro1.20 cap on the Swiss Franc. The effects of the decision were immediate, with the value of a Franc dropping from Euro1.20 to just Euro0.99. The decision caused turmoil for currency brokers and big business in Switzerland's normally bullet-proof finance sector, with some brokers out of business by the end of the same day.

It is not hard to see why these brokers were caught out by the sudden change in the SNB's position. On 18 December 2014 Thomas Jordan, Chairman of the SNB's Governing Board, stated in no uncertain terms that, "The SNB remains committed to purchasing unlimited quantities of foreign currency to enforce the minimum exchange rate with the utmost determination." In research conducted by Bloomberg News on 9 - 14 January 2015, not one of 22 economists questioned expected the SNB to abandon the cap in 2015. That's quite an about-turn by the SNB in less than a month.

The decision to 'scrap-the-cap' shows the potential of outside influences to suddenly unseat even the most secure of businesses. Such companies include Holcim, the share-price of which went on a rollercoaster on the SIX Swiss Exchange in the immediate aftermath of the announcement. At one point on 15 January 2015 Holcim had lost 20% of its value before closing 11% down on the day. It has since recovered somewhat, although a whopping Euro3bn of its capital has been swallowed up due to the plummeting Franc.

Following the sudden changes to its circumstances, Holcim immediately reinforced its commitment to its merger with Lafarge. "Regarding a possible impact on the combination with Lafarge, what we can say is that we remain committed to the merger," said spokesman Eike-Christian Meuter. There was an almost simultaneous reciprocal statement from the French producer, also stating its commitment. No change there then.

The calmness of Holcim's statements was broadly in line with commentary from bankers, which stated that large deals were unlikely to be affected by the change. This is because Swiss firms can insure themselves against the effects of such moves. Another 'get-out of jail free card' could have been a material adverse change (MAC) clause. If in place a MAC would allow the merging parties to terminate a transaction if an external event significantly changes the outlines of the deal. It is not possible to know whether Lafarge and Holcim have such a clause due to confidentiality issues.

Despite the fundamentals of the LafargeHolcim merger appearing to be unaffected, the scrapping of the Franc cap is an excellent example of how external policy makers can have a direct and unexpected impact on the underlying conditions of the global cement industry. Another major external influence at present is the low oil price, mainly affected by the oil producing cartel OPEC. HeidelbergCement said this week that it expects the oil price fall to have a positive impact on its profit in 2015. It makes 80% of its revenue in oil-importing countries, which should see reduced transport and production costs. This will result in improved economic conditions, higher levels of construction and hence cement production. For HeidelbergCement 2015 could be a case of costs down, sales up.

That surely sounds like good news, for some stagnant 'old' developed economies at least. However, in the world of 'new normals' it is the IMF that has sounded the biggest warning this week. It dropped its 2015 global economic growth forecast from 3.8% to 3.5%. As fuel prices slump, so too has inflation. In the EU this has resulted in deflationary pressures that could yet stump the recovery. Consumers (and construction firms alike) may go from a position of not being able to afford things, to not wanting to buy them. In the longer term, this may be yet more bad news for the cement sector in established markets.

South Africa: The Green Building Council of South Africa (GBCSA) has appointed Seana Nkhahle from the South African Local Government Association (SALGA) as its new Chairman. Nkhahle takes over the reins from long-time Chairman Bruce Kerswill, who played a leading role in the formation of the council.

The GBCSA was established in 2007 to promote green building development in the country. It is a member of the World Green Building Council (World GBC) and is today one of the most active councils worldwide.

Nkhahle is an Executive Director at SALGA, responsible for 'Corporate Strategy and Research.' Prior to this, he was the Executive Manager and National Programmes Co-ordinator at the South African Cities Network from 2005 to 2009. In 2004, Nkhahle received a recognition award issued jointly by the Swiss Federal Institute of Technology and the Holcim Foundation for Sustainable Construction.