Global Cement News

Indonesia: The Makassar-based Bosowa Corporation, which has interests in property development, cement, financial services, power and rice production, has announced plans to spend USD120m to expand its cement production and distribution capacity. The company is hoping to cash in on a planned infrastructure spending spree by the government and a rapidly developing property market.

Erwin Aksa, president director of Bosowa, said that the combined production of its two cement units, Semen Bosowa Maros and Semen Bosowa Batam, was expected to reach 3.5Mt/yr in 2011. Between January and September 2011 the company sold 3Mt of cement, 86% of its production target for the whole of 2011.

"We are bullish that our target is achievable as demand for cement remains stable, supported by the growth in the property and infrastructure sectors," said Erwin.

Bosowa will spend USD70m to build another cement plant in Maros, South Sulawesi. After completion of the factory in 2012 Erwin said that the group's cement production capacity would rise to 4.5Mt/yr.

Bulgaria: Bulgarian cement maker Vulkan Cement has announced that it will temporarily shut down its kilns from the beginning of 2012 due to flagging demand and imports from neighbouring countries that are flooding the market. The move has been prompted by a continuous drop observed in the cement market during the last three years.

Vulkan Cement also cited Bulgaria's obligations as an EU member state stemming from CO₂ emissions regulations and from REACH, the European Community Regulation on chemicals and their safe use, as key factors that directly affect cement production costs. It said that the temporary work stoppage would allow the company to cope with the economic downturn and properly secure its chances of a solid recovery.

The Vulkan Cement plant will continue operating as a grinding centre during the shutdown of its kilns and will receive clinker from its sister plant, Devnya Cement.

India: Cement sales in September 2011 showed signs of a revival with monsoon weather subsiding in most parts of the country. However the ongoing unrest over the creation of a new state in Telangana have affected the despatches of ACC. In addition UltraTech Cement, one of the biggest producers in the country, has not yet announced its figures for the month.

Cement demand from the real estate sector has improved with many builders putting their projects on fast track to keep up their promise of timely delivery during the festival season. But there are no substantial developments in the infrastructure sector even as some government projects have been announced.

Analysts warn that it's too early to predict a recovery in cement demand because there is no marked improvement in the economic health of the country along with continuing unstable global developments from the US and Eurozone. With concern over rising input costs and increases in lending rates still lingering, cement companies have kept their production in check in order to align with the demand.

Besides transportation interruptions, the Telangana disruption has paralysed power supplies. Big cement factories have captive power plants but smaller cement units have been badly affected. The supply of coal from Andhra Pradesh was also hit, pushing up the cost of power production for captive plants that had to rely to a large extent on imported coal shipments.

V Srinivasan, a research analyst at Angel Broking, said that cement companies are expected to face margin pressures due to higher fuel costs because of increased domestic and international coal prices. The demand revival has helped cement companies to raise prices across the country, yet despite the rise, cement producers' profitability may be under pressure due to increasing costs.

US: The US House of Representatives approved the Cement Sector Relief Act of 2011 (H.R. 2681) on 6 October 2011. The House voted 262-161 in favour of the bill, with 25 Democrats in support.

If the bill becomes law the Environmental Protection Agency (EPA) will be forced to repeal existing rules for toxic emissions from cement kilns and revise them. The bill would also give those facilities at least five additional years to comply.

The White House and top Senate Democrats strongly oppose the bill, but some Democrats in the Senate have supported delaying the cement regulations, leading supporters of the bill to be optimistic even though passage through the Senate appears unlikely.

Supporters of the bill say that the EPA has set emissions targets that will be difficult to achieve in practice and cause some cement manufacturers to close or scale down production during a recession. The Portland Cement Association stated that about 18 of 97 cement plants in the US would have to close as a result of the rules. By contrast the EPA said that 10 US cement-manufacturing facilities would have to be idled after the rule goes into effect in 2013, unless market conditions changed.

Several congressmen said during a debate on the bill that cement plants in their states could not meet the EPA requirements. "We want a regulation to be promulgated that you can actually achieve with real-world technology," said Texan Republican Representative Joe Barton.

Public-health groups and the EPA also argue that the bill directs the EPA to set standards that are less burdensome to the industry, limiting the agency's ability to impose tough rules if it believes they are necessary. The White House has said it strongly opposes the legislation and that US President Obama's advisers would recommend a veto.

New Zealand: Holcim has put plans to a build a new factory in Weston on hold until at least 2012.

The USD400m plant near Oamaru was to become the company's sole production facility in the region. Its creation was intended to create about 450 construction jobs and 120 permanent positions in the area. The decision to proceed with the factory had been expected in August 2011.

Holcim New Zealand's capital projects manager, Ken Cowie, stated that the company's Swiss headquarters had put the project on hold due to uncertainty created by the global economic downturn. "We realise that this creates ongoing uncertainty but we will continue to keep people informed," Cowie commented.

As reported by Global Cement on 5 July 2011 Holcim was seeking contractors to register interest in building the plant in July 2011. Plans to build the factory will now not be considered until late 2012.