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Portland Cement Association downgrades US consumption forecast due to weather and infrastructure budget 30 October 2017
US: The Portland Cement Association (PCA) has downgraded its forecast for cement consumption in 2017 and 2018 due to bad weather and lower anticipated budgets for the public construction sector. The association now expects cement consumption to rise by 2.6% in 2017 and 2.8% in 2018. It previously anticipated a 3.5% growth rate for both years in a statement made in May 2017.
“Once infrastructure and tax reform initiatives take hold and affect economic and construction activity, then we can expect growth in cement consumption to accelerate to higher levels,” said Ed Sullivan, PCA senior vice president and chief economist.
Sullivan noted the updated forecast assumes tax reform and a US$250bn national infrastructure program spearheaded by the Trump Administration and the House of Congress. However these initiatives are unlikely to begin until mid-2019. He added that the dual fiscal stimuli would accelerate GDP growth, construction spending and cement consumption. Lowering unemployment rates are also expected to add to inflationary pressures alongside these fiscal programs.
The PCA said that rising inflation would necessitate a stronger Federal Reserve reaction and is expected to result in a rapid and perhaps larger-than-expected increase in interest rates. This, in turn, could cause a slowdown in the construction industry leading to a potential decline in activity from the end of 2021.
Carthage Cement strike cancelled 30 October 2017
Tunisia: A planned strike by workers at Carthage Cement for late October to early November 2017 has been cancelled. The decision to call off the industrial action follows a meeting between Finance Minister Ridha Chalghoum and UGTT Secretary General, Noureddine Taboubi, according to African Manager. Further meetings between the management of the cement producer and the unions have been scheduled.
Switzerland: LafargeHolcim has grown its sales and earnings on a like-for-like basis so far in 2017. Its net sales rose by 4.3% on a like-for-like basis to Euro16.7bn in the first nine months of 2017 from Euro17.5bn in the same period in 2016. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) adjusted rose by 9.2% to Euro3.69bn. Cement sales volumes fell to 156Mt from 177Mt although this was reported as a rise of 1.8% on a like-for-like basis.
The cement producer attributed its gains to positive contributions from markets in Latin America, North America and Europe. However, market conditions were reported to be challenging in Asia Pacific and Middle East Africa where it said that actions are being taken to address weakness in key countries.
“While the company delivered solid quarterly results, they do not reflect our full potential. As the market leader, we will hold ourselves to a higher standard than anyone else in our sector,” said Jan Jenisch, group chief executive officer (CEO) of LafargeHolcim. “Today we have reset expectations for the group’s outlook to a level that reflects the current business dynamics. While I am reviewing the business, I have an immediate focus on simplification, cost discipline and performance management.”
LafargeHolcim in talks with PPC 27 October 2017
South Africa/Switzerland: LafargeHolcim says it is in talks with the board of directors of Pretoria Portland Cement (PPC) regarding a possible transaction in Africa. It added that no agreement with PPC has yet been reached and no assurance could be given at this stage that a transaction will materialise.
Canada’s Fairfax Financial Holdings with AfriSam made an offer for PPC in early September 2017. However, PPC said that the offer was ‘undervalued.’ Nigerian company Dangote Cement has also said that it is interested in buying PPC for the ‘right’ price.
Cemex grows profit in third quarter of 2017 26 October 2017
Mexico: Cemex has increased its profit in the third quarter of 2017 due to growing sales and low costs. Its net profit rose by 1% year-on-year to US$289m in the third quarter of 2017 from US$286m in the same period in 2016, according to Dow Jones. Sales increased by 2% to U$3.5bn due to higher cement sales volumes in several markets and higher prices in Mexico and the US.
The group’s overall cement sales volumes remained unchanged at 17.5Mt. Sales by volume fell in Mexico due to earthquakes, bad weather and lower government spending on infrastructure. Cement sales volumes in the US rose on a like-for-like basis.