Global Cement News

Russia: Russia's Federal Antimonopoly Service (FAS) has said that it is considering the application by businessman Lev Kvetnoi, owner of cement producer Novoroscement, to buy the Verkhnebakansky cement plant from businesswoman Yelena Baturina.

The watchdog said it needed time to collect additional information on the deal, adding that it would extend the consideration period by two months.The application was submitted by Gazmetallproyekt, which runs Kvetnoi's assets. In November 2011 Baturina sold the Verkhnebakansky cement plant to Kvetnoi for around US$534m.

Switzerland/Italy: Sika AG, the Swiss specialty chemicals company, is to acquire the global concrete admixture and cement grinding aid businesses of the Italcementi Group (directly or indirectly controlled by Italcementi or Ciments Français). The businesses are on the market under the brand Axim. Axim has approximately 150 employees in Italy, France, the US, Canada, Morocco and Spain. In 2010 it generated sales of around Euro61m.

"This agreement will allow the group to capitalise the value of this business," said Giovanni Ferrario, COO of Italcementi Group. "Moreover, this will further extend the relationship between Italcementi and Sika, enhancing the reputation of both companies as innovators in the field of concrete and cement."

This acquisition allows Sika to significantly strengthen its market position in the relevant countries. As Sika's CEO, Ernst Baertschi, said, "This acquisition is a major step for Sika in the process of expanding market shares in the admixture business worldwide."

UK: The Mineral Products Association (MPA), which covers the cement and lime industries in the UK, has released its 3rd Sustainable Development Report, which shows the continued progress of its members in the realms of health and safety, carbon emissions, biodiversity, nature conservation and resource efficiency. It highlighted that, while growth prospects are uncertain and markets remain 20% to 40% below pre-recession levels, its members continue to be committed to stringent sustainability targets.

Highlights from the report include the planting of 1 million trees in the UK by MPA member since 2005 and a drop in direct carbon dioxide emission from cement production in 2010. The ratio of land prepared for quarrying to that which was restored to nature was 0.8:1. The report also showed the extent of the slump in UK cement demand. The UK consumed just 158kg/capita of cement in 2010 against the European average of 404kg/capita.

Nigel Jackson, Chief Executive MPA, said, "Our third Sustainable Development Report shows where we have gained considerable ground. For example, there is a growing awareness of the contribution that good building design can make to sustainability and how the use of concrete can significantly reduce the whole life energy performance of buildings through thermal mass benefits."

However, the MPA used the report to reiterate its stance on certain government policies. It believes that the government should not impose excessive costs on energy intensive industries, such cement and lime, which could drive the supply of essential and indigenously available resources overseas. "The MPA believes that genuine sustainable development demands that UK industries and supply chains are both resource efficient, where our industry is best in class in Europe, and also financially sustainable."

Ecuador: The Ecuadorean unit of the Swiss cement multinational, Holcim, has announced that it will begin the second phase of its Guayaquil plant expansion in December 2012. The second phase will require an investment of nearly US$400m and it will see the construction of a third kiln at the plant. This will allow the South American country to sustain its growth in the coming decades, according to the company.

As well as aiming to supply the country's domestic cement needs, the investment will generate about 2500 direct and indirect jobs in the country during the construction phase, which will last approximately 24 months. The first phase of the expansion in early 2010, an investment of US$120m, will be inaugurated in the first quarter of 2012. Completion of the project will see Holcim Ecuador's cement capacity jump from 3.5Mt/yr to 5.4Mt/yr.

Thailand: The Thai cement industry is still waiting to see more details of the government's programme for infrastructure projects following the recent devastating floods. It is anxious to determine whether growth will exceed the normal annual rate of 3-5%. The government so far has not laid out clear plans on repairing the flood damage to roads and other infrastructure installations or for how it intends to bolster the Kingdom's disaster-protection system with floodways and/or drainage tunnels.

Kan Trakulhoon, president and chief executive officer of Siam Cement Group, said that demand for the cement in 2012 was now anticipated to grow by 5%. This rate is expected to continue for several years thanks to the demand for repairs to roads, houses and other buildings, as well as improving the flood-protection system and constructing new homes. However, it has to wait for an outline of new infrastructure projects from the government before making a clear forecast of cement demand in 2012 and the medium-term.

Trakulhoon said that sales of building materials had bright growth prospects after the flood water recedes. "Because of the floods, the demand for high-rise condominiums in central Bangkok will be higher. I have always believed that the number of high-rise residences such as condominiums has not reached saturation. I have an optimistic view that demand for cement will keep growing."

Trakulhoon also pointed to the overall improved sales of building materials and cement in October 2011 as evidence for his optimism. In that month, sales of cement in the centre of Thailand dropped by 40% but sales in the north, south and northeast were good, indicating a strong background of cement growth.

Chantana Sukhumanont, executive vice president of Siam City Cement, the country's second-largest cement producer, pointed out that restoration itself does not require particularly large amounts of cement. She said that cement consumption in 2012 would not grow significantly from building restoration, highlighting a greater need for fittings and finishings such as plumbing fixtures and electrical wiring.