Global Cement News

China: Anhui Conch Cement Co Ltd, China's biggest cement producer, plans to add 10Mt/yr of cement production capacity to its annual total by 2015 via overseas expansions. This will include both setting up its own new facilities and acquiring international rivals that are currently weakened by the European debt crisis, according to Wang Jianchao, manager of Anhui Conch's foreign economic cooperation department. Anhui Conch wants to expand its production to other countries because China has restrictions on new cement projects, which aim to combat the industry's overcapacity. The Shanghai-listed company produced 110Mt of cement in China in 2010 according to its annual report.

Jianchao said that the company, which currently has no overseas production, is engaged in a 'go-global' strategy. "Many cement plant owners in the Eurozone want a quick bailout because they need cash to save their businesses, which were hit hard by the European debt crisis," said Wang, adding that the company is moving at the best time to build its overseas operation. He declined to disclose the budget for strategy, but said the company is financially strong enough to expand.

Anhui Conch Cement began its overseas expansion in late June 2011 when it signed a memorandum of understanding to invest USD2.35bn in several Indonesian cement plants. Wang offered no details on the status of the proposed Indonesian projects, but he hinted that the Anhui Conch's first foreign factory may open elsewhere because opportunities in other countries are also being explored.

"Apart from Indonesia, we are in discussions with potential business partners in Mongolia, Central Asia and South America. It's hard to say whether our foreign production will operate in Indonesia first, because other foreign projects may proceed more smoothly," said Wang.

To help its overseas expansion plan go smoothly, Anhui Conch teamed up with the Swedish industrial leader Atlas Copco Group AB to gain access to its cutting-edge mining machinery and training systems. The two companies have a history of cooperation dating to 1993 and the drilling equipment used by Anhui Conch is supplied by Atlas Copco.The Swedish company has a strong customer base in Indonesia.

Nigeria: Cement imports in Nigeria may begin to wind down soon, as the management of Dangote cement has concluded arrangements to finally launch its new 6Mt/yr cement plant in Ibese, Ogun State. Dangote Group additionally revealed that production at Gboko plant would soon be boosted because the company has almost concluded its expansion process in the plant to hit 4Mt/yr. The Gboko plant's current output is 3.5Mt/yr.

Dangote said that with 4Mt/yr in Gboko, about 10Mt/yr in Obajana and 6Mt/yr in Ibese, Dangote's cement production capacity will hit 20Mt/yr by the end of 2011. Nigerian demand is reportedly around 17Mt/yr. "What the Dangote Group alone will be producing will be far more than the country's demand, giving room for the group to commence cement exports to other African countries," said Dangote Group in a statement.

The group stated that by having cement plant in 14 different African countries, Dangote Cement has emerged as Africa's largest and most widespread cement producer, present in Zambia, Tanzania, South Africa, Congo, Ethiopia, Cameroon, Sierra Leone, Ivory Coast, Liberia, Ghana and Senegal. Dangote's plan, according to the company, was to ensure that Africa remains self-sufficient in cement production and in making the products easily available and affordable to end users.

The group was also keen to stress the benefits of increased production to its shareholders, with the Special Advisor to Aliko Dangote, Joseph Makoju, saying, "Very soon, the new lines in Obajana and Ibese will commence full production. By then the local capacity and output will be far more than the local demand of cement and that will set the scene for exporting our products. This will lead to increased product (sales), more revenue for the company and better returns for the shareholders."

India: Jaintia Youth Federation, a social organisation, has demanded the immediate suspension of forest officials who have declared forest areas as 'non-forest' land in the Jaintia Hills area of Meghalaya. The organisation expressed its fury that a large number of cement plants have been effectively allowed to mine limestone in forested areas. It also said that the state government should ask the eight cement companies in Jaintia Hills to contribute to compensatory afforestation.

"Officials who have declared such forests as non-forests need to be suspended and severe action needs to be taken against them as they have cheated and hoodwinked the government and helped the cement companies to function all these years," said the president of Jaintia Youth Federation, refering to a 1996 technical ruling.

Majaw added that similar action to that seen recently against Lafarge needed to be brought against all of the cement companies mining in the same area.

Greece: Titan has reported a 46% decrease in income for the first nine months of 2011. The group attributed the fall to a 'rapid decline in construction activity in Greece' in conjunction with the ongoing Greek debt crisis.

Income for the first nine months of 2011 was Euro52.9m, a year-on-year fall of 46.2% from Euro98.3m in 2010. The year-on-year quarterly decline was less severe dropping 1.7% to Euro30m in 2011 from Euro29.5m in 2010. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 15.5% to Euro219.8m for the first nine months of 2011 from Euro 260.3m in 2010. Turnover fell by 18.4% to Euro838.9m in the first nine months of 2011 from Euro1028.5m in 2010.

Aside from the domestic construction slump, the group also cited continuing low levels of demand in the US and the slowdown recorded in Egypt during the third quarter of 2011. Increased prices for liquid and solid fuels also had a negative impact on production costs. In addition the depreciation of the Egyptian Pound as well as the Turkish Lira against the Euro negatively impacted results. At constant exchange rates, the group predicted that turnover would have declined by 14%, while the decline in EBITDA would have stood at 10.5%.

Denmark: FLSmidth's profits have fallen by 12% year-on-year for the third quarter of 2011. The company has subsequently cut its estimate for world cement capacity growth in 2011, blaming stalled activity in India. Group profit was hit by weaker sales in its cement division despite higher sales in its minerals machinery business.

The profit for the quarter ending 30 September 2011 profit fell by 12% to Euro54m from Euro62m in the same quarter of 2010. For the nine months to 30 September 2011 profit fell by 8% to Euro117m from Euro128m in 2010. Total group revenue rose by 5% for the third quarter to Euro743m from Euro706m in 2010.

In the group's cement sector revenue for the nine months to 30 September 2011 decreased by 18% to Euro776m from Euro950m in 2010. Quarterly revenue for cement has fallen upon each consecutive quarter, with one exception, since the end of 2009.

"We cannot say how long the growth pause will last but it will definitely also extend into 2012," said chief executive Jorgen Huno Rasmussen, adding that India will continue to be a large and promising market.

The group said that it now expected the cement plant market in 2011 to grow by about 55Mt of new contracted cement kiln capacity worldwide, excluding China, against an earlier forecast of 65Mt. India is now expected to account for approximately 10Mt/yr compared to the previous projection in 2010 of approximately 20Mt/yr. Emerging markets such as Russia, South America, Africa and Asia were singled out for their high activity.

Unrest in North Africa hit cement consumption and investment in the region in the first nine months of 2011, the company said, adding that activities in Libya might resume in 2012 as the country headed towards greater stability.