Global Cement News

Saudi Arabia: On 2 January 2012 Saudi cement producer and trader Al Jouf Cement announced that it is set to invest US$236m on the construction and commissioning of a second production line in addition to a dedicated power plant. The new production line will have a capacity of 5000t/day. The project, to be financed with a combination of own funds and debt, will take 25 months to complete.

Meanwhile, Hail Cement Company has obtained a large single order for its cement, having signed a US$31.2m joint-venture housing contract with Teberak Trading and Contracting Company and Mo B. Co. for Civil Construction. The 80,000m², four-phase project will be built around 220km north of the northern city of Hail and will be completed within 18 months.

Kenya: East Africa Portland Cement Company (EAPCC) has severed a clinker supply contract, thought to be worth hundreds of thousands of US dollars, with Bamburi, its anchor shareholder. The decision marks the end of a four-year deal that had raised questions over potential conflicts of interest due to common shareholding and market rivalry of the two listed firms. Although EAPCC is a listed firm, it is considered a state corporation, with the majority of its shares held by the government. This makes it difficult to import its own clinker due to stringent Public Procurement Oversight Authority's rules.

The cement maker has now signed a new deal for supply of clinker with rival National Cement, which will see EAPCC save about US$3.10/t. EAPCC's managing director, Kephar Tande, said, "We found out that other players were offering lower prices, which means we could leverage on lower clinker costs to improve our profitability."

EAPCC's decision to single source the supply of clinker from Bamburi alone raised eyebrows when it was signed in 2007. Bamburi, through its parent company Lafarge, controls 41.7% of EAPCC. Lafarge also holds a 73% interest in Bamburi Cement and until 2009 held a 15% stake in the country's other cement maker, Athi River Mining. Cross ownership of the three cement companies has in the past led to accusations of unfair business practices, including collusion over price setting.

National Cement MD, Raval Narendra, said that EAPCC was now its biggest client. "We are the biggest clinker importers in the region now because we have established contacts in Europe and the Emirates. We signed a supply contract with EAPCC for 0.15Mt for 2011," he said.

Brazil: Denmark's major cement plant manufacturer, FLSmidth, has signed a contract for two cement projects worth a total of US$132m with Cimpor Cimentos do Brasil Ltda in Brazil. The contract comprises equipment for the Caxitu project, a new greenfield cement plant in Paraiba State near the town of Joâo Pessoa and for a new kiln line project at the Cezarina cement plant located in Goias State, 130km from Goiania.

The scope of supply for the Caxitu project includes a circular limestone storage dome, a longitudinal storage and reclaimer system for raw materials and a similar system for additives, a longitudinal storage facility for petcoke, an Atox raw mill, a Tirax coal mill, an in-line calciner preheater system and a Rotax kiln and SF cooler. The scope of supply for the Cezarina project comprises a complete pyro-processing line including an Atox raw mill, a CF silo, an in-line calciner preheater system, a Rotax kiln and an FLSmidth Cross-Bar cooler. FLSmidth will also supply air pollution control systems for the two projects, featuring the latest pyro technology for burning and utilising alternative fuels.

"Brazil is continuously investing heavily in development projects, both to support upcoming events such as the FIFA World Cup and the Olympic Games and to provide housing and build infrastructure," said Group CEO Jørgen Huno Rasmussen. "This order enables FLSmidth to maintain its leading role in supporting Brazil's rapidly expanding cement industry and maintain close ties with our long term customer Cimpor."

The order will contribute beneficially to FLSmidth's earnings until commissioning in 2013.

Vietnam: Vietnam's industrial production grew by 6.8% in 2011, lower than that of 2010, according to data released by the Vietnam General Statistics Office (VGSO). Manufacturing industries, the inventory indices of which rose sharply in 2011, include cement, which was up by 64% year-on-year. 

Meanwhile, Vietnam is forecast to export 0.5Mt of cement and 5.5Mt of clinker in 2012, according to an official from the Vietnam National Cement Association (VNCA). The VNCA's Chief, Nguyen Van Diep, said that Africa would be the targeted market for most of the material.

Vietnam's cement output is forecast to rise to 73Mt in 2012 due to the additional operation of eight new cement plants that have a combined production capacity of 6.9Mt/yr. Meanwhile, the country’s cement consumption is predicted to be around 60Mt in 2012, accounting for 86% of the sector’s total production.

Diep maintained these targets despite cement sales in 2011 falling short of the 54.5 - 56Mt forecast. Cuts in public investment and frozen real estate projects have cut demand significantly in 2011, to around 49Mt.

Nigeria: The Nigerian president, Goodluck Jonathan, has said that the private sector is crucial in the drive by the government to diversify the economy. He said that Nigeria was currently 'over dependent' on oil. Jonathon used the official launch of the 1.65Mt/yr Lafarge WAPCO Lakatabu cement plant of Lafarge WAPCO in Ewekoro in Ogun State to highlight the importance of the cement industry in a more diverse Nigerian economy. The plant will take the company's cement production to 2.5Mt/yr in Nigeria.

The president described the cement industry as critical to his administration's drive toward moving the country away from a mono-cultural economy, critical to national survival. "If we do not discover oil reserves, our reserves will dry up; if that is true, we know that as a nation, we must prepare for our children and grandchildren," said Jonathon. "That is why we must diversify. That's why we must encourage our private sector to go into manufacturing."

The Chairman of Lafarge WAPCO, Chief Olusegun Osunkeye, said that the new plant will provide 1000 jobs and it would not relent in partnering with the government in its quest for socio-economic development.