Friday, September 12, 2014

VIETNAM: Government streamlines cement industry, reduces proposed plants



The Prime Minister has approved the Ministry of Construction’s proposal to cancel five cement projects for the 2011-2020 period, which would have projected total capacity of 910,000 tons per annum.

The Prime Minister has also agreed to delay implementation of nine other cement projects, while accepting a new project, Long Son in Thanh Hoa province. The 2.3 million ton per annum cement plant kicked off in early 2014 and is expected to become operational by 2018.

Prior to that, nine small projects with the capacity of below 2,500 tons clinker per day, were also eliminated in a Prime Minister’s Decision released in April 2013.

According to the Ministry of Construction, the small projects with the capacity of below 2,500 tons clinker per day are outdated in terms of the energy consumption index, while they require a high investment rate and cause environmental pollution.

The project development program was set up several years ago, when cement supply was short and the government called for investments in the field.

Nguyen Quang Cung, chair of the Vietnam Cement Association, noted that all the canceled projects were small and not feasible. The investors were not financially capable enough to implement the projects, while conditions were not favorable for production and consumption.

In addition, the government said it would no longer act as a guarantor for enterprises’ foreign loans, and domestic banks have refused to fund cement projects.

Cung believes that the 2011-2020 cement industry development strategy is out of date and other proposals should be eliminated as well. The strategy was created in 2011, but it was based on statistics collected up to 2005.

Economists have urged the government many times to restructure the cement industry, which is suffering heavily from oversupply.

When creating the strategy, the Ministry of Construction used inaccurate estimates on future cement demand in the future. But demand turned out to be much less than predicted, especially after the real estate market slowed down significantly.

Under the development plan, the cement industry would have been churning out 80-90 million tons by 2015 and 130 million tons by 2020.

Meanwhile, under the building materials development program by 2020 approved by the Prime Minister in August 2014, the cement demand is estimated to be only 56 million tons by 2015 and 93 million tons by 2020, much lower than the designed output.

There are 71 operational reverter-furnace cement-production lines in Vietnam which can produce 73.45 million tons.

Once the other four production lines are put into operation, the total production capacity would be 81 million tons by 2015. The capacity is believed to satisfy domestic demand even if the national economy warms up.

INDIA: Sagar Cements to buy BMM Group’s cement business

Sagar Cements is all set to buy cement business of Bangalore-based BMM Ispat Group.

The deal, with an enterprise value of about ₹500 crore, is likely to be sealed in a couple of weeks, according to sources in the know.

The annual general meeting of Sagar Cements scheduled to be held on September 24 is expected to take up the transaction.

The valuation per tonne could be around $80-$85. Once the deal is closed, Sagar’s capacity would go up from 2.75 million tonnes to 3.75 million tonnes as BMM has a one-million-tonne cement manufacturing unit at Tadipatri in Anantapur district of Andhra Pradesh.

The acquisition would benefit Sagar as it would provide easy access to southern markets and significantly reduce freight charges by over 40 per cent.

Further, it also has a captive power plant of 25 MW.

If the enterprise value is pegged at ₹500 crore, the equity payment would be about ₹100 crore as BMM has ₹250 crore debt and an unsecured loan of ₹150 crore.

Sagar Cements plans to pay for the acquisition in cash as well as in the form of its shares.

“A part of the payment could also be withheld to be paid only after 12 months from the date of closure agreement,’’ said a source, adding that barring any `last minute’ surprises, the deal was almost clinched.

Sagar Cements had recently exited from a joint venture with French Cement major Vicat group by selling its 47 per cent stake to the latter for ₹435 crore.

It had also indicated that it was interested in inorganic growth and scouting for acquisitions.

Its scrip gained 4.98 per cent on the Bombay Stock Exchange on Thursday to close at ₹367.65.

INDONESIA: Cement Sales Up in August on Demand by Property, Infrastructure Projects

Indonesian cement sales grew 33 percent year-on-year in August, due to strong demand from property and infrastructure development projects, the industry body announced on Wednesday.

Sales of the building material stood at 4.66 million tons in August, according to Widodo Santoso, chairman of the Indonesia Cement Association (ASI). That compares to 3.5 million tons in the same month last year.

Widodo said various projects, such as construction of power plants and smelter, apartment, housing and hotel development in the country helped spurred demand for the building material.

“I expect demand to continue to increase in the last four months of 2014 … So that the 5 percent growth target for cement sales can be achieved,” he told the Jakarta Globe via text message.

Between January and August, cement sales rose 2.45 percent year-on-year to 37.5 million tons.

Cement sales declined by 25 percent year-on-year in July to 3.76 million tons, due to fewer working days and the presidential election.

A ban on heavy trucks on main roads in the travel period following Ramadan also contributed to the decline.

However, for the entire year of 2014, Widodo estimates sales to grow by around 5 percent, roughly on pace with last year’s growth.

Indonesia saw a 5.5 percent growth in cement sales last year, with the bulk of sales in Java, the country’s most populous island.

State-controlled cement maker Semen Gresik leads producers in sales, controlling 44.6 percent of the market. Indocement Tunggal Prakarsa, a local unit of German company Heidelberg Cement, followed in second place with a 29.3 percent market share and Holcim Indonesia, a local unit of Zurich-based Holcim, was in third place with 14.7 percent.

Other players, including Semen Bosowa Maros and Siam Cement Group, control an 11.4 percent share.

Semen Indonesia announced Tuesday that its Rp 68 billion ($5.76 million) cement packing plant in Mamuju, West Sulawesi, began commercial operations.

Semen Indonesia president director Dwi Soetjipto said the plant will be able to process up to 450,000 tons of cement per year. Construction began in October 2013.

“The presence of our Mamuju packing plant will help strengthen our distribution networks. It is part of our efforts to ensure adequate supply [of cement] in this region,” Dwi said in a statement.

Wednesday, September 10, 2014

PAKISTAN: Shadow over South African cement exports

With export avenues narrowing down for Pakistani cement, news about filing of an application against dumping in South Africa comes as rather discouraging. To recall, South Africa is the leading export destination for cement exports from Pakistan via sea. 

Amongst cement exporters from Pakistan, Lucky Cement Limited (KSE: LUCK) stands as the leading supplier of Portland cement to South Africa. LUCKs cement costs up to 18 percent less than the ex-factory price charged by PPC, one of the leading cement manufacturers in South Africa. 

Industrial reports indicate that LUCKs exports to South Africa stood at 0.6 million tons during FY14. This accounts for a 24 percent share in the company's total exports and a seven percent share in total industrial exports from Pakistan. During FY14, LUCKs market share in terms of exports was around 20 percent. 

Given these statistics, how would imposition of the duty, if it were to happen, affect LUCK, whose total market share in the cement sector currently stands at 30 percent. 

According to Sajjad Hussain, Research Analyst at BMA Capital, imposition of anti-dumping duty of 48 percent would nullify the entire price differential offered by LUCK compared to local players in South Africa. 

Every 10 percent decline in exports to the country could bring down LUCKs earnings by one percent, while in the advent of no exports to South Africa, earnings could be hit by as much as 10.3 percent, Hussain notes. The situation could be aggravated in case other African countries follow suit and impose similar duties on Pakistani cement, as capacity expansion is also underway in the region. 

On the other hand, Ali Amin, Research Analyst at KASB Securities, posits that LUCK is likely to turn up safe in the anti-dumping case since protection to the local industry would significantly reduce consumer surplus. Local industry in South Africa also raised cases against import of Pakistani cement earlier which were put down by the government for lack of evidence, he notes. 

However, LUCK itself has reportedly been in the process of establishing a plant in the Democratic Republic of Congo which will likely go online next year with a capacity of 1.2 million tons per year. One assumes that the plant would also be delivering to other emerging export destinations in the region, including Angola, Kenya and Madagascar. 

Regardless of the result of the anti-dumping case, LUCK seems to have a plan in place. But, does the Pakistani cement industry have one, particularly at a time when exports seem to be getting more challenging?

Tuesday, September 9, 2014

VIETNAM: Cement factories destroy town in southern Vietnam

Officials in Kien Luong town say they're shy about greeting people on the street since most of them look as though they forgot to wash their faces in the morning.
“It makes no difference whether you wash your face or not. Even your bike is dusty after a short ride,” one said.
Five cement factories built within a ten kilometers radius has heavily thickened the air above the capitol of the namesake district in Kien Giang Province.
In addition to the tedious task of constantly wiping floors and faces, the ever-present dust has allegedly left many in the town sick.
Tran Quoc Vu, who lives near Kien Luong Cement Factory, demonstrated the extent of the problem by sweeping half a kilograms of dust off his ten square meter floor.
“That much dust falls in just one night. So how much cement have we inhaled after all these years?” Vu cried.
One local said they used to consider the dust a blessing. To make a little money, you need only sweep into a bag it and sell it.
Now many call the dust “unbearable” and use a Vietnamese expression that describes the town as a place that's hard to breath.
Cement factory dust coats trees and roofs all over town.
Sometimes meals when a family fails to close their doors tightly enough, it ends up coating their meals
Trees have withered in the dust.
The owner of footwear shop said she has to clean her merchandise every day to prevent it from looking used.
Tong Quang Quyen, a local man, said the factories' investors know well about extent of the damage since most of their senior advisers built homes far from the factories.
“They don’t have to inhale the dust every day like us,” Quyen said, referring to one such adviser who built a home five kilometers from the nearest factory.
Thanh Nien reporters were directed to visit the home but the people living there refused to receive them.
Locals have recently sent complaints to different government agencies citing high rates of people suffering and dying from respiratory conditions.
Nguyen Van Tuyen, a local town official, said their recent survey of around 2,800 people residents of a single 1.5km stretch of the town found that nearly 40 members had died of cancer, mostly of the lungs and throat.
“That is an unofficial figure, the real one could be bigger,” Tuyen said.
Doctor Huynh Quyet Thang, vice chairman of the Vietnam Oncology Association, called the rate “terrible.”
Thang said environmental damage is inevitable in the areas around cement factories; those impacts, he added, could lead to diseases such as lung and respiratory inflammation.
Asbestos, a fibrous mineral found in many kinds of rock including those used in cement production, and radon – the radioactive element found in rock and soil-- can cause cancer, Thang said.
Dang Kim Thanh, vice chairman of the district, said he has been informed of the health situation and has ordered the district medical center to assist locals.

And leave the factories alone?

Kien Luong Cement Factory had been operating in the area for some time before the authorities decided to establish a residential area around it.
But authorities deviated from the plan by allowing four additional cement factories to open in the area, including the giant Holcim Factory backed by Swiss investment.
The factories have eaten into limestone mountains, many of which were valued for their historical and scenic properties.
With locals accusing the factories of discharging untreated emissions, Lam Hoang Sa, vice chairman of the province, said the factories' environmental pollution stems from their use of outdated technology.
“Only the technology at Holcim is relatively acceptable,” Sa said.
On August 28, a Thanh Nien reporter witnessed raw concrete materials being transported from the factory to barges without being covered.
Wind blew the dust all over the air.
Doctor Nguyen Dinh Hoe, the general secretary of Vietnam's Association for Conservation of Nature and Environment visited the cement town and says the evidence presented by the locals should be enough to shut the factories down.
Hoe said it seems like the environmental ministry and the provincial authorities haven't done a proper job of assessing the environmental impact of such a large number of cement factories before licensing them.
Colonel Pham Trung Thanh, spokesman of Kien Giang Police, disagrees.
“The pollution has not reached a point that merits punishment,” he said, adding that they've asked the factory to clean up their production.

Doan Huu Thang, head of the environment division of Kien Giang Natural Resources and Environment Department, also expressed sympathy for the factories.
“They will have to invest a large sum of money (in treatment and the like), and haven't been able to do that yet.”

Thang specifically defended Kien Luong Cement Factory, formerly called Ha Tien 2, as saying that it has improved a lot compared to the past.

NIGERIA: 32.5 Cement Grade is for Plastering, Flooring Only

Management of Dangote Cement has revealed that its new variants of 32.5 grade of cement, was for plastering and flooring only. The company said, the clarification was in line with an earlier position of the Standards Organisation of Nigeria (SON), on the different grades of cement and their uses.

The recent categorisation of cement grades and applications by the SON, prescribed three grades of cement, 52.5, 42.5 and 32.5 for use in Nigeria. The directive was that 52.5 grade be used for bridges, 42.5 grade, for casting of columns, beams, slabs and making blocks (multipurpose), while 32.5 grade should be restricted to plastering and flooring.

Dangote Cement Plc said it was leveraging on the clear standards set by SON to push its own brand of 32.5 cement into the market for the benefits of its teeming customers who might want to plaster their houses or do the flooring. 

The Group Managing Director of the company, Mr. Devakumar V.G. Edwin, revealed last week that the decision to start producing the grade of cement was not in any way meant to take away the importance of the 42.5 grade which he said the company had been producing for the past nine years.

“SON has clearly given all cement manufacturers in the country producing the 32.5 grade of cement up till the end of this month (September) to, among other things clearly indicate on their cement bags that the grade of cement they are producing is only meant for plastering purposes only. We see this as a step in the right direction. Therefore, we believe that the time is right for us to start producing this grade of cement. This justifies what we have been clamouring for in the past months, and it underscores the high premium we place on safety,” he noted.

According to Edwin, with the addition of the fresh nine million capacity, comprising of six million metric tonnes in the Ibese plant and three million metric tonnes in the Obajana factory, Dangote has extended its capacity of integrated cement production in the country from about 20 million tonnes per annum, to around 29 million tonnes.

The managing director said the 32.5 cement grade from the stable of Dangote Cement was also to ensure consumers pay the right price for the right value so that consumers would not be paying more for lower grade as is presently the case.
The cement company noted that the move is to develop an array of cement types to meet the varied needs of consumers for the different grades of cement.

KENYA: ARM Cement comes through a mix of fortunes

When HJ Paunrana applied for a job at a cement factory in Kenya at the age of 30, he was turned away. He had left school at 13 and did not have the necessary high-school diploma. “From that day he didn’t want to work for anyone else, and cement became his dream,” says Pradeep Paunrana of his late father.

Nearly 50 years later, 55-year-old Mr Paunrana is managing director of ARM Cement, the business his father went on to create that is now listed on Kenya’s stock exchange, with a market capitalisation of $500m. It produces more cement than any of its rivals in the region – 2.6m tonnes annually, outpacing the 2.5m tonnes produced in east Africa by global leader Lafarge . With a 51 per cent personal stake in the company, Mr Paunrana is one of Kenya’s richest men.

Along the way, ARM Cement has expanded from nothing in a tough, competitive market. But it has faced several crises – what Mr Paunrana describes as “doomsday” moments – and it is only in the past decade that it has really grown.

The story began when HJ bought a plot of land with a limestone deposit not far from Nairobi in 1974, but it was not until 1996 that the company produced its first bag of cement. In the interim, the small business produced fertiliser, animal feeds and other limestone-dependent products, including glass, ceramics and plastics.

Thanks to that fledgling business, however, Mr Paunrana was educated to the hilt: he was not going to have the same experience as his father. When he returned to Kenya aged 24 in 1984, he was armed with an MBA from Stern School of Business at New York University, big ambitions and fresh from a $40,000-a-year job designing and marketing software.

ARM’s annual turnover was 4m Kenyan shillings ($45,000 in today’s money). HJ could not afford to match his son’s salary. “I told my dad: ‘This is such a small business.’ My father says: ‘In that case, here’s the key, you take over and show me what you can do’.” His father also handed over all his back copies of Industrial Minerals, a trade magazine: “That’s all you’re going to read for the next week,” his father said.

He set out to expand and to add value, but time and again raising capital for a small, untested business outranked by rivals proved the biggest hurdle. Each new piece of machinery bought was considered a great victory. “We were working with short-term bank loans, hire-purchase type financing – it was convenient because we could raise the money on the assets themselves without much security,” says Mr Paunrana, speaking over lunch at the Capital Club, a new private members’ club for Kenya’s business elite in Nairobi.

Friends and extended family were crucial: they held 75 per cent of the business from the start, with immediate family holding the other 25 per cent. Even the bank manager became a personal friend after being impressed with the thoroughness and vision of Mr Paunrana’s paperwork. Faced with a request for a $1.6m loan for a marble-cutting plant from Italy, the bank manager – Alan Pickering – told Mr Paunrana that he had never made so big a loan decision so quickly. On his retirement from banking, Mr Pickering became the company’s chairman, and offered to help raise enough investment – $10m – to go into cement. But no new bank would bite. Friends and family came to the rescue once again, eventually putting together $4m. Mr Pickering even gave £150,000 from his own pension. It was then that the banks started coughing up.

If Mr Paunrana had the formal business skills, he found he still had plenty to learn from his father’s experience, including the art of a hard bargain. His father found a UK cement plant that had gone out of business in the UK’s mid-1990s recession, and called up Mr Paunrana to fly in with the company cheque book. When Mr Paunrana told the site manager they wanted to relocate the Leighton Buzzard cement factory piece by piece to Kenya, his father quickly interjected. “Ignore this young man,” said HJ. “We want it for scrap – now, how much will you pay us to take it away?”

The two men secured the plant at a knockdown price – the copper cabling was worth what they paid for the entire plant, says Mr Paunrana – and eventually reconstituted it as a 200-tonnes-a-day cement factory (down from 1,600-tonnes-a-day in the UK). It contributed less than 7 per cent to Kenya’s entire annual cement production. “But it was the beginning of the growth of the company,” says Mr Paunrana.

Still hungry for capital and needing to pay back loans, the company became one of the first family-owned businesses to list in Kenya. The timing, in 1997, could not have been worse. The listing took place the same week that paramilitaries tear-gassed protesters seeking greater freedoms in the then authoritarian single-party state. The shilling lost 10 per cent by lunchtime on the first day of the roadshow and many feared Kenya was headed for meltdown. “Nobody turned up to the roadshow in Mombasa – no one,” he says. By the time it reached Nairobi, stockbrokers advised him to cancel the listing. But an ever-ambitious Mr Paunrana, who had already started spending money he did not have on expansion, went ahead: “I had no choice but to raise the money.”

A dramatic evening ensued. A downtown curfew meant business people were unable to go home, and he estimates that 300 instead of 100 invitees turned up “for a drink and a samosa at the Hilton”.

To the astonishment of the audience and horror of his financial backers, says Mr Paunrana, he tore up his speech and gave an address – weeping in the middle – that urged people to back the IPO and not to fear riots he believed could deliver the country from authoritarianism. “I was very emotional. I said what’s happening on the street is a good thing, we must not be afraid of it, we need to demand our rights. And cement investment is a long-term investment – people should back the IPO as a sign we believe in our country and our future.”

Ultimately, it was heavily oversubscribed. But fresh Kenyan misfortunes soon affected the company so badly that Mr Paunrana was forced to try to sell it. Heavy rains the following year washed away crops, roads and bridges, doubling the cost of transport; terror attacks struck the capital, arresting growth; economic crisis in Thailand saw ships loaded with cement dock in Kenya, trying to offload stock for a 10th of the price for which ARM could produce it. “We were dead; it felt like everything that could possibly go wrong went wrong,” he says.

In line with the collapse in Kenya’s stock exchange, shares in the company halved. “It was such a horrible time; facing our friends who we’d pushed to give us loans, buy our shares.”

ARM was rescued by a loan from rival Lafarge, which it converted into a shareholding. But when Mr Paunrana begged it to buy the whole cement business, saying that would at least knock one of its competitors out of the market, he says one Lafarge manager said: “We don’t need to buy you out, you will die a natural death.”

The relationship degenerated into boardroom spats but ARM survived. With the introduction of multi-party democracy in Kenya and the return of foreign investment in 2003, cement boomed and the company began expanding – putting up a new plant every two years, and eventually outstripping Lafarge’s production.

Lafarge’s Kenya subsidiary Bamburi sold the entirety of its 14 per cent ARM shareholding by 2010 after ARM voted Bamburi’s representative off its board. ARM now has plans to double annual production to 5m tonnes in the next few years.

“That comment made me really mad and of course then I wanted to remain in the cement business,” says Mr Paunrana. “It wasn’t strategic insight but it was entirely due to circumstances – the improving economy catapulted us.”

While the East Africa region is growing at an impressive 6 per cent a year, cement consumption is growing much faster, at 14 per cent annually, writes Katrina Manson. There is plenty of room for more growth: Kenya’s per capita cement consumption will pass 100kg this year, and still lags a long way behind heavy guzzlers such as Egypt, at 554kg in 2012.

Mr Paunrana says demand comes from rural families building their homes bit by bit, but he also expects a new rush in demand once big-ticket infrastructure projects start.

The cement market is competitive: it already includes Lafarge and East African Portland Cement. Africa’s richest man, Aliko Dangote, wants to build a $400m cement factory in Kenya too.

Cement consumption is a good proxy for the expansion of the economy and rise of the middle class, says Mr Paunrana. Every time the tea sector pays harvest dividends to farmers, his sales increase.

CHINA: Three cement companies implement price fixing and was fined 114 million yuan

National Development and Reform Commission of Jilin Province Price Bureau instructed the cement sales of Jilin Yatai Group Co., Ltd. , Northern Cement Co. , Jidong Cement Co., Ltd. , Jilin three cement companies implement price monopoly behavior , according to the law fined a total of 1.1439 million yuan. Among them, the Yatai fined 60.04 million yuan , on the north fined 40.97 million yuan , Jidong fined 13.38 million yuan . Recently, the relevant disciplinary procedures have been fulfilled, the situation now announced as follows .

Since March 2013 , the National Development and Reform Commission price supervision and inspection and anti -monopoly Bureau of the local cement industry, there is some pricemonopolistic behavior , the organization launched an antitrust investigation . After investigation, April 14, 2011 , the Company and the North Yatai company ‘s stakeholders meeting in Jidong Yatai company , agreed regional cement ( clinker ) prices and the implementation of policies , forming a ” key cement enterprises in Jilin Province regional pricing resolutions of the meeting , ” agreed clinker export prices by 300 yuan / ton executed , enter the Liaoning region clinker prices not less than 300 yuan / ton . The meeting also formed Changchun , Matsubara , rock regional cement prices resolutions , three companies agreed since at 0:00 on April 16th, 2011 from cement prices all adjustments to the latest execution price , and developed a ” Changchun , Matsubara , rock regional cement prices execution table ” , setting out the specific implementation of the price of bagged and bulk cement sales of the three companies selling PC32.5, PO42.5, PII52.5 three varieties , clear all varieties of cement prices in the table for the three companies to perform factory lowest price , listing pricesand external offer under the circumstances raised at least 10-20 yuan / ton . The meeting also tentatively scheduled April 25, 2011 three companies identified in Jidong Cement Jilin area in May execution price and execution of policies. In Yatai company April 15, 2011 to all departments Changchun area , Ming City Cement sales price adjustments in the enforcement notice issued by his subordinates , clearly with the Northern Company , Jidong companies have reached a price agreement execution , along with the implementation of agreed regional cement prices table sets out the sales execution price northern companies and Jidong cement companies in different varieties .

Also found , May 11, 2011 , the Company and the relevant personnel in northern Yatai Yatai Group companies held in Tonghua Cement Co. meeting , agreed Tonghua , Baishan regional cement prices , and the formation of the ” 2011 cement industry in Jilin Province Tonghua , Hakusan area a second time pricing will be meeting minutes , ” the company has developed and Yatai northern region in Tonghua and Baishan regional cement prices to perform list , agreed to a PC32.5, PO42.5, PII52.5 three varieties bagged and bulk cement concrete execution price sales , and clearly the price of cement in the region since the implementation of this meeting May 12, 2011 to determine the price . The meeting also recommended that May 26, 2011 for the operation of the regional market to discuss and determine the next phase of the market price.

Yatai Company , Northern companies and Jidong Company by way of frequent meetings , agreed sales price of cement , and the implementation of the resolutions agreed price in the business , agreed and implemented a price-fixing agreement in violation of China’s ” anti-monopoly law “requirement to eliminate or restrict competition in the market , controlling cement sales prices, harm the interests of downstream industries and consumers.

Taking into account the situation of China’s cement production capacity surplus , the three companies agreed and implemented price-fixing agreement duration is not long, the market competition is limited to a certain area range damage , accordingly , do not actively cooperate with the investigation Yatai company , Jidong the company imposed a fine of 2% of sales for 2012 were total 60.04 million yuan and 13.38 million yuan ; being able to actively cooperate with the investigation and rectification of the North ‘s punishable by a fine of 1% in sales year 2012 , total 40.97 million yuan .

Next , the National Development and Reform Commission will instruct the relevant provinces (municipalities ) anti-monopoly law enforcement agencies to cement price fixing behavior has been verified be punished according to the law , maintaining a fair and orderly market competition, protect the legitimate rights and interests of consumers.

NIGERIA: ICD buys $300 mln stake in Nigeria's Dangote Cement

Sovereign fund Investment Corp of Dubai (ICD) has bought a 1.4 percent stake in Dangote Cement, Nigeria's biggest company by market capitalisation, for $300 million, a Dangote spokesman said on Monday.

Dangote Cement spokesman Carl Franklin confirmed the sale, but provided no further details.

Stockbrokers in Lagos told Reuters 243 million shares of Dangote Cement were transferred to ICD, which holds stakes in some of the emirate's top companies, at 200 naira each, a 12 percent premium to Dangote Cement's price of around 223 naira on Monday.

"ICD is diversifying its portfolio ... into the West African market through a minority stake in Dangote Cement. We believe this bodes well for future investments into Nigeria from the Middle East," Akinbamidele Akintola, an Africa equity sales executive at Renaissance Capital, said.

Dangote Cement, owned by Africa's richest man Aliko Dangote, is expanding and plans to roll out cement plants across Africa to reach an annual 62 million tonnes capacity by 2017, up from a projected 42 million tonnes this year.

It reported pretax profit of 107.1 billion naira ($659.4 million) in the first half, down 0.57 percent from a year ago, on revenues of 208.9 billion naira.

Shares in Dangote cement, which make up a third of Nigeria's stock market and hit a record high of 250 naira in July, traded flat at 223 naira on Monday, valuing Nigeria's biggest company at about 3.97 trillion naira ($24.5 billion).

Dangote Cement faces competition in Africa from French cement maker Lafarge which is combining its Nigerian and South African businesses to accelerate growth on the continent.

Last year, Dangote Industries sold a 1.5 percent of its 95 percent stake in Africa's biggest cement producer to South Africa's Public Investment Corporation (PIC) for $289.3 million.

Middle East companies are expanding in Africa. Last week, Qatar National Bank (QNB) bought a 12.5 percent stake in pan-African lender Ecobank for about $200 million.

WORLD: Cemex-Holcim Spain Deal Cleared by EU as $50 Billion Lafarge-Holcim Merger Looms

Cemex will be able to buy Holcim’s Spanish assets after being given the green light by the European Commission, an important step in a huge shake up in the cement industry which could bring the proposed $50 billion creation of Lafarge-Holcim a step closer.

The Holcim assets comprise plants and quarries dedicated to the production and supply of cement, aggregates, ready-mix concrete and mortar in Spain. The Commission concluded that the acquisition would not raise competition concerns since the merged entity will continue to face sufficient competition from its rivals in all markets concerned.

By selling off these assets, Holcim and Lafarge would be nearing its $5 billion sales target in its bid to satisfy the competition authorities in order to merge into the new cement behemoth.

The Spanish transactions are part of a series of sales between Holcim, Lafarge and other European cement players contributing to the €5 billion target.

This latest development follows news earlier in the summer that competition authorities were not satisfied with the proposal for Spain.

On 23 April 2014, the Commission opened an in-depth investigation over concerns that the proposed transaction could substantially lessen competition in the market for grey cement by removing Holcim assets as an actual competitor in eastern Spain.

The Commission was also concerned that the proposed transaction could facilitate existing coordination between grey cement producers in central Spain or make future coordination more likely. However, these concerns have been dispelled.

Cemex also intends to acquire control of the whole of Holcim's activities in cement, ready-mix concrete and aggregates in the Czech Republic, an operation cleared by the Czech competition authority in March 2014.

Earlier this year Lafarge agreed to buy back Anglo American's stake in Lafarge Tarmac so it can sell the entire unit in a move which would again bring the merger with Holcim a step closer. If successful, the new company would become the largest cement producer in the world.