Global Cement News

Spare a thought for your fellow cement workers this week as reports emerge of plant employees being forced back to work at gunpoint in Kenya and Chinese workers being kidnapped in Egypt.

The news that workers have been coerced with bullets is just one horror story from the ongoing soap opera that is the East African Portland Cement Company. Since the Kenyan government dismissed the directors in December 2011, over allegations of alleged mismanagement, progressively more murky disclosures have emerged. Although the latest reports suggest that all the 1200 permanent employees have now returned to work, the situation remains volatile. Anyone who thought that a judge could simply order the plant back to work because he said so has underestimated the situation.

On one side sit the directors who have already been sacked and reinstated by the government following accusations of non-competitive tenders and rampant expenses claims in December 2011. Running scared of their own employees, they now have to face the Maasai elders who supporting the directors by ordering the closure of the gypsum, limestone and pozzolana mines. On the other side is the Kenyan government which was legally forced to return the directors they dismissed. In the middle remain the workers, at work for now but for who knows how much longer.

By contrast the 25 mostly Chinese cement factory workers who have been kidnapped in Egypt's Sinai Peninsula may have had the best management in the world. Yet working internationally can bring risks such as political instability that are hard to predict.

Elsewhere in this issue of Global Cement Weekly, you can read about new plant plans in Indonesia, rampant overcapacity in Vietnam, soaring profits in Saudi Arabia and the news that Italcementi is likely to have to sack 7.5% of its workforce.

Malaysia: Lafarge Malayan has appointed Bradley Peter Mulroney as its president and chief executive officer and Malaysian Chen Theng Aik as its executive director.

Mulroney, aged 49, is a British national. He holds a Bachelor of Arts from the University of London and he initially started his career with Redland plc, where he rose to the rank of a general manager. Redland was acquired by Lafarge SA in 1996.

Aik, aged 45 is a Malaysian who was previously the senior vice-president, finance and chief financial officer of Lafarge Malayan.

This week has seen the start of what is likely to become a string of positive financial results from the Indian cement industry. UltraTech Cement, Shree Cement and Hyderabad Industries have already seen massive improvements in their profits for the final quarter of 2011, up in one case by over 100% compared to 2010.

On the face of it such results do not chime with a recent report by Fitch Ratings, which predicts a 'negative outlook' for the Indian cement industry in 2012. Fitch's report says that based on expected growth of 2-5%, overcapacity and an increase in interest rates will prey on margins in 2012, making any mini-boom short-lived. The impressive profits may well evaporate come the end of March.

India's capacity utilisation rate dropped to just 65% in the last quarter of 2011. This is not a statistic indicative of a booming cement industry and, coupled to reports of increased profits from the sector, indicates that higher prices are being used to maintain margins.

With even more capacity being added every week and the prospect of increased input costs as the year develops, how long will this strategy work? Will the topic of cartelisation be raised again in India? The new head of the Cement Manufacturers' Association has a lot to consider as he takes up his role.

Elsewhere in this issue of Global Cement Weekly, we have the news that the German BDZ and VDZ are to fully merge, plant projects in Russia and Saudi Arabia and the latest on the developing situation in Kenya, where East Africa Portland Cement Company (EAPCC) is still in dispute with its workers. EAPCC and the government's expectation that work can resume on 26 January 2012 appears to be ill-founded considering continued resentment shown by the workforce.

Mr M A M R Muthiah, the current managing director of the Chettinad Cement Corporation has taken over as president of the Cement Manufacturers' Association (CMA). Muthiah said that the association acts as a bridge between the industry and the Government with an objective to promote the cement sector's growth, protect consumer interests and collaborate with international counterparts outside of India.

Mr O P Puranmalka, a whole-time Director of Ultratech Cement, has taken over as the CMA's new vice-president.

Pascal Casanova has become the general director of Lafarge France, a unit of the French cement giant Lafarge. Casanova was born in 1968 and joined Lafarge in 1999 after having been employed by a number of different construction firms. He served as Lafarge's research and development director since 2008.