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Second line at Nova Cimangola to start in 2018 24 November 2016
Angola: The second production line at Nova Cimangola’s plant in Luanda is expected to start production in mid-2018. Cimangola’s administrator Manuel Pacavira Júnior revealed details of the upgrade’s progress to the Jornal de Angola newspaper during a visit to the site by Secretary of State Kiala Gabriel. All the equipment for the clinker production stage of the project has been assembled and tests are scheduled to start in December 2016. The project has cost US$350m. Funding for the second phase of the upgrade project is still being gathered.
Cementos Argos sees sales fall in Colombia so far in 2016 24 November 2016
Colombia: Cementos Argos’ sales revenue in Colombia have fallen by 8.3% to US$629m for the first nine months of 2016 from US$686m in the same period in 2015. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 12.9% to US$171m and its cement sales volumes fell by 17.9% to 3.78Mt. It blamed this on a fall in demand for bulk cement in the country caused by a delay in infrastructure projects.
“The US, Honduras and Panama continue to drive the company’s results and offer great opportunities for growth, offsetting the slowdown in demand we faced in the Colombian market as a result of the delay in the start of the construction of the 4G projects during the second half of the year,” said Juan Esteban Calle, chief executive officer of Cementos Argos.
Overall the cement producer reported that its sales revenue rose by 13.1% to US$2.05bn, that its EBITDA rose by 13.8% to US$396m but that its cement sales volumes fell by 1.4% to 10.5Mt.
Indonesia faces overcapacity
Written by David Perilli, Global Cement
23 November 2016
Holcim Indonesia inaugurated a new cement terminal in Lampung last week. Unfortunately, the spectre of industry overcapacity haunts the country at present and the subsidiary of LafargeHolcim may be late to the party. The Indonesian Cement Association (ASI) has been publicly warning the government of overcapacity since the end of the summer. Its first line of action has been to lobby for restrictions on producer permits to slow the growth of new plants.
ASI figures show that cement sales in September 2016 fell by 3.3% to 5.64Mt compared to August 2016 due to lower residential sector demand. Domestic cement sales rose by 2.95% year-on-year to 44.7Mt in the first nine months of 2016 and the ASI expects sales growth of 3 – 4% for 2016 overall. Yet, the risk of overcapacity is stark. Cement production capacity has nearly doubled from 59.3Mt/yr in 2012 to 92.7Mt/yr in 2016 but demand is projected to only reach 65Mt in 2016, leaving a production oversupply of 27.7Mt. Regional consumption has fallen in Jakarta, Banten and West Java, particularly in the first two. Elsewhere, it has grown, particularly in Central Java, as well as Yogyakarta and East Java to a lesser extent.
Initial Global Cement Directory 2017 research places active production capacity at 66.3Mt/yr suggesting that the ASI may be exaggerating the risk of overcapacity. The additional c30Mt/yr capacity arises from plants that have been proposed, that are actually under construction or that have been mothballed. However, the ASI data should be more accurate as it represents the local producers. Either way, capacity is growing faster than consumption as can be seen in graph 1.
Graph 1: Cement consumption and production capacity in Indonesia, 2012 – 2016. Source: Indonesian Cement Association, Global Cement Directory 2012 – 2017.
Semen Indonesia, the country’s largest producer, reported that its revenue fell very slightly to US$1.4bn in the first nine months of 2016 and its net profit fell by 8.4% to US$215m. It blamed this on a fall in sales volumes and prices due to rising competition. The other large producers have said similar in the past. Indocement, the country’s second largest producer after Semen Indonesia, saw its revenue fall by 11.9% to US$837m in the first nine months of 2016 and its profit fell by 2.2% to US$231m. LafargeHolcim described the market as affected by overcapacity and ‘a difficult competitive environment.’
Back in May 2016 a feature on the predicament facing the Indonesian cement industry in the Jakarta Post suggested that producers were building new capacity despite the risks of overcapacity to win market share. Cement producers are about to find out whether this will work or not. Meanwhile it seems unlikely that the measures the ASI is suggesting will do much to alleviate the looming crisis. Still, on the positive side, it’s looking like a good time to buy cement as a consumer.
For more information about the cement industry in Indonesia view the first part of the Association of South East Asian Nations (ASEAN) feature in the October 2016 issue of Global Cement Magazine
Germany: Siemens has obtained a cybersecurity certification from TÜV SÜD, a German inspection and certification organisation, for an automation system based on IEC 62443-4-1 and IEC 62443-3-3. As part of the certification TÜV SÜD tested and verified the security functions implemented in the Simatic PCS 7 process control system, a system that controls and monitors continuous manufacturing processes, such as those in cement plants. With this certificate, the company has documented its security approach to automation products showing integrators and operators some of its industrial security measures.
Simatic PCS 7 provides functions for industrial security including segmentation into zones and security cells, the security of access points and user authentication, secure communication, patch management, system hardening, virus scanners and whitelisting. The security measures and functions for Simatic PCS 7 contribute toward safeguarding plant operation and avoiding plant downtime and outage times.
Wagners seeks buyer for cement terminal 23 November 2016
Australia: Wagners is attempting to sell its cement terminal in Queensland for up to US$150m. The unit has been on the market previously, according to the Australian newspaper. The Australian firm started with divisions in concrete, quarrying and transport and has since diversified into cement, fly-ash, lime and other products.