Global Cement News

Algeria: Lafarge has agreed to undertake a project inherited from an acquisition of an Egyptian firm in 2007 according to an Algerian minister of state.

Responding to a parliamentary question in mid-November 2011, the Algerian Industry and Investment Promotion Minister, Mohammed Benmeradi, said that Lafarge had agreed to undertake the project as a minority partner, owning 49%, in accordance with a foreign ownership law passed in 2009. Lafarge originally inherited the project as part of its acquisition of the global cement interests of Egypt's Orascom Construction Industries (OCI). OCI had secured licences for a new plant at Oum El Bouaghi, in the east of the country, shortly before the Lafarge takeover was announced.

Benmeradi said that the Oum El Bouaghi project would cost US$500m and would take 12-16 months to complete. He said that Algeria is currently self-sufficient in cement, producing 17Mt/yr, of which 5.5Mt/yr comes from privately owned plants. The government has a huge capital spending programme, which points to a steady increase in demand for cement. Most of the state-owned plants are in a poor state of repair.

India: Reliance Cement Company Limited is planning to start production in Bengal. The company wants to set up a 3Mt/yr plant at Raghunathpur in the Purulia district.

Reliance Cement plans to invest US$100m in the project and has submitted its letter of intent to the Bengal state government. The government is likely to highlight the project as it prepares its 200-day performance report to be unveiled in December 2011.

The Bengal unit will be the third plant from Reliance Cement as the company embarks on a capacity expansion plan to take production to 50Mt/yr. Projects with a capacity of 5 Mt/yr were announced in 2010 for Madhya Pradesh and Maharashtra. In 2008, the company secured limestone-mining licences at Satna in Madhya Pradesh.

China: China aims to make its top ten cement manufacturers hold at least 35% of the domestic cement market by 2015 according to its 12th Five-year Plan. Currently China's top ten cement manufacturers hold less than 25% of the domestic market.

China's Ministry of Industry and Information Technology (MIIT) has released the 12th Five-year Plan (2011-2015) for the country's building materials industry and five sub-plans for five building materials sectors including cement and plate glass. From 2011 to 2015, the development of the industry will mainly focus on eliminating outdated production capacity and promoting mergers and acquisitions.

According to the plan, cement companies above a designated size will expand at an average rate of above 10% from 2011 to 2015. 250Mt of outdated production capacity will be eliminated. Cement producers are expected to cut emissions of nitrogen oxides and sulfur dioxide by 10% and 8% respectively. Emissions of carbon dioxide per unit of industrial added value will be reduced by 17%.

It forecasts the domestic market demand for cement to rise by 3%-4% annually on average to reach 2.2Bt in 2015, a slower pace than the current level as the country increases efforts to make its economy less reliant on fix-asset investment and more on technologies and consumption.

Paraguay: Paraguayan officials have asked for Iranian assistance in building a cement plant. The issue was raised during a meeting between Paraguayan Parliament Speaker Victor Bogado and Iran's envoy to the country's capital Asuncion, Hojjatollah Soltani.

At the meeting Bogado noted that although a private sector Paraguayan company owns the Calicia mines, which are sufficient for producing cement for two centuries, his country required Iran's expertise to build a cement production plant. He reminded fellow attendees that at present Paraguay owns several small and medium-size cement production plants, but that it still imports cement from abroad.

Iran has in recent years expanded friendly ties with Latin America. Since taking office in 2005, Iranian President Mahmoud Ahmadinejad has expanded Iran's cooperation with many Latin American states, including Venezuela, Bolivia and Cuba. Ahmadinejad voiced Tehran's readiness to expand all-out ties and cooperation with Asuncion to his Paraguayan counterpart Fernando Lugo Mendez in March 2011.

UK: Hanson UK has announced that it is preparing for a 'tough' 2012. Jon Morrish, managing director, said "We informed employees two weeks ago that we were carrying out a detailed review of the cement business to prepare us for what we expect to be a very tough market in 2012 and beyond."

Morrish's comments arose is the wake of rumours that jobs may be cut at the company's Castle Cement plant in Lancashire. The site currently meets 25% of the UK demand for cement and employs around 300 people. Hanson, a subsidiary of the HeidelbergCement Group, currently runs three plants in the UK including plants in Lincolnshire and Wales, with a workforce of over 1000.

Morrish added, "This review, which includes an assessment of recent changes to the European carbon trading rules, encompasses all three of our cement plants and covers all functions from production and sales to technical and distribution. The three plants are all vitally important to the long term future of the business and there is no intention to close any of them."

"However, it is likely that production levels will change, which will have an impact on jobs. We plan to table outline proposals to employee representatives and recognised trade unions early next week and begin a proper and effective consultation process."