Global Cement News

Vietnam: Vietnamese cement producers are facing calls to end subsidies on buying electricity. According to Minister of Finance Vuong Dinh Hue, cement and steel producers enjoyed subsidies of US$120m in 2010, with foreign investors netting US$24m of this total.

Hue raised the issue at the latest National Assembly whilst explaining the loss incurred by Vietnam Electricity (EVN). Citing the auditing results in 2010, Hue said that the cement and steel industries consumed 11% of the total commercial electricity output (982Mkwh). The problem was that the producers only had to pay US$0.04/kwh used, while the electricity production cost was

US$0.06/kwh in 2010, according to the Ministry of Industry and Trade. Naturally foreign investment has flocked to Vietnam, turning the country into a production base for export.

"We need to settle the problem when regulating the pricing mechanisms," Hue said before the National Assembly.

Member of the National Assembly's Finance & Budget Committee Nguyen Huu Quang, who once worked for the Vietnam Cement Corporation, said that EVN now has to pay US$0.06/kwh for electricity it buys from China, but that it has to sell at less than US$0.05/kwh to cement producers.

"I asked many times to restrict the export of cement and clinker, because the export prices are lower than the domestic prices. In exporting, enterprises can earn profits, but the State cannot, while the subjects for subsidisation in the society, also cannot enjoy any benefits from this," Quang said.

Iraq: Sinoma International Engineering Co Ltd, a Jiangsu Province-based Chinese company principally engaged in the mechanical equipment and cement businesses, has recently signed an engineering contract with Iraq-based Gulf Research Development. Sinoma will build a 5000t/day cement production line in the Kurdistan city of Sulaymaniyah at a cost of $180 million.

South Africa: A South African court ruled on 2 December 2011 that the Public Investment Corporation (PIC) can convert AfriSam's debt of US$580m into equity. PIC, which manages US$120bn in South African state pensions, will now gain control of the South African producer. This will enable it to restructure the company's debt which threatens to bankrupt the company.

AfriSam's two largest shareholders, empowerment venture Bunker Hills Investments and Holcim, previously applied to block the conversion of preference shares into ordinary shares, but this was dismissed by Judge Eberhard Bertelsmann in the North Gauteng High Court.

AfriSam CEO Stephan Olivier said, "Our focus... remains on the day-to-day operations of the company and ensuring maximum operational and financial efficiency." AfriSam had earlier said Bunker Hills and Holcim had a contractual obligation in respect of the conversion.

Holcim created AfriSam in 2006 by selling 37% of its South African business to investors led by Bunker Hills, and retaining a 15% stake. Bunker Hills had earlier said these shareholdings would be diluted to 'almost nothing' after the PIC preference share conversion.

In his ruling Judge Bertelsmann said, "There can be no suggestion that there is any illegal threat to the applicant's rights." He also said AfriSam's board must approve the conversion of the PIC's preference shares into equity within 20 days.

"Owing to the limits of confidentiality we are not in a position to provide all details. This is purely to avoid jeopardising the current stakeholder's engagements," the PIC CEO Elias Masilela said after the judgement.

Ukraine/Ireland: Ukraine's Antimonopoly Committee (AMKU) has allowed Jura-Cement Fabriken AG, a subsidiary of Ireland's Cement Roadstone Holding (CRH), to acquire control of LLC Cement in Odessa. The AMKU committee said that this decision allows Jura-Cement-Fabriken to hold over 50% of the votes in the Odessa plant's management body.

The Odessa Cement Plant started operations in 1965 and its capacity is currently 550,000t/yr. The plant was acquired in May 2005 by the Portuguese company Cimento e Produtos Associados S.A., which is owned by Cimpor, Teixeira Duarte and Engenharia e Construcoes, amongst others. LLC Cement's general director, Miguel Machado, has stated that Euro40m has been invested in the Odessa plant since 1996. CRH currently owns OJSC Podolsk Cement and LLC Lviv Concrete in Ukraine.

Indonesia/Chile: Loesche Automation has been awarded contracts for building cement mills in Indonesia and Chile.

In Indonesia PT Semen Baturaja (Persero), Palembang have placed an order for an LM46.2+2 C/S vertical mill and awarded Loesche Automation the contract for the electronic and automation engineering. The company is to deliver virtually all the equipment, from the automotive engineering to the software engineering and visualisation.

The medium voltage switching system and main drives have been supplied, as have the MCCs and low voltage main distribution. The order also covers the necessary I/O cabinets and the instrumentation and process control circuits based on Loesche Automation Basic and Detail Engineering.

In Chile Hormigones Transex Ltda, Santiago awarded the contract for a LM46.2+2C/S cement mill in Puente Alto to Loesche GmbH. Loesche Automation has been charged with providing the electronic and automation engineering for this mill.

The contract covers the delivery of the mid-voltage switching system and main drives, the low-voltage main distribution with MCCs and the supply of automation components with software engineering and visualisation. The project also included the basic and detailed engineering, the necessary I/O cabinets and the instrumentation of the process control circuits.

For both projects the software engineering is specially tailored to the requirements of the plant using Loesche solutions. In order to ensure that all of the processes run smoothly, Loesche Automation is responsible for project management, commissioning and monitoring. At the same time, Loesche Automation will carry out training services. The components are due to be delivered in May 2012 and commissioning is scheduled for March 2013.