NIGERIA: ASHAKA CEMENT EARMARKS N80BN FOR EXPANSION

Ashaka Cement Company yesterday announced plans to inject N80 billion to raise its production capacity to 2.5 million tonnes annually.

Alhaji Umaru Kwairanga, the chairman of the company’s Board of Directors disclosed this in an interview with newsmen in Gombe.

The chairman said since the inception of the company about 30 years ago, its installed production capacity had remained about one million tonnes and needed to expand in line with the potentials in the market.

“Some of our equipment are obsolete and we feel that there is the need for us to create a new line for 2.5 million tonnes annually.

“This is the minimum we intend to do, so that the cement we produce would be enough for the entire North-east and some parts of the country,’’ he said.

Kwairanga assured that the expansion work would commence in earnest before the end of the first quarter of the year.

He also disclosed plans by the company to utilise the coal potentials in the area to generate power.

“We want to have a power plant, and luckily for us, we have coal which is like the backbone of the company now.

“We plan to establish a coal power plant to generate electricity for the company’s use and its host community, so that at the end of the day, the people of the community will feel more impact of the company,’’ he said.

TUNISIA: Libéralisation des prix du ciment

La libéralisation des prix du ciment gris et son impact sur la concurrence entre les cimenteries et les promoteurs immobiliers qui ont exprimé vivement leurs appréhensions quant à une possible hausse des prix des matériaux de construction émanant de cette décision. Les responsables du ministère de l’Industrie prévoient au contraire une baisse des prix étant donné que la libéralisation va contribuer au développement de la concurrence entre les cimenteries dans le cadre de « transactions transparentes » et que l’Etat s’est engagé à rester le seul régulateur des prix du ciment et qu’il interviendra en cas de monopoles, de spéculations ou encore de perturbations du rythme d’approvisionnement du marché. Entrée en vigueur à partir du 1er janvier 2014, la décision de la libéralisation des prix du ciment gris ne cesse de susciter l’inquiétude aussi bien du citoyen que des promoteurs immobiliers, sachant que ladite décision prise vient à point nommé concrétiser les recommandations de la réunion ministérielle du 25 septembre 2013, portant sur la lutte contre la contrebande des produits du ciment, le contrôle des circuits de distribution et la garantie de la transparence des transactions et de la concurrence loyale, ce qui permettra à l’évidence la garantie de l’approvisionnement régulier et la stabilité des prix. 

Ce problème d’actualité brûlante qui, pour certains, pourra générer une crise où le citoyen se retrouvera devant le fait accompli, obligé d’acheter un sac de ciment avec le prix que les vendeurs considèrent le plus approprié, et, selon les estimations, sera plus élevé. 

M.Ibrahim Chbili, directeur général des industries manufacturières, explique à cet effet, que le ministère de l’Industrie a opté en premier lieu pour la levée progressive de la subvention des produits énergétiques des usines de cimenteries, qui consomment plus de 7% du volume de consommation globale de l’électricité. Il est opportun de rappeler que le volume de la subvention des hydrocarbures dont profitaient les usines a atteint en 2013, 270 MD, ce qui a exigé la levée de la subvention dans le cadre du plan de maîtrise de la subvention au profit de ses ayant droits.

Le prix du sac du ciment 

ne dépassera pas 7d.500

Aux dires de M. Chbili, la décision de libérer les prix du ciment provient essentiellement de la demande accrue des professionnels d’augmenter les prix qui n’a pas changé depuis 2012. Une augmentation qu’ils considèrent légitime selon la loi, dont la valeur est estimée à 6% par an. La Chambre nationale du ciment a demandé une augmentation des prix de l’ordre de 25%, outre l’augmentation annuelle dont les professionnels n’ont pas profité, la levée de la subvention des produits énergétiques, la flambée des prix des carburants, des salaires, des matières premières, des sacs d’emballage, etc.

« On s’est mis d’accord pour que l’augmentation ne dépasse pas 15%, moyennant 7.500 millimes à la vente pour le sac du ciment, qui était dès l’annonce de la décision, entre 8 et 10 dinars. La Chambre nationale du ciment et le ministère de tutelle, après les négociations, sont arrivés à un accord ». 

La décision de libéralisation des prix du ciment n’est pas fortuite en se référant aux indicateurs qui montrent une baisse de la consommation allant jusqu’à 22 millions de tonnes contre une production quotidienne de l’ordre de 30 mille tonnes.

M. Chbili a dû préciser que les prix peuvent être contrôlés, et des garanties seront fournies pour les stabiliser. Ainsi, la croissance de production permettra aux producteurs de respecter les prix fixés. Avec la cimenterie de Carthage, récemment opérationnelle, première usine en Afrique qui produit entre 6 et 7 mille tonnes par jour, avec l’extension de l’usine de Bizerte dont la production accroitra de 700 mille tonnes par an à un million et demi de tonnes, le mois de mars 2014 verra un excès de la production moyennant 3 millions de tonnes par an, dont une partie sera destinée à l’exportation et le reste en tant que réserves. 

Il est à noter que la consommation nationale du ciment s’élève à 8 millions de tonnes par an, avec 550 mille tonnes destinées à l’exportation. Des quantités assurées par les huit usines produisant 12,2 millions de tonnes par an. En effet, l’abondance de la production « contribuera à la promotion de la concurrence et obligera les commerçants de gros à ne pas augmenter les prix afin de garantir la vente des grandes quantités du produits, sachant que les industriels sont inquiets de cet excès de l’offre et optent pour l’exportation qui sera contrôlée afin d’éviter une éventuelle pénurie ».

A l’évidence, l’excès de la production est le seul garant du prix fixé, qui pourrait, d’après M. Chbili, contribuer à une baisse des prix et mettre fin à la spéculation. « Cette libéralisation des prix du ciment n’aura aucun impact sur le pouvoir d’achat du citoyen, ni sur les prix du bien immobilier. Quant aux promoteurs immobiliers, on ne prévoit pas également une répercussion d’envergure sur la valeur de l’immobilier puisque le ciment ne contribue qu’ à raison de 7% dans la construction ».

ZAMBIA: DANGOTE CEMENT FACTORY TO STRENGTHEN ZAMBIA, NIGERIA ECONOMIC TIES

NIGERIAN High Commissioner to Zambia Sifawu Momoh has said the Dangote Group’s establishment of the cement factory in Zambia will strengthen economic ties between the two countries.

Dangote Group, one of Nigeria’s foremost investors, will this year complete the establishment of a cement factory estimated at US$400 million on the Copperbelt.

Ms Momoh said making the factory operational was part of a strategy by the Federal Government of Nigeria to strengthen economic ties with Zambia.

In a statement released in Abuja, Ms Momoh explained that the Dangote cement firm, when fully operational in Zambia would give direct employment to many people and boost the existing economic ties between the two countries.

She said Nigeria had a lot to learn from Zambia in areas of agriculture and tourism, adding that the West African economic powerhouse would supplement efforts to grow Africa’s leading copper producer.

”The Governments of both Zambia and Nigeria have been discussing ways of sustaining and increasing direct investments to both countries.

”Investors from both countries will soon meet to share ideas on how to bring development into the country,” Ms Momoh stated.

In a related development, Dangote Group president and chief executive officer Aliko Dangote has said the cement factory in Ndola is among five such facilities that the firm would operationalise across Africa in 2014.

The firm aims to operationalise other cement factories in Tanzania, South Africa, Gabon, and the Democratic Republic of Congo (DRC) by the end of this year.

Speaking when he addressed a group of African business executives in Nigeria, Mr Dangote said the five plants which were currently at various stages of construction, will add 13.5 million tonnes to the annual existing production capacity of cement by Dangote.

Mr Dangote said the Group’s core focus is to provide value-added products and services that meet the basic needs of the populace through construction and operation of large-scale manufacturing facilities in Africa.

”The Group is focused on building local manufacturing to generate employment, prevent capital flight and provide locally produced goods for the people,” Mr Dangote said.

This is contained in a statement posted on the Dangote Group website.

The factory in Ndola would produce 1.5 miilion tonnes.

INDIA: Cement firms to raise capacity by 20 million tonnes in 2014

The cement industry may continue to see testing times for the better half of the year with fresh capacity of 20 million tonnes (mt) going on stream, taking the industry capacity to 370 mt.

Among major additions, UltraTech Cement is expected to add 8-10 mt, while Shree Cement and JK Lakshmi Cement will put up 6 mt and 4 mt over the next fiscal. Though cement demand is expected to recover, companies may lose pricing power as competition intensifies to push additional capacity into the market. Profitability may remain stressed with rising input costs. The rupee depreciation against the dollar may make coal imports costlier. A. Srinivas, research analyst at Angel Broking, expects the cement industry to remain in the woods next year.

Contrary to market expectation, there was no major revival in demand in the December quarter. The profitability of cement companies had deteriorated as sales in the quarter rose 6 per cent year-on-year (down 8 per cent quarter-on-quarter), while prices dipped 7 per cent (down 3 per cent quarter-on-quarter).

Rajesh Kumar Ravi, research analyst at Karvy Stock Broking, said infrastructure project execution has been declining continuously and projects are being shelved at an alarming rate in the last two years. Cement demand may pick up in the second half of 2014 which may again depend on timely and good South-West monsoon, said Ravi. “We expect overall cement sales to be driven by higher demand from rural regions and tier-II and tier-III cities. This along-with an expected recovery in infrastructure project execution should boost demand.”The average all-India cement prices declined 5 per cent across regions to Rs 289 for a 50-kg bag in the December quarter against Rs 304 a bag in November. Prices in the western region (Maharashtra, Gujarat and Goa), considered the biggest market for cement, declined the most by Rs 20 a bag to Rs 293, while it was down by Rs 9 to Rs 274 a bag in the central region (Uttar Pradesh and Madhya Pradesh).

In the southern region, prices were down by Rs 17 to Rs 316 a bag. In the northern and eastern zones, cement prices declined by Rs 13 and Rs 15 to Rs 269 and Rs 295 a bag, respectively.

Cement demand in the eastern and northern regions was hit by the ongoing sand mining problems, which are expected to be resolved soon. However, prices are expected to be revised higher in the second half of January as demand revives from a few Government projects, which are expected to be rolled out before the code of conduct for next general election kicks in.

UK: Cement firms to face more competition after inquiry

The UK's cement market is set to see greater competition following changes ordered by the Competition Commission.

The Commission spent two years studying the market amid fears existing firms were concentrating on preserving their market share and failing to compete.

It said the lack of competition was costing cement users £30m a year.

The Commission has told one of the existing firms, Lafarge Tarmac, to sell one of its cement plants to enable a new firm to compete in the industry.

The dominant cement firms are Lafarge Tarmac, Cemex, and Hanson. These three were joined a year ago by new entrant, HCM. These, and another company, Aggregate Industries, which does not produce cement, make up the five main suppliers of heavy building materials in the UK, which include aggregates, cement and ready-mix concrete.

Lafarge Tarmac will be required to choose between selling either its Cauldon, Staffordshire or its Tunstead, Derbyshire cement plants.

Lafarge's chief executive, Cyrille Ragoucy, said he was "disappointed" by the decision, adding it was "not reasonable or proportionate".

"The Commission has based its remedies on a partial and historic picture of the market. Its analysis of industry profitability... is flawed, grossly overestimating the returns made," he said.

"It has also failed to take into account the new business environment that has been established by our divestments - only 12 months ago - to create a new competitor, and the entry of new importers into the market."

'Essential product'

The Commission also ordered changes in the supply of another heavy building material, ground granulated blast furnace slag (GGBS), which is a partial substitute for and input into cement.

It has ordered Hanson to sell one of its GGBS production facilities.

It says the inefficient market for this material has led to losses for buyers of a further £15m-£20m a year.

Professor Martin Cave, the chairman of the inquiry, said: "Cement is an essential product for the construction and building sectors and the amount of such work that is funded by the public purse only underlines the importance of ensuring that customers get better value for money."

BANGLADESH: SMGR eyes Bangladesh after Vietnam, Myanmar

State-owned cement producer PT Semen Indonesia, trading on the Indonesia Stock Exchange (IDX) as SMGR, is seeking to expand to Bangladesh, after success in Vietnam and plans to enter Myanmar later this year.

“We will probably acquire grinding mills in Bangladesh [...] but not this year,” Semen Indonesia corporate secretary Agung Wiharto said on Thursday evening on the sidelines of the company’s first anniversary celebration.

“For this year, we are looking to acquire a cement company or to establish a joint-venture company in Myanmar,” he said. Semen Indonesia started negotiating with three potential partners in Myanmar last year, but had not reached an agreement yet, he added.

“We told them that we wanted to be a major shareholder, but they are still thinking about it. Many Myanmar conglomerates also want to acquire major shares,” Agung said.

Semen Indonesia had allocated a budget of around US$300 million from both cash reserves and bank loans for the overseas expansion, he said. “We are upbeat that expanding overseas is the right decision as shown by the successful growth of our company,” Agung said, referring to Vietnamese Thang Long Cement Joint Stock Company (TLCC), a 70 percent share in which was acquired by Semen Indonesia in November 2012 for $157 million.

TLCC had recorded an increase in its earnings before interest, taxes, depreciation and amortization (EBITDA) margin from 14 percent before the acquisition to 20 percent afterward, he said.

The higher the EBITDA margin, the less operating expenses eat into a company’s bottom line, leading to a more profitable operation. Agung said that TLCC still suffered losses but relatively light compared to its initial losses, without disclosing the amount of the EBITDA. 

Trading consultant firm PT Astronacci International president director Gema Goeyardi said on Friday that Semen Indonesia’s overseas expansion would help the company create new markets.

“With the Bank Indonesia [BI] interest-rate hike, fewer people will build houses in the country because residential mortgage interest rates will also increase. So, having other markets will help the company obtain other revenue sources in difficult times,” he said.

Semen Indonesia president director Dwi Soetjipto said recently that his company had allocated up to Rp 5 trillion ($411 million) for its multiyear expansion projects to strengthen its position in Indonesia.

Of the total budget, up to Rp 3 trillion would be spent on constructing new plants in Rembang, Central Java, and Indarung, West Sumatra, he said. The plants are scheduled to commence operations in 2017.

Up to Rp 1 trillion will be spent on building two new grinding plants and another Rp 500 billion on cement distribution.

The company is aiming to increase its domestic and overseas sales by 11 percent to 31 million tons this year, from 28 million tons last year. “The national cement demand will grow around 6 percent this year, from about 59 million tons last year,” said Semen Indonesia finance director Ahyanizzaman.

To achieve this target, the company has started operating a new grinding plant in Tuban, East Java. The plant produces 14.5 million tons of cement per year, taking the company’s total production to 31.8 million tons this year. The company has also launched a new packing plant in Banjarmasin, South Kalimantan, to cut the distribution time and cost from Gresik, East Java, to Banjarmasin.

SMGR’s shares closed at Rp 14,900 on Friday, up by 5.67 percent from the previous day.

ESPAÑA: El consumo de cemento cae un 20% en 2013

España consume hoy 45 millones de toneladas de cemento menos que en 2007, lo que supone una caída del 80% desde el inicio de la crisis.

El consumo de cemento en España cerrará el año, según las previsiones de Oficemen, con un descenso total del 20%, registrando así, por sexto año consecutivo, caídas de dos dígitos. La demanda interior se situará por debajo de los 11 millones de toneladas. A cierre de noviembre, el consumo acumulado se situaba en sólo 10,2 millones de toneladas, un 20% menos que en el mismo período del año anterior. 

Además, la Agrupación de fabricantes de cemento de España considera que esta tendencia bajista se mantendrá también durante 2014, con un nuevo descenso entre el 7 y el 8%. Esta previsión situaría la demanda doméstica en torno a 10 millones de toneladas y el consumo per cápita en sólo 220 kg por habitante, cifra tan raquítica que tenemos que remontarnos a 1962 para encontrar un dato similar. Mientras, Marruecos, por ejemplo, alcanzó en 2012 un consumo per cápita de 526 kg.

“El sector no empezará a salir de la crisis, previsiblemente, hasta el año 2015y sólo si vuelve a fluir el crédito y se reactivan otras variables como el empleo, el consumo y la vivienda. Y con ellas la recuperación de la inversión pública, imprescindible en España para no perder el tren de nuestros vecinos europeos”, explica el Presidente de Oficemen, Isidoro Miranda.

La incertidumbre generada por la reforma energética está frenando el crecimiento de las exportaciones que se viene produciendo desde 2007. Así, mientras que en el primer semestre de 2013 las exportaciones de cemento aumentaron a una tasa media del 34%, en los tres últimos meses se ha producido una caída del 3,5% respecto al mismo periodo del año anterior. Actualmente, España representa el 18% de las exportaciones de cemento de la UE, lo que convierte al sector cementero español en el primer exportador de cemento de la UE, por delante de Alemania (14,4%). Además, nuestro país representa el 25% del total de las exportaciones de la UE con destino a países no comunitarios.

Sin embargo, el precio final de la electricidad en España es uno de los más caros de Europasegún ha reconocido el Ministerio de Industria, lo que está frenando la capacidad exportadora del sector cementero español. Nuestra industria teme que esta situación empeore el próximo año, dados los términos establecidos por la reforma eléctrica.

PERU: La construcción en el Perú redujo su ritmo de crecimiento en noviembre

El consumo de cemento en el Perú aumentó en noviembre según indicadores adelantados del Gobierno publicados el martes, aunque a un menor ritmo que el mes anterior lo que apunta a una moderada recuperación del clave sector de construcción.

El alza del consumo de cemento de un 1,14% interanual contrasta con el avance de 6,42% en octubre, de acuerdo al reporte del Instituto Nacional de Estadística e Informática (INEI).

El instituto dijo que este comportamiento se explica principalmente por la mayor construcción de obras privadas y públicas, edificación de viviendas y centros comerciales.

La construcción es un motor importante del empleo en el país, pues es uno de los sectores que más ha estado alentando el crecimiento del Perú, un gran produtor de materias primas.

Según cálculos oficiales, la expansión económica del Perú se desaceleraría el 2013 a entre un 5,1 y 5,2% desde el 6,3% en el 2012, por un descenso de los volúmenes de exportaciones y de los precios de los metales.

De otro lado, la producción de electricidad –indicador importante del desempeño de la industria– creció 5,03% interanual en noviembre, menor al 7,72% de octubre, dijo el ente estadístico.

CUBA: Inversión en Fábrica de Cementos Cienfuegos S.A. incrementará exportaciones en 2014

Una inversión en la Fábrica de Cemento Cienfuegos S.A. permitirá que se incrementen las exportaciones de cemento en bolsa durante 2014. Directivos de la planta aseguran que la modernización del área de despacho pondrá a esta industria al nivel de los estándares mundiales para el comercio internacional del producto.

Recientemente la Empresa Mixta Cementos Cienfuegos S.A, estableció récord en la producción de clinker, con un millón 24 mil toneladas de la piedra caliza cocida, elemento principal en la fabricación del material constructivo.

Esta es la mayor fábrica de cemento de Cuba y una de las de más capacidad en Latinoamérica. Fue construida en 6 años, a un costo de 200 millones de pesos.

IRAN: World’s fourth cement producer

Iran is the fourth largest producer of cement in the world with an annual production capacity of 70 million tons, a senior Iranian official says.

“Presently, Iran with an output capacity of 70 million tons of cement [a year] is the world’s fourth largest producer of cement after China, India and the United States,” said Secretary of the Union of Cement Industry Employers Abdolreza Sheikhan.

Iran will become the world’s third cement producer if its 75-million-ton nominal capacity becomes its actual capacity, he added.

The Iranian official made the remarks at the Sixth International Cement, Concrete and Construction Technology Exhibition in Tehran.

More than 120 Iranian and foreign companies, including Turkey, India, China, Russia, the United Arab Emirates (UAE) and Italy participated in the event, which was held at Tehran's Permanent International Fairgrounds from December 27 to 30.

Creating job opportunities, promoting exports, providing the chance for Iranian companies to get acquainted with the state-of-the-art technologies in the world, offering ways to tackle air pollution in cement factories and creating the opportunity for exchanging views between experts and producers of cement and concrete were among the key objectives of the exhibition.

Vahed Sherafat, a Turkish producer, whose company represents a German brand in the construction field, said, “We have established our company in Iran’s Aras Free Zone. Because of the good quality of raw materials and cost-effectiveness of the products, we have chosen Iran.”

“We produce 120 types of products based on the world’s most sophisticated technology,” he added.

Hamidreza Tajik, a cement producer, said, “For the first time in the world, we have offered the idea of having an international standard for cement. This proposal was presented to the International Standards Organization (ISO) and was welcomed by many countries.”

Iran is projected to increase its cement output to 75 million tons and export 12 million tons by March 2014.

Iran exported cement to 24 countries including Iraq, Azerbaijan, Turkmenistan, Afghanistan, Russia, Kazakhstan, Kuwait, Pakistan, Qatar, Turkey, the UAE, Georgia, Oman, India, and China in the past Iranian calendar year (ended March 20, 2013.)

The country plans to boost its cement output to 85 million tons by the end of the next Iranian calendar year (starts March 21, 2014).

MOROCCO: Le secteur du ciment sauve son bilan en 2013

L’année 2013 a été celle de tous les maux pour les cimentiers. Le marché du ciment a eu du mal à pallier les dysfonctionnements dont il souffre, en l’occurrence ceux qui ont trait aux mises en chantier en baisse et aux dispositions et taxes instaurées par la loi de Finances 2013.

En effet, après avoir accusé un repli de 21% à fin mars 2013, de 12,6% au terme du premier semestre, puis de 8,2% au terme du troisième trimestre de l'année dernière, le marché du ciment a continué d'évoluer dans le rouge jusqu'à fin décembre, mais a tout de même poursuivi sa dynamique de redressement, selon le ministère de l'Habitat et de l'Urbanisme. La baisse de ses écoulements sur l'année 2013 a en effet été ramenée à 6,3%. 

Ces performances non rien d’impressionnant puisque les membres de l’Association professionnelle des cimentiers (APC) prévoyaient une baisse d’activité de 5 à 10% en 2013. Ils avaient appelé ouvertement le gouvernement à donner plus de visibilité au secteur et à écarter le scénario de nouvelles taxes.

L’APC réclamait «des décisions vigoureuses» pour réinstaller la confiance et permettre au secteur des matériaux de construction, de l’immobilier et des BTP de «renouer avec le dynamisme qui le caractérisait jusqu’en 2011», mais l’Exécutif n’a pas été au rendez-vous.

Selon l’APC, le ciment connaît actuellement une baisse «historique» au niveau des ventes et de la consommation. «Jamais le secteur du ciment n’a connu deux années de baisse successives», a-t-on précisé.

Rappelons qu’après une croissance à deux chiffres entre 2005 à 2010, quand les ventes du ciment avaient augmenté de plus de 40%, et une explosion en 2011, quand la consommation avait enregistré une hausse de 10,7%, celles-ci ont connu un trend baissier depuis la deuxième moitié de 2012. 

Une tendance qui suscite des questions: s’agit-il d’un tournant pour ce marché de plus en plus saturé ? Ou bien est-ce une baisse passagère due à des facteurs conjoncturels ?

En effet, ce secteur fortement soumis aux aléas de la conjoncture, a connu depuis l’exercice écoulé, l’une des plus mauvaises performances depuis des décennies. Une tendance qui a commencé à s’imposer en 2012 mais ne semble pas prendre une autre trajectoire.

Face à l’accentuation de la crise dans le secteur, Mohamed Chaïbi, président de l'Association professionnelle des cimentiers du Maroc, qui s’était montré réticent par le passé, s’était ressaisi en donnant des déclarations sur le sujet à une radio locale. 

Il avait ainsi imputé la responsabilité de cette situation à des facteurs naturels. En cause, les importantes pluies qui ont induit «une baisse des mises en chantier de 27% durant le premier semestre», mais aussi l’instauration de nouvelles dispositions et taxes décidées par le gouvernement en 2013, telle que «la taxation de la plus-value sur le logement à hauteur de 30% alors qu’elle était à 20%». 

Dans le détail, il a rappelé que la machine de construction était en panne en début d’année à cause des pluies qui ont engendré des arrêts de chantiers. Les ventes de ciment souffrent de la crise que connaît l’immobilier, lequel représente 80% de la consommation de ce matériau. «Le fait que le premier semestre ait enregistré une baisse de 27% des mises en chantier est un indicateur important. Cela veut dire que les gens n’ont pas mis en chantier les constructions de maison», a-t-il regrettait. S’ajoutent à cela, selon lui, les «autres problèmes habituels, à savoir le manque de foncier, le ralentissement dans l’octroi des autorisations de construction et les lourdeurs administratives».

Pour les perspectives 2014, l’APC se montre plus optimiste. Le lancement du programme pour le moyen standing et une pluviométrie bien répartie soutiendraient la consommation des matériaux de construction en général.

AFRICA: Five Dangote’s cement plants to be completed in 2014

Dangote Group has disclosed that not less than five of its cement plants spread across five countries in Africa will be completed this year.

The Group President and Chief Executive, Aliko Dangote said that the company will add about 13.5mmt of cement per annum to the existing capacity, when completed.

The on-going plant projects are Zambia, 1.5mmtpa; Tanzania, 1.5mmtpa; South-Africa 3mmtpa; Republic of Congo, 1.5mmtpa; and Gabon 1.5mmtpa.

Information available to Vanguard revealed that Dangote Cement is already working on additional third and fourth production lines to the existing 6mmtpa in Ibese, Ogun state to bring the total capacity to 12mmtpa and another 3mmtpa line currently being added to the Obajana cement plant in Kogi state.

Addressing a group of African businessmen in his office at the weekend, Dangote said the Group’s core business focus is to provide local, value-added products and services that meet the basic needs of the populace through construction and operation of large scale manufacturing facilities across Africa.

According to him, the Group is focused on building local manufacturing to generate employment, prevent capital flight and provide locally produced goods for the people.He disclosed that presently, 

Obajana is the largest cement plant in sub-saharan Africa with a current capacity of 10.25mmtpa and an additional 3mmpa planned before the end of this year.

Dangote stated that the Group would continue to lead other investors to ensure Nigeria becomes an industrial giant nation that is self-sufficient in production rather than being a leader in importations.

Stressing on the need for investments in the real sector, he said “This indeed, shows that Africa is gradually taking its destiny in its own hands rather than wait for investors from outside Africa. Investment in the real sector of the economy is the only way that our continent can achieve the much desired accelerated growth and development that we have yearned for.

“The developmental challenges of Africa are quite tremendous. According to a report by the McKinsey Global Institute issued in June 2010, Africa requires at least $46 billion in spending annually to meet infrastructural needs.

KENYA: Cement prices hiked on new mining levy

Cement makers have increased prices of the key construction commodity in the wake of a new mining levy imposed by the Ministry of Mining.

The move wrecks hopes of lower house prices on new buildings as it rolls back the relief handed to future homebuyers by manufacturers when they slashed prices in October.

Ex-factory prices – those at which wholesalers buy from manufacturers at the factory – were hiked by up to five per cent on Monday; meaning the increase at retail outlets will be even higher when delivery costs and other charges are factored in.

Najib Balala, the Cabinet Secretary for Mining, gazetted a Sh140 per tonne mining levy on cement on December 18, overriding an earlier notice pegging the levy at one per cent of the turnover. The new levy translates to Sh7 per 50kg bag.

“This is totally unfair and nowhere in the world do governments use such unfair strategies. It is the poor wananchi who will bear the brunt as the cost will be passed on to them,” said Narendra Raval, chairman and CEO of Devki Group.

“We effected a new price on Sunday midnight. The levy is unnecessary and illegal and should not be on cement because some cement makers are not even mining anything here.”

Raval said the levy will discourage people from building houses and in return spur rapid growth of shanties, but manufacturers “have no choice”.

National Cement, a member of the Devki Group and maker of Simba Cement, has increased its ex-factory prices from Sh600 to Sh625 per 50kg bag. It had reviewed its price down on October 1.

“We have increased by Sh25, taking into account the Sh7 levy, VAT (16 per cent) and power charges of Sh4-5 per unit on the power tariffs that are the highest ever,” he said.

Bamburi Cement has reviewed its ex-factory prices upward. Its corporate affairs manager Susan Maingi was unavailable to comment on it new pricing.

“We have definitely reviewed the prices but I do not have the specific details,” said Fidelis Sakwa, Bamburi’s product development manager.

Athi River Mining, maker of Rhino Cement, said it has not adjusted its prices but is conducting a review of costs to inform its stance.

“We have not reviewed prices so far but the levy has definitely pushed up costs. We are looking at our cost structure to see where we can improve efficiency to reduce costs and avoid raising prices,” said Surendra Bhatia, the deputy managing director.

“We are fairly priced and we prospect to always find some cost efficiencies,” he said, adding that its ex-factory prices differ based on its different markets.

Phone calls to Kephar Tande, the East African Portland Cement Company managing director, to establish the firm’s position on the new levy went unanswered.

The rise in cement prices will impact on the overall cost of construction, which was hoped to otherwise head downward after makers of key commodities such as cement and steel bars slashed prices in October.

Most affected will be self-builders who rely on incremental construction models as they lack funds to out-rightly buy building materials in bulk. Cement prices have remained stable over the past five years, retailing at between Sh650 and Sh750 per bag.

Real estate analysts had hoped new-builds released in the market from October this year would have been cheaper, factoring in the price cuts in the fourth quarter 2013.

SAUDI ARABIA: Saudi Cement posts SR256m net profit

Saudi Cement beat analyst expectations with an 8 percent fall in fourth-quarter profit, which the company blamed on lower sales and rising raw material costs.

The company made a net profit of SR256 million ($68.3 million) in the three months to Dec. 31, down from SR278 million in the year-earlier period, according to a statement to Saudi Arabia's bourse.

Saudi Cement attributed the profit drop to a decrease in sales during the quarter and the high cost of imported clinker, a raw material from which cement is produced.

Analysts polled by Reuters on average forecast Saudi Cement would make a quarterly profit of SR242 million. 

The firm's full-year net profit for 2013 was SR1.13 billion, up from SR1.10 billion in 2012. It cited improved operational efficiency as a reason for this increase.