Global Cement News

India: UltraTech Cement has reported strong results for its second quarter that ended on 30 September 2011. Net profit after tax for the quarter surged upwards by 140%, reaching USD57m compared to USD24m for the same quarter in 2010.

Total income for the company has increased by 22%, to USD810m for the quarter under review from USD670m for the similar quarter in 2010. Net sales have risen by 22% over the same period USD800m. However both net profit and sales were lower than USD140m and USD890m respectively, as reported in the previous quarter that ended on 30 June 2011.

UltraTech has an installed capacity of about 52Mt/yr and it hopes to increase that by over 9Mt/yr by mid-2014. The company warned that a surplus scenario in the Indian cement industry would likely continue for 2-3 years.

"Variable cost rose by 14% (during the quarter) because of the increase in input and energy costs. The 30% increase in the price of domestic coal, continuous rise in prices of imported coal together with escalation of freight costs... have constrained the company's performance," the firm said in a statement. It continued, "Growing input costs will result in a squeeze in margins."

Cement demand in India, the world's second-largest producer after China, has declined in recent months on a slump in the construction and real estate industries due to high interest rates and growth moderation in Asia's third-largest economy.

Oman: BankMuscat has signed an agreement with Oman Cement Company (OCC) for term loans totalling USD68m to refinance and modernise OCC plants.

The loan will be invested in funding the project for upgrading the OCC furnace efficiency and improving equipment of combating pollution, in addition to benefiting from the loan in the recovery of another funding loan.

Jamal bin Shamis al-Hooti, CEO of OCC said that the agreement would help the OCC factory to meet requirements of the Omani market.

Indonesia: HeidelbergCement plans to invest USD500m in a plant on Indonesia's Java island, Indonesia's trade minister Gita Wirjawan announced on 19 October 2011.

Indonesia's cement sales, an indicator of economic growth in Southeast Asia's largest economy, rose 52% in September 2011 year-on-year due to increasing property and infrastructure building.

Cement sales volumes reached 3.8Mt, from 2.5Mt in September 2010 according to Urip Trimuryono, chairman of the Indonesian Cement Association. Sales in August 2011 had dipped 0.3% year-on-year, due to slower activity during the Ramadan and Eid al-Fitr holiday. Trimuryono forecast full year 2011 cement sales would grow 14%, with growth moderating next year to 10%.

UK: Cemex UK has been fined Euro230,000 following the death of a worker in an explosion at its Rugby cement plant. The UK Health and Safety Executive (HSE) prosecuted Cemex after the death of 28-year-old Peter Reynolds on 15 January 2008.

Leamington Spa Crown Court heard that Reynolds was treating waste cement dust in the bypass dust plant at the company's Rugby Cement Works. While he was clearing a blockage in the lower mixer, there was a violent explosion of steam and dust from inside the machine. The force of the explosion blew Reynolds out through the side of the building onto the road ten metres below. He was pronounced dead at the scene.

HSE's investigation into the incident found that Cemex had recognised the potential for blockages to cause explosions as steam pressure built up within the mixer but it took no action to prevent them. The court also heard the company had failed to review its risk assessment following a previous incident in May 2006, when another man was injured using the same machine. This explosion bent a metal-cladded external wall, pushing it out by 50cm.

Speaking after the hearing, HSE Principal Inspector Neil Craig said, "This was an entirely avoidable tragedy, which has left a young family without a husband and a father. If Cemex had investigated the previous incident properly, Mr Reynolds would still be alive today."

"Cemex's protection against the build up of pressure was for the plant to be continuously vented when processing waste cement dust, but it frequently blocked. These blockages then caused steam to build up to a high pressure."

"The company could have made a number of changes to the mixer to reduce the flow of dust and improve the venting and cooling systems, or devised a new system of work. However, no action was taken and employees were expected to operate this dangerous piece of machinery."

Cemex UK pleaded guilty to breaching Section 2(1) of the Health and Safety at Work etc Act 1974. The company was fined Euro230,000 and ordered to pay Euro200,000 costs.

India: Indian cement companies are facing a shortage of coal from Coal India Ltd, the country's largest producer. However they are unlikely to be affected by this due to the high levels of imports, a cement trade official has said.

"Most cement companies import up to 70%-75% of the coal needed to run their captive power plants. As of now, I don't expect cement supply to be affected by the coal shortage," said Sanjay Ladiwala, president of the Cement Stockists and Dealers Association of Bombay.

A brokerage report by Emkay Securities has stated that large cement companies such as ACC, Ambuja Cements and Ultratech Cement source around 20% of their thermal coal needs from Coal India's monthly electronic auctions. The report also said that Coal India has diverted the 4Mt for auction in October 2011 to power generation companies. This could lead to some cost escalation for cement producers as they have to rely on higher-priced imported coal.

Separately, Ladiwala said that cement prices rose across most of the country in October 2011, except in southern regions, as demand from the construction sector revived after the summer monsoon rains ended.