
Global Cement News
Search Cement News
Holcim Philippines projects 5-6% growth in 2012 28 March 2012
Philippines: Holcim Philippines expects a modest growth rate of 5-6% in 2012 as it attempts to recover from a steep drop in net profit in 2011, according to its chief operations officer Roland van Wijen.
The Philippine subsidiary of Switzerland-based Holcim Ltd posted a net profit of US$47m in 2011, down by 47.1% from US$90m in 2010 because of weak demand and higher production costs. Sales revenues dropped 9% to US$496m due to a surge in prices of coal and electricity, the biggest cost components in cement production.
"Last year was a challenging year for us because reduced government spending meant that there was less structure built, which has a direct correlation to cement consumption. Also, the (operational cost) has been increasing which had a marked effect on our bottom line. Those are the elements we are recovering from," Van Wijnen said at the launch of Holcim's new CSR project. He added that the company is currently cutting production cost by stepping up the use of waste materials as an alternative to coal.
Holcim Philippines currently has a market share of one third of the cement industry and at present the company has no plans of expanding its market share. "We will go there when our customers want us to go. Right, now, the market has an over-capacity so significantly increasing our market share will not contribute to growth," Van Wijnen said.
Van Wijnen said the company's growth would be greatly driven by more projects that would be approved under the government's Public-Private Partnership (PPP) scheme. The company is pursuing opportunities for supplying winning bidders in the PPP projects. Van Wijnen said the company is optimistic that both the government and the private sector would increase infrastructure spending this year.
With a workforce of over 1700, Holcim Philippines operates four plants in La Union, Bulacan, Misamis Oriental and Davao. In January 2012 Holcim reopened its cement plant in Calaca, Batangas, to take advantage of an anticipated surge in demand for new buildings and infrastructure in Metro Luzon.
Indocement to hit 30Mt/yr by 2017 28 March 2012
Indonesia: Indonesia's second-largest cement producer, PT Indocement ,has announced that its recent expansion drive will increase production to up to 30Mt/yr by 2017, up by almost 50% from the 2012 target of 20.6Mt/yr.
One of these projects is the construction of a cement mill in Citeureup, West Java, with an expected production capacity of 1.9Mt/yr. The mill is scheduled for completion in 2013.
Besides the new cement mill, the company is in the final planning stage of constructing a cement factory with a capacity of 4.4Mt/yr at an existing location (brownfield), also in Citeureup. Additionally the company is conducting final studies for the construction of two new cement factories (greenfield) in Central Java and outside Java, each of which will have capacities of up to 2.5Mt/yr.
Finance director Tju Lie Sukanto said the company would fund the expansion projects partly with US$757m of internal cash. He added that this year's market conditions, such as the continuing strong residential-market trends, thanks to an expanding middle class, would further facilitate the company in reaching its growth targets.
India: Holcim expects the Indian construction market to more than double by 2020. According to one of the company's presentations made earlier in 2012, the Indian construction market will replace Japan as the third largest, after China and the US, by 2020, by which time, emerging markets will outweigh mature markets.
At US$360bn, India accounted for 5% of the US$7.2tn global construction market in 2010. However, by 2020, India is likely to capture a 7% market share, at US$840bn, of the US$12tn global market.
Holcim, which entered India post-2000, has its presence in the country through two established brands: ACC and Ambuja Cements. Collectively, these companies have the largest market share in India. The company currently has an Indian capacity of close to 57Mt/yr and is ahead of domestic giant Aditya Birla Group's UltraTech Cement, at 52Mt/yr.
Both have plans to augment capacities. UltraTech has plans to take its overall capacity to 75Mt by 2015. Holcim's Ambuja Cements will pump in around US$365m by 2013 to add more capacity.
According to India's 12th five year Plan (2012-17) document, the two segments most important to construction activity are infrastructure and housing. Since infrastructure spending is expected to go up to 9% of gross domestic product (GDP) or US$1tn for the Plan period (2012-17), this should translate into double-digit growth for the demand segment.
The Indian cement sector is the world's second largest, after China. During the current Plan (2007-12), cement players invested around US$10bn to add fresh capacities of 150Mt. According to the 12th Plan documents on the industry, the sector would need to increase capacity to 470Mt by 2017.
Indocement Q4 net profit rises 20% 28 March 2012
Indonesia: PT Indocement, Indonesia's second largest cement producer, has announced that its fourth-quarter 2011 net profit rose 20% as demand for construction jumped in Southeast Asia's biggest economy. The firm's fourth quarter net profit was US$109m in 2011, compared with US$91m in the same period in 2010.
The HeidelbergCement subsidiary reported a full year 2011 net profit of US$392m, up by 12% from US$351m in 2010. Analysts forecast that the full-year 2011 net profit will rise by 11% to US$391m. Indocement's 2010 full-year net revenue rose by 25% to US$1.5bn.
Lafarge focused on India 28 March 2012
India: Lafarge is focused on expanding its own operations in India and isn't considering any acquisitions at present, according to its chairman Bruno Lafont.
"We will continue to grow, mostly through internal growth and by expanding our existing cement plants and growing through several green-field plants," Lafont told reporters on the sidelines of an event.
He said the company will continue with its program to increase production capacity in India by 2Mt/yr, but he didn't say when the expansion will be completed. Lafarge has increased its capacity in India from 6.5Mt/yr in 2010 to 8Mt/yr in 2012. Lafont said the company will continue investing in its concrete and construction aggregates businesses in India.
The company recently expanded its capacity through new production lines at Jojobera in Jharkhand and at Mejia in West Bengal. Its four greenfield projects in Rajasthan, Karnataka, Meghalaya and Himachal Pradesh are in different stages of progress. Lafarge entered the Indian market in 1999 with the acquisition of Tata Steel's cement business. This was followed by the purchase of the Raymond Cement facility in 2001. Lafarge currently has four cement plant across the country - in Sonadih and Arasmeta in Chhattisgarh, Jojobera and Mejia.