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PPC on track with second Zimbabwe plant 07 August 2015
Zimbabwe: PPC is on track to commission its second cement plant in Zimbabwe in the second half of 2016. It is building its new 700,000t/yr plant at Msasa near Harare at a cost of US$80m. The plant is being built by China's Sinoma International Engineering.
PPC aims to generate 40% of its total revenue from outside South Africa by 2017, compared with about 28% now. Including its second Zimbabwe plant, PPC has four cement manufacturing plant projects in Africa. The other projects are in Rwanda, the Democratic Republic of Congo and Ethiopia.
Njombo Lekula, the managing director of PPC, said that the investment PPC was making in the Msasa plant was a vote of confidence in Zimbabwe's future and an expression of its commitment to build, grow and contribute meaningfully to the national economy while delivering on local imperative. "PPC Zimbabwe is looking to the future of the country, with today's event providing a promise of things to come. While our existing plant in Bulawayo has positioned us well in Matabeleland, it's clear that much of our country's future growth centres around Harare and northern Zimbabwe," said Lekula.
PPC is engaging with numerous local suppliers to leverage the scope of opportunities on this project beyond the main engineering, procurement and construction management (EPCM) agreement. "Because almost 70% of the total value of the EPCM is allocated to the supply of actual plant equipment, it was necessary for us to contract with a provider of the likes of Sinoma to ensure we create a world class plant in and for the region. Sinoma has contracted local labour as part of its workforce on the project, as well as meeting our non negotiable local supply requirements," said Lekula. He added that local contractors, including JR Goddard Construction, Ascon-Tencraft and HVC, had already worked on the project.
"As Zimbabwe's largest producer of ordinary Portland cement and the only producer of 42.5 cement, we are ideally positioned to play a leading role in developing the country's infrastructure. We have the equipment, processes and tanker fleet in place and are thus able to handle the bulk deliveries that are vital to these big projects. As such, we see ourselves as providing not just cement but a total solution to our customers," said Lekula.
Brazil: Based on Brazil's 2015 GDP forecast, cement production and civil construction in Brazil are expected to remain flat in 2015 for the first time in more than a decade.
GDP rose by 7.53% in 2010, but growth dropped in the following four years to 2.73%, 1.03%, 2.49% and 0.1%, according to BNamericas data. The amount of cement produced has followed the same trend. While in 2010 production was up by 14.2%, it rose by 7.55%, 8.19%, 2% and only 1.5% in the following four years, ending 2014 at 71.2Mt. Finally, civil construction revenue jumped by 33.5% in 2010, but the industry posted increases of 12.6%, 12.9%, 7.60% and 8.48% over the next four years. The last drop in Brazil's civil construction industry occurred in 2002. As GDP estimates are pointing toward a 1.7% contraction for 2015, cement production and civil construction are unlikely to grow in 2015 if they continue to follow Brazil's overall economy.
Tanzania’s cement producers call for level playing field 07 August 2015
Tanzania: Local cement makers have said that they are now facing collapse due to the continued influx of cheap imported products in an already saturated market.
The Chairman of the Tanzania Chapter of East African Cement Producers Association (EACPA), Reinhardt Swart, said that their situation was being made worse because they were competing with cheap imports at a time when their margins are squeezed by overcapacity in the market. "I am not asking for protection. I'm not asking the government to ban imports. I am asking for the government to create a level playing field," said Swart. He commented they were operating in a difficult environment with risks of job losses to adjust to the situation.
Swart welcomed the entry of new players in the cement market, saying they would stimulate development in the industry but cautioned that their preferential treatment such as tax breaks was not helpful to the country as it contribute to create unleveled playing field against the local industries. "If you allow new players for integrated cement plants and give tax breaks and you allow imports in an over capacity market, that is not fair. There is a risk that cement producers will suffer job losses," said Swart.
Swart said that Tanzania's cement producers support the government campaign to help local industries grow by using local coal, gypsum and other materials, but that the government was not reciprocating the gesture. "If you force us to use local coal, that increase in cost must be calculated in monetary terms and charged on imports as well. The same applies to royalties. If you force us to grow another industry at our cost, then you must either give us subsidies or charge the exact increased amount as additional duties on imports," said Swart.
Holcim Philippines buys Lafarge Republic assets 06 August 2015
Philippines: Holcim Philippines Inc plans to expand its market and offer a wider range of construction solutions following its acquisition of Lafarge Republic Inc's Star terminal in Manila and its aggregates business in Rizal. Holcim Philippines president and CEO Eduardo Sahagun said that the purchase is a welcome addition to the company's business.
"These assets further strengthen our ability to provide products and solutions that help our customers and partners in the construction industry," said Sahagun. He said Lafarge's Star terminal would strengthen Holcim Philippines' ability to support customers in Metro Manila and South Luzon, while the acquisition of Lafarge Republic Aggregates Inc, located in Angono, Rizal, would provide the company an established aggregates business. Holcim Philippines closed the deal on 4 August 2015 and paid US$67.5m for the assets.
Shree Cement’s profit down by 63% 06 August 2015
India: Shree Cement's profit in the quarter that ended on 30 June 2015 fell by 62.5% year-on-year to US$16.3m, but its overall earnings beat expectations due to strong growth in its power business.
Its revenue grew by 4% to US$270m and its operating profit fell by 18.7% year-on-year to US$55.9m. Its results were affected by 8.2% higher power and fuel costs, 26% higher freight and forwarding expenses and a 55% depreciation cost. The cement business grew by 1.7% to US$238m, while its earnings before interest and taxes (EBIT) was a US$7.46m loss. Overall performance was supported by its power business, which contributes 23% to total revenue.