Global Cement News

Germany: HeidelbergCement has announced that its revenue and sales volumes increased in the first quarter of 2014, although it still made a loss for the period.

Revenue was up by 5.7% year-on-year for the quarter at Euro2.75bn, compared to Euro2.60bn in the first quarter of 2013. Operating income before depreciation (OIBD) was Euro229m, a 15.6% increase from Euro198m. The German multinational reported successful price increases and improved cost control as reasons behind the improved takings. Despite this, the group still reported a net loss of Euro108m for the period, although this constituted an improvement on the Euro187m that it lost in the first quarter of 2013.

HeidelbergCement reported that sales benefitted from warmer than usual weather in Europe. In North America sales volumes were adversely affected by the extremely low temperatures seen as the result of the polar vortex weather phenomenon. Elsewhere, the group reported that Asian and African markets 'continued to develop positively.' Across all of its markets, cement and clinker sales volumes rose by an average of 10% with Europe and Central Asia both reporting double-digit growth.

"Business development in the first quarter has strengthened our confidence in the outlook for the 2014 financial year," said HeidelbergCement's CEO Dr Bernd Scheifele. "Deleveraging in order to regain investment grade rating remains the highest priority for us. To this end, we will continue to be very disciplined in our spending in 2014 and focus more intensively on the sale of the building products business line in the United Kingdom and North America as well as other assets that do not belong to our core business. At the same time, we will remain on course with our successful strategy of targeted expansion of our cement capacities in growth markets."

Going forward, HeidelbergCement expects that North America will see a continuation of its economic recovery and some stabilisation in Eastern Europe. Further rises in demand are expected in Central Asia. In Western Europe, the group expects healthy growth in demand based on the strong fundamentals in Germany, the UK and Benelux.

France: Lafarge's net loss has grown by 15% year-on-year for the first quarter of 2014, from Euro117m in 2013 to Euro135m in 2014. The company blamed the result on the 'seasonality' of its business and the effect of the variations of the net-of-tax gains and losses on divestments.

Overall sales across all business lines fell by 2% year-on-year to Euro2.63bn from Euro2.68bn. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 21% to Euro343m from Euro342m. Notably an improvement in EBITDA in the group's Western Europe region was noted.

"Our first quarter results confirmed the positive trends experienced at the end of 2013. Our volumes were supported by continuing growth in emerging markets and the progressive improvement in several European markets. North America was affected by a harsh winter but the underlying market trends are positive. Our outlook for the year is confirmed and we expect to see cement demand growth in our markets of between 2% to 5% in 2014," commented chairman and chief executive of Lafarge, Bruno Lafont.

For its cement business, cement sales volumes rose by 8% to 25.9Mt from 23.9Mt. Despite this rise in volumes, cement sales remained static at Euro365m for the quarter.

By region for its cement business, Lafarge reported static sales volumes for cement year-on-year for the quarter in North America due to adverse weather. Sales volumes rose by 7% to 2.6Mt in Western Europe with notable improvements recorded in Spain and Greece. Volumes rose by 19% to 1.9Mt in Central and Eastern Europe with increases in Poland and Romania but a fall in sales in Russia. In the group's Middle East and Africa region cement sales volumes rose by 15% to 10.5Mt. In Latin America sales volumes fell by 15% to 1.9Mt impacted by group divestment and deconsolidation in Honduras and Mexico, despite increase sales volumes in Brazil. In Asia sales rose by 7% to 7.5Mt.

Uganda: The High Court in Kampala has ordered the Minister of State for Gender and Cultural Affairs Rukia Nakadama Isanga to pay US$52,000 to Hima Cement for construction materials she bought from the company.

According to court documents, Hima supplied cement worth US$31,000 to Nakadama and her husband, Dauda Isanga, between 2003 and 2005. The couple later issued cheques worth US$31,000 to the company but these cheques were rejected by the bank due to insufficient funds. Justice David Wangutusi also ordered Nakadama and Isanga to pay US$19,500 in interest to Hima Cement accrued since 2009. The judge also ordered the couple to pay 8% interest per annum on both amounts from the date of judgement until the payment is completed.

Egypt: Suez Cement Company has announced plans to invest US$42.8m to convert two out of its four plants to use coal instead of natural gas following a controversial government decision to import coal as a means of addressing power shortages.

The conversion process for each plant will cost around US$21.4m, according to Mohammed Shanan, Suez Cement's business development director. Another company source estimated the overhaul will take between 6 - 8 months. The company is still waiting for final approval from the Ministry of Environment to use coal in the production of cement.

Suez Cement's production fell by 50% during the first quarter of 2014 as a result of fuel shortages, which has led to a 50% decline in sales.

The Egyptian Cabinet approved the use of coal for power generation in April 2014, despite the disapproval of Minister of Environment Laila Iskandar. The Egyptian government had cut natural gas supply to plants in an attempt to conserve energy resources.

A number of non-governmental organisations, including the Egyptian Initiative for Personal Rights, condemned the decision to use coal in a statement in April 2014, forecasting that it will have 'devastating consequences on health and the economy.' The Egyptian Centre for Economic and Social Rights, with support from the Doctor's Syndicate, has filed a lawsuit against interim Prime Minister Ibrahim Mehleb, President Adly Mansour and the ministers of trade, petroleum, electricity and environmental affairs in an attempt to block the use of coal in Egypt.

India: ACC Cement plans to invest US$499m to modernise its Jamul facility in Chhattisgarh and to add a grinding unit of 1.5Mt/yr capacity in its Jharkhand-based unit, according to ACC sales director C Kurian. ACC aims to decommission the existing plant at Jamul and set up a new technology-based cement plant with a 4Mt/yr production capacity. Kurian added that the Holcim-owned company is likely to finish the work by the second quarter of 2015.

ACC currently has a production capacity of 6Mt/yr but plans to raise it to 10Mt/yr by 2016. It has six plants and holds a market share of 12% in India.