Global Cement News

France: Ciments Français, a subsidiary of Italcementi Group, has appointed Jean Paul Méric chairman of the board and Fabrizio Donegà as chief operating officer. Outgoing chairman Yves René Nanot, who has reached the statutory age limit, has been nominated honorary chairman of the company and will continue as a director.

Méric, aged 69, studied at the École Polytechnique and the École Supérieure d'Electricité. He began his career with EDF before moving into the cement industry, first with CERILH (Centre d'Études et de Recherches de l'Industrie des Liants Hydrauliques) then Ciments Français in 1985. He became the executive vice-president for Ciments Français in 1991 and was appointed chief operating officer in 2010.

Donegà, aged 49, is a graduate in Mechanical Engineering from Genoa University and a postgraduate in Corporate Finance from Bocconi University (Milan) and Management Development from Harvard Business School (USA). He started his career with Italcementi, first as Technical Assistance Manager in 1990 then as Plant Manager. In 1999 he was appointed manager in charge of Greece and Bulgaria. Since 2007 he has been the executive vice-president of Ciments Français.

Camargo Corrêa came out fighting this week when it announced plans to invest US$1.5bn into the Brazilian market. The move represents the serious readjustment to the Brazilian cement industry that's been shadowed ever since the government approved the Cimpor takeover in 2012.

To show how high the stakes are, in October 2012 Votarantim, the Brazilian cement market leader, released early plans to invest US$160m for a 0.75Mt/yr plant in the Treinta y Tres region of Uruguay to meet demand for the 2016 Rio de Janeiro Olympic Games. At these prices the Camargo Corrêa spend could represent projects creating up to 7Mt of cement production capacity in Brazil. This is close to the current capacity gap between Camargo Corrêa (15Mt/yr) and market-leader Votarantim (23Mt/yr)! It's no killer blow for Camargo Corrêa but it does put the two producers in the same 'weight' category.

Although SNIC, the Brazilian cement industry association, recently downgraded estimates for growth in the market to 5.5% in 2013, this still represents very strong demand growth. A previous estimate by Research & Markets put the figure at 9%/yr until 2016. Either way that puts Brazilian capacity at between 87Mt/yr and 100Mt/yr in 2016 with Camargo Corrêa poised to snare a hefty chunk all for itself.

Yet before onlookers count Votorantim out, the company filed for an Initial Public Offering on 9 April 2013. No amounts were revealed but Dow Jones reported a figure of US$2.95bn in mid-January 2013 for expansion both inside and outside of Brazil. Also, the sale of shares must be approved by the Brazilian Securities and Exchange Commission. The industry heavyweight isn't going down without a fight! International companies have also shown interest with Lafarge's announcement in January 2013 that it would invest US$500m in the country, just one of many such moves on the way. Whatever happens, the Brazilian cement market is shaping up for one hell of a scrap.

For more information see our article on the Brazilian cement industry in the February 2013 issue of Global Cement Magazine. In early 2014 Global Cement will hold the first Global Cement CemBrazil Conference and Exhibition. Dates are to be confirmed.

South America: Gebr. Pfeiffer, Inc., the US-based subsidiary of Germany's vertical roller mill manufacturer Gebr. Pfeiffer SE, is pleased to announce the recent appointment of Adriano Greco as Sales Director of the South American market.

Greco has gained extensive, world-wide industry experience through his numerous years in various management positions at GRECO Burners Company in Brazil, Austria, China and Spain. More recently, he served as General Director of ATEC GRECO in Brazil and GRECO Combustion Systems Europe GmbH in Austria.

In 2005, he was instrumental in creating the Brazilian Cement and Lime Conference. He is fluent in Portuguese, Spanish, English, Italian and French.

Last week's news that Sinoma is considering European acquisitions may seem a little odd considering that Sinoma saw its profit halve in 2012. Yet the Chinese cement equipment builder and cement producer's income (US$3.42bn) puts it level with the likes of European producers, like Italcementi (US$5.75bn) and Buzzi Unicem (US$3.58bn), and the company still made a sizeable profit (US$123m).

Now what really seems odd is the amount by which each of the major Chinese cement producers' profits fell in 2012. Each of the top five producers by capacity, including Sinoma, saw their profits decrease by 40% to 50%. CNBM 'forgot' to report its profit drop but in November 2012 it recorded a 40% fall. Anhui Conch Cement's profit fell by 45.6% to US$1.03bn. Jidong Cement hasn't released any figures but was expecting a 50% drop in late October 2012. China Resources' profit fell by 44.4% to US$300m. Compare that with the diversity of profits reported by the top five European cement producers.

As has been clearly signposted by the Chinese government, the country is overproducing cement. Just how much we can't be sure but the Ministry of Industry and Information Technology declared that 220Mt/yr of 'obsolete' capacity was eliminated in 2012. The country's entire output was placed at 2.18Bt in official figures.

Outmoded capacity is being shut down and industry consolidation encouraged for the main players. Given the state-owned nature of Chinese heavy industry some level of coordination between bad results is to be expected. To give readers an idea of the challenge facing Chinese central planners, Anhui Conch added 28.3Mt/yr of additional cement production capacity in 2012. This is equivalent to the entire capacity of Nigeria or Germany!

Of interest here are China's cement export figures that the government's General Administration of Customs recently released. Exports hit a peak of 33Mt in 2007 and then declined by 68% to 11Mt in 2011. In 2012 they increased slightly to 12Mt. That's 20Mt of cement not leaving the country any more. Plus, the 'Shenzhen sea-sand in concrete scandal' can't be helping the industry's reputation abroad either.

Also of note last week, a Kyrgyzstan minister proposed restricting imports of Chinese cement to his country. Cement produced at Chinese-owned plants will be much harder to block. The next prong of the Chinese plan to tackle its cement industry is direct overseas expansion and this is what we're seeing from the likes of Sinoma and Anhui Conch. Sinoma, as mentioned above, appears to have cash to spend and in 2012 Anhui Conch began its first international project in Indonesia.

Sri Lanka: Philippe Richart, formally responsible for the Ready Mix Concrete business in Holcim Vietnam, has been appointed CEO of Holcim Lanka.

The change of CEO, which was announced in February 2013, was part of a generational change in the company's leadership. Philippe joined Holcim Group Support in 2004 as a Commercial Project Manager for the Aggregates and Constructions Materials function, working on aggregates market development and performance improvement in various regions of the Group.

In 2007 he was appointed RMX director for Holcim Vietnam and successfully brought the division into the leading position in South Vietnam.

Before joining Holcim, Philippe held various roles in construction project management and business development for Lafarge Cement and Metso Minerals in Taiwan, USA, China and France. He holds a Master's Degree in Civil Engineering from Ecole des Hautes Etudes Industrielles (Lille, France) and an MBA from George Washington University (DC, USA).