KENYA: ARM Cement Acquires Rwandan Manufacturer

Kenya’s second-biggest cement producer, ARM has completed the acquisition of Rwanda’s Kigali Cement as it continues expanding its East African market reach.

The Kenyan company, which has held a 35 percent stake in the only privately-owned cement company in Rwanda since 2011, bought out the remaining 65 percent stake held by various shareholders to take complete control of the firm. The deal was finalized in April.

“We finally acquired a 100 percent equity stake and full control of our Rwanda grinding plant,” a newly released annual report by the company quoted Chairman, Rick Ashley as saying.

According to Ashly, the company also plans to increase its capacity and market share using its flagship brand, Rhino Cement.

The value of the deal was not disclosed, but it is estimated to cost over Sh106 million ($1.2 million), going by the Rwandan company’s net asset value and will be financed by banks, according to Pradeep Paunrana, ARM chief executive.

The acquisition is part of its expansion plans which seeks to invest more in the Rwandan subsidiary to improve sales in the country and neighbouring markets. The company will leverage on its new acquisition to expand its production and distribution network in East Africa.

Ashley says ARM will seek further measures to increase market presence in Kenya, East Africa’s largest economy, as well as Rwanda and Tanzania, completing ongoing projects and focusing on new markets in the region.

Kigali Cement, who has Sh163.5 million ($1.9 million) in net assets (as at 2013), has capacity to produce 100,000 tonnes per annum, which is expected to increase with further ARM investments.

ARM is expected to commission Tanzania’s Tanga plant – which holds a production capacity of 1.2 million tonnes of cement per year – in the fourth quarter of this year. It will also start construction of its Sh26 billion ($300 million) Kitui factory (Kenya) in October. The facility be fitted with 8,000 tonnes capacity.

WORLD: HeidelbergCement aims to sell building products business this year

HeidelbergCement aims to offload its U.S. and British building products business this year to have the best chance of buying cement assets that Lafarge and Holcim must sell when they merge, a source with knowledge of the company's plan said.

HeidelbergCement had said it can wait to get the best price for the business in the U.S. and Britain, which makes mainly bricks, concrete pipes and roofing tiles and is worth at least 1 billion euros ($1.36 billion).

But its bigger rivals Lafarge and Holcim have committed to shed around 5 billion euros of assets to secure a green light from competition authorities for their tie-up and are likely to push through the divestments next year.

HeidelbergCement's stated priority is debt reduction but it has also hinted it may seize opportunities to snap up assets.

"The Lafarge-Holcim merger could speed up Heidelberg's asset disposal plans because Heidelberg would then be able to use its proceeds to buy some of the stuff that Lafarge-Holcim will divest," the source said.

Heidelberg is likely to sell the building materials business by the end of the year, the source added.

An analyst who follows the company said he believed HeidelbergCement would use no more than 500 million euros of the divestment proceeds for acquisitions because its main goal was still to relieve its debt burden.

Moody's and Fitch have a rating of Ba1 and BB+ on HeidelbergCement's debt. The company missed its debt reduction targets last year partly because it needed to pay a 161 million euro German cartel fine. Its net debt at the end of 2013 was 7.523 billion euros, up from 7.047 billion a year earlier.

"I could imagine Heidelberg would use the proceeds to acquire interesting assets from Lafarge-Holcim, but I don't think it would use all of it because they've always said they wanted to get back to an investment-grade rating," said the analyst, who did not want to be identified.

HeidelbergCement is in the process of hiring Bank of America Merrill Lynch, Deutsche Bank and BNP Paribas to help with what will probably be a trade sale of the building products business, although a possible flotation was also being pursued, two people familiar with the situation said.

Some sources aware of the matter said HeidelbergCement had begun to separate the UK and U.S. assets from the rest of its building products division. One said the company was establishing the accounts of the assets up for sale using U.S. GAAP accounting rules.

A spokesman for HeidelbergCement declined to comment.

POTENTIAL BUYERS

Apart from private equity funds, potential industrial buyers may include U.S.-based Acme Brick Company, owned by Warren Buffet's holding Berkshire Hathaway, Australian building products company Boral, as well as European players such as Austrian brick maker Wienerberger.

A spokeswoman for Wienerberger declined to comment beyond saying: "We look at everything in the market that concerns our core business".

Boral declined to comment and Berkshire Hathaway could not immediately be reached.

Analysts estimate the assets for disposal make an annual profit before interest, tax and amortization (EBITDA) of around $120-150 million. HeidelbergCement said their annual revenue is around 1 billion euros.

Chief Executive Bernd Scheifele told analysts this year that the assets may be worth 10-11 times EBITDA, or up to $1.65 billion, based on a similar deal between U.S. private equity firm Lone Star and Lafarge last year, according to a second analyst who also wanted to remain anonymous.

Heidelberg's building products arm was acquired from Hanson Plc in 2007. The German company held onto the assets until the U.S. and UK housing markets recovered.

Some analysts questioned whether the business can really fetch the kind of price mentioned by CEO Scheifele.

"There's no doubt there's recovery potential in the earnings of the building materials businesses in the UK and the U.S, where you've got growing markets. But when you get 10-11 times EBITDA, you're pricing in quite a lot of growth," said Sanford Bernstein analyst Phil Roseberg.

He said businesses in which EBITDA is growing by 5 percent a year were likely to command a multiple of 8 times. ($1 = 0.7345 Euros) 

WORLD: Les cessions issues de l'opération Holcim excitent les fonds

Blackstone, Cinven et le fonds de pension canadien CPPIB étudient une offre commune sur 5 milliards d'euros d'actifs appartenant à Lafarge et Holcim, selon deux bonnes sources obtenues par le 'Financial Times'. Les deux cimentiers doivent en effet se séparer d'une partie de leurs portefeuilles en vue d'obtenir le feu vert des autorités antitrust à leur projet de fusion, ce qui ne sera pas une mince affaire.

Outre ces trois-là, d'autres prétendants seraient aussi sur les rangs. Début juin, des rumeurs évoquaient déjà une alliance, entre CVC Capital Partners et KKR, et l'intérêt d'autres cimentiers. Le 'FT' parle également de Carlyle, Apollo, TPG ou de BC Partners, soit à peu près tous les gros fonds spécialisés en capital-investissement industriel de la place.

Le 7 avril dernier, les deux cimentiers avaient annoncé un projet de fusion entre égaux. La question de l'ampleur des cessions qui seront demandées par les autorités antitrust conditionnera la portée réelle du rapprochement, notamment au niveau des synergies. Si l'opération aboutissait, nous la considérerions comme une transaction de rupture dans un secteur qui est déjà connu une globalisation massive ces dix dernières années, expliquait à l'annonce du projet l'analyste de Deutsche Bank Glynis Johnson.

Lafarge a fait appel à Rothschild et Holcim à Goldman Sachs comme conseils. Crédit Suisse, HSBC, Morgan Stanley et BNP Paribas ont pour leur part été mandatés pour plancher sur les cessions

NIGERIA: Northern block makers comply with cement classification

Piqued by the menace of building collapse in the country, northern block makers have given heed to earlier instruction by the Standards Organisation of Nigeria (SON) on block classification. Block makers in the region have resorted to using 42.5R cement in compliance with SON’s directive on cement grades and usages.

SON had issued a directive that 52.5R be used for bridges, 42.5R be used for casting of columns, beams, slabs and making blocks, while the low grade 32.5MPA was restricted to plastering. Speaking during a sensitisation seminar organised by Dangote Cement Plc, block makers in the North said they have complied, as most of them now use 42.5R for making blocks.

Fielding questions from newsmen in Kaduna recently, Chairman of the Kaduna State Blocks and Concrete Makers Association (BCMA), Alhaji Hamza Haruna Gambo, said all his members have complied with the SON directive on cement classification.

Gambo, who owns block-making factories across the country said the directive was in national interest and that most block makers in the North now use Dangote 3X cement as it is the only cement with 42.5R grade, which meets SON’s specification.

He urged those who have not complied to do so as his association was desirous of supporting government in its effort to stamp out what he described as “senseless killing of innocent people” as a result of building collapse in the country.

“We’ve been using the new improved cement for the past two months. Those of our members who will refuse to comply, we would deal with them according to our constitution,” he added.

He commended the Dangote Group for organising the seminar across the country, saying it would add value to block making businesses and safety of Nigerians.

Speaking to newsmen in Kaduna, the Sales Regional Director of Dangote Cement Plc, Mr. Shola Alo, said the seminar is aimed at sensitising block makers on the new directive of SON, as well as educate them on issues bordering on manufacturing, marketing, sales, cement usage and at the same time lend a helping hand and get a feedback.

Mr. Olaniyi Johnson, Regional Sales Director who handled the technical aspect of the training said the seminars across the North are paying off as they enable the end users to make right choices and at the same time avoid unethical practices in the application of cement.

In Kano, the Chairman of the Block Makers Association, Malam Ya’u Suleiman, said the training would, without doubt, help his members in making the right decision. He said his members now use 42.5R cement produced by the Dangote Cement Plc.

Alhaji Yau Ahmad, Chairman of the Progress Block Industry in Suleja Niger State said his company only uses the 42.5R cement produced by the Dangote Cement Plc, adding that it was in the interest of all Nigerians to do so.

The cement company also supported the block makers with wheelbarrows, shovels, boots and hand gloves.

PERU: Despachos de cemento crecieron 0.51% a mayo por mayor inversión en infraestructura

Los despachos de cemento en el mercado peruano sumaron cuatro millones 129,906 toneladas métricas (TM) entre enero y mayo, un crecimiento de 0.51% respecto al registrado en el mismo período del 2013 (cuatro millones 108,977 TM), informó hoy la Asociación de Productores de Cemento (Asocem).

Durante el mencionado período la producción de cemento fue de cuatro millones 231,221 TM, lo que representó un alza de 0.95 por ciento en relación con el mismo período del 2013, cuando sumó cuatro millones 191,295 TM.

En ese sentido, los despachos totales de cemento (mercado nacional más exportación) sumaron cuatro millones 225,623 TM en los primeros cuatro meses del año, cifra que muestra un aumento de 0.84 por ciento respecto a similar período del 2013, cuando sumaron cuatro millones 190,333 TM.

La información recogida por Asocem es proporcionada por las empresas Cemento Andino, Cementos Lima, Cementos Pacasmayo, Cementos Yura, Cementos Selva y Cementos Sur.

El analista de la consultora Maximixe, John González, señaló que el crecimiento del despacho de cemento se debe principalmente, a la recuperación de la inversión pública, ya que en el mes anterior (abril), se registró una caída de 3.4 por ciento.

"Esta recuperación impulsó un alza en el despacho nacional de cementos, y está relacionada con la inversión en infraestructura, como por ejemplo en carreteras o en obras importantes como el tramo 2 de la línea 1 del Metro de Lima", dijo en declaraciones a la Agencia Andina.

Agregó también que este crecimiento de la producción de cemento se debe a un mayor dinamismo dentro del sector privado, y entre sus ejemplos, destacó la construcción del nuevo Centro de Convenciones de Lima, en el distrito de San Borja, así como la construcción de varias universidades privadas.

Indicó que las perspectivas para este segundo semestre son positivas, ya que se espera que ingresen a etapa de construcción los proyectos de inversión pública que ya fueron concesionados en el primer trimestre del año.

EGYPT: cement producers face energy cuts

Muted levels of construction activity since the 2011 revolution, combined with constraints on electricity supply, has stifled operating conditions for Egypt’s cement producers, though new projects scheduled to launch in the second half of 2014 could provide a helpful boost to the segment, recently buoyed by the successful IPO of Arabian Cement.

The IPO, the first in Egypt for four years, of the local cement producer was 18.5 times oversubscribed after 85m shares were sold worth $110m. This emphasised the performance of the country’s capital markets in recent months, with the main index rising by more than 70% over the past year.

The large subscription for shares in Arabian Cement, in which Spanish firm Cementos La Union holds the largest stake, not only reflects the latent demand for new Egyptian stock offerings, but may also herald a much-needed turnaround in fortunes for the broader building materials sector. 

Navigating challenges

Output in the building materials industry has been impacted by the turbulence with public spending on construction and infrastructure activity declining. The value of investments in the sector fell by 71% in 2012 according to data by the Central Bank, cited in a report by Bank Audi from March this year.

Private investments in new residential and commercial property development have also dwindled, albeit to a lesser extent. Rents for the best Cairo offices fell to $40 per square metre per month in 2013 from $50 since 2009 while retail rents have plunged to $100 per square metre per month from $150, according to data from real estate consultant Knight Frank.

But things are starting to improve. Construction and building activity grew by 6% in 2013 with construction expenditure standing at $6.2bn according to the Bank Audi report. It is expected to rise to $7.3bn in 2015.

In a bid to revive the flagging economy, the interim government has pledged to pump money into construction, particularly targeting mothballed infrastructure projects and low-cost housing, as part of a $4.3bn stimulus package. With a focus on job-creation through the activation of projects in the public sector, the government is also hoping to spur growth in the private sector. 

Gas flow

But another problem remains. Inadequate supplies of natural gas are impacting the ability of producers to maintain output. Balancing rising domestic consumption with export commitments has been a challenge for Egypt’s gas sector in recent years and in May, a number of cement firms were forced to stop production after the Egyptian Natural Gas Holding Company (EGAS) halted the flow of gas to 10 plants, which account for more than two-thirds of the industry’s output, to ensure sufficient supply elsewhere on the grid.

Supplies to the sector, which obtains gas from state-owned EGAS at a subsidised rate, had already been scaled back by 35% at the start of 2014 as the government sought to balance industrial needs and power stations’ gas requirements, while also moving to increase prices nearer market rates. 

Sector canvassing fuelling options, weighing costs

However, there may be a silver lining as the restricted supply is encouraging producers to diversify their energy sources to keep their kilns operating.

One of these alternatives will be coal, with the government easing restrictions on imports of the fuel in April. There have been objections to the plan to import coal although the government has said the ongoing outages in power supplies to the public warrant both cutting gas flows to industry and allowing coal to be used for industrial purposes and to generate power.

Suez Cement announced at the end of April that it would be shifting to a fuel mix comprising 80% coal and 20% waste material. Another firm, Misr Beni Suef Cement Company, has announced it will be using diesel to keep at least one of its production lines operating, after being informed by the state that gas supplies would be suspended throughout May.

Bruno Carre, Suez’s managing director, agrees that all Egyptians, citizens and companies must help reduce their energy consumption but the process will take time. “Companies, like cement producers, must also diversify their energy mix as was recently approved by the Cabinet. But this will take some time to implement during which cement production will continue to be constrained and costly imported cement products will be necessary,” he told OBG.

PUERTO RICO: Nueva contracción de la economía

El Índice de Actividad Económica (IAE) se contrajo 1.1% en mayo pasado, luego de que un alza decimal en el empleo no agrícola no fuera suficiente para hacer contrapeso a la marcada caída en las ventas de cemento y la generación de electricidad.

De acuerdo con el informe que el Banco Gubernamental de Fomento (BGF) publicó en la noche del viernes, en mayo pasado la economía de Puerto Rico se contrajo en relación a mayo de 2013. En relación a abril de este año, la principal herramienta para medir el rumbo de la economía avanzó apenas dos décimas, lo que confirmaría un escenario de estabilización. Ello no implica que la economía mejora o comienza a crecer, sino que ha parado de caer.

Partiendo del IAE, la economía de la Isla medida por el producto bruto se encuentra en negativo desde diciembre de 2012. Como resultado, el IAE apunta a que luego de dos años fiscales con crecimiento positivo (aunque a niveles decimales), el producto bruto podría contraerse nuevamente al concluir el año fiscal 2014.

Según el informe, en mayo pasado, el empleo no agrícola avanzó cuatro décimas, ubicándose en 932,100 puestos de trabajo. La generación de electricidad estuvo 3.3% por debajo de la generación de hace un año.

El consumo de gasolina menguó en medio punto porcentual y las ventas de cemento hicieron lo propio, pero a razón de 10.8%.

Los nuevos datos económicos surgen al tiempo en que la administración de Alejandro García Padilla se apresta a comenzar un nuevo año fiscal con un presupuesto con $75 millones menos que lo recomendado, lo que agregado a recortes previos podría resultar en una contracción del gasto público y por ende, de la economía.

COLOMBIA: Producción de cemento gris alcanza un récord histórico

La producción de cemento gris en Colombia ascendió a 1,7 millones de toneladas en mayo de 2014, cifra superior en 15,3% a la del mismo mes de un año atrás, en la cual se registró una producción de 929.099 toneladas.

"Esta es la segunda cifra más alta registrada en la serie de producción de cemento gris", dijo el ministro de Vivienda, Luis Felipe Henao, tras conocer las cifras reveladas por el Dane, dice comunicado de prensa del ministerio.

En mayo de 2014 también se despacharon 1,34 millones de toneladas de cemento gris al mercado nacional, lo que significó un incremento del 14,7% frente al mismo mes del año anterior.

De igual forma, desde enero hasta mayo de 2014, la producción de cemento gris presentó un incremento de 12,6%, mientras que los despachos aumentaron 12,2%, frente al mismo período de 2013. Asimismo, en los últimos doce meses hasta mayo de 2014, la producción de cemento gris tuvo un aumento de 9,3 % con relación al año anterior.

Comparado con mayo de 2013, los principales incrementos del pasado mes en los despachos de cemento gris se registraron en Antioquia con 20,0 %, Cundinamarca con 30,0 %, Atlántico con 23,8 % y Norte de Santander con 46,3 %, entre otros departamentos en los que la locomotora de vivienda avanza con sus programas de viviendas gratis y vivienda para ahorradores, Vipa.

"Estas estadísticas son muy significativas, porque muestran lo que realmente está pasando en la construcción de edificaciones, y porque son cifras que nos señalan, una vez más, que la construcción de vivienda social con el programa de las 100.000 viviendas gratis, con el nuevo programa para ahorradores, Vipa, y el subsidio a la tasa de interés, han sido políticas exitosas, que han llevado al sector a jalonar todos los días industria en el país", señaló el ministro de Vivienda en el informe de prensa.

UZBEKISTAN: Eurocement to build new cement plant

The Eurocement Group, the biggest supplier of cement, ready-mix concrete, and aggregates in Russia, plans to construct a new cement plant in Uzbekistan.

The relevant agreement worth $128 million for the supply of equipment, design, installation supervision, and training for the construction of the cement plant in Uzbekistan's Tashkent region was signed with the Chinese CAMC Engineering Co., Ltd., Eurocement said on June 30.

The new plant's capacity will amount to 2.4 million tons of cement per year, and the facility's commissioning is scheduled for 2016.

The Eurocement Group has 16 cement plants across Russia, Ukraine, and Uzbekistan, as well as several concrete mix plants, concrete goods factories, and aggregate-mining quarries.

The cement consumption of the mineral-rich Uzbekistan is 300 kilogram per capita, a figure below the global average which is estimated at 536 kilogram per capita. This places Uzbekistan in a favorable position for the future development of the cement industry.

Local building materials company Uzbuildmaterials JSC announced the government's plans to invest $49.1 million in the local cement industry in late February 2014.

The program includes nine projects for the three largest cement plants in the country: the Kyzylkumcement plant, the Akhangarancement plant, and the Bekabadcement plant.

INDIA: Companies agree to lower cement prices

With chief minister Virbhadra Singh toughening his stand on the issue of cement being sold in Himachal Pradesh at rates higher than the neihgbouring states, cement companies have finally agreed to lower the price by Rs 15 to Rs 35 in the border areas. The cement price has remained a political issue in the state and the development has come days before the start of the monsoon session of the assembly.

A decision was also taken to reduce the cement price from Rs 15 to Rs 25 in other parts of the state. It was also decided that the companies will submit quarterly statement of comparative rates of cement being sold in border areas and other parts of the state to the director (industries) and the pricing formula for Himachal will continue as per the above decisions in the future.

A decision to this effect was taken in a meeting chaired by the CM. Also present in the meeting were industries minister Mukesh Agnihotri and the representatives of cement companies, including ACC, Ambuja and Jaypee, having their plants in Himachal Pradesh. All the three companies have now agreed in principle to lower the rates of cement in border areas of the state from Rs 15 to Rs 35 or bring them on a par with the rates prevailing in the neighbouring states, officials said.

The CM in the beginning of the meeting made it clear to the companies that the government would not tolerate cement being supplied at higher rates to people of the state as compared to its neighboring states, where the prices were low. "The government has given land to these plants to operate in the state, besides many other facilities like water and power, among others. We want people to get cement at cheaper rate," he added.

Giving clear message to the representatives of cement companies, Virbhadra said the first thing they should keep in mind was the interest of the state people.

A similar meeting was held earlier in the chamber of industries minister where all the heads of cement companies were present and all the issues pertaining to cement prices and other related matter were discussed. Mukesh Agnihotri said when the government was providing all facilities to the cement companies within the state, they should not be autocratic and not take decisions as per their convenience while ignoring the interest of the state.

PACIFIC: CEMENT DEMAND

PACIFIC Cement Limited (PCL) has noted positive progress with its branded cement following an increase in demand for supplies from distributors.

PCL acting general manager Sonni Dutt said they had been producing cement for home brands for the past 12 months, whereby customers had been given the opportunity to select the brand.

He said the company's original brand, Pacific Cement, was well known in Fiji and the region for more than 40 years.

"The emerging market trend is that every distributor wishes to have the cement in his brand. We started with our distributor in Port Vila, Vanuatu. The distributor requested cement under his own brand and we supplied.

"After 12 months, response is extremely good and export from Fiji under the new brand has increased. The demand is increasing because we are branding it according to their brand and then we can identify the loyal customers," Mr Dutt said.

He said the biggest advantage under this business model was that they did not have to do any marketing.

The Fijian Holdings Group company had also commenced the same process in Fiji with two key distributors requesting cement under their own brand.

"We are trying to get more customers and we are in fact expecting a few more to come on board so that has become a loyalty between the supplier and the customer, and presents a win-win situation for both parties," he said.

He said the company produced a world-class cement as per Australian standard and received ISO 9001, ISO 14000 and ISO 17025 certification for its process.

Mr Dutt said they sourced major raw materials from Thailand and Australia, and imported high quality clinker, the main ingredient in making cement, from Mitsubishi in Japan.

CAMEROON: Dangote to Halt Cement Imports Into Cameroon With U.S.$140 Million Investment

The Dangote Group has so far sunk $140 million (about N23 billion) into its cement grinding plant in the Cameroonian economic capital city, Douala.

The investment, according to the company is to help the country to attain self-sufficiency in cement production and consumption and to halt importation of the commodity into the country, Nigeria as a reference point.

The grinding plant with a capacity of one million metric tons of cement a year and which will be upgraded to 1.5 million metric tons is located in an area called Base Elf on the shorelines of the River Wouri off the Atlantic coastline.

Investigation revealed that Cameroon imports about 500,000 metric tons of cement annually and that the yearly demand for cement is estimated at four million metric tons. Efforts by the government to boost domestic production saw supply increase from 1.6 million metric tons to an estimated 2.2 million metric tons leaving a shortfall of 1.8 million metric tons. To this end, the government invited private sector investment s in the sector. It was based on this that the government signed an investment agreement with the Dangote Group in September 2011.

Abdullahi Bada, General Manager of the Doula plant, noted that the entry of Dangote into the Cameroonian cement industry is premised on the fact that for long, Africa has been a dumping ground for products over which we have comparative advantages and we have seize this opportunity, taking the bull by the horn to make sure Africa has comparative advantage, especially in the area of cement manufacturing.

According to him, the first 50kg bag of 42.5 grade of cement from the plant will be available in the market from August this year.

"As a policy, Dangote Cement worldwide produces 42.5 grade cement because we take the healthy and safety of our people very seriously. We can't rule out the fact that most of the builders and contractors in the rural areas lack engineers to monitor what they do; however, if you have a good product they will be able to come out with standard constructions that will last and won't endanger people's lives."

Regarding competition, he noted, "The cement industry in Cameroon is largely dominated by the Cinmenteries du Cameroun, CIMENCAM, owned by the French group Lafarge, which has for a long time been the only firm in this activity. The presence of the Moroccan group CIMAF whose annual production capacity is 500 tons; a Korean firm is also

TRINIDAD: Cement price to go up by $5 from today

The price increase was disclosed by Trinidad Cement Ltd (TCL) whose customers can expect to pay around $5 more per bag.

The company stated: “TCL Premium Plus, which accounts for 95 per cent of local market share, will be adjusted by nine per cent, which is equal to a five cent increase per pound from $.53 to $.58 VAT inclusive. Ordinary Portland Cement (OPC), which is used by approximately five per cent of the market, will move by 15 per cent.”

This means the average price ($60 for a bag of cement) will go up at least $5. Hardware owners and contractors have already been informed of the increase by TCL.

TCL stated: “These price movements have resulted from continual increases in major cost components over the past 18 months, but more so, over the past six months, when there has been a steady rise in the price of equipment spares, raw materials, freight rates and supplier services.”

It said the entire local construction industry was facing increased costing in building materials and the last time the company’s cement price was adjusted was on January 2, 2013. A commitment was made then to not make any changes for 12 months.

The company stated: “In recognition of the fact that cement is a major element of local and regional economic growth, TCL has kept the adjustments to a minimum and is pleased to state, that its prices still remain close to the lower end of the tier when compared in a global context. Independent studies by Quantity Surveyors have confirmed the total cost of cement in a standard dwelling house is just five per cent of overall construction material cost.”

TCL stated that as is customary, all contractors registered with the Trinidad and Tobago Contractors’ Association (TTCA) will be offered a three-month waiver of the new price for fixed price contracts with their clients.

n An official with a major construction company in Chaguanas said the increase in prices of cement may result in less work being done privately, and some contracts may be fixed so contractors would be operating at a loss. He also said since cement was used to make concrete blocks, increased prices in those were also expected.

The official said: “With the construction sector and with people building their own houses, it is going to be a bit hard with the cement prices going up. It will be a bigger expense to the contractor and the people who have houses to build.”

However he added: “People would spend their money if they have a project going on. It may slow down the private sector but as for contractors, the job has to be completed no matter what.”

TANZANIA: Set to Be One of Africa's Top Cement Maker

CEMENT production is becoming an important manufacturing activity that would contribute immensely to Tanzania's economic growth, in terms of exports and job creation.

The cement industry has of late seen more key players coming in, the move that would lead to increased production to make the country the largest cement producer in Africa. Locally, the situation will stir up competitions that would force prices to decline, to benefit the local consumption thus becoming an important incentive in encouraging construction activities.

Adjourning the 14th session of the National Assembly in Dodoma at the weekend, the Prime Minister, Mr Mizengo Pinda, said the cement industry has positive prospects to become the largest contributor of revenue to the government as well as job creation.

He said the current production capacity in the country is 3.8 million tonnes per annum, but it is expected to more than double to 8.3 million tonnes per annum in the near future. Domestic consumption is also projected to increase to 3.9 million tonnes per annum from 2.25 mtpa.

Premier Pinda said there are ongoing five cement mills construction projects in Arusha, Tanga, Lindi and Mtwara regions to make a total of nine cement projects which will make Tanzania the largest cement producer on the continent.

"To ensure that Tanzania exploits fully the huge potential in the cement industry, Premier Pinda said the government will act strongly in curbing importation of 'cheap' cement which have been contributing to killing the local industries and deny the country revenue," he said.

Also, it is projected that construction of residential and commercial housing will continue to dominate local cement demand at around 85 per cent in the medium term. Construction and housing sectors will continue per same projections to be the main driver of cement consumption in the country.

Available reports from the cement producers show that by next year, Tanzania is projected to become a net exporter of cement - fully supported by projected strong demand from its (import dependent) neighbour countries of Burundi, Rwanda, and East DRC.

Even though the projections show a diminishing role of the mining sector (mine construction) in increasing demand for cement in the country, it is still foreseen an uptick of activities in other sectors (infrastructure and residential housing in particular).

Also the more key players enter into the cement industry, it is projected a decline in production costs (supported by falling energy costs and improving energy supply), and a decline in prices due to the expected entrance of new players (Lake Cement and Arthi River).

Factoring projected falling prices, it is also expected revenue growth to be largely driven by volume, riding on the expected increase in demand (internal and external) especially from neighbouring countries of Rwanda, DRC, and Burundi.

For example, the new Dangote Cement Factory now under construction in Mtwara, will be the biggest cement project in the country, East and Central Africa, is expected to ease pressure on prices of the product once the investment project starts production next year.

Mr Aliko Dangote, the Group President and Chief Executive Officer said during his visits to the country last week that when the plant starts work next year, the company would look at how to reduce pressure on the price of cement.

One of the measures he noted is to find ways of countering costs that arise as a result of distribution difficulties as one way of reducing pressure on cement prices.

The firm would first procure 250 trucks to handle distribution of the product across Tanzania. Similarly, to handle challenge of getting skilled labour in Tanzania for their operations, they would first take Tanzanian engineers to the Dangote Academy near Abuja for training.

The country is set to more than double its cement production capacity next year when the factory is completed. Currently, the price of cement per tonne remains relatively high averaging between 90 and 105 US dollars due to high energy costs and dependence on imported clinker.

The capacity of the factory is expected to be three million tonnes per annum, out of which he expects to get a good chunk of the market share. Mr Dangote hopes that the new cement plant would first satisfy the local market. Tanzania Portland Cement is currently the country's biggest producer with a production capacity of 1.4 million tonnes per annum.

Comparatively, Tanga Cement has a capacity of 1.25 million tonnes per annum while Athi River Mining Tanzania produces 750,000 tonnes per annum. Mbeya Cement Plant has an installed capacity of 350,000 tonnes per annum. Alhaj Dangote is a Nigerian business magnate who is ranked by the Forbes magazine as 43rd richest person in the world and first in Africa.

According to the company, they have set a goal of becoming one of the world's leading cement companies by 2016. The company's investment profile in the continent stretches from Nigeria, Tanzania, Cameroon, Senegal and Gambia to South Africa, Zambia and Ethiopia, to name just a few.

This is an opportunity to exploit the comparative advantage in cement production that will bolster construction sector and its contributions to economic growth and job creation.

BOLIVIA: Construcción crecerá este año en al menos 10%

El gerente general del Instituto Boliviano del Cemento y el Hormigón (IBCH), Marcelo Alfaro, estimó que la tendencia del crecimiento anual del sector de la construcción es del 10% aproximadamente.

“Típicamente la construcción ha venido creciendo (entre) 10% (y) 11%, este dato lo maneja la Cámara Boliviana de la Construcción (Caboco), pero la tendencia (para este año) entiendo que es similar, o sea todos los últimos años viene creciendo un 10% la construcción aproximadamente”, expresó.

El presidente de la Caboco, Cristhian Eduardo, mencionó en abril que el sector de la construcción el año anterior registró un crecimiento del 7,6% y este año, alcanzaría hasta el 9%.

Enfatizó que en el departamento donde más se construye es Santa Cruz.