Global Cement News

Indonesia: Indonesia's domestic cement sales grew by 17% in 2011 on the back of new property construction, according to Indonesia's cement association (ASI). Total domestic cement sales in 2011 reached 48Mt, with more than half the sales in the main Java island, data from the association showed.

"Indonesia had large physical development during 2011 and the result followed strong economic growth figures. We also saw a huge decline in exports, which means domestic suppliers prioritised the domestic market," said ASI chairman Urip Trimuryono.

Total cement exports fell by 59% to 1.2Mt from 2.9Mt in 2010. The country's cement sales fluctuate month-to-month depending on factors such as holidays and the government's end-of-year project completion deadlines. Sales volumes in December 2011 rose by 17% from the same month in 2010 to 4.6Mt. The association has forecast cement sales growth by 6% in 2012.

"We believe the 2012 outlook for cement remains promising, supported by the land-clearing law and continued strong property demand on the back of a continued low interest rate environment," said Teguh Hartanto, an analyst at Jakarta-based Bahana Securities.

Indonesia's parliament stamped a long-awaited land acquisition bill in December 2011, an attempt to break the bottleneck in infrastructure development that has long been seen as holding back growth in the country.

Ben Guren will be appointed as the new Group Chief Financial Officer of FLSmidth and a member of the Group Executive Management. Guren is expected to take up his new position no later than 1 July 2012.

Guren, aged 51, is a Norwegian citizen who since 2007 been Group Vice President Finance, IT & Legal of Jotun Group, Norway. From 2006 to 2007 Guren was acting as Chief Financial Officer of Helly Hansen Group, Norway and from 1989 to 2006 he was partner in KPMG, Norway. Guren is a state-authorised public accountant, graduated from the Norwegian School of Economics & Business Administration in Bergen.

Guren replaces Poul Erik Tofte who has been the Group Chief Financial Officer at FLSmidth since 2003.

South Africa: South African cement sales rose for the first time in four years in 2011.

Sales climbed by 3.2% to 11.2Mt/yr in 2011 compared with 2010, when they fell by 7.8%, according to newly released figures from the Johannesburg-based Cement and Concrete Institute. Sales dipped by 1.8% to 730,000t in December 2011 from a year earlier.

"A long-term recovery in South African cement demand is long overdue and latest industry trends indicate that further decline is unlikely," said Pretoria Portland Cement Co, South Africa's largest cement producer.

Pakistan: The capacity utilisation of the cement sector in Pakistan has reached its lowest point in the last decade. Capacity utilisation sank to 70% in the first half of the fiscal year, which ended on 31 December 2011 for the current fiscal year. Meanwhile exports have continued to decline, offsetting the gains in local consumption.

"The expected turn around in the economy did not materialise as the capacities of the sector continued increasing," said a spokesman of the All Pakistan Cement Manufacturers' Association (APCMA). He said that expansions in the cement sector were planned six years ago when the economy was far stronger. The prolonged recession of recent years and drying up of government development programmes had disrupted the viability of the cement sector.

The APCMA spokesman added that domestic demand in December 2011 was encouraging, showing a growth of over 13% compared to December 2010. This compensated to some extent the 5% decline in local demand in November 2011. However exports remained under pressure during the six months to December 2011, posting a decline in four of the last six months. Exports declined by over 8% in December 2011. The overall decline in exports stood at 5% during the July - December 2011 period.

Total cement output in the country for the first two quarters of the fiscal year reached 15.40Mt, which was 4% higher than the 14.78Mt seen during the corresponding period of 2010. The majority of the capacity is located in the northern part of the country, where the industry posted a modest gain of 6% in domestic market and a lower increase of 3% in exports.

The spokesman for APCMA also pointed out that most of its member companies had been incurring huge losses after substantial increases in the cost of production. Input prices, especially coal, furnace oil, diesel, electricity have significantly increased in recent months forcing up the cost of production for cement producers.

Ireland/Ukraine: Europe Materials, a division of the Irish holding company Cement Roadstone Holdings (CRH,), completed the acquisition of 51% of the shares of LLC Cement in Odessa in southern Ukraine on 5 January 2012.

CRH intends to use the plant, which can produce up to 0.5Mt/yr of cement, for grinding clinker produced at Podilsky Cement in the east of the country.

The purchase follows clearance in December 2011 by Ukraine's Antimonopoly Committee (AMKU) to allow CRH to purchase the company.