Global Cement News

South Africa: PPC (Pretoria Portland Cement), South Africa's largest cement maker, may increase production in the country by as much as 4% in 2013, according to its new chief executive Ketso Gordhan.

"South Africa is in a very tough environment at the moment," said Gordhan, who added that an oversupply of cement, partly caused by new entrants, would have an impact on the market in the first quarter of 2014. South African cement sales fell by 3.8% in the third quarter of 2012 as widespread strike action and slower economic growth sapped demand. However, PPC's sales rose by 8% in the three months to 30 September 2012.

Competitor Sephaku Holdings is expected to begin construction of a new production plant in 2013. Macquarie First South Securities analyst Peter Steyn said that PPC was, "unlikely to be unscathed" by the new arrival.

Indonesia: Indonesia's cement consumption is expected to rise by more than 10% year-on-year to 62Mt in 2013, compared to 55Mt in 2012. Tuti Rahayu, the Industry Ministry's director for downstream chemical industry, informed the Antara News agency that the increase in demand for cement was due to the country's growing infrastructure development.

According to Tuti, consumption of cement in Indonesia grew by 14.5% year-on-year in 2012 to 55Mt compared to 48Mt in 2011. Demand in the eastern parts of country grew the most rising by nearly 54%. The country has had to build at least two new cement factories each year to meet surging demand. Tue added that a mixture of state-run and private companies have started building new factories across Indonesia in Papua, Sulawesi, Sumatra and Java.

Pakistan: Lucky Cement Limited has outperformed its competition by recording a 42.2% rise in its half-year profit for the year 2012-13. It has declared a profit for the half-year ending on (31 December 2012) of US$43.9m.The company's gross profit increased by 32.3% during the half-year as its net sales revenue improved by 13.9% to US$179.3m.

During the period under review, the combined sales revenue of Lucky Cement increased by 13.9%. This was attributed to a 21.3% growth in domestic sales and a 3.7% growth in exports.

To enhance the quality of cement and for capturing new export markets, Lucky Cement plans to replace its existing cement grinding mills from Chinese suppliers located at the Karachi plant with vertical mills from European suppliers. This replacement will reduce the cost of production due to more energy efficient operations.

Egypt: Suez Cement has reported in a filing sent to the Egyptian Exchange that the cement sector in Egypt is facing a drop in natural gas supply below normal levels. However, Suez Cement indicated that deliveries at its plants were not affected due to the group's strategic inventory of clinker.

On 20 January 2013 the Ministry of Trade and Industry announced that it would increase prices of mazut, a heavy, low-quality fuel oil, for the cement and ceramics industries by 50% to US$225/t from US$150/t. This follows a threatened increase in the price of mazut in late December 2012 of 130% that the government exempted cement producers from. However, the government planned to increase the price of natural gas to US$6/mmBtu from US$4/mmBtu at the same time.

India: Prism Cement has reported a loss of US$10.1m for the quarter ending 31 December 2012, due to poor demand for the building material, high power and raw material costs. The firm, which has also has interests ready- mix-concrete and tiles as well as cement, had made a US$4.3m net profit in the October-December quarter of 2011. Prism's net sales fell as expenses rose.

"Poor demand, weak government spending on infrastructure kept prices of cement under pressure in the quarter," said Prism in a presentation to investors. "Coupled with higher power,freight and raw material costs, realisations have been adversely impacted. The markets are expected to improve and stabilise during the last quarter of the financial year."