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India: Officials in Jharkhand have said that the recently announced sale of Lafarge India to Nirma will require state approval to transfer land at the Jojobera cement plant. The East Singhbhum deputy commissioner, Amit Kumar, has been asked to calculate the revenue that the government stands to gain from such land transfer and its registry, according to the Hindustan Times. Previously, the district administration served a notice to Lafarge India on 10 October 2015 when Lafarge India was in talks with Birla Corporation regarding the sale of some of the same assets.
"It's mandatory to seek state government's prior approval for third-party transfer of leased land, in this case leased to Tata Steel. The district administration had informed this to the company, requesting it to seek government's approval," said KK Sone, the state land and revenue secretary. "It has to comply with the administration's notice. Any violation would draw administrative, civil as well as criminal actions."
The Jojobera plant was built on government land leased to Tata Steel. Tata Steel then signed a business transfer agreement for its Jojobera plant with Lafarge India in March 1999.
Kazakhstan: Steppe Cement’s sales volumes rose by 6% year-on-year to 762,000t in the first half of 2016 from 718,000 in the same period of 2015. However, its sales revenue fell slightly to US$24m from US$25m. The cement producer also reported that its local market share increased to 18% in the first half of 2016 from 16% and it exported 4% of its sales compared to 0% in 2015.
The cement market in Kazakhstan decreased by 10% during the first half of 2016 compared to the same period of 2015. However overall cement shipments from local companies remained stable compared to 2015 as imports decreased by 63% (representing 5% of the local market) and exports doubled due to the favourable exchange rate against the currencies of surrounding countries. Steppe Cement estimates that national consumption will be around 9Mt in 2016.
Hear Nirma roar!
Written by David Perilli, Global Cement
13 July 2016
Another week and another massive Indian cement industry deal. This week Nirma has won the bidding for the assets of Lafarge India that LafargeHolcim is selling. Before we get too carried away though, the diversified conglomerate entered into a letter agreement with LafargeHolcim on 7 July 2016 to pay US$1.4bn for three cement plants and two grinding plants with a total cement production capacity of 11Mt/yr.
It is worth noting that this is only a letter agreement. LafargeHolcim signed one previously with Birla Corporation for some of the same assets in August 2015. Unfortunately, an ambiguous amendment to the Mines and Minerals (Development and Regulation) (MMDR) Act struck in January 2015 made it unclear how easily mineral rights could be transferred with an industrial plant sale. After much likely internal squabbling Lafarge India said it was selling all of its assets in January 2016 followed by threats of legal action by Birla.
Some commentators in the Indian media have flagged the new deal as expensive for Nirma. It will be paying US$127/t for the new capacity compared to the US$118/t that UltraTech Cement is offering Jaiprakash Associates for its laboured deal. The Nirma deal comprises integrated cement plants at Sonadih in Chattisgarh, Arasmeta in Chattisgarh and Chittorgarh in Rajasthan, and cement grinding plants at Jojobera in Jharkhand and Mejia, West Bengal. Other assets include 63 ready mix concrete plants, two aggregate plants and a blending unit.
However, unlike UltraTech, Nirma is a relatively new entrant in the cement industry. Its main industries are in detergents and soda ash manufacture. It invested US$194m in a 2.28Mt/yr cement plant in Rajasthan that was commissioned in November 2014. It also ran into environmental issues over a proposal to build a new cement plant at Mahuva in Gujarat. One report compiled under request by the Indian Supreme Court in 2011 cited the presence of Asiatic lions as a reason for concern!
Lions aside, Nirma may be paying over the odds for its new cement business but it will gain a bigger presence in the industry quickly and diversify from its other existing industries in which it faces fierce competition. The Lafarge India plants are mostly in eastern Indian states compared to Nirma’s plant in Rajasthan in the west, giving it a reasonable geographic spread.
Nirma reportedly plans to finance the purchase through a leveraged buyout and the Mint business newspaper has described this as the largest transaction of its kind in India to date. The risk here will be how the Indian cement market plays out in the short term. LafargeHolcim reported that its cement volumes fell in 2015, although this has since picked up in the first half of 2016. UltraTech did better in its 2015 – 2016 financial year but it reported a slow construction market. Longer-term demographic trends suggest that the cement industry will grow, especially in the east of the country. With this in mind it may be a while before Nirma’s cement business roars.
Denmark: FLSmidth has released ECS/ProcessExpert 8.3, the latest version of its process control system. Following installation and testing at four sites, it is now available for different cement and mineral plant applications, including as a free commercial release to all existing ECS/ProcessExpert version eight customers. The update improves a number of features and benefits including easier transitions for cement recipes.
"Some of the advanced techniques used by the new system include model predictive control and fuzzy logic rules. These allow it to continuously monitor the plant's process and quality parameters and continuously compute new control set points with more speed and accuracy than a human operator," said FLSmidth's Global Product Line Manager for Process Optimisation, King Becerra.
Other benefits offered by the update include a full decision tree on the front page of the system to help operators understand controller actions better and enhanced full plots on the front page to allow operators to see actuator actions and measure responses to a given action from the main page.
US: HarbisonWalker International (HWI) has increased its inventory levels of monolithic refractory materials in response to customer demand. The North American supplier refractory products and services says it is now supplying its widest ever range of materials. The company previously announced a restructuring and rebranding initiative in May 2016 to increase its competitiveness. This included reorganising its distribution centres as Global Sourcing Centres to hasten delivery and product availability.
HWI runs an international network in North America, Europe and Asia, with 19 manufacturing plants, 30 global sourcing centres and technology facilities in both the US and China. Its cement refractory products include Versagun, Versaflow, Shot-Tech, Kruzite-70, Kala, Magnel RS, Magnel, Thor, Magnel Ultra and Magnel Ultra AF.