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Holcim's net profit soars by 59.3% in 2013 27 February 2014
Switzerland: Swiss cement maker Holcim has announced a net profit increase of 59.3% to Euro1.3bn for 2013.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 0.2% to Euro3.21bn, boosted by the performance in the US, the UK, Germany, Ecuador and the Philippines, while India, Mexico, Canada and Brazil had a negative impact. The EBITDA margin grew to 19.8% from 18.4%. After adjustments for restructuring costs that were booked in 2012, EBITDA declined by 5.6%.
Revenue dropped by 6.8% to Euro16.2bn due to exchange rate effects and low prices in some markets. Holcim's cement sales fell by 2.4% mainly due to a decline in the Asia/Pacific business. The high demand in Russia and Azerbaijan boosted sales in Europe.
For 2014 the company expects cement demand to grow in all regions and operating profit to improve in organic terms.
Two subsidiaries to merge with India Cements 27 February 2014
India: Trinetra Cement and Trishul Concrete Products Ltd, both of which are subsidiaries of India Cements Ltd (ICL), will be merged with ICL. The board of ICL met on 26 February 2014 and approved the amalgamation of the two subsidiaries with itself. The amalgamation is subject to regulatory and other approvals.
ICL holds a 61.22% stake in Trinetra, which has a paid-up capital of US$721,000 through its fully-owned subsidiary, ICL Financial Services Ltd. ICL has an 88.4% stake in Trishul Concrete, which has a paid-up capital of US$352,000 through its wholly-owned subsidiaries.
Under the scheme of amalgamation, the appointed date for the merger is 1 January 2014.
Cement and the Association of Southeast Asian Nations Economic Community
Written by Global Cement staff
25 February 2014
There has been an interesting knock-on effect from further economic integration of the Association of Southeast Asian Nations (ASEAN) this week. Holcim Philippines may delay the construction of a 2.5Mt/yr cement plant in Bulacan province due to a drop in import tariffs in 2015. Vietnam or Indonesia were named as possible sources of clinker due to their excess capacity.
The ASEAN group comprises 10 countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar and Cambodia. Their respective cement production capacities range from 0.3Mt/yr at a clinker grinding plant in Singapore to Indonesia's integrated cement production capacity of 45Mt/yr. In total the ASEAN countries have a production capacity of around 220Mt/yr for a population of about 600m with national gross domestic products (GDP) per capita ranging from US$900 (Laos) to US$52,000 (Singapore).
One scenario for cement producers in the ASEAN countries is that they might be swamped by exports from places like Vietnam. That country had a production capacity of 73Mt/yr in 2013 with cement sales predicted to rise to 63Mt in 2014. Assuming the government released figures are correct, that leaves at least a 10Mt of cement production-sales gap that could torpedo a neighbouring country's cement industry in the free trade area.
Indonesia, the other potential source of clinker that Holcim Philippines mentioned, has seen construction growth slow and production capacity grow. Holcim reported in its nine-month report in November 2013 that, while national cement sales had risen by 5.3% to 41.6Mt, supply capacity had risen by 9% to 59Mt/yr. Assuming equal sales distribution throughout this suggests a capacity gap of 4Mt.
Some politicians in the region have complained that impending free trade area will create winners and losers. At a recent ASEAN meeting in Yangon, Myanmar a Myanmar planning minister raised the issue of a development gap within the ASEAN region calling for renegotiation for countries like Myanmar, Cambodia and Laos.
Meanwhile both the cement industries in Vietnam and Indonesia have clearly anticipated the implications of the ASEAN Economic Community. The Vietnam National Cement Association expects to remain competitive within the ASEAN region and against Chinese imports after 2015. In Indonesia State Enterprises Minister Dahlan Iskan stated this week that the cement industry was ready for the ASEAN Economic Community thanks to the government's strategy to consolidate its major cement producers within one company, Semen Indonesia. Consistent cement industry growth in South East Asia may be about to change.
CRH announces non-executive board appointment
Written by Global Cement staff
25 February 2014
Ireland: The Board of Cement Roadstone Holdings (CRH) has announced that Henk Rottinghuis has been appointed as a non-executive director of the company.
Rottinghuis, aged 58, is a Dutch citizen with a background in distribution, wholesale and logistics. He was until 2010 Chief Executive Officer at Pon Holdings BV, a large, privately held international company that is focused on the supply and distribution of passenger cars, trucks and equipment for the construction and marine sectors.
Rottinghuis is currently the Chairman of the Supervisory Board of Stork Technical Services which provides asset management services to the oil and gas, power and chemical industries. He is also a member of the supervisory boards of the Royal Bank of Scotland NV and the retail groups Blokker Holding BV and Detailresult Groep.
Saudi Arabian Cement to boost Rabigh plant production capacity 25 February 2014
Saudi Arabia: Arabian Cement Company (ACC) has announced that its management board has approved a project to boost the production capacity of the company's plant in Rabigh. The new production line will add a capacity of 10,000t/day and is expected to start operations in mid-2017. No financial details were available.