Global Cement News

Spain: The board of directors of Oficemen, the Spanish cement association, has elected Jesús Ortiz, the chief executive officer (CEO) of HeidelbergCement in Spain, as its new president. He suceeds Jaime Ruiz de Haro, the CEO of Cemex España.

Jesús Ortiz, aged 56 years, worked between 1983 and 1989 as a Diplomatic Commercial Attaché for the French Ministry for Economy and Finance in various overseas postings and in France. In 1989 he joined Italcementi Group in France and then held different operational responsibilities at its Spainish operations. Between 2003 and 2007 he served as Managing Director of Italcementi Group’s activities in Greece and Bulgaria. He joined HeidelbergCement in 2007 as its General Manager for Spain before moving to Brussels to assume responsibilities for the group’s aggregate and concrete business in Europe and Africa. Following HeidelbergCement’s acquisition of Italcementi in 2016 he returned to Spain to coordinate the integration of the companies.

He holds a diploma in Economics and Business Administration from the ESC Clermont Graduate School of Management in Clermont-Ferrand, France and a master's degree from the European Institute of Business Administration in Fontainebleau, France. He is also the president of the European Aggregates Association (UEPG).

Malaysia: Richard Curtis is to retire as Group Managing Director of Cahya Mata Sarawak Berhad (CMS) on 31 December 2017. He will then remain as a Non-Independent Non-Executive Director until the end of 2018. Curtis will be succeeded by Isaac Lugun as the company’s Group Chief Corporate Officer and Goh Chii Bing as its Group Chief Operating Officer.

Ireland: Maeve Carton plans to retire as Group Transformation Director of CRH and from its board on 31 August 2017. Since joining CRH in 1988, Maeve has held a number of senior financial roles prior to joining the board as Finance Director in May 2010. She was appointed Group Transformation Director in January 2016.

Germany: Karl-Heinz Fiegenbaum has retired from Schade Lagertechnik. During a career spanning 47 years he became the managing director of the company in July 2011 with responsibility for the sales and commerce. Christoph Seifert, who joined the business as its Technical Managing Director in February 2015, will succeed him. Klaus Paul, who joined the company in March 2017, will become the new Technical Managing Director.

Last week we looked at the prospect of two new Angolan cement plants, a situation that will reportedly lead the country to being ‘self sufficient in cement.’ When we hear this phrase, very often from relatively small markets in Africa or Asia, the obvious next step invariably follows: The country in question will become a regional powerhouse for cement exports.

But try telling that to the desperate Vietnamese cement producers, swamped by chronic overcapacity and very low prices, both at home and abroad. In an effort to shift more of Vietnam’s cement mountain, this week the Ministry of Planning and Investment (MPI) proposed big changes to its handling of cement exports. At the moment cement is subject to a 5% export tax and does not receive VAT refunds. This means that Vietnamese cement has become less competitive than Chinese, Thai, Indonesian and Japanese cement on the regional market, compounding the oversupply situation at home.

The MPI now proposes to scrap the tax and allow for VAT refunds to avoid a colossal 36-47Mt oversupply of cement by 2020. It is quite staggering that this response hasn’t been considered before. This is especially the case, given that the VICEM’s General Director Tran Viet Thang asked for the government to look at the rules back in February 2017. Indeed the Vietnam Cement Association predicted an oversupply of nearly 50Mt/yr by 2020 in January 2017.

Vietnam exported 14.7Mt of cement and clinker in 2016 according to its domestic statistics service. The country was the seventh largest exporter of cement and clinker in 2016 in value terms, with a total value of US$431.7m. China, as one might suspect, topped the list, but only at US$683.6m, around 58% more than Vietnam. Given that China’s cement capacity is around 20 times that of Vietnam, this highlights the extent to which Vietnam is trying to rely on imports.

A market-led response to this would be to close some of the cement plants down and stop commissioning any new ones. China has made some inroads into this approach and Vietnam is following suit… to some extent. That said, however, Trinh Dinh Dung, the Deputy Prime Minster, inaugurated the second production line at the Thanh Thang Cement plant on 4 July 2017 and Long Son Cement will open its second production line at Long Son in late August 2017. That new line will add nearly another 3Mt/yr of capacity to the national total just by itself. On top of this, Thai-owned Siam City Cement Vietnam opened a new ‘terminal’ in Vietnam in late June. Thailand ranked above Vietnam in the cement and clinker export list for 2016 at US$612.2m, suggesting that, contrary to the obvious implication, the port could even be used to ship out Thai exports into Vietnam!

This is not the first time we have heard about Vietnam’s massive cement surplus but it is the first time that the government appears to have registered it as needing attention. A market-led economy would simply shut the plants down but Vietnam plays by different rules. Will changing the rules on tax help it sell out its surplus? Call us in 2020…