Global Cement News

France: Multinational buildings materials producer Lafarge has shown signs of improved profitability in 2012 as its operating income rose by 12% to Euro2.44bn. Chairman and CEO Bruno Lafont has attributed the turnaround in the group's fortune's to cost reduction measures and continued growth in emerging markets. However the group's net income continue to fall in 2012, by 27% to Euro432m in 2012 from Euro593m in 2011.

"We have delivered on our objectives for 2012 and our results grew for the fifth consecutive quarter, driven by strong operational performance and growth in emerging markets, which generated close to 60% of our sales," said Lafont.

Sales rose by 3% to Euro15.8bn from Euro15.3bn. Earnings before interest, taxes, depreciation and amortisation (EBIDTA) rose by 7% to Euro3.45bn from Euro 3.22bn. The group reduced its net debt 5% to Euro11.3bn.

The overall volume of cement made by Lafarge fell by 3% in 2012 to 141Mt compared to 145Mt in 2011. Lafarge attributed this to the continued construction slowdown in Europe, increased local supply in Egypt, the current situation in Syria and the impact of the US divestments, mitigated by growth in Asia, Latin America and most countries of Middle East and Africa. EBIDTA for Lafarge's cement business rose by 6% to Euro2.96bn from Euro2.73bn. Overall results for the fourth quarter of 2012 were broadly similar to the year although both volumes and sales of cement fell suggesting that Lafarge's recovery remains fragile.

By region, in North America volumes of cement fell by 5% to 12.8Mt in 2012 from 13.5Mt in 2011. However volumes were down by 7% to 3Mt in the fourth quarter of 2012 due to tornadoes and bad weather.

In Western Europe cement volumes fell by 11% to 16.4Mt in 2012 from 18.4Mt in 2011. Notably sales volumes fell significantly in Spain and Greece, by 26% and 37% respectively. In Central and Eastern Europe cement volumes fell by 6% to 13.2Mt from 14.1Mt. Poland was singled out in this region, where sales volumes fell by 21% in 2012, following the completion of construction projects for the European Cup games in June and lower EU funding.

In the Middle East and Africa cement volumes fell by 3% to 45.2Mt from 48Mt. Sub-Saharan Africa, Algeria and Iraq were singled out for strong performance. Egypt's volume sales of cement fell by 5% and Syria reported 'sharp' declines. In Latin America cement volumes rose by 4% to 9.2Mt from 8.8Mt, led by Brazil, Honduras and Ecuador. In Asia cement volumes rose by 4% to 44.3Mt from 42.5Mt, led by strong gains in India, Indonesia, the Philippines and South Korea.

In its outlook Lafarge stated that it expects to see cement demand continue to rise by 1-4% in 2013 driven by emerging markets. The group also plans to reduce its net debt below Euro10bn as soon as possible in 2013.

Tajikistan: Tajik-Chinese joint venture Huaxin Gayur Cement is building a 1Mt/yr cement plant in the Yovon district of Khatlon province, according to the Ministry of Energy and Industries (MoEI). The budget for the coal-powered plant is US$110m.

Elsewhere in Tajikistan a 50,000t/yr plant being built at Vahdat Township by Tajik-Chinese joint venture, Vahdat Hualun is nearing completion. It is expected to start operation during the first quarter 2013. A plant with a cement production capacity of 20,000t/yr in the northern city of Konibodom will start operation in the first half of 2013. Two cement plants funded by foreign investment in Danghara and Shahritous districts are also nearing completion. A 100,000t/yr plant in the Mastchoh district, Sughd province that opened in 2012 has plans to increase its capacity to 1Mt/yr.

According to data from the MoEI, eight cement plants with a capacity of 1.5Mt/yr currently operate in Tajikistan. The country's largest cement plant is OJSC Tojikcement (Dushanbe cement plant) with a capacity of 1.1Mt/yr. However it has not been in operation since the start of January 2013 due to a lack of natural gas.

Tajikistan's annual demand for cement has sharply increased in connection with construction of the Roghun hydroelectric power plant (HPP), highways and other facilities of the nationwide significance. Currently Pakistan is the main supplier of cement to Tajikistan.

Egypt: Alexandria Cement continued producing cement during a recent hostage scenario. In a release to the Egyptian Stock Exchange the producer announced that on 14 February 2013 some subcontractors trapped a number of their management officials and Alexandria Cement's management, including the factory manager. The subcontractors were calling for permanent contracts.

Alexandria Cement informed the authorities. The hostages were freed on 17 February 2013. All of the accused workers were arrested. Throughout the situation Alexandria Cement continued to produce cement, although deliveries were halted during this period.

India: Madras Cements has reported increased net sales of 18% in the third quarter of its 2012-2013 financial year. The Indian cement producer made US$137m in the quarter ending 31 December 2011 which rose to US$162m in the same quarter in 2012.

'Sustained focus on containing costs' and improving efficiency were responsible for the positive results according to the CEO of Madras Cements, A.V. Dharmakrishnan. The growth in sales revenue came despite a sixteen day strike by dealers in Kerala which constitutes nearly 25% of the company's market.

Net profit for the quarter ending 31 December 2012 rose year-on-year by 9% to US$15.6m from US$14.2m. Revenue for the company's cement segment rose by 18% to US$159m from US$135m.

Also of note in the producer's results was that transportation and handling costs rose by 37% year-on-year in the quarter to US$33.3m due to higher railway freight charges and a diesel price hike.

Cameroon: The government of Cameroon and the German group GPower Cement has signed a partnership agreement to build a cement plant in the south-western town of Limbe. US$60.9m has been invested in the project with a target annual production capacity of 800,000t/yr. Construction of the plant will begin in June 2013 and is expected to produce its first cement bag by late 2015.

The initiative joins other projects underway such as those of Nigeria's Dangote Group (1Mt/yr) and Addoha from Morocco (500,000t/yr) in the commercial city of Douala. Cameroon's local producer and Lafarge's subsidiary Cimenteries du Cameroun (CIMENCAM), which has two factories in Douala and Figuil, has begun plant construction works on the outskirts of the capital, Yaoundé, to supply the Central, Southern and Eastern regions of the country.

Cameroon, which has been facing recurrent cement shortages for more than a decade, has opted for massive imports, with potential domestic demand being 8Mt/yr, while domestic production is currently estimated at just 1.6Mt/yr.