Global Cement News

Tukey: Oyak Cement Group has posted a net profit of Euro73m and a sales revenues of Euro336m in the first nine months of 2011. The group said that domestic cement demand increased by 12% your-on-year in the first half of 2011 and Oyak has reiterated its expectation that domestic cement sales would increase by 8% year-on-year in 2011 as a whole.

The group's Mardin Çimento recorded an earnings before interest, tax, depreciation and amortisation margin of 38.7%, a net income margin of 31.4%, and return on capital of 21.1% over the first nine months. This performance was the strongest of the 15 cement companies listed on the Istanbul Stock Exchange.

France: Lafarge has announced a new organisation project, which aims to make the group more agile and responsive, focused on its markets and its clients and designed to accelerate the group's development and profitability.

The building materials giant, which has major interests in cement, concrete and aggregates, will replace its product line-based
organisational structure with a country-based organisation. This will include the removal of a layer of management and the resulting reorganisation of the Executive Committee.

The project involves three main measures: to implement a country-based organisation, with country CEOs' responsibilities extended to cover all cement, aggregates and concrete activities; removal of one hierarchical layer, with the aim of cutting out the regional level; the resulting transformation of the structure and responsibilities of the Executive Committee, including the creation of 'Performance' and 'Innovation' functions.

The project was described by Lafarge as 'the natural next step' following its geographical expansion and its recent refocusing on 
cement, aggregates and concrete. This has become more pertinent following the disposal of most of its gypsum activities. Its aim is to increase Lafarge's differentiation through the development of higher value-added products and solutions for construction.

Bruno Lafont, Chairman and Chief Executive Officer of Lafarge, said, "This new organisation project will reinforce our efficiency. It will drive us to greater focus on our markets and customers' needs and to 
accelerate the group's development through organic growth and innovation. This transformation is a milestone for the group. It should strengthen Lafarge's position as a key player in sustainable construction." The project will be implemented from January 2012 onwards.

Saudi Arabia: United Cement Company has won the first of three new licenses to set up new cement plants in Saudi Arabia. United Cement's director general, Fahd bin Abdullah Al-Harbi, signed the deal on behalf of his company.The total annual production capacity of the completed plant is not expected to be more than 2Mt/yr.

Sultan bin Jamal Shawly, undersecretary at the ministry for mineral resources, said, "This license is issued as part of the first phase during which two more licenses will be issued to exploit limestone used for Portland and white cement." Shawly added that the license relatedo Hurrat Hadhen in Taif. "We will announce the winners of the second and third licenses on 26 November 2011 at the beginning of the new Hijrah year 1433H," he added. A number of local producers are in the running to secure the two other new licences.

Shawly said that the licenses are being issued with certain conditions that should be strictly followed by the winning company. "One condition is that the (plant operators) should employ and train Saudi workers and the percentage of Saudi workers should be not less than 40% by the end of the first year after starting production," he said. "We have also insisted that the number of Saudi workers in the company should reach 80% after the completion of four years of production."

Thailand: The Siam Cement Group (SGC) has said that Thailand's economy is expected to recover rapidly from the current flooding thanks to anticipated massive spending on infrastructure development. It believes that this development will boost the country's competitiveness in the coming Asean Economic Community (AEC).

Speaking at the Asean Business and Investment Summit in Bali, Indonesia, Kan Trakulhoon, chief executive and president of SGC, said that as soon as the floodwater recedes, much of the country's logistical infrastructure will be repaired. He said that new infrastructure would also be developed, particularly water-management systems. The proposed infrastructure development is meant to prevent flooding but could also spur growth.

"A decade ago we developed very few infrastructure projects such as electric trains and an airport. Now it is time to turn crisis into opportunity and kick off more projects. The infrastructure will enhance the country's competitiveness in the long run," said Kan. He added that Thailand still had much potential for direct foreign investment because of its skilled workforce, research and development spending and its location within the Asean region.

"Signs of recovery are emerging such as sales of building materials and cement in November 2011 returning to normal, following a 40% contraction in October 2011," he said. Kan said that SCG remained committed to its USD5bn five-year investment plan for 2012-16 in all of its business sectors despite the flooding.

The recent floods have affected more than 2 million people in central Thailand and disrupted supply chains for many business and manufacturing sectors.

India: Ultratech Cement plans to invest USD2.2bn to expand its production capacity the company has told its shareholders. The expansion will add 10Mt/yr to the company's capacity with a completion date of March 2014. Ultratech currently produces 52Mt/yr. Ultratech said it would fund its capital expenditure through a 'judicious mix of internal accruals and borrowings.'

In the first six months of this fiscal year, which began 1 April 2011, the company spent USD220m on its expansion projects. Ultratech said India's cement demand is expected to grow by 8%/yr over the coming years.