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The India Cements (ICL) slips into red 08 November 2013
India: Continued oversupply coupled with low prices pushed The India Cements Ltd (ICL) into the red in the second quarter of 2013. The South India-based cement company said that it had incurred a net loss of US$3.6m for the quarter ending 30 September 2013, compared with a net profit of US$7.8m during the same quarter in 2012. Weak demand for cement resulted in mounting pressure on cement selling prices.
New Lafarge Tarmac HQ inauguration 08 November 2013
UK: Lafarge Tarmac has marked the official launch of its new headquarters, Portland House in Solihull, by welcoming Caroline Spelman, MP for Meriden, to the facility.
More than 100 employees joined Spelman for a celebratory lunch at Portland House before being briefed on the company's plans and its contribution to the region's economy, as well as its importance to UK construction, by Lafarge Tarmac's chief executive officer, Cyrille Ragoucy.
"This is a big day for us and we were delighted to welcome Caroline to Portland House to mark this special occasion. It was good to meet her and provide her with an overview of our business. She was extremely interested to meet our colleagues and hear about the important contribution that we are making to the regional and national economies and the role that our innovative products are making to the future of UK construction," said Ragoucy.
Spelman said she felt privileged to have been invited to inaugurate the building and visit such an exceptional site. "It's great to see that a business based in the heart of the UK with fantastic transport links is developing products which are making a positive contribution to the sustainability of the built environment,' she said.
Portland House, the company's new low-energy headquarters near Birmingham International Airport, has undergone a major internal refurbishment to allow the offices to accommodate up to 500 Lafarge Tarmac employees. The state-of-the-art sustainable building, which was originally constructed in 2007 using the company's materials, reduces the need for heating and cooling thanks to its innovative concrete design.
Lafarge sits on carbon permits so far in 2013 due to weak prices 07 November 2013
France: Lafarge has stockpiled carbon permits in the European Union for the first nine months of 2013 due to weak prices. The multinational cement producer confirmed the situation to Reuters following the release of its third quarter results on 6 November 2013.
"Given the current price for CO2 rights there is not a strong rationale for sale compared to holding them for the future," said a Lafarge spokeswoman. Lafarge made Euro56m from selling carbon permits in the first nine months of 2012. Holcim reported in its third quarter results for 2013 that its revenue from the sale of CO2 emission certificates in the first nine months of 2013 fell by 17% year-on-year to Euro8.10m from Euro9.7m.
The EU Emissions Trading Scheme (ETS) has seen the price of carbon permits fall by over 80% to Euro4/t in August 2013 from Euro30/t in 2008. The scheme has been undermined by an oversupply of permits.
Fijian commission approves cement price rise 07 November 2013
Fiji: The Fiji Commerce Commission has approved a 2.7% increase in the wholesale price of bagged and bulk cement effective from 1 November 2013. Commission chairman Dr Mahendra Reddy said the prices were determined following factors raised in a detailed analysis of the submission from Fiji's sole cement producer, Fiji Industries Limited (FIL) and an independent investigation and analysis.
"Those factors included an increase in the price of raw materials (clinker and slag) from previous years because of the strong US currency, an increase in production labour rate by 4% based on union log of claim and an increase in capital expenditure to maintain the mill efficiency in the financial year 2013," said Reddy.
Update on Saudi Arabia
Written by Global Cement staff
06 November 2013
Demand for cement is so intense in Saudi Arabia that certain producers have reported production line shutdowns in dedicated stock market statements. Notably, industry newcomer Hail Cement reported a scheduled shutdown for late October/early November 2013, Al Jouf Cement reported unscheduled shutdowns in October and June 2013 and Najran Cement reported scheduled maintenance in July 2013. Even a short delay to cement production is a newsworthy event for both investors and analysts.
Saudi cement producers have risen to the infrastructure challenges of the country's Ninth Development Plan, increasing cement production by 6% year-on-year to 42.7Mt for the first nine months of 2013. In this febrile environment, the king ordered 10Mt of cement imports in April 2013 followed by government demands for producers to build up a two-month 'strategic' inventory reserve. Unsurprisingly, as we report this week, exports of cement from Saudi Arabia have fallen by 55% for the first nine months of 2013.
At the time of Global Cement's feature on Saudi Arabia in December 2012 only two of the country's cement producers had an inventory of joint clinker and cement stock meeting the government's stockpiling request. For the first nine months of 2013 the situation remains the same although the overall inventory has increased by 18% year-on-year to 10.3Mt. This compares to the end of 2012 where inventories fell year-on-year by 14% to 7Mt.
Unsurprisingly again, the Kingdom's major cement producers have seen balance sheets bulge so far in 2013. Yamama Cement reported a 12% year-on-year rise in net profit to US$145m for the first half of 2013 on the back of local demand. Saudi Cement Company reported a 5% year-on-year rise in its net profits to US$173m and Southern Province Cement saw a 4% year-on-year rise in its net profits to US$150m for the same period. Yanbu Cement saw its net profit rise by 29% year-on-year to US$176m for the first nine months of 2013.
With more large government infrastructure contracts pending, analysts expect the Saudi cement market to remain heated. Although as NCB Capital pointed out in September 2013, uncertainties over fuel supplies for coming cement plant expansions provide uncertainty to the situation. Nobody wants a repeat of the Yanbu - Aramco spat over fuel supplies that occurred in 2011. Irony would barely describe the situation if a Saudi Arabian cement boom was dented by a lack of fuel in one of the countries with the biggest oil reserves in the world.
Global Cement will be at stand T9 at the 18th Arab-International Cement Conference and Exhibition in Jordan from 11 – 13 November 2013