Global Cement News

Switzerland: Swiss-based multinational building materials producer Holcim has announced that Wolfgang Reitzle will take over as chairman in 2014. To ensure continuity, current chairman Rolf Soiron has been proposed for re-election at the annual general meeting of 17 April 2013. Also at the meeting the board of directors will propose the election of Hanne Birgitte Breinbjerg Sørensen and Anne Wade to the board of directors of Holcim.

Sørensen is currently the CEO of Maersk Tankers based in Copenhagen, one of the world's largest tanker operators. She holds an MSc in Business Economy from the University of Aarhus.

Wade, an investor with extensive experience in capital markets, was the Senior Vice President and Director of an investment management company, Capital International, based in London from 1995 to 2012. She graduated with a BA from Harvard University and holds a Master of Science from the London School of Economics.

In addition the board of directors is proposing the re-election of Beat Hess for a three year term. He is currently deputy chairman of the board of directors. Markus Akermann and Peter Küpfer are no longer available for re-election. Christine Binswanger has resigned from the board effective from the date of the meeting.

If you have any spare cement this week – send it to Ghana!

First, HeidelbergCement announced plans for a new cement mill on the coast at Takoradi. Then, Dangote officially started to export cement to the west African nation.

HeidelbergCement's strategy in the region is telling because it is starting to head inland. The press release on Ghana indicated that the German-based cement producer intends to expand its capacity to 4.4Mt/yr by late 2014. This follows a recent announcement that HeidelbergCement are building their first grinding plant in Burkina Faso, directly north of Ghana. Previously the producer imported cement there. Now it intends to build a US$50m plant with a production capacity of 0.65Mt/yr.

Since most of HeidelbergCement's existing infrastructure in the region is based on the coast, building a plant in a landlocked nation - Burkina Faso - is a huge vote of investor confidence in west Africa. "In particular the countries of sub-Saharan Africa have a very high growth potential due to their early stage of industrialisation and rich natural resources," said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement in the statement accompanying the Ghana expansion.

The move also provides a clue as to how competitive the cement market is becoming in territories near the coast in Africa. Currently HeidelbergCement holds a mostly coastal presence in western Africa, in Benin, Democratic Republic of the Congo, Gabon, Ghana, Liberia, Sierra Leone and Togo. It has four cement plants and nine grinding plants. Its cement business made a year-on-year increase in revenue of 12% to Euro612m in 2012.

Roughly calculated, HeidelbergCement is paying US$77/t in Burkina Faso compared to US$38/t in Ghana to build its new production capacity. HeidelbergCement must be paying double for a reason.

Meanwhile, Dangote Cement announced on the same day (11 March 2013) that a fleet of cement trucks were heading to Ghana. Already the Nigerian cement producer holds a cement terminal with a bagging capacity of 1.5Mt/yr in the country. Dangote intends to start exporting 5000t/week of cement. Its eventual target is 5000t/day when the logistics are in place, or up to 1.8Mt/yr. Not a bad start in unloading Dangote's self-declared overcapacity of 20Mt/yr in Nigeria upon the neighbouring nations in the Economic Community of West African States (ECOWAS).

Ethiopia: Tamiru Wondimagegn has been appointed as board chairman of Habesha Cement. He is a prominent lawyer and board member of Habesha Cement. He succeeds Gizaw Teklemariam, who previously worked in the oldest state owned cement factory, Mugher.

Habesha held elections for its board in late January 2013, following a reduction in board places from 12 to nine. The Ethiopian cement producer has also given three board of directors seats to two South African companies, International Development Corporation and Pretoria Portland Cement, which are credited for bringing in 49% equity to Habesha.

One of the ironies of the on-going Eurozone crisis is that several of the affected multinational cement producers hold a presence in Egypt. Egypt, which has a population of over 80m and growing demand for cement, should be hauling these balance sheets out of a hole. Instead it teeters on the edge of one. The country, one of the few well-performing countries in Titan's 2012 results this week, came with a sting in its tail.

According to Titan, cement consumption in Egypt reached 'new highs' in 2012 justifying the group's new capacity. Although Titan declined to publish actual figures, it stated that turnover declined only slightly despite the greater total supply of cement in the market. Overall, Titan's Eastern Mediterranean region, which includes Egypt, saw turnover increase by 7% to Euro296m. Yet Titan's operating margins in Egypt were impacted by increases in energy costs. In addition the country's political and economic instability negatively affected the group's outlook there for 2013.

Italcementi commented too in its annual results about how much cement consumption grew in 2012. The Italian-based multinational stated that it grew by 5% from 2011 supported by the residential sector. Revenue grew in Egypt by 2% to Euro564m despite domestic sales volumes falling as much as 15%. As a whole, operating results were slightly lower than in 2011, partly due to the strong increase in the cost of energy factors, notably gas.

Titan and Italcementi are clearly both trying to play up their achievements in Egypt in otherwise dismal annual reports. Other players have no such compunctions.

Cemex encountered a 10% decline in sales volumes for 2012, half its Mediterranean region average of 19%. Lafarge reported that its sales were down by 5% in 2012 and its domestic volumes were down by 12%. It pointedly mentioned the impact of new cement production capacity on its sales. Cimpor in its third quarter results to September 2012 reported a 2% fall in sales volumes and a rise in turnover of 8% to Euro138m.

Looking back at Egyptian cement industry news stories on GlobalCement.com reveals two regular issues echoed by the annual reports: fuel concerns and labour unrest. This week is no exception, with the Egyptian government reacting to price rises related to energy input issues.

A question occurs. How much better would the Italcementi and Titan balance sheets be without the problems in Egypt? It's almost impossible to tell, but one solution would be to tackle energy supply issues by increasing the use of alternative fuels. This is covered by the Global CemFuels Conference & Exhibition that takes place on 11-14 March 2013 in Istanbul, Turkey. For more information and to register visit: www.cemfuels.com.

Netherlands: Van Aalst Bulk Handling B.V. has appointed Dick Borst as International Sales Manager. Borst will be added to the sales team of Van Aalst Bulk handling, that currently consists of A van Aalst and H van Est. Van Aalst Bulk Handling is a producer of shore based pneumatic ship (un)loading systems for abrasive bulk powders such as cement and fly ash.