Global Cement News

Italy: At their annual general meeting held in Bergamo, the shareholders of Italcementi SpA elected the Board of Directors for the next three years, until approval of the financial statements for 2015.

The members of the new Board are Pierfranco Barabani, Giorgio Bonomi, Fritz Burkard, Victoire de Margerie Federico Falck, Lorenzo Renato Guerini, Italo Lucchini, Emma Marcegaglia, Sebastiano Mazzoleni, Jean Paul Méric Carlo Pesenti, Giampiero Pesenti, Carlo Secchi, Elena Zambon (all elected from the majority list presented by Italmobiliare SpA) and Giulio Antonello (a candidate from the minority list presented by First Eagle Global Fund).

Brazil: Dirce Navarro de Camargo, who became Brazil's richest woman when she inherited the Camargo Corrêa industrial conglomerate, has died at the age of 100.

Camargo died on Saturday 20 April 2013. Her age was disclosed by an executive close to the family who asked not to be named because the matter is private. She controlled a fortune valued at US$13.8bn and was the 62nd richest person in the world, according to Bloomberg.

Founded in 1939 by her late husband, Sebastiao Camargo, the conglomerate has played a key role in developing Brazil's infrastructure. It participated in the construction of Brazil's new capital, Brasilia, in the 1950s. Today, its interests range from publicly-traded cement maker Cimpor Cimentos de Portugal to a flip-flop manufacturer.

Camargo's three daughters, Regina de Camargo Pires Oliveira Dias, Renata de Camargo Nascimento and Rosana Camargo de Arruda Botelho, are poised to inherit the family fortune. The company spokesman declined to comment on how that fortune will be split up.

King Abdullah bin Abdulaziz Al Saud of Saudi Arabia has issued an urgent edict ordering the import of 10Mt of cement. As one of Global Cement's many followers on Twitter playfully reacted, "that's a bloody big patio."

Humour aside, the Kingdom desperately needs cement for several infrastructure projects. It committed US$373bn for development and infrastructure projects from 2010 to 2014 in its Ninth Development Plan, including building six 'economic cities.' Following this investment, an export ban on cement was introduced in February 2012 and then an import ban was repealed in March 2012. The three Saudi cement firms on whose first quarter financial results we report upon in this week's Global Cement Weekly - Yamama Cement, Arabian Cement Company and Yanbu Cement - all logged increased profits attributed to increased demand and sales.

Back in February 2013, Arab News reported that an estimated 500 trucks had been queuing outside the Yanbu plant near Jeddah. Some of whom said they had been waiting for up to five days in an attempt to receive deliveries! Abdullah Radwan, chairman of the contractors' committee at the Jeddah Chamber of Commerce and Industry, was quoted at the time as saying that the high price of cement in the country was due to a lack of cement plants in the country. The following month in March 2013 the Northern Region Cement Company was forced to halt production due to a road closure.

At the close of 2012, Saudi Arabia's cement product capacity was just over 50Mt/yr. Analysts predict that by the close of 2017 the country's demand will be over 80Mt/yr, with only 25Mt/yr of additional capacity commissioned by the same date. What happens to all that production capacity once the building is done may be giving producers across the Gulf region sleepless nights. On a separate note, Iran also reported this week that it hopes to increase its cement exports by 6Mt in the 2013 – 2014 year. The timing may be right - if regional rivalries can be put aside.

France: Ciments Français, a subsidiary of Italcementi Group, has appointed Jean Paul Méric chairman of the board and Fabrizio Donegà as chief operating officer. Outgoing chairman Yves René Nanot, who has reached the statutory age limit, has been nominated honorary chairman of the company and will continue as a director.

Méric, aged 69, studied at the École Polytechnique and the École Supérieure d'Electricité. He began his career with EDF before moving into the cement industry, first with CERILH (Centre d'Études et de Recherches de l'Industrie des Liants Hydrauliques) then Ciments Français in 1985. He became the executive vice-president for Ciments Français in 1991 and was appointed chief operating officer in 2010.

Donegà, aged 49, is a graduate in Mechanical Engineering from Genoa University and a postgraduate in Corporate Finance from Bocconi University (Milan) and Management Development from Harvard Business School (USA). He started his career with Italcementi, first as Technical Assistance Manager in 1990 then as Plant Manager. In 1999 he was appointed manager in charge of Greece and Bulgaria. Since 2007 he has been the executive vice-president of Ciments Français.

Camargo Corrêa came out fighting this week when it announced plans to invest US$1.5bn into the Brazilian market. The move represents the serious readjustment to the Brazilian cement industry that's been shadowed ever since the government approved the Cimpor takeover in 2012.

To show how high the stakes are, in October 2012 Votarantim, the Brazilian cement market leader, released early plans to invest US$160m for a 0.75Mt/yr plant in the Treinta y Tres region of Uruguay to meet demand for the 2016 Rio de Janeiro Olympic Games. At these prices the Camargo Corrêa spend could represent projects creating up to 7Mt of cement production capacity in Brazil. This is close to the current capacity gap between Camargo Corrêa (15Mt/yr) and market-leader Votarantim (23Mt/yr)! It's no killer blow for Camargo Corrêa but it does put the two producers in the same 'weight' category.

Although SNIC, the Brazilian cement industry association, recently downgraded estimates for growth in the market to 5.5% in 2013, this still represents very strong demand growth. A previous estimate by Research & Markets put the figure at 9%/yr until 2016. Either way that puts Brazilian capacity at between 87Mt/yr and 100Mt/yr in 2016 with Camargo Corrêa poised to snare a hefty chunk all for itself.

Yet before onlookers count Votorantim out, the company filed for an Initial Public Offering on 9 April 2013. No amounts were revealed but Dow Jones reported a figure of US$2.95bn in mid-January 2013 for expansion both inside and outside of Brazil. Also, the sale of shares must be approved by the Brazilian Securities and Exchange Commission. The industry heavyweight isn't going down without a fight! International companies have also shown interest with Lafarge's announcement in January 2013 that it would invest US$500m in the country, just one of many such moves on the way. Whatever happens, the Brazilian cement market is shaping up for one hell of a scrap.

For more information see our article on the Brazilian cement industry in the February 2013 issue of Global Cement Magazine. In early 2014 Global Cement will hold the first Global Cement CemBrazil Conference and Exhibition. Dates are to be confirmed.