Global Cement News

India: Some US$49.8m, which equates to 27,420t, of Nestlé's Maggi noodles has been recalled in India and is now being used as an alternative fuel at five Indian cement plants. Nestlé said that the recall process is one of the largest in the history of India's food industry.

"The recall of Maggi noodles from the market is an immensely complex mammoth activity, the largest in the history of Nestlé," said Luca Fichera, executive vice president of the supply chain in India. "The trust of our consumers is extremely important for us and despite the enormity, we are focused on completing this efficiently and as fast as feasible."

The recall started on 5 June 2015. Of the total to be consumed by cement plants, some US$32.7m was recalled from the market, while US$17.1m was removed from Nestlé's factories and distribution centres.

The Indian cement plants have been consuming the noodles as alternative fuels since 9 June 2015. "This was the most environment-friendly solution to destroy the recalled noodles: To convert them into fuel," said Fichera. It will take 40 days to destroy the 27,420t of noodles at the five cement plants.

The food safety regulator ordered Nestlé to withdraw the noodles after some samples were allegedly found to contain higher-than-permissible levels of lead. This was rejected by Nestlé, which said that its own independent tests suggested otherwise. Nestlé has since moved to the Bombay High Court, challenging the order. The court has issued notice to the Food Safety and Standards Authority of India (FSSAI), the regulator and other respondents and posted the matter for hearing on 30 June 2015. Nestlé has halted the production of Maggi noodles in its factories since 5 June 2015 and has withdrawn the product from the market.

Sri Lanka: Dalmia Cement (Bharat) Limited is increasing its exports to Sri Lanka through its channel partner M/s Smart Dragon Lanka Pvt Limited. With a total capacity of 20Mt/yr, Dalmia Cement has cement plants in southern and eastern India, making it a prominent manufacturer of cement in India.

Dalmia Cement currently supplies cement to the Sri Lankan market from its 3.5Mt/yr plant in Dalmiapuram, Trichy, Tamil Nadu. The plant has 21 silos, making it convenient to store many varieties of cement. It can also supply Sri Lanka from its 2.5Mt/yr plant in Kadappa, Andhra Pradesh. The plants use the ports of Tuticorin and Chennai in Tamil Nadu and the port of Krishnapatnam in Andhra Pradesh.

"Dalmia Cement has been exporting cement to Sri Lanka since 2009. We wish to strengthen our bond and relationship with Sri Lanka by providing superior-quality cement, with a vision of becoming one of the leading exporters of cement to the country within the next three years," said R Sanjay, assistant executive director of institutional sales at Dalmia Cement.

Indonesia: Cement consumption fell by nearly 4% year-on-year during the first five months of 2015, the biggest decline in the January - May period in the last six years. The fall has been blamed on the country's slowing economy.

Data released by the Indonesian Cement Association show that cement demand in January - May 2015 fell by 3.8% year-on-year to 22.9Mt. It was the steepest drop so far in 2015. Consumption has declined consistently since February 2015. It was also the biggest drop recorded since 2009, when domestic demand fell by nearly 7% year-on-year due.

Indonesia's economy grew by 4.7% in the first quarter of 2015, the slowest in six years and since the start of the global financial crisis. Cement consumption has been a parameter in emerging markets' economic growth. "Cement demand has not fully recovered yet due to slower economic growth, relatively high interest rates, changes in property regulations and bleak commodity exports, which hampered property demand and consequently reduced cement consumption," said Marwan Halim from the stockbroking arm of United Overseas Bank Ltd, UOB KayHian, in a report. Bank Indonesia has maintained its interest rate at 7.5% to curb inflation and maintain its currency, while mortgage regulation and a lower price threshold for property products subject to 20% income have contributed to constraining the property industry.

Cement consumption in May 2015 fell by 7.9% year-on-year, much steeper than the 1.1% decline recorded in April 2015. It was the biggest May drop recorded since May 2009. Lower sales in May 2015 occurred in almost every part of the country, although East Nusa Tenggara and West Nusa Tenggara Provinces saw monthly sales rise by nearly 50% year-on-year. Commodity-based provinces experienced the highest declines during the month, with South Kalimantan and East Kalimantan making the steepest plunges with 41% and 24%, respectively. Even West Java, which traditionally has one of the highest cement consumption rates in Indonesia, suffered a sales decline of 8.3% year-on-year in May 2015.

Tunisia: According to the African Manager website, white cement production in Tunisia fell by 11.5% to 141,000t in the first four months of 2015 compared with 160,000t in the same period in 2014. According to deputy director of construction materials industries at the Ministry of Industry Taoufik Khardani, white cement sales fell by 8.8% to 59,000t during the period, down from 64,500t in 2014. Some 87,400t of white cement was exported in the first four months of 2015 compared to 102,400t in 2014.

Algeria: Qalaa Holdings, an investment company in the Middle East and Africa, has reported that its revenue in the first quarter of 2015 grew by 42.5% year-on-year to US$256m. Growth was driven mainly by operational improvements at ASEC Cement's Sudan subsidiary Al-Takamol, which recorded 157% year-on-year revenue growth. The energy and cement segments contributed 71% to its consolidated revenues.

Qalaa Holdings reported that its earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at US$36.2m, an eight-fold increase on the same period of 2014. It had a net loss after tax and minority of US$14.7m in the first quarter of 2015, a 51.6% year-on-year improvement. Foreign exchange charges rose to US$6.95m, compared to a gain of US$1.71m in the first quarter of 2014. Qalaa Holdings' cement and construction unit ASEC Holding recorded US$10.2m in foreign exchange losses due to its stake in dollar-denominated ASEC Holding Convertible.

Qalaa Holdings' plans for the future include several cement divestments. Negotiations are progressing for the sale of ASEC Cement's operations in Algeria, with an Algerian Holding Company in the cement industry being the natural buyer for Zahana Cement as it already owns 65% of the company. The greenfield plant in Djelfa, Algeria is being bid for by two Algeria-based industrial groups.