Global Cement News

Egypt: Ten cement plants, accounting for 70% of Egypt's capacity, have been forced to temporarily halt production after state-run Egyptian Natural Gas Holding Company (EGAS) stopped providing them with natural gas.

"These plants have not yet officially announced that they are shutting down. They initially gave employees 15 days off and have extended the leave by another week, because the agreed-upon daily supply of natural gas was stopped," said an official from the Federation of Egyptian Industries (FEI). He said that the plant owners are holding discussions with the prime minister to review gas prices to ensure that the cement sector can continue to operate. The shutdowns are costing each plant around US$2.14m/day on average.

EGAS supplies nearly 800Mft³/day of gas to the industrial sector at subsidised prices, of which 150Mft³/day is allocated for the cement sector. However, frequent power outages have forced the government to redirect gas supplies from some cement plants to meet the needs of power plants.

The Ministry of Petroleum had initially reduced gas supplies to cement plants by 35% in the first two months of 2014. "The government, represented by the petroleum sector, bears a cost of US$1.4bn from selling natural gas at subsidised prices to cement plants, whereas those plants export their production or offer it in the local market at international prices," said Petroleum minister Sherif Ismail.

Ismail said that the government is considering a new price mechanism for the industrial sector, however, any changes would be implemented gradually because of the difficult economic situation in Egypt 'which cannot withstand a sudden spike in prices.'

Pakistan: The attempts for an ultimate buyout of Lafarge Pakistan Cement Limited (LPCL) intensified on 30 April 2014 as interested parties made public announcements of their intention to acquire shares. That was to comply with the requirements of Listed Companies (Substantial Acquisition of Voting shares and Takeovers) Ordinance 2002. Currently, Lafarge SA has a 73% stake in LPCL.

William Gordon Rodgers, authorised representative of Vision Holding Middle East Limited (VHMEL), made a public announcement of VHMEL's intention to acquire 75.86% of LPCL. He said, "The total number of issued shares of LPCL is 1.45bn. VHMEL intends to buy 1.10bn shares, constituting 75.86% of the total." Rodgers added that if VHMEL proceeds to buy the shares, it would make a public announcement of offer to acquire further ordinary shares of LPCL in accordance with the requirements of the Listed Companies (Substantial Acquisition of Voting shares and Takeovers) Ordinance 2002.

DG Khan Cement Company Limited (DGKC) also disclosed its interest in Lafarge. The company expressed its intention to acquire the 100% stake of Lafarge in LPCL. DGKC's company secretary, Khalid Mahmood Chohan, said, "The proposed transaction will be subject to the relevant approvals and legal formalities, including formalities under the Listed Companies (Substantial Acquisition of Voting shares and Takeovers) Ordinance 2002."

LPCL has an installed capacity of 2.4Mt/yr with its plant located in Chakwal, Chakwal District.

Mongolia: The European Bank for Reconstruction and Development (EBRD) is extending a US$65m loan to Senj Sant to build a cement plant as part of a financing package dating from May 2013, which included a US$20m equity investment. Construction at the 1Mt/yr plant situated in southern Mongolia began in April 2013

"The EBRD's long-term finance, including equity, not only helps us build the first cement plant in Mongolia using the environmentally-friendly dry process, but also supports the company in raising business standards to international levels," said

CEO of Monpolymet Group, Munkhnasan Narmandakh. Senj Sant is a subsidiary of Monpolymet Group.

Laos: Siam Cement Group plan to build a US$370m cement plant in Laos. The 1.8Mt/yr plant is expected to start production in the second quarter of 2017.

"This plant is meant to serve the greater Mekong region," said President and CEO of Siam Cement, Kan Trakulhoo. Siam Cement intends to continue investing within the Association of Southeast Asian Nations (ASEAN) which is set to introduce a common market at the end of 2015.

Siam Cement's revenue for the first quarter of 2014 increased by 11% year-on-year to US$3.74bn. Kan added that political tension in Thailand has affected demand for cement in that country. Subsequently, the company is shifting its emphasis to exports.

Spain: Grupo Alfonso Gallardo has signed an agreement to sell its cement subsidiary, Cementos Balboa, and its paper subsidiaries to venture capital firm Kohlberg Kravis Roberts (KKR). Under the terms of the deal, KKR will refinance a Euro500m loan to Grupo Alfonso Gallardo, which will concentrate on its core steel production activities.

The transaction led to the completion of the restructuring project launched by Grupo Alfonso Gallardo in 2012, destined to reinforce its financial position and refinance a debt worth Euro1.5bn.

Cementos Balboa runs a 1.6Mt/yr cement plant in Alconera, Badajoz. The plant started production in 2005.