Friday, April 29, 2011

TURKEY: Turkey's Sabanci cement group seeks acquisitions

Turkey's Sabanci (SAHOL.IS) cement group chairman Mehmet Gocmen said the group is seeking buyouts in the region and may spend between 1 and 1.5 billion lira ($660 million-$988 million) for takeovers this year.

The group is also interested in acquiring domestic cement makers and may buy Afyon Cimento (AFYON.IS), Gocmen told reporters late on Thursday.

BRASIL: Brazil's CSN raises stake in Usiminas further

CSN ups stake in Usiminas voting stock to 10.01 pct

* Company has 5.25 pct of Usiminas nonvoting stock

(Reuters) - Brazil's CSN (CSNA3.SA)(SID.N) raised its stake in Usiminas (USIM5.SA) in a further step to enter its rival steelmaker's controlling bloc.

CSN's holdings of Usiminas increased to 10.01 percent of voting stock and to 5.25 percent of nonvoting stock, it said in a securities filing late on Wednesday. Brazil's financial markets were closed on Thursday and Friday for holidays.

The company said in March it had about 8.6 percent of Usiminas voting shares and around 5 percent of nonvoting shares at the end of the first quarter. Last week, CSN lifted its stake in Usiminas's voting shares to 9.45 percent.

"The company continues to weigh strategic alternatives related to its investment in Usiminas," CSN said in the filing. It did not specify how it purchased the additional shares nor its objective with the move.

CSN Chief Financial Officer Paulo Penido Marques had said on March 29 that CSN's immediate goal was to own 10 percent of Usiminas' voting shares, without elaborating.

The disclosure comes amid growing opposition among some industry players to CSN's aggressive expansion plans into steel and cement -- the latter thwarted by bitter rivals and Usiminas shareholders Votorantim and Camargo Correa in the past.

CSN hinted in March that it planned to enter Usiminas' controlling bloc, formed by Nippon Steel (5401.T), Camargo Correa, Votorantim, and Usiminas' employee pension fund.

By raising its voting stake in the company, CSN assures that it will be treated equally with majority shareholders in the event of a change of control in Usiminas.

Local media has reported that Gerdau (GGBR4.SA) was in talks to acquire a combined 13 percent stake that Votorantim and Camargo Correa have in Usiminas. Gerdau said the reports were unfounded.

INDIA: Higher input costs dent cement majors' profits

Domestic giant UltraTech, part of the conglomerate Aditya Birla group, managed to meet industry analysts’ expectations. However, Swiss cement major Holcim-owned ACC and Ambuja Cements had to settle with a decline of around 10 per cent in their profits.

Higher input costs have dented the top cement majors’ profits in the quarter ended March. Despite maintaining high prices irrespective of a poor demand scenario throughout the quarter, companies could not post strong quarterly numbers.


UltraTech Cement, the country’s largest cement maker with a capacity of 52 million tonnes per annum, posted a rise of 218 per cent in its net profit for the March quarter at Rs 726.77 crore, compared with Rs 228.54 crore in the previous corresponding quarter. The company’s net sales during the period too jumped 135 per cent to Rs 4,490.13 crore from Rs 1,909.35 crore in the same quarter last year.


For the financial year ended March, UltraTech’s consolidated net profit stood at Rs 1,367.35 crore against Rs 1,095.20 crore in 2009-10, a rise of 24.85 per cent. Its consolidated net sales were up 90.8 per cent at Rs 13,691.15 crore compared with Rs 7,175.13 crore last year. However, the results are not comparable given the amalgamation of Grasim Industries’ cement assets with UltraTech with effect from July 1, 2010.

Taking into account the like for like (LFL) comparison, the company’s quarterly net sales witnessed a nominal growth of 6.76 per cent at Rs 4,490.13 crore compared with Rs 4,205.85 crore. On the same basis, profit before interest and tax (PBIT) stood at Rs 903.70 crore, up 5.36 per cent, against Rs 857.72 crore. Similarly, on LFL basis, UltraTech’s consolidated net sales for the year rose by less than one per cent to Rs 13,691.15 crore against Rs 13,567.53 crore while its PBIT witnessed a decline of 38.5 per cent.

The company said the year saw the lowest growth in the decade. “This was primarily on account of subdued growth in various key cement consuming states driven by lower infrastructure spending, slowdown in the realty sector, an extended monsoon and non-availability of railway wagons,” the company said in a statement. Moreover, during the March quarter, variable cost rose 14 per cent while imported coal prices were up 27 per cent.

On the other hand, the net profits of ACC and Ambuja Cements dipped around 11 per cent and 12 per cent respectively during the March quarter. Both the companies follow the calendar year as their accounting year. ACC’s quarterly net profit stood at Rs 350.17 crore against Rs 392.87 crore in the previous corresponding quarter while Ambuja’s net profit was down to Rs 407 crore compared with Rs 462 crore last year.


THE GOING GETS TOUGH
Company
March quarter (FY 11)
Change
(%)
Closing share
price*
Change
(%)
Net
profit
Change
(%)
Net 
sales
ACC350.00-10.872556.2014.101122.601.06
Ambuja407.00-11.802207.0010.90157.501.19
UltraTech726.77218.004490.13135.171060.652.43
* Rs /share, All figures in Rs  crore                                              Source : Companies and Bombay Stock Exchange



However, Holcim companies managed to post better net sales during the quarter. The consolidated net sales of ACC were up 14 per cent in the quarter at Rs 2,556.20 crore compared with Rs 2,240.32 crore, thanks to the commissioning of the company’s new units, which helpd boost cement sales. Ambuja too saw its net sales grow by 11 per cent to Rs 2,207 crore against Rs 1,990 crore.

The cost of power and fuel was up 22 per cent for ACC while Ambuja faced a 35 per cent increase in its energy costs.

On the Bombay Stock Exchange, the share price of UltraTech closed firmed with a gain of 2.43 per cent to settle at Rs 1,060.65 on Tuesday. Shares of ACC and Ambuja firmed up by over a per cent to close at Rs 1,122.60 and Rs 1,57.50 in a weak Bombay market.


WEAK OUTLOOK
Cement players have painted a weak outlook. According to the Birla firm, the pricing environment may remain challenging and with the impact of surplus capacity, margins may continue to remain under pressure. Ambuja Cements, in a statement said, “With steep increases in energy costs, driven by an increase in coal costs, higher freight costs and higher expected inflation, profit margins are expected to be under pressure.” Cement prices, which rose 25 per cent in the March quarter alone, have started softening a bit. So far in the current month, prices have slipped around Rs 7-10 for a 50-kg bag.

MEXICO: Mexico's Cemex posts loss, but sales rise



* Loss narrows but is wider than analysts' forecast

* Sales beat expectations, rise 11 percent (Recasts with market forecast, sales details, quote)

(Reuters) - Mexico's Cemex (CMXCPO.MX) (CX.N), the world's No. 3 cement maker, reported a wider-than expected first-quarter loss, but sales rose as demand improved in Mexico, Europe, South America and the Caribbean.

Net sales rose 11 percent to $3.4 billion, a sign that Cemex, one of Latin America's biggest companies, is pulling out of the worst crisis in its century-long history. The company has yet to fully recover from the U.S. housing crisis.

"This is the seventh consecutive quarter of top-line recovery in our results," said Fernando a Gonzalez, Cemex's executive vice president of finance and administration, who recently took on the role of chief financial officer.

Cemex posted a net loss of $276 million, down from a year-earlier loss of $342 million. Six analysts polled by Reuters forecast, on average, a loss of $229 million.

Earnings before interest, taxes, debt and amortization, or EBITDA, rose 1 percent to $519 million.

Weak cash flow underscored Cemex's challenges as the U.S. market, where the company is the top cement maker, remains feeble. In the first quarter, free cash flow after maintenance capital spending was negative $317 million, compared with a negative $171 million in the same quarter of 2010.

Monterrey-based Cemex, once an emerging market darling famed for buying up rivals in developed economies, has been struggling through a deep slump ever since it bought Australia's Rinker with short-term bank debt just before the U.S. housing crisis.

INDIA: Indian Cement Industry Forecast to 2012

India is the world’s second largest producer of cement. Indian cement industry has outpaced the growth rates of other prominent industries in the country on the back of factors, such as rising demand from the housing sector, increased activity in infrastructure, and construction recovery. Recent industry developments and the government supportive policies are attracting global cement giants and sparking off a spate of mergers & acquisitions to spur growth.

Our report has found that, the Indian cement industry sustained its growth rate even in the tough conditions of economic slowdown. Cement production is expected to increase above 9% year-on-year during 2010-11 against the previous fiscal year. Almost every cement major expanded their installed capacity in the backdrop of the government backed construction projects as these projects have created strong demand for cement in the country. Moreover, it is anticipated that the industry players will continue to increase their annual cement output in coming years and the country’s cement production will grow at a CAGR of around 12% during 2011-12 - 2013-14 to reach 303 Million Metric Tons.

At the regional front, Southern Region (including Andhra Pradesh, Tamil Nadu, and Karnataka) was leading the country in terms of cement production in 2009-10. Sufficient raw material availability and various incentives provided by the state governments make this region lucrative for investments. Numerous domestic and international cement companies are striving hard to establish their production base in this region.

“Indian Cement Industry Forecast to 2012” provides an extensive research and objective analysis of the cement industry in India. It thoroughly examines all prominent emerging trends and drivers fueling growth in the industry. The report highlights major segments, such as production, installed capacity, export, import, plant size, and consumption to present clients valuable information of different aspects of the cement industry. It also throws light on the regional cement demand-supply outlook to help clients understand the market dynamics and get an insight of the industry at the micro level.

Most importantly, the report has also presented industry forecasts based on the correlation of past drivers, challenges, and opportunities for expansion. In this way, the report presents a complete and coherent analysis of the Indian cement industry, which will prove decisive for the clients.

JAMAICA: Carib Cement Touts Lucrative South American Deal



Caribbean Cement Company Limited (CCCL) is about to expand its supply markets into South America, virgin territory for the Jamaican company, which has been building out its export operations to make up for business lost to imports in its home market.

General Manager Anthony Haynes said his company expects to close a new deal with a South American company in three months.

"The new contract will represent significant business for us but I can't speak to volume," Haynes told Wednesday Business on Tuesday.

"South America is where we are seeing more growth so we have been focusing in that area," he said.

Explaining why CCCL is taking on markets in the region, instead of parent Trinidad Cement Limited (TCL), Haynes said the Jamaican operation was motivated to grow to pay back the investment in its expansion, and was inclined to look overseas because of the projected 30 per cent contraction in the domestic market last year.

"So as the demand and supply dynamics change we turn to more export markets," he said.

"... The logistics and second phase of our expansion is to look to these markets in South and Central America which are seeing much more growth than the Caribbean."

pushing market growth

Beyond the immediate contract being finalised, Caribbean Cement will be going after market share in South American countries such as Venezuela and Colombia, as well as Costa Rica and Panama in Central America.

"We are now pushing market growth in the Spanish-speaking countries," said Haynes.

Caribbean Cement increased its productive capacity from one million to 1.8 million tonnes in 2009, but currently sells less than 750,000 tonnes of cement per year.

Sales volumes last year have underperformed because of falling domestic demand; and notwithstanding export growth linked to new markets in Haiti and Dominican Republic. Exports of cement rose by 73,000 tonnes in the January to September period, but domestic sales fell by 86,000 tonnes, as did clinker reports, which fell by 40,000 tonnes. Revenue, as a result, fell from J$6.9 billion in the nine-month period of 2009 to J$6.1 billion last year.

Caribbean Cement also reported a J$1.55 billion loss on operation in the 2010 period.

Trinidad Cement, which bears the brunt of the debt acquired to expand the Caribbean Cement plant, is now touting the new supply contract as significant enough to enhance the Jamaican company's business and improve the group's near-term prospects.

The group, at last report ending September 2010, was TT$2.5 billion in debt.

Under the plan being drafted, TCL hopes to defer principal repayments on long-term loans due 2011 to 2013, and extend the maturity of short-term debt.

The debt-restructuring plan is now being crafted, based on independent adviser FTI Consulting Canada's report to a steering committee of TCL lenders — who together hold a combined 75 per cent of TCL's total debt — on TCL's financial status and future business prospects.

TCL is drafting its own debt-restructuring proposal, which it will also present for consideration by lenders.

The cement group has delayed publication of its yearend results until April 30 and potentially to May 31, as well as those of listed subsidiary companies Caribbean Cement and Readymix, "to provide the maximum possible assurance" to external auditors about the debt plan.

Publishing the financial results before the debt programme is resolved would, TCL said, leave shareholders with a distorted view of the group's "performance and state of affairs".

"In relation to its Jamaican subsidiary, Caribbean Cement Company Limited, negotiations are at an advanced stage for the implementation of a major supply contract which will significantly enhance the company's and, by extension, the group's prospects in the near term," TCL said in a market filing.

"The finalisation of this supply contract has relevance to the group's 2010 audited financial statements."

The group made a loss of about TT$30 million in the third quarter, but reported positive earnings of TT$144 million over the nine-month period on depressed revenue of TT$1.2 billion (9m 2009: TT$1.37b).

Despite the parent's touting of the new supply deal, Caribbean Cement declined comment on the terms being negotiated and just how lucrative the contract was likely to be.

"I am not in a position to share any more information," said Haynes.

more efficient

Caribbean Cement's two largest export markets are said to be Guyana and Haiti, followed by Dominican Republic.

Haynes said, inside the Caribbean, potential growth markets include Guyana and Suriname, but that these are countries better served by TCL because of proximity.

"... While CCCL, instead of shipping all the way to Guyana, would ship to these markets which are closer in terms of distance, which would be more efficient," he said, referring to South and Central America.

"Over time, I believe there will be a natural rationalisation of the markets," he told Wednesday Business.

Haynes suggested that the new contract being pursued is a demonstration of Caribbean Cement's more aggressive stance on growing revenues.

JORDAN: New cement factories allowed on condition of no local sales

The Cabinet has recently approved a decision to grant licences to new cement factories under a condition that the products be for export purposes only.

Minister of Industry and Trade Hani Mulki told The Jordan Times that new factories which wish to invest in the country should provide the government with guarantees not to sell their products in the local market.

“Currently local production of cement covers over threefold of the market needs,” he said, adding the conditions imposed on new factories were meant to protect investors.

“It is the duty of the government to offer guidance and advice to investors and when we tell them that their production should be directed to markets abroad it means that the government is basically protecting them and also protecting local manufacturers,” Mulki remarked.

However, the official noted that the new decision will be reconsidered at the beginning of 2012 after studying the local market needs.

If construction activities pick up and the government finds there is a need to provide the local market with cement, these new factories will be allowed to do so, he explained.

On November 7, 2010, the Cabinet decided not to issue licences for establishing new cement factories and not to allow expansion at already operating plants.

The cement industry in the Kingdom has witnessed some controversy over the past two years, when certain local factories complained about “unfair competition”.

Jordan Lafarge Cement Factories Company lost JD953,000 in 2010 compared to net profits of JD45.7 million generated in 2009, with the company blaming “unfair” competition in the cement industry in Jordan for the losses.

The company attributed the decline in sales to the fact that new companies which had entered the local market were importing clinker, the basic ingredient in the industry, from countries that subsidise the material.

Early this year, the company called on the government to impose tariffs on imported cement and clinker.

In a memo sent to the Ministry of Industry and Trade, Lafarge explained that the Kingdom’s imports of the clinker substance, manufactured in countries that subsidise fuel for cement factories, influence competition in the local market and threaten the future of the cement industry in the country.

VIETNAM: Cement, steel makers grapple with rising input costs and slow sales

Cement, steel makers grapple with rising input costs and slow sales

Price of building materials including steel and cement are showing signs of declining after surging constantly early this year, leaving many businesses struggling with the increasing inventory.

Steel makers are under high pressure of the increasing input costs and harsh competition from imported steel, while cement producers are coping with rising inventory due to slow sales (Photo:Minh Tri)


Local construction firms were very anxious on the increasing steel price in the last three months, moving up by about VND400,000 per ton and even VND800,000 to VND19 million (US$950) per ton.

However, the rising streak has been cooled off, with local retail price VND200,000-300,000 per ton lower than the wholesale ones by steel makers.

D6 and D8 steel of the country’s two leading steel producer Vinausteel and Hoa Phat remain at high price of VND1.8 million ($90) per ton.

Analysts said the move came from the fact that construction firms and dealers dumped huge volumes of steel they had stockpiled earlier to cut losses.

The owner of Hanoi-based steel trader Song Nhi, who wanted to be unnamed, told Dau Tu Tai Chinh Newspaper that steel price would not drop further and rally soon on the increasing ingot steel, electricity cost and a stronger US dollar.

Experts said local steel makers were facing in a dilemma of choosing between raising their prices and keeping their prices unchanged.

The first option will pave a way for imported steel to beat them with lower prices, while the latter will leave them grappling to survive from the increasing input costs.

The Vietnam Steel Association has requested authorities to tighten control over imports from China and Southeast Asian countries as the market share of local products has dropped sharply.

News website VnExpress early this month cited Nguyen Tien Nghi, vice chairman of the association, as saying that steel imports amounted to around 350,000 tons per month in January and February, hurting local producers.

He noted that Vietnamese steel products now only account for 14 percent of the market, compared to an average 30 percent in previous months.

As a result, the association said customs, tax and trade officials should take immediate measures to control imports. It said the right import tax rates must be applied for particular imported products.

For instance, steel products of ASEAN (Association of Southeast Asian Nations), which are eligible for a zero tax rate, must actually be produced by, instead of just coming from an ASEAN country.

The association also said steel imports from China, even with boron, must carry a 10 percent tax if they are used for construction projects.

Local producers in 2009 discovered a case in which an importer claimed 29,000 tons of steel imported from China to be alloy steel to benefit from lower tax rates, even though the products were simply carbon steel with a small quantity of boron added. Generally, boron is added to steel products to increase strength.

According to the Vietnam Steel Association, local steel output has reached double the local demand. It expects total production to reach 8.8 million tons this year, up from 7.8 million tons in 2010.

Cement sales frozen
Cement is treading water, with retail price in the north ranging from VND1.1 million per ton to VND1.4 million ($70) per ton. The price in the southern provinces is higher, ranging from VND1.44 million per ton to VND1.48 million per ton.

Dealers expected the market price would likely to be unchanged in the next five or seven days before fluctuating.

Nguyen Van Diep from the Vietnam Cement Association said the cement sales in the first two months of 2011 amounted to 6.2 million tons only, compared to last year’s 7 million tons.

“The sales should have reached around 8 million tons in the first two months in accordance with the expected consumption growth rate of 10 percent and the targeted sales of 56 million tons,” said a cement trader.

“Low sales show cement producer will have to face with the increasing inventory,” he said.

AFRICA: EGYPT: Egypt's South Valley Cement 2010 net falls 66 pct



Egypt's South Valley Cement 2010 unaudited net profit fell 66 percent to 50.9 million Egyptian pounds, the firm said in a statement to the bourse on Tuesday.

The firm's 2009 net profit was 151.3 million pounds according to the statement.

Shares in South Valley Cement were trading 1.6 percent higher at 1142 GMT while Egypt's benchmark share index inched down 0.2 percent.

SAUDI ARABIA: Cement prices fluctuate as monitors come and go

The Ministry of Trade and Industry stepped in to set the price of a bag of cement at SR14 this week as purchasers across the city accused manufacturers and suppliers of deliberately pushing prices up.
A ministry official said that inspectors were sent out to “force all outlets to heed the ministry pricings”.
“Any infringements will be punished accordingly,” the official said. 

He added that “large amounts” of cement were expected to arrive in Jeddah “in the coming hours” and said that “the sale of the materials will be conducted under the monitoring of ministry inspectors”. 

Police were required to bring calm to Jeddah’s cement market on Bin Ladin Street Monday as heated arguments broke out between buyers and sellers over price rises induced by the short supply of cement across the region.

The price of a single bag of cement, after the Ministry of Trade had set it at SR14, had risen to SR17, provoking the ire of consumers who blamed a failure on the part of the authorities to control prices.

Purchasers at the site, according to Al-Madina Arabic daily, said that cement companies were deliberately reducing the quantity of material available on the market in a bid to push prices up, and that a scarcity across the western region had led to sellers heading for the Jeddah marketplace to “make the most of the opportunity”.

Abdullah Al-Ghamdi said that he had gone to the market over the previous two days with the intention of purchasing the 1,000 bags of cement he requires for building work on a private house.

“I was surprised to find Sunday that they were charging 18 riyals for a single bag, and on Monday Ministry of Trade inspectors turned up and set the price at 14 riyals,” he said. “But as soon as they left the market the prices went back up to 17 riyals.”

He said that the ensuing arguments between sellers and purchasers threatened to turn violent and led to the police being called to bring calm to the market.

“Ministry officials should be at the market at all hours of operation to keep control of the prices,” he said.
Another consumer who later in the week had an altercation with one seller said that traders were blaming the cement factories.

“Even if there are problems with production, that’s not the fault of consumers and we should not have to end up paying for it,” he said. 

Seller Ahmad Asiri said that a shortage in production was the problem, coupled with an increase in demand.
“I have heard of bags going for up to 20 riyals in some parts of Jeddah,” he said.

Manufacturers told the newspaper, however, that all their production lines were working to maximum output and that there was no shortage from their end.

“The crisis is being caused by people who are trying to exploit the increase in demand for cement that we’re seeing at the moment,” they said. 

Saudi Gazette reported earlier this week that cement prices in Jeddah had been oscillating between SR17 and SR20, as salesmen accused suppliers of trying to “dry up the market” in a bid to push prices up. 

The Ministry of Trade and Industry was reported last week, however, as having contacted major Arab cement companies to ask them to address the shortfall in cement production. The ministry warned them that it was “prepared to issue fines over price rises”.

AFRICA: TANZANIA: Cement firm loses key Appeal to TRA



Mbeya Cement Company Limited will have to pay over Sh1bn unremitted tax to the Tanzania Revenue Authority (TRA) after losing an appeal that challenged tax assessment.

Last week, the Court of Appeal sided with TRA when by ruling that “there was no cause for the court to interfere with the decision of the administrative tribunal” that the assessment was valid. 

The cement company was challenging the assessment of additional Value Added Tax (VAT) of Sh1billion made by TRA over imported technical and management services it received between January 2001 to March 2005.The company lodged a notice of objecting of the assessment to TRA, but the latter declined to withdraw the assessment on grounds that it has powers to make such assessments.

Mbeya Cement then successfully appealed against the assessment at the Tax Revenue Appeals Board (Trab). In April 2007, the board held that TRA did not have powers under section 43 (1) of the VAT Act to make the assessment.

However, Trab decision was overturned five months later following TRA’s appeal to the Tax Revenue Appeals Tribunal (Trat) which held that section 43 (1) of the VAT Act empowered the authority to make tax assessment on imported services on the appellant.

Trat further held that the failure by a registered taxpayer to comply with the provision occasioned a failure to account for the demanded tax.

Aggrieved, Mbeya Cement lodged an appeal at the Court of Appeal, arguing that the tribunal erred in holding that the commissioner for VAT had powers under section 43 (1) of the VAT Act to make tax assessment on imported services of a registered taxpayer.

INDIA: Suresh Mahadevan's view on cement sector



Suresh A Mahadevan, Head of India Research - UBS Securities is bearish on cement sector barring Grasim Industries.

Mahadevan told CNBC-TV18, "We have been bearish on the cement sector. The only name we like in that is Grasim other than that we generally had a negative bias on the sector because we still think some of the supply issues continue. Around monsoon these stocks do correct historically so post that we would take a relook at the sector but at this point with exception of Grasim we are bearish on the sector.

INDIA: Pakistan to seek easier cement export route

Pakistan is likely to seek the removal of non-tariff barriers on its cement in India at the two-day trade meeting that started in Islamabad today.

Indian authorities certify the quality of Pakistani cement every year and do not allow imports to come through road, which are considered as non-tariff barriers by Islamabad.

“Cement is a major issue for Pakistan and it is likely to be pushed by Islamabad during the talks. We can expect some progress on the issue as we need cement for our rapid infrastructure development,” commerce ministry sources said.

The two-day talks between commerce secretary Rahul Khullar and Pakistani counterpart Zafar Mahmood began in Islamabad today.

The talks will focus on trade expansion and the removal of non-tariff barriers between the two countries.

After a six-month delay, the Bureau of Indian Standards issued quality certificates to cement units in Pakistan last week, which could result in the export of a lakh tonnes of the commodity in the next three months. However, the BIS allows exports only through the sea and rail routes.

Islamabad is likely to press for the renewal of the certificate once in three years rather than annually and seek permission for the movement of trucks with cement bags through Wagah as most of the units are located near this border area.

It could also suggest to the BIS to engage an international inspection firm operating in Pakistan such as Moody International and SGS or get the quality of the exported cement checked at an Indian laboratory, reducing both cost and time.

Officials said India could agree to Pakistan’s demand on certification every three years and the road transport of cement as the country needs the commodity in huge amounts for building infrastructure.

However, Indian cement firms do not want the government to put them at a disadvantage.

AFRICA: CONGO: l'unique usine de ciment du pays envisage d'atteindre une production annuelle de 300 mille tonnes

La société nouvelle des ciments du Congo ( Sonocc), la seule usine de ciment du pays dont la Chine est le principal actionnaire envisage la mise en oeuvre d' un programme d'extension de la cimenterie de Loutété (au sud) pour augmenter sa capacité de production et accroître de 50% son revenu,a appris Xinhua auprès de la direction de cette société.

« Vu la demande du marché local, nous projetons d'augmenter la production annuelle à hauteur de 300 mille tonnes dans les trois ans à avenir contre environ 1000 tonnes à ce jour », précise le directeur général de la Sonocc, Liang Qingshan, dans le programme d'activités de 2011.

L'ambition de la société a été exprimée lundi par les administrateurs congolais et chinois au cours de l'assemblée générale et du conseil d'administration qui avaient pour but d' examiner le rapport d'activité 2010 et d'envisager un programme d' activité pour l'année 2011.

Selon le rapport d'activité, la société afficherait une bonne santé et a connue pour la première fois, depuis sa mise en place en 2002, un revenu principal d'exploitation de plus de 6 milliards de Fcfa, soit une marge nette de plus de 263 millions de Fcfa.

« ..L'entreprise se porte de mieux en mieux. Si la tendance continue dans deux ou trois ans, nous aurons des résultats positifs très significatifs », a reconnu le conseiller à l' industrie et à la promotion du secteur privé du chef de l'Etat, Eugène Ngangoué.

Malgré cette embellie financière, la Sonocc n'a totalisé que 57. 382,5 tonnes de vente de ciments, un chiffre jugé en baisse par les administrateurs, comparativement à l'année 2009. Cette réduction, précise la direction générale, se justifie entre autres par la défaillance de transport qui cause le retard d'acheminement du ciment à Brazzaville qui constitue la principale zone de vente.

« Pour le moment, le transport est le problème le plus important, car il conditionne toute vente et délimite le développement de la cimenterie », a souligné la direction de la Sonocc, précisant que le problème matériel constitue aussi un frein pour l'amélioration de la productivité, malgré les efforts des ouvriers.

En dépit des difficultés de tous genres rencontrées en 2010, la Sonocc prévoit d'augmenter son revenu à plus de 50%.

« Concernant la composition du coût, il aura certaines fluctuations à cause de l'augmentation du prix de matériaux et de main d'oeuvre. Cependant, nous estimons que le résultat de compte sera à profit, et la marge de bénéficiaire va dépasser celle de l' année 2010 », indiqué la direction générale de la Sonocc.

Pour y parvenir, la société envisage de dépasser la vente en 2011 en espérant atteindre le cap de 2009, soit une production d' environ 100.000 tonnes.

Selon le programme 2011, la société ambitionne d'utiliser une partie de système de production existant pour construire, à côté de l'ancienne, une nouvelle chaîne de fabrication supplémentaire de clinker (matière première) pour favoriser une production de 1000 tonnes par jour et renforcer ainsi la capacité d'exploitation de mine puis atteindre la demande de production.

Avec un capital total de 3,510 milliards de Fcfa repartis entre le gouvernement congolais (1,550 milliard FCFA) et la partie chinoise (1,960 milliard Fcfa), la Sonocc jusqu'ici unique usine de production du ciment au Congo est le fruit de la relance de la coopération économique sino-congolaise.

Créée en 2002, la production annuelle de la Sonocc atteint environ 1000 tonnes.

OMAN: Oman Cement plans new cement mill

Oman Cement plans to invest in a new cement mill with a design capacity of 150 metric tons per hour.

Tender documents for consultancy services as well as the Engineering-Procurement-Construction (EPC) contract, are due to be floated by the second quarter of this year, Abdullah Abbas Ahmed, Chairman of the Board of Directors, stated in the company's quarterly financial report. The announcement comes on the heels of the completion of Oman Cement's third clinker line, which will boost the company's total clinker production capacity by 4,000 tons per day. Trial production and commissioning of the new facility, built with an investment of RO 62.7 million, is underway, with performance guarantee tests due to be carried out during the current quarter.

Last month, the company signed contracts for a capacity upgrade of Kiln 1 along with the refurbishment of the kiln's pollution control systems. Both upgrades, entailing an investment of RO 14.27 million, will be completed by April 2012.

While the ongoing commissioning of the third kiln will contribute to major cost reductions and improvements in the company's profit margins, cement inflows from neighbouring countries will continue to hurt profitability, the Chairman warned in the Board of Directors Report.

Meanwhile, Oman Cement posted a 42 per cent slump in profit after tax, which declined to RO 4.151 million for the quarter ending March 31, 2011, as against earnings of RO 7.118 million during the corresponding quarter of 2010.

The lower profit was attributed to the "decrease in the selling prices of cement to face the competition". Adverse movements in the fair value of investments due to stock market fluctuations also impacted on the company's profits, the report said.

Cement sales during the quarter under review decreased marginally by 1.62 per cent to 490,865 metric tons as against sales of 495,958 metric tons during the same period last year. In value terms, revenues were lower by 17.74 per cent at RO 12.860 million during Q1 2011 as against earnings of RO 15.633 million during the corresponding period last year.

Commenting on the future outlook for cement sales, the Chairman stated: "The demand for cement continues to be good in view of government spending on infrastructure projects. Inflow of cement from neighbouring countries at reduced prices is posing a threat due to the excess supply position there. Despite the strong competition locally and also from neighbouring countries, the company maintains a sizeable market share in Oman."

ESPAÑA: El buque ‘Cristina Masaveu’ arriba a El Musel para realizar pruebas




El cementero Cristina Masaveu volvió ayer a casa. El buque tiene cuerpo y alma gijonés, aunque su cuna final haya sido Santander. Se terminó de construir en los astilleros Astander de la capital cántabra, en cuya dársena se botó el pasado 21 de marzo. Sin embargo, el casco y la superestructura del buque se habían fraguado en el astillero Juliana hasta su cierre. No fue hasta hace justo un año, en abril de 2010, que se trasladó a Santander para el remate de la obra.
El ‘Cristina Masaveu’, ayer, entrando en el muelle de la Ribera de El Musel. Armando Álvarez
El Cristina Masaveu atracó a última hora de la tarde de ayer en el muelle de Ribera, en la segunda alineación de El Musel, justo al pie de la terminal de cementos. El buque, que recaló en Gijón procedente de Santander, permancerá en El Musel hasta el domingo. El objetivo: llevar a cabo pruebas de carga y descarga en la dársena gijonesa, con vistas a la reanudación de la línea de transporte marítimo de materias primas que tiene como puerto de llegada El Musel y que funciona desde hace cuatro décadas.
El Grupo Masaveu, propietario de la cementera Tudela Veguín, es un cliente añejo del puerto gijonés. De hecho, el Cristina Masaveu sustituye a otro buque cementero construido en la década de 1970 también en Gijón, en concreto en el Marítimo de El Musel.

El puerto gijonés es el principal aglutinador de las importaciones marítimas de Tudela Veguín, que llegan principalmente de Canarias y Brasil. De hecho, el Principado y el Cabildo canario firmaron el pasado mes de enero un protocolo de colaboración para reforzar el tráfico de mercancías entre ambas comunidades, principalmente por mar, un convenio que beneficia, de rebote, a Tudela Veguín.

De hecho, Tudela Veguín es el sexto productor de cemento de España. Además, la empresa que pertenece al Grupo Masaveu produce escorias, hormigón y prebafricados. El Musel es un enclave esencial para los tráficos de Tudela Veguín, que importa en Asturias la materia prima que, posteriormente, viaja a través de la llamada cinta verde que, desde las bodegas del buque y a través de unos conductos, comunica la dársena con la fábrica de cementos de Aboño, donde se fabrica el clinker, material básico para la elaboración del cemento. Las pruebas de carga y descarga se prolongarán en El Musel entre hoy y mañana. Las maniobras serán el aperitivo de la presentación en Asturias del buque, que en un primer momento se iba a celebrar a comienzos de abril pero que finalmente se ha pospuesto para mayo, probablemente después de las elecciones.

Nuevas perspectivas El Cristina Masaveu, uno de los tres buques que posee el Grupo Masaveu, supone la apertura de nuevas perspectivas para la empresa. La crisis de la construcción en España ha tenido un efecto negativo en la venta de cemento y, por ende, en su producción. Sin embargo, la capacidad del nuevo cementero, que permite transportar múltiples productos como cenizas, escoria, alúmina y productos dolomíticos, supone que el abanico productivo de Tudela Veguín se amplíe. Además, el diseño del buque permite que las operaciones se produzcan, tanto a bordo como en tierra, en circuitos totalmente cerrados lo que evita cualquier tipo de contaminación.

La ampliación de posibilidades que aporta el Cristina Masaveu, con sus 133 metros de eslora, siete de calado y 18.000 toneladas de capacidad, será también un revulsivo para los tráficos de El Musel, en crecimiento sostenido desde 2010. De hecho, los tráficos aumentaron un 46% en los tres primeros meses de 2011.

CHILE: Polpaico espera una mayor demanda cementera en 2011

Un mejor 2011 espera la cementera Polpaico en relación a 2010, año en que no se dio la mayor demanda proyectada por la reconstrucción, tras el terremoto del 27 de febrero de 2010. 

El presidente de la compañía, Juan Antonio Guzmán, indicó ayer en la junta de accionistas que, a pesar del aumento en volumen de ventas que hubo en 2010, “este fue un año complejo para la industria, pues no se alcanzaron las cifras de 2008, a lo que se sumó un alza de 77% en las importaciones de clínker, lo que mermó las ventas en 4,8%”. Sobre el plan de inversiones, Guzmán dijo que “tenemos capacidad instalada para satisfacer la demanda del mercado, aunque sí invertiremos en mantención de plantas y equipos”, afirmó. “En todo caso esperamos que 2011 sea un mejor año que el anterior”, recalcó. 

Las utilidades de Polpaico en 2010 ascendieron a $ 399 millones, una baja de 92% respecto de 2009, debido sobre todo a un aumento de 8% en los costos de distribución. Además, la firma subió en más de 2% su participación en el mercado del hormigón.

El directorio quedó conformado por Guzmán, Francisco Silva, Rodolfo Krause, Sergio Orrego, Andrés Segú, José Picasso y Andrés Serra.

BOLIVIA: Coboce: aporte al desarrollo de la región

En 39 años de trabajo Coboce Cemento, unidad principal de la Cooperativa Boliviana de Cemento, Industrias y Servicios, Coboce Ltda., se ha consolidado como una de las principales industrias cementeras del país. A nivel departamental, su presencia ha contribuido de manera determinante al desarrollo económico.

Actualmente, la empresa está en condiciones de ratificar que se encuentra en el umbral de su consolidación como una megaindustria y líder en el rubro de la producción del cemento y de la construcción a nivel nacional.

La cooperativa ha experimentado un impresionante salto en su capacidad productiva. Desde el año 2009, el crecimiento sostenido de la empresa le permitió alcanzar volúmenes diarios de producción de 38.000 bolsas. Un importante aumento en comparación con las 22.000 que eran producidas anteriormente.

El reto de los ejecutivos y trabajadores es hacer realidad uno de los pilares fundamentales para el desarrollo productivo del país, la nueva planta de cemento que tiene una importante inversión económica.

NUEVA PLANTA Con el propósito de incrementar los actuales volúmenes de producción y responder a la demanda nacional, la empresa realizó una inversión de 71 millones de dólares para la implementación de una segunda línea de producción. 

La nueva planta permitirá que Coboce Cemento logre una producción diaria de 80 mil bolsas. 

El gerente de Coboce Cemento, José Manuel Ramírez, explica que “despachar al mercado 80 mil bolsas cada día es un reto, y se va a requerir de una gran logística, además que se dinamizará la economía de Cochabamba”.

Ramírez asegura que implementar la segunda línea de producción es “prácticamente construir otra fábrica”. La misma cuenta con un gran molino, silos de almacenamiento, de prehomogeneización, una torre de piroproceso de 121 metros de altura, un horno de 72 metros de largo por 4,6 de diámetro y el molino de clinker (materia prima del cemento).

Por el momento, la empresa ha asumido la prioridad de responder la demanda de su “mercado natural”, Cochabamba; el elevado índice de requerimiento local no permite que la producción llegue a otros departamentos. Sin embargo, la consolidación de la empresa permitirá abastecer la exigencia de la construcción a nivel nacional.

EMPLEO Una importante meta para Coboce es la generación de puestos de trabajo estables y con sueldos dignos.

La empresa genera actualmente 800 empleos directos y, por el efecto multiplicador del rubro de la construcción, 12.000 indirectos.

El proyecto de ampliación de la planta prevé el incremento de los recursos humanos hasta de 1.000 trabajadores, cuando la nueva fábrica esté produciendo en toda su capacidad. De acuerdo al avance de las fases de ejecución se requerirá la paulatina contratación de mano de obra calificada, con efecto multiplicador de uno por diez en la prestación de servicios de transporte, venta y otras actividades afines.

RESEÑA En retrospectiva, hace cuarenta y cinco años, la escasez de cemento en la región era uno de los obstáculos más grandes para plasmar proyectos de construcción y de obras públicas para el desarrollo regional.

La cooperativa nace por la resolución de un grupo ciudadano, encabezado por Jaime Méndez Quiroga, de responder a un desafío estructural como era la escasez de cemento. Este grupo puso en marcha el proyecto en 1966 con el apoyo financiero del ahorro del pueblo para la producción.

La industria empezó sus operaciones el 15 de septiembre de 1972 con una planta con capacidad de producción de 100.000 toneladas anuales de clinker. El acertado manejo gerencial determinó la paulatina creación de otras unidades productivas: Coboce Cerámica, Ceramil, Hormigón, Construcciones y Coboce Metal, que han respaldado la dinámica del sector de la construcción en el departamento. Asimismo, se promovió la fundación del Fondo de la Comunidad y del periódico Opinión.

AFRICA: EGYPT: the struggle continues

Thousands of workers in Egypt continue to hold strikes and sit-ins as they fight for their rights under the new regime.

Cement workers at the Torah Cement company have walked out and occupied their factories.

Now the 1,000 workers are joining up with the trade unions to secure their legal entitlement of a 10 percent profit share.

Last month the workers held a 13 day sit-in and won some of their demands.

In Mahalla, 4,000 cotton workers are on strike against the rising price of cotton, which has not been reflected in their pay.

Both companies are trying to claim that the workers do not deserve better.

But the continuing struggle by workers across the country shows that they think differently.

In Menoufia, about 90 miles from Cairo in the Nile Delta, the main employer is the Shebin spinning and weaving factory.

Locals have worked at the sprawling 150-acre plant for generations, spinning Egyptian cotton for the world market.

But the factory is now closed. The workers are all on strike.

INDIA: Contractors to purchase cement directly

In a significant decision aimed at minimizing chances of pilferage, the Government today ordered dispensing with the practice of direct purchase of cement for supply to contractors for works in PHE, Irrigation and Flood Control Department. Now, the cement has to be procured by the contractor himself but its quality has to be certified by the AEE concerned.

As per the order issued by the PHE, Irrigation and Flood Control Department, after its approval by the concerned Minister, Taj Mohi ud Din, the tenders shall be invited for works with inbuilt system of purchase of cement by contractors as per prescribed ISI specifications and that too from stipulated manufacturers. The requisite provision shall be included in the agreement drawn with the contractor, the order reads.

The AEE incharge of a specific work shall, as per the order, record a certificate of quality check for cement, in addition to existing prescribed certificates, in the works register and measurement book.

Construction experts and engineers are of the opinion that the decision is set to bring in transparency in Government works and improve upon the quality standards of works undertaken.

It may be recalled here that PMGSY, one of the flagship programmes of central Government, too has a similar provision for cement procurement as a guideline.

INDONESIA: Holcim to build 3 silos to meet Sumatra demand

Cement producer PT Holcim Indonesia has announced plans to build three silos worth a total of US$8 million, to support its cement supply to Sumatra.

“We will build the silos in Batam, Dumai and Belawan,” Holcim president director Easmon Ginley said as quoted by kontan.co.id on Monday, referring to cities in Sumatra.

Ginley added that each silo would have a capacity to store up to 2,000 tons of cement.

The construction of the three silos is targeted to be complete by the end of the year, he said.

Holcim, which is a publicly listed company, decided to build the three silos in Sumatra to cater to the increasing cement demand in the region.

“During the first quarter of this year alone demand from Sumatra increased 23 percent,” Ginley said.

INDIA: Prism Cement skips final dividend

The Board of Directors of Prism Cement Ltd at its meeting held on April 29, 2011, inter alia, has recommended that the Interim Dividend @ Re. 1.00 per share aggregating to Rs. 58.70 crores (including dividend distribution Tax) paid on November 08, 2010 be treated as Final Dividend.

The stock closed the day at Rs.55.95, down by Rs.0.95 or 1.67%. The stock hit an intraday high of Rs.57.15 and low of Rs.54.35.

The total traded quantity was 3.43 lakhs compared to 2 week average of 0.59 lakhs.

BRASIL: Brazilian group Camargo Corrêa changes name of its cement holding company



Brazilian group Camargo Corrêa has set up a stake-holding company called InterCement to manage the cement businesses that had so far been part of Camargo Corrêa Cimentos, the group said Tuesday in a statement published on its website.

The name change aims to make the brand known outside Brazil and InterCement starts operating with 16 factories, 5,000 employees, operations in Brazil, Argentina Angola and Paraguay, as well as owning a 33 percent stake in Portugal’s Cimpor – Cimentos de Portugal.

According to the statement, “the new identity reflects the idea of internationalisation and a capacity to unite people and cultures, represented by a new word, created by combining “inter” (link, union) and cement.”

As part of its internationalisation strategy, Camargo Corrêa Cimentos acquired stakes in 2010 in a Mozambican producer and in partners in Paraguay and Angola.

Last year it also bought a 33 percent stake in Cimpor, during a dispute for control of Cimpor in which Brazil’s Companhia Siderúrgica Nacional (CSN) put forward a takeover bid that was defeated. Camargo Côrrea and its partner Votorantim together own 53 percent of the Portuguese cement group.

OMAN: Raysut Cement shipping unit launches operations

MUSCAT -- Raysut Cement's shipping subsidiary, Raysea Navigation, has commenced commercial operations, Mohammed bin Alawi Ali Muqaibal, Chairman of the Board of Directors of the parent group, said in the quarterly report of the company's financial performance for the quarter ending March 31, 2011.

Raysea Navigation, which provides shipping services to Raysut Cement, earned a profit of RO 81,421 during the first quarter of this year.

Meanwhile, Raysut Cement posted an eight per cent decline in sales revenues, which dropped to RO 14.9 million during the three-month period ending March 31, 2011 against earnings of RO 16.3 million during the corresponding period last year. Profit before tax stood at RO 4.45 million for Q1 2011, as against RO 6.81 million earned during the corresponding period of last year, a decline of 35 per cent.

Total revenues earned by the Group during Q1 2011 amounted to RO 20.24 million, while profit before tax stood at RO 4.98 million.

"The decline in profit is attributable mainly to severe competitions faced both in domestic and the export markets impacting both volume and the price, which started from the later quarters of the previous year," the Chairman stated.

Raysut Cement's newly acquired subsidiary, Pioneer Cement, earned a profit of RO 452,012 for Q1 2011 despite severe competition in the domestic market. Production of clinker and cement at Pioneer stood at 329,220 metric tons (MT) and 262,277 MT respectively, against 331,475 MT and 356,932 MT respectively in the corresponding period of the previous year.

"The fall in demand and the resultant competition in the UAE are standing in the way of larger production," the report stated.

Of these volumes, Pioneer Cement sold 114,210 MT in the domestic market and 148,279 MT in Oman during Q1 2011, compared with 313,423 MT and 44,490 MT respectively in the corresponding period of last year.

The Group's combined output during Q1 2011 amounted to 806,907 MT of cement and 894,799 MT of clinker.

Clinker production at the Salalah plant increased 3 per cent to 565,579 MT of clinker during the quarter ending March 31, 2011, against 547,613 MT produced in the same period last year. Cement output at the Salalah plant also jumped 16 per cent to 544,630 MT this year, against 468,360 MT produced during the corresponding period last year.

The Group as a whole sold 851,844 MT of cement during the quarter ending March 31, 2011. Raysut Cement's contribution amounted to 569,355 MT of cement and 32,982 MT of clinker during this period, against 509,405 MT of cement and 91,158 MT of clinker in the corresponding period last year.

Cement exports jumped 39 per cent 179,573 MT this year from 129,646 MT during the corresponding quarter last year. Sales in the domestic market climbed 3 per cent to 389,782 MT against this year, from 379,759 MT in the corresponding period of 2010.

Commenting on the short and medium outlook for company, Mohammed bin Alawi Ali Muqaibal stated: "The plan outlay for 2011 will provide a significant boost to Oman's economy in all the sectors including the infrastructure sector. Some of the significant projects cleared by the government will have its impact on the increase in demand in the infrastructure sector, and particularly in the construction segment."

INDIA: Exports volume declined 31%

Holchim group company, Ambuja Cement posted a 10% growth in revenue to Rs. 2222.47 crore during the quarter ended March 2011. OPM declined by 410 basis points to 28.2%. PBT was down by 8% to Rs. 559.2 crore, but effective tax jumped by 300 basis points to 27% leading to 12% de-growth in PAT to Rs. 407.48 crore.

Cement demand growth was subdued during the quarter, registering a 5% y-o-y growth versus 10% witnessed in the corresponding quarter. The southern region had a contraction in demand, demand in north was moderate, while demand in west and east was strong. The export market continued to remain depressed.

Production of cement for the quarter went up by 4.8% to 5.59 million tonnes compared to 5.33 million tonnes for the same quarter last year. Overall sales (domestic and saleable clinker) increased by 6.8% y-o-y from 5.28 to 5.64 million tonnes. Domestic cement sale volumes increased by 5.5%. Cement exports were 89000 tonnes compared to 129000 tonnes last year, a decline of 31%.However, clinker sale were 134000 tonnes as compared to 18000 tonnes in the corresponding period.

Clinker production registered a good growth of 20% y-o-y backed by investment in new kiln lines. Accordingly, clinker purchases were negligible during the quarter in comparison during the corresponding period. This brought down clinker purchase cost substantially. Although the cost of other raw material increased, the overall raw material cost decreased by 21% to Rs. 145 crore.

Operating Costs increased substantially during the quarter driven by increase in power and fuel costs on account of sharp increase in coal prices, higher grid tariff and increase in freight rates. With the capex initiative taken in the previous quarter, there was an overall efficiency improvement in substituting own clinker with purchased clinker, improvement in thermal and electrical efficiency and gains in power generation and logistics efficiency. These operational efficiencies, to a large extent negated steep increase in input costs.

Power and fuel increased 36% y-o-y, partly as a result of higher clinker and cement production, substantial increase in coal and pet coke prices and increased grid power purchase rate. This increased were partly mitigated by favorable efficiency gains in both thermal and electrical energy consumption. Freight and forwarding expenses increased by 23% y-o-y impacted by higher freight rates, growth in sales volume and increased sales transfers. However, on y-o-y basis, the net selling price increase of 4%, increase in clinker production and efficiency gains were not sufficient to mitigate the steep increase in the input cost.

Performance during the full year ended December 2010
During the year revenues were up by 5% to Rs. 7517.55 crore, but there was a 150 basis point decline in OPM to 26%. PBT after EO was down by 8% to Rs. 1661.87 crore, but an 800 basis point drop in the effective tax rate to 24% helped the PAT grow by 4% to Rs.1263.61 crore.

For the full year ended December 2010, sales were up by 5% to Rs. 7517.55 crore. The growth was only 5% since the growth in volumes was offset by reduction in average realizations. The production for cement was up by 7% to 201 lakh tonnes. The Raw Material cost for clinker was down by 78% to Rs. 123.7 crore, being 640bps less at 1.6% as a % of sales. While the other raw material cost was up by 20% to Rs. 472.58 crore which is 70bps more at 6.2% as a % of sales. The power & fuel expenses grew by 19% to Rs. 1697.34 crore and freight charges also by 19% to Rs. 1610.08 crore, each being 250bps and 240bps more at 22.4% and 21.3% as a % of sales respectively. Other expenses grew by 19% to Rs. 1373.51 crore, being 200bps more at 18.1% as a % of sales. These factors dragged the OPM down 150 basis points to 26%. The operating profit was down by 1% to Rs. 1950.96 crore, which included Rs. 29.17 crore for sale of power during the current year and Rs. 42.51 crore for the previous year.

The other income declined by 20% to Rs. 120.26 crore. The interest cost for the previous year included Rs. 46.16 crore being discount on pre-payment of an outstanding deferred sales tax loan. After providing for the interest cost and the depreciation which grew by 117% to Rs. 48.69 crore and 30% to Rs. 387.19 crore respectively, the PBT before EO declined 9% to Rs. 1635.34 crore during the period under review. The EO gain stood at Rs.26.53 crore which included profit on sale of investment in ING Vysya Life Insurance of Rs.72.63 crore and provision of Rs. 46.1 crore consequent to change in policy of recognizing provision for slow moving inventories of spares based on the age of inventory. PBT after EO slipped 8% to Rs. 1661.87 crore. The 800 basis point decline in the effective tax rate to 24%, helped in the 4% growth in PAT to Rs. 1263.61 crore.
Recent Development
During the quarter, the company has commissioned 5 wind turbine generators having total capacity of 7.5 MW at Kutch in the state of Gujarat.
Outlook
With steep increase in energy costs driven by increase in coal cost, higher freight rates and higher expected inflation, profit margins are expected to remain under pressure. However, due to executed and ongoing capex investments, ACL continues to work on high productivity and improved operational efficiency thereby partly mitigating the pressure. Revival of good demand and improvement in realization to absorb the additional burdens are critical in the next quarters.
Ambuja Cement: Results


Particulars1103(03)1003(03)Var. (%)1012(12)0912(12)Var. (%)
Sales2222.472018.76107517.557181.485
OPM (%)28.232.326.027.5
OP627.00651.25-41950.961971.49-1
Other income52.0925.98101120.26151.23-20
PBIDT679.09677.2302071.222122.72-2
Interest13.7910.782848.6922.43117
PBDT665.30666.4502022.532100.29-4
Depreciation106.1176.7238387.19296.9930
PBT before EO559.19589.73-51635.341803.30-9
EO0.0020.08-10026.530.00
PBT after EO559.19609.81-81661.871803.30-8
Tax151.71147.623398.26584.93-32
PAT407.48462.19-121263.611218.374
EPS (Rs)*10.711.78.18.0