Global Cement News

US: The Board of Directors of National Cement Company, a subsidiary of Vicat Group, has elected James E Rotch as Chairman of the Board of National Cement Company. Rotch will continue in the practice of corporate law with the firm of Bradley Arant Boult Cummings LLP, a regional law firm with offices throughout the Southeast, including Birmingham, Alabama, in addition to his duties as Chairman of the Board.

Romania: The Romanian unit of Swiss cement producer Holcim has announced that Francois Petry will be appointed as its director general as of 1 February 2014. Currently the general manager for aggregates at Holcim France, he joined the Swiss firm in 2008. He will replace Daniel Bach.

Bach has recently been appointed Area Manager for South East Asia and will be in charge of the Holcim subsidiaries from Indonesia, Thailand, Philippines, Vietnam, Malaysia and Singapore, according to a statement from Holcim Romania.

"Romania is one of the most important markets of Holcim Group in Europe, with significant growth potential," said Petry. "It's not going to be an easy job, as the economy is still recovering from the global crisis, but I know that we have here all that is needed to continue on the same successful path: talented and devoted people as well as modern and efficient production facilities."

Holcim Romania operates two integrated cement plants.

Following a two-year investigation, the UK Competition Commission (CC) has concluded that the UK needs a new cement producer to further encourage competition. Lafarge Tarmac will be required to sell one of its five cement plants. Additionally the CC wants the HeidelbergCement subsidiary Hanson to sell one of its slag grinding plants to increase competition in the supply chain for ground granulated blast furnace slag (GGBS).

The CC's competition investigation estimated that UK customers were cost at least Euro55m/yr between 2007 and 2012 due to high cement and GGBS prices, brought about by a lack of competition. According to Mineral Products Association (MPA) cement sales data, over the same period cement sales in the UK fell from 12Mt in 2007 to 8Mt in 2012.

Although it seems strange that the CC has acted again to support competition in the UK (just one year afterthe Lafarge Tarmac merger) the CC defended its actions in a letter to the December 2013 issue of Global Cement Magazine. According to Rory Taylor, the Lafarge Tarmac merger inquiry could only maintain pre-existing levels of competition, while the investigation's remit was to increase competition if it found a problem.

Explaining their administrative procedures provided little comfort for Lafarge Tarmac, which complained about the ruling. "Its analysis of industry profitability, which is central to its conclusion of Adverse Effect on Competition, is flawed, grossly overestimating the returns made. It has also failed to take into account the new business environment that has been established by our divestments - only 12 months ago - to create a new competitor (Hope Construction Materials), and the entry of new importers into the market."

One such importer, Quinn Cement, popped up this week with news that it is to invest Euro16m in its cement plant at Cavan, Ireland. It has hopes to capture 1% of the mainland British market, making it up to Euro9.6m in the process. Although the CC doesn't think that imports significantly effect cement prices in the UK, those Irish hopes have likely been boosted following the UK CC's decision. Whether it is in the interest of UK consumers remains to be seen. One measure of the CC's activity this time might be the time that passes before its next intervention in the cement industry.

Returning briefly to last week's column (MINT cement focus: Indonesia, GCW133), Holcim Indonesia has reported that its sales fell by 2% in 2013. Growth in the cement industry in Indonesia is by no means assured. Holcim will publish its full annual results for 2013 on 26 February 2014.

Russia: Yuri Kozlovsky has been appointed as Managing Director of Krasnoyarsk Cement plant, part of the Sibirsky Cement Holding group. Kozlovsky previously served as the technical director for the plant. He started his career in 1987 at the Topkinsky cement plant, graduated from the Belgorod Technological Institute of Building Materials in 1993 and returned to Topkinsky until 2011.

Thank you to everyone who commented on the column in last week's Global Cement Weekly (GCW132, MINTed cement industries). Amongst the more interesting thoughts was that in a large cement producing country like the US, there are regional areas of focus. So, returning to neologisms, FACT might refer to, say, Florida, Alabama, California and Texas, four southern states with the highest cement production capacities in the union. Similar regional breakdowns could be applied to countries such as China, India or Brazil.

Following last week's look at the MINT (Mexico, Indonesia, Nigeria and Turkey) economies in the context of cement we now take a quick recap on what has been happening in the 'I' of the MINT, Indonesia.

Indonesia has a population of 238m, a cement production capacity of 47Mt and a Gross Domestic Product (GDP) of US$1.29tr. Both its cement consumption per capita and GDP per capita are low by international standards suggesting that it has considerable growth potential for its cement industry as its wider economy grows.

Indonesia's biggest cement producer, the state owned Semen Indonesia (formerly Semen Gresik) has reported to local media that its unaudited net profit rose by 14% year-on-year in 2013 to US$410m. Its revenue rose by 12% to US$1.8bn. Its new 1.5Mt/yr cement plant in Tuban, East Java has been reported as being operational, bringing Semen Indonesia's cement production capacity up to 31.8Mt/yr in 2014.

The country's second biggest cement producer, Indocement, has not reported any figures for 2013 as a whole yet. However parent company HeidelbergCement did note that the Indonesian economy had slowed down as a result of falling commodity prices. Cement and clinker sales including exports rose by 0.6% in the first nine months of 2013. Around mid-2013 local media reported that Indocement was losing market share in Indonesia.

Holcim Indonesia has also not revealed its financial situation in 2013. However, like Indocement, Holcim Indonesia reported with its third quarter results that economic growth had 'temporarily' flattened in the country. Operating results had not improved on levels in 2012.

Overall domestic cement sales rose by 5.8% year-on-year to 47Mt for the first 10 months of 2013 according to data from the Indonesian Cement Association. Previous annual rises in cement production and cement consumption had started to slow in 2012.

Growth in the Indonesian cement industry is also having an effect on the larger geographical region. Australian cement producer Boral suspended clinker production at its Waurn Ponds plant in late 2012 due to cheaper imports from countries such as Indonesia. New Zealand followed suit in mid-2013 when Holcim announced plans to build cement import terminals instead of building a new cement plant at Weston.

In summary it seems likely that the cement market in Indonesia slowed down in the first half of 2013 but it still appears to be generating growth none-the-less, true to the MINT pattern. Market analysts from Kim Eng agree, pinning issues with domestic cement consumption in 2013 on capacity bottlenecks and over-crowded ports. Growth in the cement markets for the MINT countries may seem likely but in the case of Indonesia it cannot be assumed.