COLOMBIA: Cemex sees Colombia market growing 13% this year

Firm also discloses it plans to expand installed capacity in the country.

Cemex says it expects cement market in Colombia to expand 13% this year, a report from El Nueva Dia said.

According to the report, the Caracolito Cemex plant, located in the area of Buenos Aires, Ibague, is one of the most important in Colombia.

The multinational produces about 230 000 tons of cement per month, corresponding to 25 percent of product sold in the country.

"The plant is 25 percent of cement sold in the country, the largest of Colombia and is currently operating at maximum capacity," Carlos Jacks, president of Cemex Colombia said.

He said that the country "this year is growing about 13 percent by volume of the industry, then it is a plant that we will make some investments in the coming months to expand capacity, which will be relevant to the country.

"Expansion will be commensurate with the growth of industry in Colombia, that in the next two years, according to Jacks Chavarria, would be between eight and 10 percent in volume, "would mean that the country will require one million tonnes of additional cement years, representing a new plant each year. "

Tanzania forced to import more cement from Pakistan

Country may be facing acute cement shortage because one of the local plants has been idled.

A breakdown in one of Tanzania's cement plants has led to the country to import more cement from Pakistan to make up for a looming shortage, a report from the Express Tribune said.

Masoud Hamisi of Tandika hardware said due to shortage he decided to import cement from Pakistan.

“There is no local cement. We have turned to imported supplies.” Cement producers say production cost is too high in Tanzania compared to that of Pakistan.

While it costs $86 to transport one ton cement from Dar es Salaam to Kigoma, the same quantity could be transported from Karachi in Pakistan to Dar es Salaam for just $25, the report said.

Brazil cement sector expected to grow 8% this year

Sales advanced 7.7% in September, hitting 5.8 mm tons; Holcim Brasil expects net to surge.

Brazil's cement industry is expected to rise 8% this year, on the back of the government social housing program and accelerated building ahead of the 2014 World Cup, a report from DCI said.

The industry has recorded sales advanced 7.7% higher in September compared to the same month last year, reaching 5.8 million tons. In the year, the evolution is identical, since the market reached 47.2 million tons, compared to 43.8 million.

"After four years of strong demand, we now have slower growth rates, more consistent with our economy," says National Union of the Cement Industry (SNIC) head Jose Carvalho.

According to him, events like the World Cup and the Olympics, a should not be the great levers of the sector. He states that such works only anticipate the contributions, unlike more sustainable programs such as the Growth Acceleration Program (CAP).

"Housing construction was largely responsible for the sector's revenues in the last five years," says Carvalho. In addition, the executive pointed out that increasing middle-class incomes has also helped to encourage the cement industry.

Holcim expects to accompany the expected growth in the sector this year, and selling 4.8 million tons of cement in 2011, representing an increase of 8% over 2010.

"Our demand is heated and have not yet felt the effects of the crisis," says director of corporate affairs of the company, Carlos Eduardo de Almeida Garroch. Holcim's net profit could rise almost 10% this year, according to company projections. Last year, the amount was R $ 1.3 billion.

Vietnam: Cement production sufficient for 2012

Ministry of Construction says local production still more than enough to satisfy demand.

Vietnam's cement producers are expected to generate more than enough cement to satisfy demand next year, a report from VietNamNews said.

Deputy Minister of Construction Nguyen Tran Nam said according to cement consumption figures this year, the ministry expected demand to reach 55-56.5 million tons next year with domestic cement production hitting 70 million tons.

According to the report, the projections included 19-19.5 million tons from the Viet Nam Cement Corporation, 17-17.5 million from joint ventures and the remaining from other cement plants, Nam said.

Meanwhile, the ministry estimated that this year's domestic cement demand would not increase against last years, he said.The local cement demand in 2011 was predicted to reach 50 million tons, the same rate as last year, and lower than the target 54.5-56 million tons target, VietNamNews said.

In the first nine months of this year, Vietnam consumed 35.27 million tons of cement, or 65.2% of the target.

SPAIN: Cimpor modernizes facility in Spain

Company prepares for future difficulties in Spain’s building materials sector.

Cimpor is planning to further modernize its facility, a report from Huelva Informacion said.According to the report, the company recently invested around 25 million euros to improve its facility in Nielba, Spain. Majority of the investment will be used to improve the facility’s energy efficiency and worker safety, while decreasing CO2 emissions.Previously, the facility has increased its production capacity of clinker from 1,500 tons a day to 2,200 tons, the report said. Currently, the company is planning to further improve the efficiency of its production to weather forecasted difficulties to be faced by Spain’s building materials industry.

Spain: Cement consumption dips further in September

Demand falls 19.8% to 1.7 mm tons, the latest in 46 months of continuous declines.

Cement consumption in September continued to tumble in September, as volume dropped to 1.7 mm tons, 19.8% lower than the previous year's total. According to Oficemen, that is now 46 months of continuous fall in consumption and it does not expect a turnaround. The decline in cement consumption is worse in the last six months after beginning a slow recovery in early 2011.On the other hand, the production of clinker, has declined by 28.6% in September while cement production fell by 20.3%, to 1.8 million tons.In the last twelve months Spain has seen a decline in production of cement by 12.8% to 23.6 million tons. Cement consumption has fallen 14.5% from October 2010 to September 2011 and 21.9 million tons puts us in the 1973 consumption levels. In terms of foreign trade, exports have remained at 3.8 million tonnes, while imports decreased by 38.5%.

AFRICA: EGYPT: Italcementi Group to invest Eur140m as a continuous commitment to the future growth of Egypt

Nine leading international wind turbine manufacturers have arrived in Hurghada to take part in a site-visit organized by Italgen (Italcementi Group) to present a new state of the art renewable energy project in the Red Sea area, which represents the first Foreign Direct Investment in this sector.

The investment, estimated around Eur140m, envisages job opportunities and social initiatives to the local community besides allowing the transfer of know-how. The project will cover the energy needs of the Suez Cement Company plants in Egypt (whose main stakeholder is Italcementi Group), thus contributing to Egypt's environmental goals of reducing impact on the environment and consumption of fuel based energy resources.

Giuseppe De Beni -managing director of Italgen- also met the new Governor of Red Sea, H.E. Counsellor Mahmoud Assem, to discuss the features of the project, mainly the economic and social benefit that will be generated to Red Sea Governorate, especially Wadi Dara and Gulf El Zayt areas. In the afternoon, a meeting was held with international suppliers and senior representatives of the New and Renewable Energy Authority and other Egyptian Institutions. Egypt has set a very ambitious target to have 20% of total energy capacity installed from Renewable Energy in 2020. This would mean 7000 MW installed before 2020 and the contribution of the private sector is crucial to met the target. 

"I have been extremely pleased to listen to the new Government, saying that the private sector could help Egyptians by partnering with them" underlined Mr. De Beni, "this is exactly the attitude of Italcementi Group towards Egypt and the framework within which we are developing this wind energy project. We do expect a continuous close cooperation with New and Renewable Authority Energy and with the Ministry of Energy to finalize very soon the last phase of the permitting process and to start the implementation phase." 

Mr. de Beni added that private investors are now looking to Egypt to understand whether the framework will be favorable in the next future and that he is sure that the implementation of such a relevant project in a crucial and innovative field like renewable energies would be an important sign of the renewed confidence and trust of foreign investors in the country. 

"Egypt is a priority in our internationalization strategy and we are fully committed to it. We are confident that the new era will mean a favorable and more dynamic business environment," he said. 

Italgen is part of Italcementi Group, one of the biggest Italian companies and the fifth cement producer worldwide, operating in 22 Countries. The Group has been contributing to the industrial and social development of Egypt since 2001 (as main stakeholder of Suez Cement group of Companies), providing know-how and updated technology, investing more than one billion euros, and implementing social actions dedicated to local communities.

AFRICA: NIGERIA: FG must allow 30% cement import to check monoploy - Rabiu

The Chairman of Sokoto Cement, Alhaji Abdulsamad Rabiu has called on the Federal Government to allow 30 per cent of cement import to check monopoly, insisting that a situation where 150 million Nigerians rely on just two players was dangerous for the economy.

Rabiu, who was part of the just concluded two-day presidential retreat with the private sector on economic development and job creation, at the Banquet Hall of the Presidential Villa, described the two days spent with President Goodluck Jonathan as the best for the private sector so far.

He warned that the call for licences for cement importers not to be renewed was not good for the economy, as the two major players would not be able to meet the demands of Nigerians for the product.

“We had a retreat with most of the stakeholders here in Nigeria business wise and with Mr. President. Everybody was frank, open and most of the issues discussed were really issues that affect the business environment in this country and so we are really happy.

“ I am a cement manufacturer, I have got a cement plant, Sokoto cement in Sokoto State, I have got another one in Edo State, so I am a manufacturer but I know that the demand for cement in Nigeria is a lot more than we can produce. So there is need and government has always had that policy in issuing licences to bridge the gap between what we can produce and what the demand is in the country.

“Right now, we are in the situation where by the end of this year, licences will expire and there is a lot of clamouring that licences should not be renewed again for the importation of cement. The reason I am bringing this issue and we raised this with Mr. President at the retreat is simply because we see a situation where 80 to 90 per cent of cement production is being controlled by two companies in Nigeria, I believe that is risky, it’s dangerous and should not be allowed because the consumer comes first. Yes, it is good, it is commendable to some of the companies, putting up cement factories in Nigeria and yes they have put in a lot of money but look, we are talking about one or two companies as against 150 million Nigerians. 

“So that is why I actually raised the issue that we should carefully make sure that we do not fall into the hands of very few players in the market.

AFRICA: NIGERIA: Dangote Cement capitalisation hits $15 billion, says Paramjit

Dangote Cement capitalisation has hit a whopping $15 billion and the company would single-handedly surpass Nigeria’s entire cement need which stands at about 17 million metric tons annually, before the end of next year.

Dangote Group’s Chief Human Resources Officer, Mr. Pabby Paramjit disclosed this at the inauguration of Dangote Academy’s Graduate Engineer Trainees Scheme, GETS, at the Obajana Cement plant, Kogi State, at the weekend.

He put Dangote’s current cement output at about 12 million metric tons per annum and that a new cement plant at Ibere, Ogun State would soon come on stream with another six million metric tons, annually. The third phase of the Obajana Cement Plant, he disclosed, would soon be commissioned and therefore boost output of the commodity.

He said that the vision of the President of the Group, Alhaji Aliko Dangote was to grow the cement segment of the business empire into an international organisation that would export cement from Nigeria to the West African sub-regional market within the next four years.

According to him, cement accounted for 80 per cent of Dangote Group’s business, while non-cement segment such as the flour mills, water, juice, pasta and bag account for the remaining 20 per cent. Mr. Paramjit said Alhaji Dangote decided to establish the Dangote Academy in recognition of the important roles personnel play in building great companies around the world.

INDIA: Cement sector likely to witness negative growth in October

The cement sector is likely to witness negative growth in sales in October due to a slowdown in infrastructure construction activities amid the festive season, besides the higher base in the corresponding month last year, a brokerage firm has said.

"Given last year's higher base and the upcoming festival season (Diwali), the cement industry is expected to report negative year-on-year growth in dispatches for the month of October, 2011," Elara Securities said in a report.

In September, the country's cement firms reported a marginal 1.4% decline in dispatches vis-a-vis the same month last year. In August, cement dispatches were down by 6.6% in comparison to July.

Industry sources said the unavailability of sand has impacted cement offtake in the Western region, while the monsoon and the fluid political situation hit sales in Andhra Pradesh.

"As cement demand is still subdued, cement players have cut down supply in the low price non-trade segment. Thus, cement prices during the month increased in most parts of the northern, eastern, western and central regions by Rs 5-30 per 50 kg bag," it said. Cement prices in the southern region (except Andhra Pradesh) remained flat, as cement demand was weak due to

festivals like Onam and Dussehra. Prices in Andhra Pradesh have inched up by Rs 10 per bag due to the Telangana agitation.

"Cement dealers expect prices to inch up further by Rs 5-10 per bag in most regions,"

INDIA: Cement producers to shift to high cost imported coal

Emkay Global Financial Services has come out with its report on cement sector.

Cement producer will have to shift to high cost imported coal: With the multiple issues plaguing the coal supply, the country today is facing acute shortage of coal and the power stations running on very low inventory of coal. To improve the worsening coal supply issue, Coal India (CIL) has decided to offer the October -11 e-auction quota coal to power companies first (though the same would be under of the FSA quota for FY12). We believe that this move will affect cement manufacturers who have significant dependence on e-auction coal. In the event of short supply of coal through e-auction, cement manufacturers will have increased dependence on imported coal. Though prices of coal in international markets have been stagnant at USD 120, the sharp depreciation of INR against USD has increased the landed price. Currently price of imported coal is ~Rs6600/t as compared to e-auction price of ~Rs3400/t. However adjusted for calorific value, the cost of imported coal is ~15-20% higher.

Costs most likely to get passed given the onset of construction season: The increase in fuel cost though negative for cement producers, is unlikely to impact FY12 earnings meaningfully as CIL chairman has said that the supply of e-auction quota coal to power producers is only for the month of October-11. Further with the onset of busy construction season, cement producers should be able to pass on the increased cost to the consumer.

Continued shortage could impact cement production and dispatches: Though cement companies keep 30-40 days of coal inventory we believe that the continued shortage of domestic coal could disrupt production schedule which in turn would impact the cement dispatches. The following exhibit contains the proportion of coal procured through e-auction by cement companies.

Impact: Cement majors procure 20% of their requirement from E-auctions. If we assume that the problem could persist for a quarter i.e. the Oct-Dec-11 quarter, ACC & ACEM’s CY11 EPS could get impacted negatively by 1.2% while that of Ultra TechCement by ~4% Shree to benefit as it has no dependence on domestic coal. Further the sharp surge in price of merchant power will significantly improve the profitability of its power division in short term.