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South Africa imposes duties on cement 18 May 2015
South Africa: South Africa has imposed provisional anti-dumping duties of 14.3 – 77.2% on Portland Cement originating in or imported from Pakistan from 15 May 2015 for six months. Lucky Cement is subjected to pay 14.3% duty, followed by Bestway at 77.2%, DG Khan at 68.9%, Attock Pakistan at 63.5% and other cement makers at 62.7%.
This follows an investigation initiated by the International Trade Administration Commission of South Africa (ITAC) on 22 August 2014 after a number of local cement producing companies submitted an application on behalf of the South African Customs Union (SACU). A number of companies, including Afrisam, Lafarge Africa, NPC Cimpor and PPC, approached the ITAC and established a prima facie case that convinced the commission to initiate an investigation on the basis of dumping, material injury, threat of material injury and causality. However, the application was opposed by Pakistani cement producers, such as Lucky Cement, Bestway Cement, DG Khan Cement and Attock Cement.
The commission found that the industry is suffering material injury through a decline in sales volume and output as well as profits and cash flow. The industry also experienced price undercutting and price suppression. The commission further found that a threat of material injury exists given that Pakistan has increased its production capacity; Pakistan's exports to its traditional markets are declining and imports from Pakistan into South Africa increased by >600% in 2010 - 2013.
The commission made a preliminary determination that Portland cement originating in or imported from Pakistan was dumped into the market. In order to prevent further injury to the industry while the investigation is under way, the commission has requested the SARS (South African Revenue Service) to impose the provisional measures on imported Portland cement originating from Pakistan for six months.
Nigeria: Dangote Cement has announced a gross profit of US$375m for the three months that ended on 31 March 2015, a 10.5% increase over the US$340m recorded in the same period of 2014. Its revenues rose to US$576m from US$520m in the corresponding quarter of 2014. The improvement was buoyed by maiden contributions from non-Nigerian plants. Net profit was up by 44.1% to US$345m.
Group cement sales volumes were up by 3.4% to 3.8Mt, driven by contributions from South Africa, Senegal, Cameroon and new lines in Nigeria. The margins from Nigeria increased due to pricing, improved gas supply and more use of coal. Dangote's newly-operational cement plants in Zambia and Ethiopia are expected to impact positively on its future financial situation.
"Our African projects are now beginning to deliver revenue growth for the group and even at this early stage we are seeing good potential in all the countries into which we are expanding," said company CEO Onne van der Weijde. "Senegal has made an excellent start, Cameroon is poised for a strong entry into an exciting growth market and Sephaku Cement is shaking up the South African market as the first new entrant in many years. Although sales fell in Nigeria, we improved both revenues and margins thanks to pricing actions in December 2014 following the collapse of the oil price and currency devaluation. We are making a significant investment to improve our logistical capabilities and I am pleased to report a much more favourable fuel supply in the first quarter of 2015. We have invested for growth in Africa and each new plant that opens will generate good returns for shareholders as we deliver on our promise to become Africa's leading cement company."
Ireland: Gardaí (Ireland's police force) and officials from the Competition and Consumer Protection Commission (CCPC) raided Irish Cement's offices last week in an investigation into the Euro50m bagged-cement industry. According to local media, the inquiry is focused on charges of abuse of a dominant position, which is an offence under both Irish and European law.
The alleged offence involves a business using a powerful position in a particular market to force out rivals or put them out of business. It often involves predatory pricing, namely cutting charges for products or services to a point where others cannot compete. Irish Cement is one of the largest players in the market.
"Irish Cement fully facilitated the inspection and is continuing to cooperate with the CCPC. Inspections regarding competition policies, procedures and practices are an accepted part of the business environment around the world," said Irish Cement in a statement. The company added that it operated to the highest standard and was confident that it had no issues in relation to competition.
India: Prism Cement's net profit rose by 463% to US$9.73m in the fourth quarter of its 2015 financial year, which ended on 31 March 2015, compared to US$1.73m during the prior year quarter. Sales rose by 0.55% to US$240m in the fourth quarter of the 2015 fiscal year compared to US$239m in the same quarter a year earlier.
For the full year that ended on 31 March 2015, Prism Cement's net profit was US$2.31m compared to a net loss of US$12.9m during the full 2014 financial year. Sales rose by 12.7% year-on-year to US$877m in the 2015 financial year.
India: Saurashtra Cement's net profit rose by 107% to US$6m in the fourth quarter of 2015, which ended on 31 March 2015, compared to US$2.89m during the prior year quarter. Sales declined by 21.6% to US$21.6m in the fourth quarter compared to US$27.5m during the 2014 fourth quarter.
For the full 2015 financial year that ended on 31 March 2015, Saurashtra Cement's net profit rose by 227% to US$10.6m compared to US$3.25m during its 2014 financial year. Sales rose by 6.04% to US$87.8m during the year.