AFRICA: NIGERIA: Nigeria sets up Cement Technology Institute to boost production

The Federal Government of Nigeria has announced the setting up of the Cement Technology Institute (CTI) to assist the nation to optimize its cement production capacity and capability, through acquisition and development of appropriate technology that will make cement product adequately available as a low cost basic building material for the average Nigerian.

This was disclosed by the Hon. Minister of trade and Investment, Olusegun Aganga while inaugurating the Board of Trustee (BOT) and the Project Implementation Team (PIT) for the Cement Technology Institute (CTI) at the Headquarters of the Ministry in Abuja. The Board is chaired by the Group President Dangote Group, Alhaji Aliko Dangote while the Chairman, Project Implementation Team is Alhaji Lateef G. Salami, Director, Industrial Development department in the Ministry Inaugurating the Board, the Minister also pointed out that the Institute would also be the fulcrum for the positioning of Nigeria as a net exporter of cement with the capacity of meeting the needs of the ECOWAS sub-region.

The Institute is mandated to carry out research and development, technology adaptation and human capacity building in cement sub-sector of the economy. The objectivities of the Institute shall include:

(i) to train and enhance manpower in cement technology and related fields, especially at the middle management level;
(ii) to undertake research and development in the areas of:
(a)Suitable alternative technologies in cement manufacturing;
(b)Utilization of local raw materials for cement manufacturing and building;
(c)Utilization of industrial by-products e.g. slag, fly ash and agro-wastes for cement manufacturing;
(d)Development of various types of cement high alumina cement, low-heat cement, etc.
(e)Capacity to use mineral admixtures that will prolong life span of the raw materials;
(f)Cleaner and environment friendly production processes and waste management in the cement industry;
(g) Energy conservation;
(h)Developing and establishing prototype mini-cement plant;
(i)Utilization of locally manufactured components and parts for the cement industry;
(iii) to maintain data bank for cement and cement related industries.
(iv) liaise with other research Institutes with a view to tapping their full potentials for enhancing cement technology development, as well as to harmonize the programmes of these Institutes in areas of common national interest;
(v) training of manpower for the cement industry, just like the Petroleum Institute, Warri is doing for Oil Industry;
(vi) possibilities of cement exports within a reasonable time thereby saving the huge foreign exchange currently being spent on cement importation.

(vii)Increase in local production of cement using improved technology provided by the Institute at a cheaper cost.

The CTI would be run and managed as Non- governmental Organization. The Board of Trustee with members drawn from government and major stakeholders in the cement Industry will principally manage the CTI fund, while the Project Implementation Team would undertake and execute the process of the implementation of the establishment of the CTI

INDIA: Siam Cement eyes $1.1 bln in Indonesian acquisitions

Confirms Siam Cement keen for stakes in two Indonesian petchem firms

* Seeks Southeast Asian expansion

* PTT also eyes stake in Indonesia's Chandra Asri

* Shares up 1 pct, outperform market (Adds details)

By Pisit Changplagngam

Thailand's top industrial conglomerate, Siam Cement Pcl , will bid for two Indonesian petrochemical assets worth an estimated $1.1 billion, the company said on Tuesday, as part of a Southeast Asia expansion drive.

The deals are set to be another indication of increasing foreign interest in Southeast Asia's biggest economy, which is attracting investors because of strong economic growth and a buoyant stock market.

Siam Cement, 30-percent owned by the Thai royal family's Crown Property Bureau, said it was interested in PT Sulfindo Adiusaha, an Indonesian chemical producer controlled by Indonesia's Tanojo family.

South Korea's Hanwha Chemical Corp may also bid for Sulfindo Adiusaha, sources with knowledge of the deal said recently.

Sulfindo's owners, the Tanojo-controlled Victoria Group, are seeking to sell the whole company for about $700 million.

Separately, Singapore state investor Temasek Holdings Pte Ltd is trying to sell its 23 percent stake in PT Chandra Asri Petrochemical Tbk in a deal worth an estimated $400 million, two sources with direct knowledge of the deal told Reuters recently.

"We are interested in both petrochemical firms in Indonesia...details of the deals cannot be disclosed at this point because they are quite big deals," Siam Cement Chief Executive Kan Trakulhoon told reporters on Tuesday.

Thailand's top energy firm, state-controlled PTT Pcl is also keen to buy a stake in Chandra Asri, an industry source said last week, possibly through its PTT Chemical Pcl unit.

SOUTHEAST ASIA EXPANSION

Siam Cement and PTT group have aggressively scouted for opportunities for assets overseas, especially in Southeast Asia.

Siam Cement focuses on three core business: cement, petrochemicals, paper and packaging. Petrochemicals generally make up almost half of profits.

Valued at $13.2 billion, Siam Cement had cash of about 58 billion baht ($1.93 billion) at the end of June.

The company already has interests in petrochemical plants in Indonesia and its subsidiary, Thai Plastic Chemicals Pcl , has a polyvinyl chloride (PVC) plant in the country with a capacity of 120,000 tonne a year.

If Siam Cement acquires Sulfindo, the group would have PVC capacity of 200,000 tonnes a year, compared with total PVC capacity in Indonesia of 605,000 tonnes, and that would raise its market share to 33.1 percent from 19.8 percent, Kasikorn Securities said in a note to clients.

The conglomerate also planned to build a $3.5-4.0 billion petrochemical complex in Vietnam, but the project has been delayed since 2009. Siam Cement has said it expected to conclude a plan for the project in Vietnam by the middle of 2011.

At 0738 GMT, Siam Cement shares were unchanged after rising more than 1 percent earlier, while the broad index was 0.04 percent lower.

CHINA: Conch Cement To Expand Capacity

Anhui Conch Cement (600585, 0914.HK) plans to purchase an 80 percent stake in Guangxi Sihe Industry and Trade and stakes in several subsidiaries of Shaanxi Zhongxi Cement Group for a total of 600 million yuan, reports yicai.com, citing a company filing. 

Sihe Industry owns a new dry-process cement clinker production line with capacity of 4,000 tons per day, a cement grinding system with capacity of 2.4 million tons per year, and 9MW of waste heat power generation units.

Zhongxi Cement’s subsidiaries possess clinker capacity of 7.2 million tons per year, and cement production capacity of nine million tons per year.

BOLIVIA: Insumos importará 25.000 t de cemento para construcción

Crece la demanda de cemento en el país y, para evitar desabastecimiento, la estatal Insumos Bolivia prepara la importación de 25 mil toneladas del producto para garantizar el insumo a la industria de la construcción.

El director general ejecutivo de Insumos Bolivia (IB), Óscar Sandy, informó que para este año se prevé un incremento de la demanda de cemento en 10%, aproximadamente, y en caso de que el mercado requiera más cantidades, no se descarta aumentar la importación.

Según el ejecutivo de la estatal, desde septiembre del año pasado hasta julio de 2011 se importaron 550 mil bolsas de cemento, de los cuales sólo queda en sus almacenes alrededor de 40 mil bolsas.

“Hemos hecho un requerimiento de 25 mil toneladas de cemento, este pedido puede incrementarse en función de la demanda de este producto. Si existe déficit, tenemos que importar más”, afirmó Sandy.

Según informes del ejecutivo, la ciudad de Santa Cruz y otras poblaciones de esa región son los que más demandan cemento, y para cubrir esa necesidad se analiza la posibilidad de abrir tres agencias de Insumos Bolivia para atender ese mercado y evitar la especulación del producto.

Como la mayor demanda se encuentra en Santa Cruz, la entidad estatal implementó sistemas de control para evitar la reventa de cemento cuando tienen pedidos superiores a las 2.000 bolsas. En ese caso les piden número de identificación tributaria (NIT) de la empresa, contrato de la obra y les hacen firmar una declaración jurada para evitar la reventa, tomando en cuenta que el precio que comercializa Insumos Bolivia es de Bs 42,5 y el comprador cubre los costos de transporte.

El Gobierno otorgó un fideicomiso por tres millones y medio de dólares para comercializar productos que tengan mayor demanda en el mercado interno, como una medida preventiva orientada a evitar el agio y la especulación.

Entre tanto, la ministra de Desarrollo Productivo y Economía Plural, Teresa Morales, informó que ya no existe clínker en América Latina para la importación y las empresas cementeras hacen el esfuerzo de traerlo desde el Asia, para no parar la producción de cemento.

Esta situación generó el incremento en el precio de la bolsa de cemento en las anteriores semanas.

PRODUCCIÓN

De acuerdo con los informes del Instituto Boliviano del Cemento y el Hormigón (IBCH), a junio de 2011, la producción de cemento de Soboce fue de 634.792 toneladas métricas (TM); le siguen la estatal Fancesa con 340.434 TM; Coboce con 195.180 TM e Itacamba con 50.979 TM. La producción total de las empresas fue de 1.221,386 TM.

Para cubrir la demanda del mercado interno, a junio de este año las empresas cementeras importaron 9.109 TM, mientras que la importación de clínker en el mismo periodo alcanzó a 109.218 TM. Soboce fue la empresa que más importó el insumo.

AFRICA: NIGERIA: Who hiked cement price?

The current increase in the price of cement, which took the consumers unawares only two months after the Federal Government gave local manufacturers a standing order to increase production capacity to crash down the price, is biting harder. A bag of cement now sells for N2,800, against the initial price of N1,500.

While most people attributed the sudden price hike to lack of infrastructure like constant supply of electricity to enable local manufacturers produce at a cheaper rate, others said the persistence price increase is caused by the market forces of demand and supply. This implies that demand is greater than supply of the product in the market, thereby forcing the price to go up.

Some block makers who spoke with Sunday Business during a market survey, said the decrease in the supply chain occurred recently because one of the major manufacturers stopped production due to challenges in the business.

The hike in cement price assumed an alarming rate last week with a bag being sold for N2,800 in some areas of Ojodu, Berger, Isheri, and Sabo in Lagos while some retailers in Alagbole, Akute, Olambe, Oshere and Matogun areas of Ifo Local Government Area of Ogun State, sold a bag for N3,000.

The manager of Adufat Block industry at Kampala area of Olambe, Mr. Ade Shittu, said, “the demand for cement in the market is very high because of the level of consumption. Government should grant more people licences to import cement to meet the demand of consumers”.

Our visit to some block makers revealed that they are the worst hit, because they engage in daily business of moulding blocks, which they supply to building engineers at construction sites.

While some of them have few bags of cement left in their shops, others are out of stock, thus being forced to stop operations. For instance, the price of a six-inch block, previously sold for between N120 and N125, now goes for N150, while a nine-inch block, which is bigger in size, and of better quality, sells for between N170 and N175, against the initial price of N135.

There is the multiplier-effect. For instance, a tipper load of sharp sand used in moulding and setting blocks has also increased from N10,000 to N12,000, while the price of plaster sand remains N13,000 per tipper, depending on the quality.

Our visit to some depots of Lafarge/WAPCO Cement Plc in Lagos showed open transactions with the old price of N1,600 per bag of cement displayed on the price index board.

When contacted, Head of Communications, WAPCO Cement, Temitope Oguntokun, said, “our prices are still the same. There is no increase in the price of cement from our company at present.

We are putting measures in place to increase our production capacity from 2.5 million tonnes (MT) to 4.5 million tonnes (MT) annually in order to meet the increasing consumption demand in the market.

Aside from that, WAPCO has done a lot of work in the expansion project of N75 billion (€354 million), which involves construction of a new cement plant at Ewekoro, construction of a new power plant with electricity generation capacity of 90 mega watts (Mw) and the installed capacity of 76 MW.

Other projects include construction of a 4.7kilo metre long double conveyor belt to transport limestone and shale between the quarry and the new cement plant, improvements of the existing cement plant, additional power capacity, clinker silo of 60kt capacity and coal grinding mill.

“WAPCO is still complying with the recent directive from government on the need for manufacturers to cut down the price of cement. We share the concern of government on the price of cement.

Prior to the announcement by government, we took proactive initiatives to increase the volume of our products to various outlets.

The initiative was to ensure that a higher number of end-users could purchase cement directly from us at our official price. That was following the increase of our sales outlets from seven to over 19.

We equally placed our official price at all our depots nationwide. We would continue with our plans of opening more depots to push more volumes to these depots”.

SRI LANKA: Sri Lanka cement crisis continues amid price controls

Sri Lanka's construction industry is facing a shortage of about a million 50 kilogram sacks of cement a month, a media report said as price controls limit supplies and threaten the island's construction sector.

Amid the shortages created by price controls, state enterprises have got into the act like in the 'closed economy' days of 1970s when price controls and shortages of even foods were common.

One state agency has also got into a controversy for importing substandard cement.

"At the moment we can estimate that there are about Rs.1 billion worth of contracts being carried out," Sri Lanka's Daily FT newspaper quoted Rohan Karunaratne, president of the Ceylon Institute of Builders as saying.

"The imports by the government are inadequate. On average the government imports range around 200, 000 bags per month and this is even less than 20 percent of the required amount.

"We met with the Chairman of the Sri Lanka Cement Corporation on Tuesday morning and stressed that around 1 million bags are needed urgently to offset the shortage."

World cement prices have moved up amid a weakening dollar that has sent most commodities rising to new highs. Energy - a key ingredient of cement - is also high.

The Daily FT newspaper said local producers Holcim Lanka and Tokyo Cement can only supply 60 percent of the market.

But a part of Holcim's production and almost all of Tokyo cement is made by grinding imported clinker.

Cement firms have requested Sri Lanka's Consumer Affairs Authority to increase retail price of cement to 785 rupees per 50 kilo bag. But the agency and consumer affairs minister Johnston Fernando has denied the price increase.

The newspaper said suppliers from countries like Pakistan where a bulk of Sri Lanka's cement is imported have 'better offers' from other countries.

INDIA: Housing slump, monsoon may hit India Cements this quarter

Chennai-based India Cements benefited from curtailed output among players in the South in the June 11 quarter. In addition, there was a strong improvement in realisations on a per-tonne basis.

As a result, the company's operating profit margin doubled compared to a year earlier to 23.2% in the first quarter of FY12 while net sales improved 20.2% year-on-year (YoY) in the quarter under review.

In the company's key cement division, its realisations improved an estimated 29% YoY to 4,172 per tonne in the first quarter of FY12, while dispatches declined nearly 12.8 %. Other leading players in the South, like Madras Cement, also improved their realisations by nearly 20.7% YoY on a per-tonne basis in the first quarter of FY12.

According to analysts' estimates, total cement despatches in the South declined nearly 5.4% YoY in the first quarter of FY12. India Cements' smaller divisions include its presence in the cricket series IPL, coupled with vessels involved in coastal shipping.

However, the turnover of these two smaller activities is less than 10% of its net sales. Strong cement realisations helped India Cements' net profit rise 308% YoY to 102 crore in the June 11 quarter. South-based players had also maintained production discipline in the March 11 quarter and it had also helped them report an improved performance in that quarter.

The India Cements stock ended Monday's trade 1.75% higher at 70. And despite the improved performance in the June quarter, investors are skeptical of the broader sector, with the India Cements' stock hovering above its recent 52-week low. And that's because rising home finance rates have cast a shadow on demand from key users.

Going forward, the September quarter is the monsoon quarter and there is curtailed construction activity across the country. Also, the cement companies' ability to manage rising operational costs would remain key. India Cements trades at a P/E of 14.8 times on a trailing four-quarter basis. Rival, Madras Cements trades at 9.5 times.

AFRICA: NIGERIA: FG to position Nigeria as net exporter of cement, says Aganga

Olusegun Aganga, the Minister of Trade and Investment, says the Federal Government has put machineries in motion to position Nigeria as a net exporter of cement to the ECOWAS sub-region.

Aganga disclosed this in Abuja on Wednesday at the inauguration of the Board of Trustees (BOT) and the Project Implementation Team (PIT) charged with establishing a Cement Technology Institute (CTI) in the country. He said that the quest to set up the institute had been on the drawing board for more than 10 years and expressed happiness for being able to ensure its realisation.

``The CTI is being set up to assist the nation to optimise its cement production capacity and capability through acquisition and development of appropriate technology. ``This will make cement adequately available as a low cost building material for the average Nigerian. ``The institute would also be the fulcrum for the positioning of Nigeria as a net exporter of cement with the capacity of meeting the needs of the ECOWAS sub-region,’’ Aganga said.

According to him, the institute will carry out research and development technology adaptation and human capacity building in the cement sub-sector of the economy. He said the objective of the institute, include to train and enhance manpower in cement technology and related fields, especially at the middle management level. It is also to undertake research and development in the areas of suitable alternative technologies in cement manufacturing, utilisation of local raw materials for cement manufacturing and building among others.

Aliko Dangote, the President of Dangote Group of Companies, is the chairman of the board. Responding on behalf of others, Dangote, who was represented by Joseph Makoju, the Chairman of Cement Manufactures Association of Nigeria (CMAN), described the event as a milestone.

``We have high expectations of this institute and we want to see it happen, so we are matured and ready to manufacture cement. We should not only be exporting cement, we should be exporting technology,’’ he said.