KENYA: kSh12bn Pokot cement factory to be completed next year

Investors in the Sh12 billion cement factory in Pokot have pledged to complete the project next year after revising its implementation plan.

The project was initially scheduled to end this year.CEO of the Cemtech Sanghi Group, Rajesh Kumar Rawal, has dispelled fears that the project may not take off.

"Its a complex project but we are committed to completing it within the next 15 months so that it is commissioned," he told the Star on the phone yesterday.

"We are on course to implement it because we have done much of the ground work and we have all the necessary licenses and approvals for the project." 

The plant is expect to produce more than 1.2 million tonnes of cement annually and directly employ hundreds of residents.It was commissioned by Prime Minister Raila Odinga last year.

Rawal said they are carrying out tests on the limestone deposits in Pokot to ascertain how long the raw material will last.The project's general manager Diptish Nandha has been stationed at the site to work on the implementation and says they are working round the clock.

"This is a long term and serious commitment and we have all systems running including the importation of material soon," said Diptish.The government has supplied power to the construction site at Sebit near Ortum.

Residents had expressed fears that the plant may not take off following the long delay but the CEO said they have been briefing all stakeholders including the government on the progress.

The company has bought land, made donations to 20 schools and other projects as part of its cooperate social responsibility to the community.

It bought 650 acres of freehold land in Pokot at a cost of Sh120 million for the project.Cemtech has put up an office and residential premises at Kapenguria and Sebit for its staff.

Rawal said the designs, machinery and equipment had been completed in India and China and the machinery would be moved to Kenya in the set timelines.

The plant is expected to have the latest technology comprising of fully automated manufacturing systems and controls, well-equipped chemical and physical laboratories to meet international standards.Rawal said the PM's office is aware of the implementation plan.

IRAN: Iran’s cement, clinker exports up 32% in 9 months

Iran exported over 10.45 million tons of cement and clinker in the first nine months of the current Iranian calendar year (March 20-December 20, 2012), IRNA reported.


The figure shows 32.2 percent growth compared to the same period last year.

On December 28, 2012, Iranian Industry, Mine, and Trade Deputy Minister Vajiollah Jafari said by reaching the annual output capacity of 115 million tons, Iran will become world's third largest cement producer in the coming years.

Iran's cement output will reach 75 million tons by the end of current Iranian calendar year, ISNA reported.

Iran plans to increase its cement output up to 85 million tons by the end of the next Iranian Calendar year.

The world's total cement production in 2011 stood at 3.6 billion tons.

Iran plans to export 12 million tons of cement in the current calendar year.

Industry, Mine and Trade Minister Mehdi Ghazanfari said in August 2012 that the country's cement production capacity will reach 110 million tons by 2015.

AFRICA: Portland, National Cement fall out over clinker contract

East Africa Portland Cement Company has turned to its anchor shareholder,Bamburi Cement, for raw materials a year after it severed a four-year supply deal with the firm and inked a contract with National Cement.

Portland fell out with National Cement for breach of contract linked to non-payment and making orders of clinker — a key raw material for cement manufacturing — that were below the agreed quantity threshold.

This forced Portland to beat a hasty retreat and secure a fresh multi-million shilling clinker supply contract with Bamburi Cement in what is set to raise questions over potential conflict of interest due to common shareholding and market rivalry of the two listed firms.

“I’m not supplying them because they are not paying,” said Mr Narendra Raval, the managing director of National Cement in an interview with the Business Daily. “The contract stipulated EAPCC purchase the clinker in quantities of shiploads, equivalent to 30,000 tonnes. However, they were making orders in bits of 5,000 or 10,000 tonnes and delaying to make payments.”

Information on the Bamburi deal is contained in EAPCC’s annual report, which shows it paid its rival Sh134.1 million in the year to June.

Last year, Portland said it turned to National Cement because it was saving Sh270 per tonne of clinker, arguing that Bamburi’s prices were higher than the market average. It’s decision to single source the supply of clinker from Bamburi raised eyebrows when it was signed in 2007. Bamburi Cement and its parent company Lafarge have a 41.7 per cent stake in the firm.

Lafarge also holds nearly 60 per cent stake in Bamburi Cement and until 2009, held a 15 per cent stake in the country’s other cement maker, Athi River Mining (ARM). Cross ownership of the three cement companies has in the past led to accusations of unfair business practices, including collusion in setting prices.

The government controls more than half of EAPCC’s stake, 25 per cent directly and 27.5 per cent through the National Social Security Fund.

National Cement imports its clinker from Asia but has announced plans to build a clinker plant in Kajiado at a cost of Sh10 billion, to be funded through a syndicated loan from KCB and the Standard Chartered Bank.

“We import clinker from China, India and Indonesia and because we buy in large quantities, we get good prices of about $2-3 off the price,” said Mr Narendra“I also supply to ARM, Bamburi and the regional market — Rwanda, Uganda.”

EAPCC also plans to set up a clinker plant in Kitui next year after it acquires a limestone-rich parcel of land to ensure self-sufficiency.

The company made a net loss of Sh821.4 million in the year to June compared to last year’s net profit of Sh1.7 million. Its share at the Nairobi bourse has shed 30.3 per cent over the past year to Sh44.75 in a period that saw rivals Bamburi Cement gain 36.23 per cent and ARM gain 45.75 per cent.

AFRICA: Togo : Le groupe allemand Heidelbergcement investit dans le granulat concassé

Le groupe cimentier allemand Heidelbergcement intensifiera ses investissements au Togo à travers l'ouverture prochaine de la société GranuTogo pour la production de granulats concassés, a appris lundi l'agence Xinhua de bonne source dans la capitale togolaise.

« Le matériel lourd nécessaire pour le démarrage des activités de cette nouvelle société est presque réceptionné. Il ne reste que la finalisation de certaines démarches administratives », a-t-on précisé.

Les activités de cette société démarreront dans le sud à relief légèrement accidenté du Togo, environ 100 km au nord de Lomé, marqué de chaines de rochers de granite en affleurement.

La production du granulat concassé est une nouvelle filière qui attire de plus en plus d'investisseurs au Togo, dans un contexte d'intenses activités dans les bâtiments et travaux publics avec de grands chantiers d'infrastructures de transports routiers, ferroviaires, portuaires et aéroportuaires.

La société GranuTogo sera la troisième société sous investissement du groupe cimentier allemand Heidelbergcement qui a déjà en place les filiales Cimtogo (Ciment du Togo) depuis les années 1970 et ScanTogo-Mines ayant démarré ses activités en avril 2012 et à laquelle un permis d'exploitation à grande échelle du gisement de calcaire a été obtenu.

ScanTogo-Mines porte sur un projet de « complexe industriel moderne » de 258 millions de dollars destiné à la production du clinker et du ciment.

INDIA:Exploit opportunities for economic activities: Slathia

Inspects 300 tonnes capacity Cement plant

The Minister for Industries and Commerce S S Slathia Saturday called for exploitation of all opportunities available in the State for Industrial growth with a view of generating more employment and economic activities.

Speaking to the officers and field functionaries of the J&K Cements Limited (JKCL), during his inspection to the up-coming Clinker Grinding-cum-packaging unit at Samba today, Slathia called for commissioning of the plant as early as possible, so that the major market share of cement is tapped by the Organization.

The Managing Director JKCL R.K. Razdan, FA&CAO JKCL Q.A. Wani, General Manager JKCL Atul Sharma and XEN Civil, JKCL Ashok Khokhar accompanied the Minister during his inspection to the plant. The team from Power Development Department to whom the construction work for 2.50 MVA Receiving Station has been entrusted, was headed by XEN Jameel.

The Minister had a detailed discussion with the officers regarding progress on various stages of the installation of the unit on especially work on installation and erection of various equipments of Cement Mill and civil works.

The Minister showed his satisfaction with the progress achieved.

However on spot instructions were given to further gear up the job of commissioning of the plant so that the trial-run takes place immediately after completion of the plant.

The Minister instructed that all the officers and Engineers of JKCL posted at Site should work in very coordinated manner keeping full attention on quality of work and completion of job in time so that the unit is ready for operation in time.

As regards constructions of 2.50 MVA Receiving Station, which forms the integral part of the plant and has been entrusted to PDD by the JKCL, the Minister had a detailed interaction with the concerned XEN and instructed that the Receiving Station should be ready latest by 1st week of February 2013.

Managing Director JKCL R.K. Razdan briefed the Minister that the plant will produce 300 TPD cement and will significantly contribute in the development works by catering the demand of various Govt. Deptts.

This will generate commercial turn-over of the Company as well as its profit. He said the JKCL was established as State Public Sector Undertaking by Government in the year 1982 and since then has been in the field of manufacturing “Jehlum” Brand 43 Grade OPC Cement, which has become first preference of the customers and Government Departments.

AFRICA: NIGERIA: Cement importation: The unholy business

The business climate for manufacturers has been stormy. For instance, the dawn of textile boom in the country was eclipsed by the twin evils of cheap importation and infrastructural conundrum.

Import substitution industrialisation (ISI) is a trade and economic model that seeks to replace foreign imports with domestic production. It was developed since the 18th century by Classical economist David Ricardo. Its principles were endorsed by European countries and the Americas and it paid off. But it was abandoned by developing economies in the 1980s due largely to structural indebtedness and IMF/World Bank adjustment programmes that lend credence to trade liberalisation policy for poor countries. To say, therefore, that the consequences of trade liberalisation policy and unchecked importation on these economies have been colossal is to rehash a cliché.

Nigeria today can neither clothe nor feed itself. About 90 percent of the country’s textile needs are imported and about $158.4 million is spent on importation of textiles and fabrics from Dubai alone annually. This is scandalous and enough to send jitters down the spine of a serious government. The country has also witnessed mass exodus of tax-paying manufacturing companies. Those who choose to stay back eventually collapse due to high cost of production and the importation of cheap goods from China and elsewhere, where the cost of production is pretty low. While the government had hitherto expressed determination to encourage made-in-Nigeria goods to bolster domestic direct investment, it has, however, yet to walk it talk.

The business climate for manufacturers has been stormy. For instance, the dawn of textile boom in the country was eclipsed by the twin evils of cheap importation and infrastructural conundrum. Unbridled importation of tyres has since forced Dunlop and Michelin to kiss the dust and relocate to another African country. Nigeria’s ranking on the global scale for ease of doing business has also nosedived.

It is against this backdrop that the ongoing altercation between the country’s cement manufacturers and importers is a cause for concern for discerning Nigerians. The government’s macabre dance is not helping matters either. Both Dangote Cement and Lafarge WAPCO Cement Plc have raised alarm that the business environment is becoming intolerable. For instance, Dangote’s four million metric tonnes cement plant that employs about a thousand people in Gboko, Benue State, was shut down last month due to glut in the market. Similarly, the management of Lafarge has cut its production. Plant manager, Lafarge’s Ewekoro cement plant, Lanre Opakunle, said 50 percent of Lafarge’s Shagamu plant has been shut down. He said that the company’s Ewekoro plant had cut production by 40 percent in response to the glut in the market. According to him, the various Lafarge factories have excess cement and clinker inventory at their plants of about 300,000 metric tonnes, which cannot be absorbed by the Nigerian market.

Hence, the suspension of operation by one of Dangote’s cement factories owing to market glut created by nefarious importers should disturb the government. This is so because as a manufacturing company, the Dangote Group has contributed enormously to the development of this country. It pays an average of N50 billion in tax annually. Its philanthropic profile soared to around N20 billion between 2011 and 2012. It gave N2.5 billion to the flood victims last year. The Dangote Group is today adjudged the largest donor and biggest employer outside government. It has caused the employment of over 100,000 in direct and indirect labour. All this is made possible through MANUFACTURING, not importation.

The country’s cement subsector almost hit the rocks by 2002 when total domestic production was a paltry 1.9 million metric tonnes. But change came with the federal government’s backward integration policy for the manufacturing sector. With this policy, total production rose to 18.5 million metric tonnes as at 2012, while another 12 million metric tonnes is in the offing. According to chairman of Cement Manufacturers Association of Nigeria (CMAN) Joseph Makoju, “The 18.5 million metric tonnes is representing just 65 percent of the present total installed capacity of the industry. Between 2002 and May 2012, a total of $6 billion new investment was made by the local manufacturers while the ongoing expansion and new plants is estimated to cost another $3.5 billion. Due to the continuous rapid growth, the nation no longer requires cement imports as local demand is being effectively met and even surpassed. However, with continuous importation of the product into the country, as at today, most local cement plants have huge inventory of unsold cement and the clinker, signifying the attainment of self-sufficiency.”

The question being asked is: why has cement price not crashed in the face of the glut? It is a truism that the cost of production in Nigeria is very high. Any producer or businessman will easily confirm this. Manufacturing is not synonymous with charity. The business of business is business. As a former economics teacher, I know that the forces of demand and supply are not all there is to bring down a price in the long run. There are exceptional and abnormal situations. Nigeria’s economy, as we all know, is not normal. “Energy cost accounts for over 35 percent of production cost in Nigeria,” Makoju had explained, “whereas it is 10 percent in China. In Nigeria, the price of LPFO has jumped from N25 per litre to N107.76 per litre as at November 2012, an increase of 331 percent. Haulage is another factor that is out of the control of manufacturers. Haulage cost alone accounts for between 20 and 25 percent of the open market price of cement. All bulk products are affected by this factor due to deplorable state of Nigerian roads.”

Pundits therefore say the backward integration policy introduced by the Obasanjo government to encourage local production is once again being threatened. With the Jonathan government’s indecisiveness, the cement subsector, they say, is regretfully set to tread the path the textile sector trod. It is also worth mentioning that cement consumption in Nigeria is still very low. This speaks volumes of the state of infrastructural projects in the country when compared to other African countries. Cement consumption in Nigeria is below Senegal. It is also behind Egypt which consumes an average of 48 million tonnes. This does not speak well of a country that has an estimated housing deficit of 16 million units, and whose road networks are almost in tatters. Government can also help mitigate the glut by using concrete for its road construction projects instead of asphalt in order to save substantial outflow of foreign exchange. Concrete roads are strong, durable and evoked all over the world.

Local cement consumption was said to have risen by 11.1 percent from 8.42 mmtpa in 2004 to 9.35 mmtpa in 2005. In 2006 it grew to 10.08 mmtpa, 10.98 mmtpa in 2007, and by 22.1 percent to 13.41 mmtpa in 2008. Average consumption hit 14.80 mmtpa in 2009 and 15.83 mmtpa in 2010. In 2011, it reached 17.10 mmtpa. In 2011, cement manufacturing started closing the gap on domestic cement demand. With total local consumption projected at 20.97 mmtpa by end 2012, Dangote Cement, with over 20 mmtpa capacity, had met local demand for the product. Therefore, to allow continuous importation when Nigeria can now export is to kill the idea and the success recorded through the backward integration and import substitution policies. It would be recalled that between 2010 and 2011, cement manufacturing saved Nigeria a staggering N270 billion. The amount it costs the country to import cement yearly dropped from N300 billion to N30 billion. This corroborated the fact that import substitution policy can help free a country from its economic shackles. 

With Nigeria’s huge size and comparative advantage in cement production, manufacturing is most likely to achieve economies of scale for the country. Nigeria also has additional advantage of controlling the West African market. The chorus in every corner should be: No to cement importation!

BRASIL: Movimentação do Porto de Pecém cresceu 22% em 2012

Durante os 12 meses de 2012, a movimentação de mercadorias através do Porto do Pecém cresceu 22%, comparando  com o mesmo período do ano anterior. No ano passado foram movimentadas 4,15 milhões de toneladas (t), enquanto em 2011 a movimentação foi de 3,41 milhões. O destaque ficou por conta das importações que atingiram 37% de aumento, representando 80% do total movimentado no ano.  Durante todo o ano operaram no porto cearense 421 navios, o que representa uma média mensal de 35 embarcações, computando-se no transporte de cabotagem e de longo curso. Os dados são da Secex.

As importações contribuíram com 3,32 milhões t movimentados, enquanto as exportações registraram a movimentação de 833 mil t. O item frutas registrou o maior índice de exportação, com 214 mil t, seguindo-se do minério de ferro (172 mil t), sal  (51 mil t), alumínio (43 mil t), farinha de trigo (32 mil t), água de coco (25 mil t), carnes (22 mil t) e calçados com 13 mil t. A liderança nas importações ficou com os combustíveis minerais, com 521 mil t de gás natural e mais 517 mil t de carvão mineral, tendo sido transportadas no período mais de um milhão de t. A segunda colocação ficou com cimento não pulverizado (clinker) com 650 mil t, seguido dos produtos siderúrgicos com 744 mit t, plásticos e suas obras com 102 mil t e escórias de altos fornos com cem mil toneladas.

No item frutas foi registrada a movimentação de 113 mil t de melões, 37 mil de manga, 23 mil de uvas, 19 mil de melancia, 16 mil de castanhas de caju, três mil de amêndoas eduas2 mil t de bananas. As frutas tiveram origem nos estados do Ceará (44%), Rio Grande do Norte (29%), Pernambuco (15%) e Bahia, com 11%. A Holanda foi o país que mais importou, totalizando 40% da movimentação, seguido pela Grã Bretanha (28%), Estados Unidos (17%) e Espanha, com 7%.

Ranking

Nas exportações de frutas o Pecém manteve a primeira colocação entre todos os portos brasileiros, com participação de 30%, seguido pelo porto do Rio Grande do Norte (22%), Salvador (14%), Santos e Mucuripe com 11% cada um. Nas exportações de calçados o Pecém ficou na segunda olocação, ao lado do porto de Rio Grande, com participação de 23% cada. A liderança foi do porto de Santos, com 25%. Suape registrou a participação de 11% e o Mucuripe teve participação de 10%.

Na movimentação de cimento não pulverizado (clinker) o Pecém manteve a liderança com participação de 32%, seguido pelos portos de Santarém (21%), Cabedelo (11%) Belém (8%) e Suape (7%). Na importação de produtos siderúrgicos a liderança foi do porto de São Francisco do Sul, com participação de 23%, seguido pelo Pecém (18%), Santos (14%), Itajaí (10%) e Rio de Janeiro (6%).

BANGLADESH: Mother vessels with commodities sitting idle for two days at Ctg port

Cargo transportation from the maritime port and its outer anchorage faces a total disorder as the river transport workers enforced their strike for the second day to press home realisation of their demands.

At least 15 mother vessels have been sitting idle with import cargoes in the outer anchorage and port jetties on Thursday due to suspension of carrying goods by lighter vessels to different destinations of the country, port sources said.

Following the situation the Water Transport Coordination Cell has cancelled fresh booking of lightering vessels. The WTCC is a body that provides lighter vessels for offloading and transportation of cargo from the mother vessels which cannot enter the port due to draft limitation in Chittagong seaport.

Apart from the impasse in cargo delivery through river routes, the impasse has caused financial loss to the tune of about Tk 20 million per day to those concerned with transportation.

Owners of the lightering vessels said they would have to count financial loss of about Tk 15 million per day as demurrage.

Around 400 lightering vessels including the loaded ones are also lying idle in different areas of Karnaphuli River and the outer area in the Bay due to work abstention by transport workers.

Nowjan Sramik Federation, a forum of the river transport workers, enforced the strike to realise their 16-point charter of demand from Wednesday that has created stalemate.

Their demands include increase in the number of river transport workers, preventive measures to check extortion, issuance of appointment letter and identity card for workers, keeping rivers pollution-free and expediting dredging of the river routes.

Secretary of Chittagong Port Authority Syed Forhad Uddin has said offloading of cargo from ships is undisturbed in the port jetties, but offloading in 12 mother vessels in the outer anchorage remains suspended as the workers of lighter vessels are on strike.

"Lightering of cargo from the mother vessels is a major problem now," he said adding that these vessels have carried fuel oil, sugar, urea fertiliser, salt, cement clinker, wheat and steel billet.

Executive director of the WTCC Mahbubur Rashid admitted that delivery of cargo from the port to country's other parts through river routes is facing problems due to ongoing strike of the lighter vessels workers for enhancement of their wages.

A senior leader of Bangladesh Shipping Agents Association (BSAA) observed, it will bring adverse impact on the retail market of commodities and the common people will feel the pinch if the stalemate is allowed to continue.

He termed the strike as not time-befitting and illogical and said that vested quarters in the water transport cell are acting from behind the scene.