Global Cement News

Australia: Cement and lime manufacturer Adelaide Brighton Ltd (AB) has announced that its half-year profit for the first six months of 2011 declined by 10.6% amid weakness in the housing sector. The company stressed, however, that it was confident with regard to its future earnings. AB's net profit fell to USD64.67m for the six months to 30 June 2011 from USD72.0m in the first half of 2010. Its revenue declined by 2.2% USD531.5m.

While outlining a mixed to steady outlook of demand for its building products, AB said that it was, "confident on future earnings due to its strong exposure to infrastructure and resources."

Covering off the furore over Australia's potential CO2 tax, AB said that it had, "already significantly reduced its carbon footprint by using alternative fuels and sourcing alternative raw materials." It added that it had already closed inefficient clinker facilities and was now the largest importer of cement and clinker into Australia. This, it said, has helped to reinforce a strong position for the company relative to domestic cement and clinker competitors.

AB's apparent stance is distinctly opposed to those of the members of the public (who came out in protest in the capital Canberra on 16 August 2011), Opposition politicians, BCG Cement and the Cement Industry Federation, which have variously warned of massive job losses in the cement industry, price increases and emission leakage to countries with weaker environmental regulations.

Chris Harris from AB said that the company believed that the carbon tax, as proposed, would not have any significant impact on the continuation of AB's successful growth strategy of the past decade and that AB would continue its successful long-term strategy of operational improvement, growth in the lime business and vertical integration into downstream markets.

Turkey: Kahramanmaras Cimento Beton Sanayii Ve Madencilik Isletmeleri (KCS) has awarded KHD Humboldt Wedag the contract to supply equipment for its second cement production line with a capacity of 4500t/day clinker near the city of Kahramanmaras in southeastern Turkey. Commissioning of both the new kiln line and the clinker grinding system is planned for the end of 2012.

Signing with KHD Humboldt Wedag for delivering clinker production line I in May 2006 allowed KIPAS Holding to enter the cement industry via the subsidiary to meet the requirements for entering the Turkish cement industry as a producer. The scope of KHD´s delivery and services includes the engineering and delivery of mechanical and electrical equipment as well as advisory supervision of erection and commissioning (including training) for the new kiln line and for the clinker grinding system. Its capacity will increase from 100t/hr to 200t/hr at a fineness of 3600cm²/g.

For its second line, KCS has chosen to install a KHD combustion chamber, with which coarse secondary fuels and/or secondary fuels associated with difficult ignition and combustion can be used. The new technology should lower the quality requirements for the alternative fuels as well as preparation requirements. This will be the second KHD combustion chamber in Turkey, following the first installation in a cement plant near Ankara. The increase in clinker capacity with the new kiln line accompanied a decision by KCS to increase the output of the existing cement mill, a ball mill of Chinese design with a throughput capacity of 100t/hr CEM I 42.5.

UK: The Office of Fair Trading (OFT) has published a market study into cement, ready-mix concrete and aggregates. It proposes to refer these key sectors of the construction industry to the Competition Commission for more detailed investigation.

Key issues that the OFT study covered featured the high barriers to entry in these sectors due to the difficulty of obtaining planning permission and the level of investment required. It was noted that high and increasing concentration dominated the market with five major players accounting for over 90% of the cement market and 68% of ready-mix concrete production.

The study picked up on the effects of vertical integration pointing out that the major firms are integrated across ready-mix concrete and cement. The OFT had also received complaints about vertically integrated firms refusing to supply or discriminating against non-integrated competitors through their pricing. Multiple contacts and information exchanges across the markets were mentioned, with major firms supplying each other with both aggregates and cement and engaging in joint ventures and asset swaps.

Lastly the study noticed an apparent squeeze between rising cement prices and stable or falling ready-mix concrete prices, affecting independents that both buy cement from vertically integrated majors and compete against them in the ready-mix concrete market.

John Fingleton, OFT Chief Executive, said, "We are concerned that competition is not working well in these sectors, with underlying features of the market giving rise to persistent concerns."

Cement, ready-mix concrete and aggregates sectors had a combined turnover in 2009 of up to Euro3.86bn and are vital inputs in the construction sector, which represents 7% of UK GDP. Some 40% of construction expenditure is in the public sector, for schools, hospitals, roads and other physical and social infrastructure, with central government being the biggest customer.

The OFT will consult until 30 September 2011 on its proposal to refer the market to the Competition Commission. Key parties will be contacted directly but parties wishing to make a submission are invited to contact the OFT in writing.

Egypt: In collaboration with the Egyptian Environmental Affairs Agency (EEAA) Suez Cement Group of Companies (SCGC) has begun the implementation of a new integrated alternative fuel (AF) system at its Kattameya plant in New Cairo.

"As part of the activities to enhance our sustainability, this project will realise environmental returns through the application of advanced technologies for using AFs in cement production operations, a matter which will maximise our competitiveness and reduce the use of traditional energy sources thus helping the country," said Carlo Foroni, technical director of the SCGC. "This will also relieve the community from the need to treat their waste materials and will also limit CO₂ emissions," Foroni added.

According to Mohamed Aymen, SGCC environment affairs manager, following EEAA's 2009 approval of burning agricultural and municipal wastes at the company's Kattameya and Helwan plants, industrial testing started at Kattameya through a pilot feeding line. "All of these products will be recycled and used as an alternative fuel by being safely burnt at cement kilns," said Aymen.

While the environmental impact assessment for using alternative fuel systems at the Suez plant is underway, the project's feeding line will already be applied as planned at the company's Helwan plant later in 2011.

Japan: Taiheiyo Cement Corp has announced a net loss of USD67.7m from sales of USD2.14bn in the three months to 30 June 2011. The company's net loss was less than half the loss that it suffered in the same quarter of the previous fiscal year, which was USD140.6m. The closure of three domestic factories in the previous quarter and smaller payrolls boosted its bottom line.

While sales at the firm's mainstay cement operations were nearly unchanged from 2010, its operating loss totaled USD15.6m, far better than the USD49.5m operating loss logged in the same quarter of the previous fiscal year.

Cement demand in the Tohoku region fell in the wake of the massive earthquake that hit north east Japan in March 2011, but demand from construction of condominiums and commercial facilities rose in the Tokyo metropolitan area in particular, leading to the rise in sales.

Taiheiyo Cement expects its net profit through to the end of the current fiscal year (ending 31 March 2012) to jump by 150% to USD141.3m. The firm has also forecast that sales will drop by 2% to USD9.15bn and that operating profit will surge by 64% to USD351.5m for the full year.