USA: Forecast cement consumption increase 7.9%

The PCA – formerly the Portland Cement Association – forecasts US cement consumption will increase +7.9% this year. This is almost double last year’s +4.5% growth rate, and the association expects similar steady increases in demand for the next five years.

PCA chief economist and group vice president Edward Sullivan said, “There is considerable evidence that the economy’s growth path has softened during the past several months, but we believe that the underlying economic fundamentals are stronger than the data suggest.”

The PCA said US real GDP growth weakened considerably to +2.6% in the fourth quarter of last year, compared to +4.1% in Q3. It added that preliminary first quarter estimates were for just +0.1% growth and noted other headwinds like declining mortgage applications and slower construction activity.

However, Mr Sullivan said this was a seasonal effect. “The weather conditions had an obvious impact on cement consumption – limiting construction and concrete use. The northern states and much of the east coast were hit hard, with year-over-year losses of as much as -25%. However, despite this drag, nation-wide cement recorded gains. Through the first quarter, cement consumption increased +4.5% compared to the same period in 2013,” he said.

MOROCCO: Sale temps pour les cimentiers Baisse de 3,1% des ventes à fin avril 2014

Dans le secteur du bâtiment et travaux publics, les ventes de ciment ont accusé une baisse de 3,1% à fin avril 2014, après celle de 16,5% un an auparavant, selon Bank Al-Maghrib (BAM).

Pour sa part, l'encours du crédit immobilier a décéléré, revenant à 3,5% à fin mars 2014, au lieu de 7,1% l'année précédente, sur fond du ralentissement de 10% à 6,2% des crédits accordés à l'habitat et de la diminution de 3,5% de ceux alloués aux promoteurs immobiliers, contre une hausse de 0,9% durant la même période, a expliqué la Banque centrale dans sa revue mensuelle de la conjoncture économique, monétaire et financière pour le mois de mai 2014.

S'agissant du secteur énergétique, la production nette d'électricité s'est améliorée de 3,8% à fin mars 2014, contre une contraction de 3,7% un an auparavant. Cette évolution recouvre un accroissement de 11,5% de la production thermique, qui représente 86% du total, et de 56,3% de celle éolienne, ainsi qu'un fléchissement de 46,1% de celle des énergies hydrauliques. 

A cet égard, la demande a augmenté de 2,6%, avec une hausse de 6,7% des ventes en basse tension, destinées essentiellement aux ménages, et de 1,5% de celles en haute et moyenne tensions, utilisées par les industriels et les régies de distribution, a précisé la même source. Par conséquent, le recours aux importations a progressé de 13,7% à fin mars 2014 contre 24,4% un an auparavant.

Pour le secteur minier, la production marchande de phosphate brut a baissé de 0,4% à fin février dernier à 3,9 millions de tonnes, contre une augmentation de 3,7% un an auparavant.

CONGO: Addoha s’attaque au marché congolais Les travaux de construction de 15.000 logements sociaux seront lancés en juillet prochain

Les travaux de construction de 15.000 logements sociaux par le Groupe marocain Addoha en République du Congo, dont l’investissement dépassera 250 millions d’euros, seront lancés en juillet prochain, indique une source officielle congolaise. 

Cette annonce a été faite, lors d’un entretien, vendredi à Oyo (centre du Gongo), entre le président congolais, Denis Sassou N’guesso et le PDG du Groupe Addoha, Anas Sefrioui, indique-t-on dimanche auprès du site Internet du gouvernement congolais.

«L’objectif est de lancer un guichet unique où toute l’administration sera représentée dans nos bureaux pour permettre aux Congolais de disposer de leurs logements dans un temps très court avec un crédit allant de 20 à 25 ans», a souligné M. Sefrioui, relayé par le portail du gouvernement congolais, précisant que le chef de l’Etat congolais «a donné des instructions pour que la première semaine de juillet soit posée la première pierre du lancement des travaux de construction de ces logements». 

La rencontre entre le PDG du Groupe Addoha et le président congolais intervient au lendemain de la pose de la première pierre pour la construction d’une nouvelle cimenterie par le Groupe marocain Ciment de l’Afrique (CIMAF), à Hinda, dans le département du Kouilou (Sud). M. Sefrioui a précisé que l’usine «passera de 500.000 tonnes de production cette année à 1 million de tonnes en 2015».

«Nous avons lancé l’usine de ciment il y a deux mois, nous nous sommes engagés avec le président que dès la mise en route de l’usine, nous allons doubler sa capacité de production pour passer à 1 million de tonnes. Le matériel va bientôt arriver pour commencer les installations et le montage », a relevé M. Sefrioui, ajoutant que les employés congolais de la cimenterie seront envoyés au Maroc par CIMAF pour suivre une formation de 6 à 8 mois. En mars dernier, Sassou N’Guesso, accompagné de M. Sefrioui, avait procédé à la pose de la première pierre pour la construction de cette cimenterie, à 17 km de Pointe-Noire, deuxième ville du Congo-Brazzaville et poumon économique du pays. 

Dans de récentes déclarations à la presse, le PDG du Groupe Addoha avait indiqué que le continent africain compte actuellement 600 millions d’habitants et à l’horizon 2025, il en abritera plus de 1 milliard, affirmant qu’il existe un énorme potentiel, non seulement pour le logement ou le ciment, mais pour tous les secteurs d’activité. Concernant les programmes de logements déjà lancés, M. Sefrioui avait fait savoir que le 1er projet a concerné le marché ivoirien, ensuite la Guinée, le Congo-Brazzaville et le Cameroun, estimant que l’objectif est de parvenir à une production optimale qui représentera entre 20 et 25% du chiffre d’affaires du Groupe Addoha dans deux ans, soit 2 milliards de dirhams.

SOUTH AFRICA: New cement producer enters South African market

China's Jidong Development Group, one of the world's top five cement makers, is to enter the South African market with the construction of a R1.8-billion, one-million tonne per annum cement plant in Limpopo province.

Nedbank Capital and the Bank of China Johannesburg on Monday announced that R1.1-billion in debt capital had been raised to fund Mamba Cement, a special purpose company established to build and operate the plant at an established limestone deposit near Northam in Limpopo.

Equity in addition to the loan will be provided by Jidong Development Group, the majority shareholder in Mamba Cement, the China-Africa Development Fund, and South African investment and operating group Women Investment Portfolio Holdings (Wiphold).

Mamba Cement will manufacture "high-quality pure cement with the capacity to produce very cost-effective products," Nedbank Capital said in a statement, adding that the company would have "a sustainable transport advantage due to its proximity to the major cement demand centres of Johannesburg, Pretoria, Mpumalanga, Rustenburg and Brits".

The investment is expected to create jobs and provide opportunities for small suppliers for communities north of Brits. "In addition, the sponsors and developers have also committed to supporting local schools and other socio-economic development initiatives in the long term," Nedbank Capital said. "The project will also result in a major improvement of basic infrastructure such as power and roads, which will benefit adjacent communities."

The South African cement market received an additional 2.5-million tonnes of annual capacity this year with the completion of Sephaku Cement's new plant in North West province.

The Nigerian-backed company is the first new entrant in the South African cement production market to open its own new plant since 1934, challenging established local producers PPC, AfriSam, NPC and French multinational Lafarge.

Market researchers Frost and Sullivan have predicted that rapid infrastructure development in South Africa and its neighbouring countries will boost the prospects of the cement industry in the southern African region.

Frost and Sullivan's study, "Southern African Cement Industry Production and Investment Forecasts", published in September, forecast that US$940-million would be invested in the cement industries of three countries - South Africa, Zambia and Zimbabwe - between 2013 and 2018.

Cement production will be instrumental to government expenditure plans, the study found, especially the Regional Infrastructure Development Master Plan which the Southern African Development Community (SADC) aims to roll out over the next 15 years.

Internally, the South African government is planning to spend in excess of R4-trillion on a massive state-led infrastructure drive over the coming years, with a substantial focus on rail, road, energy and water infrastructure.

NIGERIA: Lafarge Targets Pan-Nigeria Expansion Through Acquisitions

Lafarge Cement WAPCO Nigeria Plc said it is aggressively pursuing its pan-Nigeria expansion through the acquisitions of some local cement firms in the country.

Country Organisation and Human Resources Director, Lafarge Nigeria, Mrs. Fidelia Osime, disclosed this during the launch of the "State of World Cities Report" (SWCR) at Caleb University, Imota, Ikorodu Lagos.

Osime said, "We have been in Nigeria for over fifty years and currently enjoy a national presence with Lafarge WAPCO in the South-West, and we are now targeting pan-Nigeria markets through the spread of our subsidiaries such as: UNICEM in Calabar, Atlas in the East and Ashaka Cement Plc in the North.

"We will expand pan-Nigeria in no distant future. Lafarge has very strong commitment to Nigeria and this explains why we have grown from three million metric tonnes in 2008 to 8.5 million metric tonnes in 2012 with an investment of one billion euros during the period," she stated.

She also said that plans are underway to double their capacity in the next three to four years as indicated by the recent ground breaking ceremony of additional three million tonnes capacity new line in AshakaCem.

On why the company sponsored the launch of 'World cities report, she noted,

"Ät Lafarge, we believe that the main 21st century challenge is the acceleration of growing urbanisation and its human economic and political impact, and our objective is to bring solutions to build better cities, more beautiful, more compact, more connected, more durable.

"Our sponsorship and participation in this event is well considered as it is quite central to our commitment of building better cities. With our large and growing population, the needs arising from an 18 million housing deficit, there is no better place than Nigeria to demonstrate what we can bring to alleviate this global challenge.

On his part, Prof. Banji Oyelaran Oyeyinka, Director, Monitoring and Research, UN-Habitat, Nairobi, Kenya, added that in the absence of effective urban planning, the consequences of rapid urbanisation will be dramatic.

TUNISIA: Carthage Cement déclare une perte de 21,7 millions de dinars tunisiens en 2013

L’entreprise tunisienne spécialisée dans la production et la commercialisation des matériaux de construction Carthage Cement, a déclaré pour l'exercice 2013 une perte de 21,7 millions de dinars tunisiens, un résultat qui se présente comme une aggravation de la situation, compte tenu de la perte de 6,9 millions de dinars enregistrée en 2012.

A la lecture du compte des résultats pour la période de référence, il ressort que ce nouveau creusement du déficit chez le cimentier, est attribué à des revenus qui, bien qu'en hausse à 59 millions de dinars, n'ont pas suffit à compenser les charges d'exploitation, elles aussi en très forte progression à 68,9 millions de dinars tunisiens.

De ce fait, le résultat net de l'exercice a affiché un recul à près de 10 millions de DT. Il en a résulté la perte nette constatée, qui s'est davantage creusée avec le poids des charges financières (11,9 millions de DT en 2013, contre en 1,7 millions DT en 2012).

Toutefois, cette période semble aujourd'hui dépassé et on relèvera que les performances du premier trimestre bien qu'en deçà des prévisions, sont plutôt positives.

Pour cette période couvrant les trois premiers mois de l'année en cours, Carthage Cement a réalisé un chiffre d'affaires de 41,3 millions de DT, contre 48 millions de DT pour toute l'année 2013. Une performance qu'elle doit à l'entrée en production du clinker depuis le mois de novembre 2013.Actuellement à 930 000 dinars/jour, l'entreprise s'attends dès juin, à voir ses revenus journaliers grimper à 1,25 millions de DT, une fois que rentrera en vigueur la suppression des subventions de ciments.

En attendant la concrétisation de ces promesses, la valeur de son action sur la bourse des valeurs mobilières de Tunis où l'entreprise est cotée, ne décolle pas. Elle cumule depuis le 1er janvier 2014, un recul de 8,68%.

OMAN: Raysut Cement net profit rises to OMR8.23m

Raysut Cement Company, Oman's largest cement firm, said its net profit for the first quarter of 2014 increased to OMR8.23 million from OMR8.17 million posted by the company for the same period of last year. 

However, sales revenue stood lower at OMR24.82 million as compared to OMR25.22 million during the period under review, according to the company's first quarter results posted on MSM website.

Severe price competition

In spite of the severe price competition from the UAE suppliers, and the volatility in the export market, the company has achieved the sales revenue out of its Salalah operation for OMR17.89 million during the period of three months against OMR18.17 million achieved during the corresponding period in the previous year, a fall of 1.5 per cent. The group as a whole has sold 991487 tonnes of cement and 7384 tonnes of clinker during the quarter ended March, 2014 against 1020907 tonnes of cement only in the corresponding period of last year, indicating a decline of two per cent. 

The company has sold 650979 tonnes of cement and 7384 tonnes of clinker in the three month period of current year against 673919 tonnes of cement only in the same period of last year, out of the operations in its Salalah plant. 

In the first quarter of current year, Pioneer Cement has sold 355045 tonnes of cement against 369800 tonnes in the same period of last year, a decrease of four per cent. There was no sale of clinker during the current and previous year in Pioneer. 

Construction segment

The construction segment in the GCC is taking its positive vibration further with much larger outlays being planned in near future. In the first quarter itself the contracts worth $40 billion have been awarded across Gulf Cooperation Council (GCC) countries and it is likely to touch $150 billion by the year end.

Iraq is on a significant developmental spree with a possible award of contract valuing $20 billion during the year, GCC might benefit from it apart from various major projects slated for unveiling within GCC itself. So there are significant opportunities going forward in 2014 as well as in later periods. 

The actual developments in UAE till now are still to absorb the local capacity reasonably, leading to a severe pressure on demands and prices in Oman market during the quarter, which has impact on domestic sales. However the Yemen market has shown signs of improvements. The company's strategy to expand its market base to Yemen, East Africa and to other countries has helped through rise in export, particularly in Yemen market. In this competitive environment Company's focus on its internal efficiencies has given benefits to its advantages. 

The group as a whole has produced 857533 tonnes of clinker and 982384 tonnes of cement during the period ended March, 2014 against 790830 tonnes of clinker and 991858 tonnes of cement in the same period of previous year. The overall production clinker went up by 8 per cent and that for cement went down by 1 per cent, respectively. 

During the period, 545102 tonnes of clinker was produced in Salalah plant of RCC, against 538639 tonnes produced in the same period of previous year, an increase of 1 per cent. 

The company produced 629428 tonnes of cement in its Salalah plant during three months, against 629342 tonnes produced during the corresponding period in the previous year, with a marginal increase in production volume. 

During the period, the sales revenue, earned by Pioneer Cement amounted to OMR7.16 million compared with OMR7.49 million achieved in the same period of previous year. 

Pioneer Cement has earned a profit of OMR1.54 million as against OMR1.15 million earned in the same period of previous year, in spite of the severe competitions faced by the company in the UAE and Oman markets.

EGYPT: Decision to use coal in cement industry is irreversible

Prime minister denies reports that Suez would be transferred to the authority of Cairo governorate.

The government’s decision to use coal as an energy source in the cement industry is final and irreversible in solving the country’s energy crisis, Prime Minister Ibrahim Mehleb said Monday.

The Ministry of Environment is expected to issue regulations governing the import of coal and its use in cement plants next month.

Egypt is experiencing a severe fuel crisis caused by a shortage in gas production and increasing consumption as the summer months of high electricity consumption are approaching.

In remarks made during his visit to Suez Governorate, Mehleb denied reports about the government’s intention to transfer authority over Suez to the Cairo governorate. He also said he had not canceled the agreement signed by Egyptian television concerning an advertising agreement between Lebanese agency Choueiri and MBC, whereby Egyptian television will receive EGP 300m annually for a period of three years.

The prime minister also cited a number of projects the government is implementing in the Al-Adabia area, with total costs reaching EGP 79m, pointing out that work is underway to improve the Al-Adabia road to Suez, of 16km in length. He added that a 2km path is being built to allow the entry of trucks, in addition to a 390 metre pier in the city’s port. In addition, four electronic gates are being built and four parking spaces for trucks.

SPAIN: El consumo de cemento en España aumenta su caída en abril

El consumo de cemento en España descendió un 5,6 por ciento en el mes de abril, informó el miércoles la patronal cementera, aumentando la caída en un sector especialmente golpeado por el hundimiento de la construcción en el país.

En los cuatro primeros meses del año, el descenso acumulado es del 3,4 por ciento, frente al 2,2 por ciento en el primer trimestre, aunque en los últimos 12 meses el descenso es del 14,1 por ciento, lo que supone una moderación progresiva, dijo Oficemen en un comunicado.

Los fabricantes esperan para este año que la caída se modere al 7-8 por ciento, sumando siete años consecutivos a la baja.

En abril se consumieron 858.920 toneladas, 51.081 toneladas menos que en el mismo mes de 2013. El consumo total de los cuatro primeros meses es de 3,2 millones de toneladas, 115.826 toneladas menos que en el mismo periodo del año pasado.

Oficemen ha pedido una recuperación de la inversión pública que ayude a recuperar un sector muy perjudicado por el pinchazo de la burbuja inmobiliaria desde 2007.

SOUTH AFRICA: Mamba Cement to build new plant in Limpopo

South Africa’s cement market is set for even fiercer competition with the entrance of the Jidong Development Group, one of the largest enterprises in China’s building materials industry and one of the world’s top five cement groups.

A R1.8 billion greenfields pure cement plant with a capacity of more than 1 million tons a year is to be built at an established limestone deposit near Northam in Limpopo. It will be well placed to serve the major cement demand centres of Johannesburg, Pretoria, Rustenburg and Brits.

The project is being undertaken by the Mamba Cement Company, a special purpose vehicle established to construct and operate the cement production facility and mine the limestone.

Mamba Cement has been provided with R1.1bn in debt capital jointly by Nedbank Capital and the Bank of China Johannesburg.

The majority shareholders in Mamba Cement are Jidong Development Group and the China-Africa Development Fund (CAD Fund), with a 51 percent shareholding in the project.

Jidong and the CAD Fund’s shareholding in Mamba Cement is held through African Rhino Cement, which is 60 percent owned by Jidong and 40 percent by the CAD Fund.

The other shareholders in Mamba Cement are majority black women-owned and managed investment and operating group Women Investment Portfolio Holdings (Wiphold), with a 23.9 percent stake, and the unidentified holder of the limestone mining rights, with a 25.1 percent shareholding.

Gavin Bouwer, the senior vice-president and chief manager at Bank of China Johannesburg, said yesterday that construction of the new plant would start in about three months and be completed in about 18 months.

Bouwer said the total project value was about R1.8bn, with Mamba Cement shareholders providing equity in addition to the R1.1bn loan.

Jidong subsidiary Hebei Building and Material Industry Design and Research Institute will enter into a fixed-price, turnkey, design and construction contract with Mamba Cement to build and hand over a fit-for-purpose plant within a defined period.

The plant will incorporate a waste heat recovery system, which will generate 25 percent of the power required to operate the plant.

Jidong will also enter into a production, management and technical services agreement with Mamba Cement to provide key management and support the operations of the company.

Nedbank Capital head of infrastructure, energy and telecoms Mike Peo said the project finance deal was the first opportunity for Nedbank and Bank of China Johannesburg to work together as joint mandated lead arrangers and, based on the success of the deal, Jidong had approached Nedbank Capital and Bank of China Johannesburg to act as its banking partners in its expansion efforts into the rest of the continent.

Zhikun Qiu, the chief executive at Bank of China Johannesburg, said the deal held particular appeal given the significant economic development potential it held for southern Africa.

“A new entrant will not only help to instil competition into the market but also serve to stimulate economic growth and job creation in line with the country’s established development plans. The Bank of China is pleased to have been a key part of such an economically relevant initiative,” he said.

South Africa’s established cement manufacturing giants have had to face up to increased competition this year when Sephaku Cement became the biggest new entrant to the sector since 1934. It started commercial production at its Delmas milling plant in January.

Market leader PPC has reacted with a strategy to expand into the rest of Africa with the aim of generating 40 percent of its revenue from outside South Africa by 2017.

WORLD: Cemex says CEO Lorenzo Zambrano died in Spain

Lorenzo Zambrano, who transformed Cemex SA de Mexico from a regional cement producer into a global player, died Tuesday in Spain, the company said.

Zambrano, 70, died in Madrid of natural causes, the company said without giving other details.

Trained as an engineer, Zambrano was considered one of the most important businessmen in Mexico. He became Cemex's chief executive officer in 1985. A decade later he added the title of chairman of the board of directors.

With Zambrano at the helm, the Monterrey-based company expanded beyond Mexico and now has operations in 50 countries on five continents.

Cemex has been the world's largest supplier of cement, and possibly the biggest building materials supplier, since 2007, when it won a controlling stake in Australia's Rinker Group Ltd.

The company said in a statement that "the operation and administration of the group will continue to develop normally" and that in the coming days the board of directors would meet to decide how to proceed.

"My condolences to the family and friends of Mr. Lorenzo Zambrano, a man of great commitment and love for Mexico," President Enrique Pena Nieto said in a message on his Twitter account.

Pena Nieto noted that Zambrano "made @CEMEX the number one cement producer in the world."

Zambrano studied mechanical engineering at ITESM, a private university in Monterrey, his hometown, and he earned an MBA at Stanford University.

Cemex produces and sells cement, concrete and other construction materials, with about 43,000 employees worldwide. It reported annual revenue of more than $15 billion in 2013.

TUNISIA: Voilà comment seront octroyés les permis

Le ministère de l’Industrie, de l’Energie et des Mines a publié un cahier des charges fixant les conditions d’octroi (entre 2014/2017) des permis de réalisation d’usines de fabrication de ciment gris et blanc, lit-on dans un communiqué publié, hier, par le ministère.

Selon la même source, ce cahier des charges, publié le 28 avril 2014, s’inscrit dans le cadre de l’application des recommandations issues d’une séance de travail ministérielle tenue le 25 septembre 2013.

Le document met l’accent sur cinq principaux volets; à savoir: 

- Le volet économique qui accorde la priorité à l’approvisionnement du marché local, et financier garantissant une participation tunisienne d’au moins 35% dans le capital de la société.

- Le volet énergétique mentionne l’utilisation des énergies renouvelables, outre l’obligation d’utiliser le coke de pétrole ou autre source d’énergie en tant que source principale d’énergie thermique.

En matière de développement, le cahier des charges met l’accent sur la nécessité de renforcer et d’encourager les investissements dans les régions, conformément aux dispositions du code d’incitation aux investissements.

S’agissant du volet environnemental, le cahier des charges impose le respect des exigences de préservation de l’environnement (l’étude des impacts environnementaux devra être soumise à l’approbation de l’Agence nationale de protection de l’environnement /Anme).

Le contenu du cahier des charges peut être consulté et télécharger sur le site Web du ministère : www.tunisieindustrie.tn ou sur sa page officielle sur le réseau social « facebook ».

INDIA: Cement firms scout for overseas mines to secure gypsum supplies

Indian cement companies are on the lookout for overseas mines to secure supplies of gypsum, a key ingredient for manufacturing the building material.

Domestic supply of gypsum is limited, say industry executives, which is forcing Indian cement makers to look for acquisitions of overseas mines or even look at producing a synthetic form of the raw material.

In the first such acquisition, one of the top three cement makers in India is likely to announce an acquisition of a gypsum mine overseas, which will act as a captive mine for the company, said a top cement firm executive on condition of anonymity.

Details of the acquisition will be announced soon, the executive said.

One tonne of gypsum in a reserve typically costs around $26-30 (Rs.1,560-1,800), and the average size of a mine overseas ranges between 30 and 40 million tonnes (mt), he added. This takes the minimum total cost to roughly $780 million.

Indian companies are eyeing reserves located in Thailand, Oman, Iran and other countries in close proximity to India.

According to a research report jointly published on 30 April by lobby group Confederation of Indian Industry and consulting firm AT Kearney, India has a paucity of gypsum resources, which does not bode well for the cement industry.

The production deficit in the domestic market has led to increased dependence on imports and synthetic gypsum to meet production demand, the report said. Manufacturing one tonne of cement generally requires 4-5% of gypsum as a raw material, it added.

In India, gypsum reserves are found in Rajasthan, Gujarat, Jammu and Kashmir, Himachal Pradesh, Tamil Nadu, and Uttar Pradesh. About 90% of the total Indian production of gypsum comes from western and north-western Rajasthan.

The report said that at present, usable gypsum reserves in India amount to 140-150 mt, of which around 125 mt is available to the industry. These numbers are for Rajasthan and Gujarat, as reserves in other states are unusable.

This available supply will be enough to support the cement industry for the next seven-eight years, beyond which the sector will need to rely on imports, the report added.

Vinod Juneja, managing director of Binani Cements Ltd, said that the shortage of gypsum domestically has forced the company to consider the possibility of overseas mine acquisitions, but the high cost of such acquisitions is a deterrent.

“We have looked at gypsum mines for acquisition in the Middle East, South Africa, and Iran, but the prices are too high so it does not prove to be viable since the returns are also not high,” he said.

“Gypsum is a very important raw material for cement production and we don’t want to depend totally on imported gypsum,” Juneja added.

Some others like JK Cements Ltd are yet to take a call on how to tackle the shortage of the raw material. “Gypsum is in shortage and we are working out a solution for it,” said Madhavkrishna Singhania, special executive at JK Cements.

“There are two options—either we acquire a mine overseas or produce synthetic gypsum, so right now we are contemplating these options and in a year or two we will have to figure out what needs to be done,” he added.

Analysts say that the acquisition strategy is feasible only for companies that have cement plants located close to a port.

“As far as overseas acquisitions are concerned, the logistics costs would be very high, specially to transport the material from the port to the plant and so it will only favour companies who have plants in close proximity to a port, however for others it will be a challenge,” said Rakesh Arora, managing director and head of research (India) at Macquarie Capital Securities (India) Pvt. Ltd.

“The cement industry has already started moving away from natural resource gypsum to chemical gypsum and phosphorous gypsum because of the limited reserves in India,” he added.

The most common solution to tackle the shortage is importing gypsum. However, imports attract a 2.5% duty, thus escalating costs for an industry which has been facing headwinds in an economic downturn. High transport, logistics and raw material costs have hit margins across the sector.

NIGERIA: Dangote Moves to Reduce Cement Price in Nigeria

The President of Dangote Group, Aliko Dangote, said that nine million tonnes of cement have been released into the market to stem the escalating cost of the product.

Mr. Dangote, who disclosed this to journalists on Friday at the premises of Obajana Cement Company in Kogi State, said that the move was to make the product available in all parts of the country and stabilise its prices in the open market.

The businessman, who spoke after conducting the visiting President of Tanzania, Jakaya Kikwete, on a facility tour of the plant attributed the scarcity of cement in recent times to low production between January and March.

He said the low production followed the yearly turn around maintenance of the plants at Ibeshe, Obajana and other parts of the country.

He assured Nigerians that the price of cement will drop to its normal price of between N1, 450 and N1, 550 very soon.

Mr. Dangote said that the president of Tanzania was at the cement plant to see things first hand and to enable him have a fore-taste of the kind of cement plant the company was replicating in his country.

He said the plant, being established in Tanzania at a cost of $600 million, would have the capacity to produce three million tonnes of cement per annum.

He said the construction work at the plant has reached 30 per cent completion stage and work is being intensified to ensure its completion and inauguration in 2015.

In his remarks, President Kikwete said that he took time off the World Economic Forum holding in Abuja to visit the plant to have an idea of what his country would experience after the completion of the plant.

He described what he saw as "wonderful," saying that his country was looking forward to seeing the same or better facilities.

He said the visit had further convinced him that Tanzania has a great partner in Mr. Dangote.

INDONESIA: Elections, Low Demand Slow Cement Sales in Indonesia

Cement sales in Indonesia stalled in April due to the legislative elections and slow infrastructure development in the first four months of the year.

Cement sales in Southeast Asia’s largest economy declined 0.4 percent year-on-year in April to 4.52 million tons, according to data from the Indonesia Cement Association (ASI).

“Demand for building material was low throughout the legislative campaigns, which is why cement sales were down last month,” said ASI chairman Widodo Santoso on Friday.

Figures for the sales of cement have declined throughout the archipelago. According to data collected by ASI, 934,000 tons of the building material was sold in Sumatra last month — a 4 percent drop from the same period last year.

Kalimantan saw an 8.7 percent decline in sales to 355,000 tons, while Sulawesi’s fell 3.4 percent to 322,000 tons. Cement sales in Bali and the Nusa Tenggara islands fell the most, with a 13.8 percent decline to 230,000 tons.

Only Java and some eastern parts of the country experienced some improvement; Java saw sales rise 3.1 percent to 2.57 million tons of cement.

Despite the slump reported in Kalimantan, Sulawesi, Bali and Nusa Tenggara, Widodo remained confident that business would pick up by 8 percent to 62 million tons nationwide this year.

“We hope to see a better performance next month. Hopefully, the presidential elections won’t have any negative effects on cement sales, which have fallen across the country, with the exceptions of Java and Maluku and West Papua,” he said.

Indonesia’s cement makers are also preparing themselves for the hike in electricity tariff, which starts in May.

Widodo said the association estimates the tariff increase to bring production costs up by 3 to 5 percent.

The government approved a decree to raise the tariff for exchange-listed companies in medium-scale industries by 38.9 percent, while large-scale industries will see a 64.7 percent rise.

Widodo said the country’s cement industry has requested incentives from the government — including a zero import tax for imported machineries — to compensate for the rising electricity costs.

Indonesia’s biggest cement producer remains state-owned Semen Indonesia, although units belonging to foreign companies, like German HeidelbergCement’s Indocement Tunggal Prakarsa and Swiss-based Holcim’s Holcim Indonesia, are creeping up to secure a close second and third place respectively