Global Cement News

US: Texas Industries (TXI) has announced the addition of Sean Foley (54), Bernard Lanigan (64) and Tom Ryan (47) to its board of directors. The appointments of the directors is effective as of 11 July 2012. All three are from outside of the cement industry.

"We are delighted to have found directors of the quality and experience of Sean, Bernie and Tom to join TXI," said Bob Rogers, chairman of TXI's board. "Given the improvement in construction activity, the near completion of additional cement capacity, the high quality of the company's assets and the markets we participate in, this should be an exciting time for them to be a part of TXI."

The news that Brazil's competition regulator, Cade, has approved Camargo Corrêa's attempt to control Portugal's Cimpor after over two years of poker-faced mergers, acquisitions and deals, has significantly changed the cement landscape of the country. Camargo will now be allowed a controlling stake in the Portuguese producer assuming that Votorantim, Cimpor's other major shareholder, sells its Brazilian Cimpor assets to a third player. 

The deal looks likely to happen fairly quickly, with Votorantim stating that it never intended to remain as Camargo's partner in Cimpor. Lafarge appears to have first refusal as the original seller of the stake to Votorantim, but Cade may want to avoid this due to Lafarge's strong Brazilian position.

With its Cimpor interests now set to go to another producer, the regulator is clearly looking to spread the cement wealth in the country. Cade also said that Camargo must sell some assets in Brazil's heavily developed São Paulo state - presumably not to Votorantim! An asset swap will see Cimpor assets abroad transferred to Votorantim.

The Brazilian cement market has become increasingly concentrated since 1990. At that time there were 19 different producers; by 2000 there were 12. That number has since increased slightly, but Votorantim, Cimpor, Camargo Corrêa, Holcim and Lafarge still have 85% of the integrated capacity between them. Cade's attempts to moderate their influence is understandable, given that some regions are currently now supplied by Votorantim-owned production to the tune of 70%. Accusations of cartels have been rife in Brazil for many years.

Consumers, both large and small, will be hopeful that the deal will go through smoothly and that a drop in market concentration will reduce prices in the country. Even the Brazilian government is affected. It is seeking to spend hundreds of billions of dollars on road, port and home construction and for expansion of its mines, farms and factories. If prices of building materials can be reduced, it will be able to accelerate its general development and ramp up extraction and production of its valuable natural resources.

Germany: HeidelbergCement AG has announced the appointment of Prof Dr Marion Weissenberger-Eibl as a member of its supervisory board following the resignation of Dr Ing Herbet Lutkestratkotter for private reasons.

"We are pleased that, in Prof Dr Marion Weissenberger-Eibl, we have succeeded in attracting a well-respected top German engineer as a new member of our supervisory board," announced Fritz-Jurgen Heckmann, Chairman of the supervisory board of HeidelbergCement AG. "She is very well-connected in the fields of business, science, and politics. Her extensive experience and expertise in the areas of innovation research, renewable energies, demographic development, sustainability and knowledge management will be a valuable addition."

Cement industry results from China have all told an alarming story this week: profits for the first half of 2012 look set to fall by more than 50% year-on-year.

China Resources Cement Holdings warned that its first-half earnings were down sharply. China National Materials Co. Ltd. (Sinoma), the cement equipment and engineering services provider, and Gansu Qilianshan Cement, a small Shanghai-listed cement producer, have both forecast similar drops. Sinoma blamed its drop in profit partly on an overseas project but 'interestingly' no further information was released detailing which project.

Previous to this in June 2012 Anhui Conch Cement warned that its net profit would fall by more than 50% due to weak demand and falling product prices. In May 2012 China National Building Material Co Ltd (CNBM) reported that its net profit for the first quarter of 2012 was down by 45% year-on-year. In April 2012 Jidong Cement reported an increase in its net loss for the first quarter and a year-on-year revenue drop of 14%.

Each of the Chinese big players in the cement industry have issued profit warnings of a similar scale suggesting that the Chinese market faces a uniform downturn or that a slowdown is being centrally managed. Official signs that the Chinese industry faced a slowdown emerged in March 2012 when the national growth target was lowered, analysts' predictions were released forecasting weakened profits for the nation's main producers and government officials admitted that overcapacity loomed within five years.

According to OneStone Research data on the Chinese market in 2010 CNBM, Anhui Conch, Jidong and Sinoma represented over 20% of Chinese capacity. To give these figures some perspective, in 2011 CNBM's profit was US$1.7bn. Holcim's operating profit for the same period was US$2bn and Lafarge's operating income was US$2.74bn. Even halved, CNBM's profit is a massive figure for a company with less of an international presence than the European multinationals.

Germany: Tomasz Czop, former Purchase Director of Ożarów Cement Poland (CRH Group) is now leading business development at MVW Lechtenberg & Partner, the German consulting firm for the implementation of alternative fuels from biomass and useable wastes in the cement industry.

As a former member of the management board of the Polish subsidiaries of Ireland's CRH he was directly responsible for the whole procurement of all business units in Poland and Ukraine. Within MVW Lechtenberg he will lead the business unit of alternative fuels and raw materials trade which is currently focused on the supply of refuse derived fuels for the cement and power generating industry in northern and eastern Europe.