NAMIBIA: Biofuel boost for Namibia's cement-maker

You can hear it long before you can see anything. Slowly and relentlessly, the specially developed harvester cuts its way through the tangled undergrowth. Blackthorn can grow to as high as seven meters (23 feet) and form impenetrable thickets. It won't let any other species grow in the vicinity, much to the chagrin of local famers. But the harvester rips through it, turning the bush into wood chips.

They are used for fuel by Ohorongo Cement, Namibia's only cement manufacturer, giving it a potential edge over some of its competitors on the world market. Biofuel accounts for 30 percent of Ohorongo's energy needs; eventually the company wants to raise this figure to 80 percent.

"We have the technology and the raw materials to produce high quality cement. We manufacture it economically with staff we have trained ourselves who are really very good workers," he said."In the long term, we will be very competitive," said manager Gerhard Hirth. Not having to rely on coal and oil imports, the company was able to keep energy costs down while making a positive contribution to the environment.

Hirth, a German national, comes from Ulm. The family firm Schwenk Zement KG has been in the cement business for the last 160 years. "Nonetheless," he said, "Africa was new - and different."

A small player compared to South Africa

Hirth has invested 250 million euros ($340 million) in Namibia. As well as deploying modern technology, he also chose a logistically favorable location from which his high quality building material can be freighted to Botswana, Zimbabwe and Zambia.

Ohorongo's aluminum outbuildings glisten in the midday sun. The landscape appears deserted, apart from a truck stirring up a trail of yellow dust on the horizon. Local residents, on discovering that a major investor is planning a huge project nearby, are often skeptical. But the people of Otavi appear contented. Jona Israel is filling up his Landrover at a gas station. "By and large, it is a development we are happy with," said the haulage contractor. "The factory is a big investment, not just for our region but for the whole of Namibia." His trucks are now delivering cement so he has profited personally from the arrival of the plant. Hilma Shaanika believes the benefit to the local community has been minimal. "The jobs went mostly to people from the big cities, from Windhoek and Swakopmund. But people in Otavi are poor," she said.While Hirth is in his office pouring over his balance sheets, 50 kilogram (110 lb) sacks of cement are coming off the conveyor belt in rapid succession. The plant produces 600,000 tons annually, of which 500,000 is destined for the Namibian market. The rest is exported. Namibia is only a small cement producer, neighboring South Africa is a much bigger player turning out 16.5 million tons a year.

Production manager Manfred Pirker concedes that many of the staff come from the cities, but says well trained skilled workers were difficult to find in northern Namibia. The company will have to train more workers itself in future.

A few houses further down, Matsika Farai David is sitting behind an array of household goods he is selling - plastic combs, pots and batteries. "Of course Ohorongo has improved our lives," said the street vendor. "Many who used to hang around out on the streets now have a job to go to." In addition the company has done work on the road and donated an ambulance to the local hospital.

No escape from Chinese competition

Ohorongo Cement employs 330 people but it has also generated employment indirectly as well. Job opportunities have been created for subcontractors, which wouldn't exist if the plant wasn't there. They include supplying catering, work clothes, and freight haulage. Ohorongo's management says the company keeps a total of 2,500 people in work. In Namibia, where 30 percent of the labor force is unemployed, every one of those jobs matters.

Ohorongo's company history is a good guide to the obstacles littering the road to entrepreneurship in Africa. Markets can be fickle. Ohorongo had counted on being able to sell cement to oil-rich Angola. "That was a mistake," said Gerhard Hirth. Angola slapped an import ban on Namibian cement. Angola's cement now comes from China.

Hirth said the Chinese are always a few cents cheaper than their competitors. The Namibian government had promised Ohorongo Cement it would be protected while in its initial growth phase by a tariff agreement. Cement imports from outside Namibia would be subjected to a 60 percent levy. But now there is a Chinese importer operating in the country, paying no levy and offering cement at competitive prices. He had taken legal action against the tariff agreement. "The cement is already in Namibia and we have lost more than 30 million euros," Hirth said. Legal proceedings are still in progress and are unlikely to end anytime soon.

MEXICO: Inauguración de Cementos Fortaleza

Cementos Fortaleza, perteneciente a Elementia se inaugurará el día de mañana en el estado de Hidalgo, el evento estará encabezado por el presidente Enrique Peña Nieto y Carlos Slim Helú, uno de los mexicanos más ricos del año.

De acuerdo con fuentes pertenecientes a Cementos Fortaleza, no tienen ninguna relación con Mexichem, lo único que los relaciona es que junto con Elementia pertenecen a Antonio del Valle de Grupo Kaluz.

Antonio del Valle es propietario del de Elementia y el 46% restante pertenece a Carlos Slim, propietario de Grupo Carso.

Cementos Fortaleza planea producir aproximadamente dos millones de toneladas de cemento al año en el mercado, donde compiten con Cemex, Holcim, Cruz Azul entre otras.

Elementia es un consorcio mexicano que reúne compañías líderes en el ramo de la construcción e industrial para brindar soluciones integrales de gran tecnología. Está compuesto por cuatro divisiones: Metales, Construsistemas, Plásticos y Cementos. Tiene presencia comercial en más de 40 países en América y Europa.

UNITED KINGDOM: Anglo American to sell stake in UK's largest cement maker Lafarge for £885 million

Britain’s biggest cement, concrete and aggregates company has been put up for sale with a likely price tag of almost £2 billion.

A queue of bidders is expected for a major business which is likely to be a major beneficiary of the UK’s economic recovery and plans for major infrastructure projects like HS2.

Lafarge Tarmac, which dates back to the early years of the 20th Century, employs 6,600 people in this country and has 330 sites spread across the UK.

It has been put on the auction block as part of the giant E40 billion merger of Switzerland’s Holcim and France’s Lafarge which will require major sell-offs by both companies in order to get the green light from European competition authorities.

At the same time mining giant Anglo American has agreed to sell its 50% stake in the jointly owned Lafarge Tarmac to the French company for at least £885 million.

That will make it easier for Lafarge to sell the UK business in its entirety for around £1.8 billion.

Anglo American said it would use the cash raised from the sale to pay down its own debt and concentrate on its core mining activities.

Lafarge Tarmac was first mooted as a joint venture in 2011 but only became a reality last year after a near two year investigation by the Competition Commission which demanded various local sell-offs of businesses.

Originally the joint owners had planned to float Lafarge Tarmac on the stock market but this was unlikely to take place until next year at the earliest and has been overtaken by the Swiss-French merger.

Potential bidders for Lafarge Tarmac could include its two major UK rivals Breedon Aggregates and CRH.

But the stronger likelihood is a bid from private equity with a consortium of Blackstone, Cinven and a Canadian pension fund already running its slide rule over Holcim Lafarge assets. Other private equity firms potentially in the frame include Apollo, Carlyle, TPG Capital, BC Partners, CVC and KKR.

Analysts pointed out that any buyer would be unlikely to face competition problems given that the joint venture had been put together so recently with the okay from what was then Competition Commission.

Holcim and Lafarge also announced a number of other disposals today including a cement plant in Austria, Most of Holcim’s French business, Lafarge’s German and Romanian assets and Holcim’s assets in Hungary and Serbia.

Competition authorities in 15 countries as well as the European Commission are examining the deal.

Credit Suisse, HSBC, Morgan Stanley and BNP Paribas are handling the sell-offs.

Anglo American bought Tarmac for £1.2 billion in 1999 while Lafarge built its UK business through a series of takeovers including the bitterly fought £3.1 billion two year battle for Blue Circle which ended in 2001.

GHANA: Dangote Cement to increase production

The Vice Chairman of Dangote Cement Ghana, Tajudeen Sijuede, says the company has successfully completed its cement processing plant in Tema, which will in the next few months produce 1.5million metric tonnes of cement per annum.

The company is also setting up another 1.5million metric tonne cement production facility in the Western Regional capital Takoradi.

The two new projects will enable the company to produce 3million metric tonnes of quality cement per annum.

Mr. Sijuede said: “We are establishing another clinker-grinding plant at Takoradi with capacity of additional 1.5million metric tonnes, which will be in operation by second quarter of 2015. The combined capacity of Dangote Cement in Ghana will be 3million metric tonnes, the highest capacity being distributed outside Nigeria.”

He indicated that the increase in the company’s production capacity will bridge the supply deficit currently faced by the construction sector.

The total production of cement in the country stands at seven million metric tonnes per annum. Ghacem, the largest supplier of cement in the country, has a market share of 58 percent, while Diamond Cement comes second at 25 percent. Relatively new entrant Dangote Cement controls 8 percent of the market share.

He assured that the company will continue to produce quality cement to its customers, saying: “When it comes to quality, we want to assure the public that when we start production we are still going to maintain our quality”.

He said when the expansion work is completed in Takoradi it will create about 1,200 jobs, and Tema will also increase its employees from 500 to 1,000.

He said this will help the company achieve its target of capturing 30 percent of the market share in the next three years.

Asked why the company suspended importation of cement into the country, he said it is not because the company does not want to bring cement into the country but because of foreign exchange challenges.

“This is a very critical situation for all of us who are importing into the country. Nobody wants to go out of business; we are here to stay because we have invested a lot into the economy.

“I am sure that the government is aware of this and we have held series of meetings with the Trade and Industry Minister. I think they will do something about it, and once we have foreign exchange we will have abundance of cement in Ghana,” he added.

KENYA: Cement consumption rises to 2M metric tons

Cement consumption for first five months of this year went up by more than four hundred thousand tons to two million metric tons according to the latest figures from the Kenya National Bureau of Statistics.

The leading economic indicator report says the quantity of cement produced increased from 461 thousand metric tons in April 2014 to 477 thousand metric tons in May 2014.

Consumption also went up from 427 thousand metric tones recorded in April 2014 to 450 thousand metric tones in May 2014.

The construction industry is witnessing a major boom with the government and the private sector embarking on mega projects like the LAPPSET corridor and the standard gauge railway line plus the various shopping malls and multi-storied buildings under construction around the country.

Latest economic indicators data from the Kenya National Bureau of Statistics indicates that the production and consumption of cement in Kenya has nearly doubled as the real estate sector continues to shine.

The industry is among the fastest growing in the country, with consumption jumping by more than 100,000 metric tons the consumption a year ago.

However, the building and construction sector recorded a slower growth of 4.9 percent compared to a growth of 7.4 percent in a similar quarter in 2013.

According to KNBS, Kenyans are now consuming more than 450,000 metric tons per month, up from 340,000 metric tons a year ago.

In May, consumption of cement in stood at 450,379 metric tons. This was an increase of 112,513 metric tons from what the country consumed in a similar period last year and 140,878 metric tons more in comparison to figures in 2012.

The report further says the use of cement has increased from March, with consumption rising from 387,266 metric tons to 426,523 metric tons in April and 450,379 metric tons in May.

There are five cement companies in Kenya, namely Bamburi Limited, Rhino, East African Portland, Athi River Mining and Savanna.

Bamburi and East African Portland are the largest, commanding more than half of the market share.

As demand of cement increases, more players are set to come into the sector, among them Dangote Cement, owned by Nigerian tycoon Aliko Dangote and the Indian based Sanghi group of company who are putting up a 12 billion shillings plant in Pokot County.

MALI: A quand les dividendes pour les actionnaires ?

C’est la question que se posent aujourd’hui les actionnaires de la société Diamond Cement. En effet, ils sont de plus en plus nombreux à se poser la question de savoir ce que sont devenues leurs actions au sein du capital de la nouvelle cimenterie du Mali -Diamond Cement- dont l’existence date de 2008, avec la signature d’une convention d’établissement avec l’Etat malien.

En fait, il y a maintenant deux voire trois ans que la société a commencé la production et la commercialisation de son ciment ‘’made au Mali’’. Au grand bonheur de la population malienne (quoique le prix de ce ciment est encore à discuter) au pied de qui on venait d’enlever une épine. Qui n’a pas été heureux d’apprendre en 2008 que le Mali allait avoir une cimenterie, après la disparition de celle de Diamou?. Mais hélas ! L’espoir suscité en son temps a fait place aujourd’hui au désespoir- tant du côté de la population (qui juge d’ailleurs trop élevé le coût du ciment produit par Diamond Cement)- que chez les actionnaires de la société. Particulièrement, les actionnaires populaires qu’on appelle couramment les petits actionnaires. Lesquels sont aujourd’hui en colère, car n’ayant reçu jusque là aucune dividende pour les actions auxquelles ils auront souscrit. Ce qui a certainement valu la création depuis 2012, de l’association des Actionnaires Populaires de Diamond Cement (APDIC). L’objectif visé est de défendre les intérêts des’’ petits actionnaires’’.

A cet effet, des réunions sont constamment initiées pour tenir informés les membres de l’association quant à leurs préoccupations. La dernière réunion s’est tenue en fin de semaine dernière, dans les locaux de l’Union Nationale des Travailleurs du Mali. (UNTM). A l’ordre du jour : informations et dispositions à prendre avant la tenue de l’Assemblée Générale ordinaire des actionnaires de la société. Outre les nombreuses préoccupations évoquées, les ‘’petits actionnaires ont longuement échangé sur l’épineuse question des dividendes. Lesquelles tardent à tomber, selon ces derniers. ‘’Il est temps de goûter aux dividendes générés par l’entreprise, fussent-elles minimes’’, ont-t-ils indiqué. En effet, Ils n’arrivent pas à comprendre pourquoi ça coince jusque là, à propos des dividendes. L’argumentaire de la perte de 1, 800 millions de FCFA évoqué à la dernière assemblée générale(en juin 2013), ne tient pas aux yeux des petits actionnaires, qui exigent des explications claires et précisent sur ce point. Aussi, ils ont unanimement dénoncé leur marginalisation au sein du conseil d’administration de Diamond Cement. ‘’Les petits actionnaires n’ont aucun représentant au sein du conseil d’administration, malgré les différentes correspondances adressées à cet effet, au président du conseil d’administration. « Mais depuis, rien n’y fit. « Le mépris vis-à-vis des actionnaires continue. Pour preuve, les actionnaires populaires n’ont pas été informés de la tenue, le 3O juin dernier, de l’assemblée générale des actionnaires de la société. ‘’ Nous l’avons appris ici même dans la salle de réunion à travers un membre de l’association. Lequel dit en avoir eu échos a travers la presse’’. C’est inamissible, a déploré le secrétaire général de l’association. C’est pourquoi, séance tenante, il a invité les uns et les autres à prendre toutes les dispositions pour ne pas manquer ce rendez-vous. ‘’C’est l’occasion ou jamais pour nous de se faire entendre. Au pire, nous saisirons qui de droit pour que justice soit faite’’, a-t-il martelé.

EGYPT: Gas prices increase to $8 per million BTUs for cement industry

The government has raised gas prices for cement factories to $8 per million British Thermal Units (BTUs) compared to $6 previously, while fuel oil increased from EGP 1,500 to EGP 2,250 per tonne.

An official source from a cement company who requested anonymity anticipated cement prices to increase in the coming days due to higher production costs.

“Energy represents 60% of cement production costs and any increase in energy prices have a direct influence on final prices,” said the source, “We do not yet know the impact of increased energy prices on consumers as cement prices are also affected by supply and demand.”

“Gas is generally not available and we are experiencing a large and persistent deficit in its supply which has reduced our production capabilities,” he said.

He added that the problem faced by cement factories is not so much the price as its availability.

A number of cement companies operating in Egypt are looking to use coal as an alternative source of energy this year.

The source ruled out these companies’ resorting to importing gas at this time due to high prices for the process, valuing up to $ 14m BTUs.

VENEZUELA: Iran to inaugurate cement plant

Iran will inaugurate a cement plant in Venezuela within the next few months, Iranian Mines and Mining Industries Development and Renovation Organization Managing Director Mehdi Karbasian said.

The plant will have a capacity to produce one million tons of cement per year, the Mehr News Agency quoted Karbasian as saying on Saturday.

In 2012, IMIDRO signed an agreement to establish the cement plant in Venezuela and started the work, but the construction operations were halted due to budget deficit, he noted.

Iran exported around 18 million tons of cement to 24 countries, including Iraq, Azerbaijan, Turkmenistan, Afghanistan, Russia, Kazakhstan, Kuwait, Pakistan, Qatar, Turkey, the United Arab Emirates, Georgia, Oman, India, and China in the previous Iranian calendar year, which ended on March 20, 2014.

The country ranked first in the Middle East and third in the world in terms of cement exports.

PAKISTAN: Cement sales likely to pick up further this year

Thanks to the uptick in domestic demand, cement sales have remained robust in line with expectations of the industry and analysts in fiscal year 2013-14 (FY14) as they have eclipsed the previous peak recorded in 2009-10.

With this, what is important to see is that the analysts are predicting even further pickup in sales in the new fiscal year in the face of growing construction activities as the government focuses its energies on building major dams and highways.

Overall, cement sales (domestic and overseas) jumped a healthy 2.51% in FY14, standing at 34.27 million tons compared to 33.43 million tons a year earlier.

“The increase of 2.5% in cement sales is a healthy growth and it will further rise in the next 12 months. I think demand will touch 35.5 million tons in 2014-15, recording a jump of 3.6%,” Saad Hashmi, analyst at Standard Capital Securities, told The Express Tribune.

“Only the recently inaugurated Dasu Dam is going to create a demand for one million tons of cement over the next five years,” he added.

On June 20, just before the close of the fiscal year on the 30th, the All Pakistan Cement Manufacturers Association (APCMA) – the lobbying group of all cement-makers in the country – expressed the hope that overall dispatches in FY14 were expected to remain at an “all-time high”.

Though sales hit a record high, they were just marginally higher than the previous peak touched in 2009-10. Sales in FY14 stood at 34.27 million tons compared to 34.24 million tons in FY10, up just 0.08%.

A gradual improvement in economy and growing construction activities, especially in the wake of higher allocation by the government for the Public Sector Development Programme, are the reasons behind the expected rise in cement demand over the next 12 months.

In FY14, the federal and provincial governments set aside over Rs1 trillion for development schemes with the Centre alone targeting to spend Rs525 billion.

The growing construction schemes are mainly visible in large cities. According to the Economic Survey of Pakistan 2013-14, the construction sector posted an exceptional growth of 11.3% in the fiscal year ending June 30, 2014 compared to a negative growth of 1.7% in FY13.

In the same way, analysts say, domestic cement demand, compared to overseas sales, will primarily support overall dispatches in the current fiscal year.

Based on local demand, prospects of the cement industry look better and this comes at a time when exports are dropping on the back of a sharp appreciation of the rupee against the dollar in the past six months.

Apart from growing appetite for cement, the local market is also offering improved profit margins to the companies in stark contrast to overseas markets where they face stiff competition from cheap Iranian and Chinese cement.

Another major reason why industry officials and analysts are upbeat is the increasing capacity utilisation in the industry over the years. It is touching 80%, a six-year high, something that the manufacturers had achieved in FY08.

GHANA: GHACEM still producing, despite cement shortage

GHACEM Limited has responded to the debate over the scarcity of cement on the Ghanaian market and refuted speculations that the company has reduced production. The company described as wrong, the notion that it has contributed to the scarcity by producing below expectation.

On the contrary, the company insisted it currently produces an average of about 58,000 tonnes of cement a week, a feat it described as commendable. In an interview with the company’s Strategy and Corporate Affairs Director, Dr. George Dawson-Ahmoah, he said GHACEM was currently facing two challenges in attempts to arrest the shortage.

It identified the first as erratic power outages affecting production especially at the Takoradi factory of the company, and the second as “the current pressure on the market.” He observed that “for one reason or the other, other cement manufacturers and importers of cement cannot meet the demand in supply” due to the depreciation of the cedi."

This, he said, has caused importers to refuse selling their products, with the congestion at the port in Togo also hindering the operations of Diamond Cement, Aflao, which imported its raw materials from that country.

Dr. Dawson said the aforementioned challenges have “pushed pressure” onto GHACEM because an average of about 40,000 tonnes of cement expected from other local manufacturers and the importers are now missing in the market “Now the pressure is on us to meet this huge shortfall in production,” he noted, calling for immediate action to address country’s electricity challenges and the depreciation of the cedi.

Ghacem he reiterated has the capacity, technical expertise, raw material and the ability to meet the country’s increasing demand for quality cement hence Government should do its part especially improving power supply in the Takoradi Factory.

NIGERIA: Cement Manufacturers Backs Reps On Quality Review

Major cement manufacturers have aligned with the House Representatives that the 42.5mpa grade should be the minimum quality standard produced in the country, while all expired ones be withdrawn forthwith from the market.

The manufacturers, including Bua, Ibeto and Dangote, said long before the quality review by the Standard Organisation of Nigeria (SON), they have been producing the new quality grade and nursed no intention to do otherwise.

It would be recalled that the Dogara ad-hoc Committee on Cement Composition and pigmentation, had after a public hearing from stakeholders submitted its report to the House of Representatives, in which it asked the SON to commence implementation of its cement standardization and that manufacturers should retool their machineries for the production of the higher grade of cement.

Its recommendation, according to the report, was based on the fact that if offered the chance of choosing between 32.5 and 42.5 grades of cement, consumers would choose the 42.5 higher grade and that because those employed for building structures are mostly non-professionals it would be in the national interest to adopt a cement grade that is less susceptible to wrong application.

Chairman of Bua Cement, Abdulsamad Rabiu said after a meeting in Lagos that what the lawmakers has done was a patriotic one that should be supported by all manufacturers with the safety and well-being of the people at heart.

According to him, Bua which operates the oldest cement plant in Nigeria, Cement Company of Northern Nigeria (CCNN) has been producing the higher grade of cement right from the time of importation till the era of local production and that his company sees nothing wrong with the Reps decision.

"As a responsible corporate entity, with the interest of the nation and its people at heart, we value the lives of our people more than profit, and therefore supports our lawmakers"

He said what cement manufacturers and indeed other stakeholders should do is to cooperate with the SON as the regulating authority so that the menace of structure failures could abate.

Rabiu said the BUA Cement brand is different from others because it is of 42.5 and 52.5 texture grade. This is the highest quality texture which mixes and dries easily. Most companies import lower quality. Our prices are also competitive within the industry and our delivery process is excellent.

In its own reaction, the management of Dangote Cement said it was poised to giving all necessary support to government and its agencies to succeed in the bid to stem the spate of building collapse through production of quality cement that can stand the test of time.

Its Group Managing Director, Devakumar Edwin explained that Dangote Cement has never produced a lower grade of cement and that the quality review by SON, which was also affirmed by the federal lawmakers who investigated the disturbing menace of structure failures only confirmed its long held view that Nigerians deserve the best quality of cement.

Corroborating the lawmakers, Edwin stated that the 42.5 grade of cement as the minimum standard to be produced is the best for the country, given that most builders are non-professionals who knew little or nothing about the right application of cement as a key component of construction.

"I say this because, with the strength of the 42.5, it will be less susceptible to wrong application and therefore saves the people the hassles of how best to apply cement. Anything contrary to promotion of 42.5 as the better grade by any manufacturer could only be motivated by profit.

"As for us in Dangote Cement, we have the understanding that the new standard which prescribes the production and use of the 52.5 grade of cement for the construction of bridges; the 42.5 grade for the casting of columns, slabs and moulding of blocks and the 32.5 grade for plastering only, is in line with the current prevailing international standards to which we pledge our full support.

"As a responsible and patriotic corporate citizen with the interest of Nigerians as our primary concern, we state our unreserved support for the new cement standards especially as this will help to further improve safety in the Nigerian building and construction industry."