Global Cement News

Pakistan: Power Cement, formerly Al Abbas Cement Industries, has released the names of its directors for the period to 2016. Kashif Habib, Samad Habib, Muhammad Ejaz, Nasim Beg, Syed Salman Rasheed, M Yousuf Adil and Muhammad Yahya Khan are all set to be elected unopposed at the company's extraordinary general meeting to be held on 4 June 2013 in Karachi.

Back in November 2012 this column asked whether the UK cement market had become more competitive following the sale of the Hope cement plant. Broadly, we thought it had. Half a year later though and it seems that the UK Competition Commission doesn't think so. On 21 May 2013 it released provisional findings that the UK's three major cement producers were failing to compete on price with each other.

Its three main points of evidence included increases in average cement prices between 2007 and 2011, rising profitability for UK producers between 2007 and 2011 and only small changes in annual market share of sales. All of these market outcomes occurred despite a 'significant' slump in demand for cement from 2007 to 2009.

The problem here is that the Competition Commission's data refers to the UK market before it took action. In 2012 it forced the sale of Lafarge's Hope cement plant as a condition of the joint-venture between Lafarge and Tarmac. Subsequently, Lafarge and Tarmac's combined cement production capacity in the UK fell from 5.15Mt/yr to 3.85Mt/yr. However, the Competition Commission has modelled Hope Construction Materials as an effective replacement of Tarmac's previous market share in its analysis. With no major change to the status quo in the UK cement industry, it feels that competition is unlikely to improve. Hence the need for further action.

It must be emphasised that the Competition Commission did not find any evidence of explicit coordination between the producers. Professor Martin Cave, Competition Commission Deputy Chairman and Chairman of the Inquiry Group, summed it up as follows: "In a highly concentrated market where the product doesn't vary, the established producers know too much about each other's businesses and have concentrated on retaining their respective market shares rather than competing to the full."

To look at just one example, it should be noted that most of the management team of Hope Construction Materials came originally from jobs at either Lafarge or Tarmac. However in Hope's defence, who else would the new company hire except seasoned industry personnel. Naturally they would want the best people possible!

With the revival of the UK construction industry hanging in the balance the Competition Commission has a tough job ahead to ensure increased competition in the future.

Pakistan: Lucky Cement has announced that its chief executive Muhammad Ali Tabba has been appointed as a member of the cement producer's Human Resource and Remuneration Committee. The committee now includes the following members of the board: Rahila Aleem, Jawed Yunus Tabba, Zulekha Razzak Tabba and Muhammad Ali Tabba.

Congratulations to Cemex for their work on alternative fuels in Germany. In April 2013 Cemex reached an alternative fuels substitution rate of over 80% at its German cement plants, with the Kollenbach plant beating 90%. Impressive stuff.

The German cement industry as a whole is already one of the leaders in the industry for alternative fuels use, reaching levels above 60% in 2010. This compares favourably with, for example, the UK's (high) rate of 40% in 2011 and the Cembureau average rate of 28% for its 27 European member states in 2009.

To show how fast the change in alternative fuels usage has been in Germany, in 2000 the rate was around 25%. For Cembureau members it was about 10.5% in 2000. Cemex's achievement at Kollenbach even surpasses HeidelbergCement's alternative fuels rate of 85% that it achieved across the border in 2011, at its Eerste Nederlandse Cement Industrie (ENCI) plant in the Netherlands.

Globally, Cemex seems likely to meet its 2015 target of 35% alternative fuels substitution rate. The other large multinational cement producers have similar plans in place. For example, Lafarge intends to reach 50% usage by 2020.

For more information on the German cement industry, read our feature 'Germany: A modern force in cement' in the May 2013 issue of Global Cement Magazine.

This week we present the 100th issue of Global Cement Weekly, Global Cement's weekly cement industry news digest. To mark the occasion we would like to know what you think about what we are doing. Let us know by taking the Global Cement Reader Survey 2013. All completed submissions will be entered in a draw to win an iPad Mini.

Take the Global Cement Reader Survey 2013

China: China Tianrui Group Cement has said that Yu Yagang tendered his resignation as an executive director and chief financial officer with effect from 11 May 2013 for reasons of personal development. Yu will remain as the chief accountant of Tianrui Cement, a wholly owned subsidiary of China Tianrui.

Yang Yongzheng has been appointed as an executive director, authorised representative and a member of the nomination committee. Yang will remain as the general manager of Tianrui Cement. Xu Wuxue has been appointed as an executive director, chief financial officer and a member of the remuneration committee. Xu will remain as the chief financial officer of Tianrui Cement. Wang Delong has been appointed as an executive director and deputy chief executive officer.