INDIA: UltraTech eyes Jaypee's three cement plants in Madhya Pradesh

Aditya Birla group firm Ultratech Cement is believed to be looking at possible acquisition of Jaypee Group's three cement plants in Madhya Pradesh in a deal that could be worth about Rs 5,500-6,000 crore.

While investment banking sources involved in the talks said that the discussions are currently under way for a possible deal, a spokesperson for UltraTech declined to comment on queries in this regard.

When contacted, Jaypee Group spokesperson Askari Zaidi denied any plans for sale of these plants.

"This information is not correct. The company has no plan to sell its Reva cement plants," he said.

Sources, however, maintained that UltraTech is looking to acquire the three cement plants of Jaypee Group in Reva, Madhya Pradesh and pegged the valuation at around Rs 5,500- 6,000 crore. They added that the discussions are currently focussed mainly on valuation part.

In the June quarter, UltraTech had completed the acquisition of Gujarat units of Jaypee Cement Corp comprising an integrated unit at Sewagram and a grinding unit at Wanakbori with a combined capacity of 4.8 million tonnes per annum.

A leading market player, UltraTech is into manufacturing grey cement, ready mix concrete and white cement in the country. The company has an installed capacity of 62 million tonnes per annum for grey cement.

Ultratech has 12 integrated plants, 16 grinding units and six bulk terminals, among others, as per its website.

A diversified entity, Jaypee Group has good presence in the cement sector.

According to its website, it produces special blend of portland pozzolana cement and has an aggregate capacity of 33.8 million tonnes per annum.

In recent times, Jaypee Group has been looking to divest some of its assets across sectors, as part of larger efforts to bring down its debt burden.

On the BSE, shares of UltraTech fell over three per cent to close at Rs 2,558.90 while the scrip of Jaiprakash Associates gained more than two per cent to close at Rs 27.30.

EUROPE: Two industry groups eye Lafarge-Holcim assets - sources

Irish cement maker CRH (CRH.I) has teamed up with Mexican rival Cemex (CMXCPO.MX) to explore a bid for all the assets industry giants Lafarge (LAFP.PA) and Holcim (HOLN.VX) must sell to get the go-ahead for their planned merger from competition watchdogs, according to several people familiar with the matter.

Germany's HeidelbergCement (HEIG.DE) and Brazilian firm Votorantim Cimentos SA VCSI.UL are also considering a joint bid for the entire portfolio, the sources said.

These would compete with several private equity groupings that have been formed to pursue a deal for the assets, which could be valued at anywhere between 4 billion and 7 billion euros (3.11 - 5.50 billion pounds), they said.

Teaming up would allow companies to carve up the assets according to their geographic fits and would also help split the cost.

A spokesman for Cemex said it does not comment on market rumours, while HeidelbergCement and CRH declined to comment. No one at Votorantim Cimientos was immediately available for comment.

A spokeswoman for Lafarge declined to comment beyond saying the companies are on track to close the merger in the first half of next year. Holcim declined to comment.

Lafarge and Holcim unveiled plans in April to create the world's biggest cement group with $44 billion in yearly sales.

But competition regulators in some 15 countries, as well as the European Commission, are expected to take a hard look at the deal which brings together the world's top two cement makers with a combined stock market value of more than $55 billion.

The pair are seeking buyers for Holcim's French activities, Lafarge's German interests and other operations in Austria, Hungary, Romania, Serbia, Britain, Canada, the Philippines, Mauritius and Brazil. That would affect some 10,000 workers and account for about 3.5 billion euros ($4.4 billion) of sales.

Holcim said last month the two companies were seconding one senior manager each to a divestment committee to advance plans for the disposals, which could involve setting up a new business as well as outright sales.

In the event of any spin-off, the two managers would be the chief executive and chief financial officer of the company, Holcim said, in a move that could facilitate a sale to private equity firms.

Turkish conglomerate Sabanci Holding (SAHOL.IS) plans to bid for some of the assets, while other strategic bidders could also team up to bid for the assets.

At least four consortia of private equity firms are also eyeing the entire portfolio, sources familiar with the matter said.

BC Partners, Advent and Temasek TEM.UL have teamed up, as have CVC and sovereign wealth funds the Abu Dhabi Investment Authority (ADIA) and Singapore's GIC. Bain and Onex form the third group and Blackstone (BX.N), Cinven and Canadian pension fund CPP are the fourth.

Blackstone, CVC, BC Partners, Advent, Cinven, Bain, CPP and ADIA all declined to comment. The other firms could not immediately be reached for comment.

SENEGAL: La cimenterie Dangote va démarrer ses activités en mi-novembre

La troisième cimenterie du Sénégal construite par le groupe nigérian Dangote va démarrer ses activités en mi-novembre 2014. L’annonce est de Serigne Aramine Mbacké, Directeur général de ladite structure. Et la bonne nouvelle pour les Sénégalais, c’est qu’il prévoit une baisse de 10 à 15% sur le prix actuel de la tonne de ciment. Selon lui, le groupe va aussi investir dans le sucre, le riz et les hydrocarbures avec la perspective de créer 80 000 emplois. Pour cela, révèle-t-il, un portefeuille de 1000 milliards de FCFA est déjà disponible. 

“Nous sommes prêts à investir 2000 milliards de FCFA, voire plus, dans la filière Riz au Sénégal”, souligne le DG de Dangote, société qui est en négociation avancée pour racheter la Société africaine de raffinage (Sar). Ce présent projet de cimenterie qui va générer 5 000 emplois non loin de Pout, a nécessité 350 milliards de FCFA. Dangote industrie va produire 1 500 000 tonnes de ciment par an.

RUSSIA: Lafarge sells one Cement Plant in Russia for a total enterprise value of €104 Million

Lafarge has announced the sale of its cement operations in the Urals region (Russia) to Buzzi Unicem for an enterprise value of 104 million euros.

Lafarge UralCement operates one cement plant located in Korkino, 40km in the south of Chelyabinsk.

This divestment will contribute to Lafarge's objective to reduce net debt.

This transaction is subject to the authorization of relevant authorities and customary closing conditions.

After this divestment, Lafarge will remain present in Russia in the dynamic Central region (Moscow), with notably its Ferzikovo plant inaugurated in May 2014.

ALGERIA: L’Algérie n’arrive pas à rattraper son déficit en ciment : Grands projets et immenses incertitudes

Au moment où l’Algérie annonce sa volonté d’augmenter sa production de ciment pour satisfaire le marché interne, la facture des importations explose.

Le discours annonce une hausse imminente, ou à moyen terme de la production de ciment en Algérie. Mais pour l’heure, ce sont les importations qui augmentent de manière inexorable, depuis des années, démentant un discours résolument optimiste, parsemé de projets et de perspectives prometteuses, jamais concrétisées sur le terrain.

Durant les huit premiers mois de l’année 2014, les importations algériennes de ciment ont augmenté de 31%, avec une facture de 373,5 millions de dollars, contre 285,3 millions durant la même période de l'année dernière, selon le Centre national de l'informatique et des statistiques des douanes (CNIS). Au total, l’Algérie a importé des matériaux de construction pour une valeur 2,25 milliards de dollars, contre près de 2,11 milliards durant la même période 2013, ce qui représente une hausse de 7%. En volume, on passe de 6.3 à 7,1 millions de tonnes, soit une hausse de 13,7%. Pour le ciment, on passe de 3,2 à quatre millions de tonnes.

Qu’en est-il pour le rond à béton, autre produit clé pour le secteur du bâtiment? L’entrée d’Arcelor Mittal à El-Hadjar, il y a une décennie, devait non seulement colmater cette brèche des importations, mais dégager un excédent destiné à l’exportation. Aujourd’hui, il est question d’un désengagement, déjà entamé, d’Arcelor Mittal, mais la facture est toujours là : les importations ont atteint 1.29 milliards de dollars, pour 2.01 millions de tonnes de produits importés. Ciment et rond à béton coûtent désormais à l’Algérie autant que les céréales.

Discours décalé

Que dit le discours officiel sur ces questions ? Le ministère de l'industrie promet que l'Algérie cessera d'importer du ciment dans trois à quatre ans, quand les projets lancés commenceront à produire. Le pays sera alors en mesure de combler le déficit actuel, évalué à cinq millions de tonnes. Le marché algérien consomme 23 millions de tonnes, pour une production de 18 millions de tonnes. Le gouvernement prévoit même de porter la production à 29 millions de tonnes en 2018.

Le gouvernement fait feu de tout bois pour atteindre ces résultats. Il compte d’abord sur le GICA (Groupe industriel de ciment d’Algérie) pour lancer de grands projets dans le secteur. Il devrait construite quatre nouvelles cimenteries, et augmenter la cadence de production de six autres actuellement en production. 

En parallèle, il compte sur un apport du privé, avec notamment l’entrée du groupe Cevital de l’homme d’affaires Issaad Rebrab sur ce créneau. Le Conseil National de l’Investissement a donné son accord pour le lancement d’un projet d’envergure à d’El-Khroub, près de Constantine. La capacité de cette cimenterie, la plus grande du pays, sera de huit millions de tonnes par an.

Prévisions optimistes

L’usine produira quatre millions de tonnes à son entrée en production, en 2017. La production sera ensuite portée à huit millions de tonnes, dont la moitié sera exportée, selon M. Rebrab, qui prévoit une saturation du marché à l’horizon 2020.

Mais pour l’heure, le décalage entre production et consommation a forcé le gouvernement à tenter de rattraper le déficit, qui prenait de l’ampleur au fil des années. Entre 2012 et 2013, le déficit a augmenté de 23%, et il menace d’exploser dans l’immédiat, avec les projets lancés par le gouvernement dans le domaine de l’habitat. Pour le quinquennat 2015-2019, le gouvernement a annoncé son intention de construire 1.6 millions de logements pour éradiquer l’habitat précaire dans le pays. Même si ces chiffres doivent être pris avec beaucoup de prudence, ils indiquent une tendance qui risque de peser lourdement sur le marché algérien : habitat et travaux publics continuent en effet de tirer la croissance avec les énormes budgets qui leur sont consacrés.

Bureaucratie

Rien ne garantit cependant que les résultats en matière de production de ciment seront au rendez-vous. Car si le groupe Cevital, géré de manière performante par son propriétaire, semble en mesure de respecter son calendrier, le groupe public GICA est largement tributaire de décisions qu’il ne maitrise pas. D’ores et déjà, le groupe est engagé dans une opération de restructuration, lancée par le ministère de l’industrie, qui veut réduire le nombre de groupes publics de moitié, pour les ramener à une dizaine. Cette simple opération risque de déstabiliser le GICA, et d’absorber une partie de son énergie.

La force d’inertie qui écrase les groupes publics, avec un mélange de gestion bureaucratique, du poids de la tutelle, et d’absence d’autonomie risquent aussi de peser dans la balance pour, au final, transformer les projets en cours en simple discours. Le ministre de l’industrie lui-même, Abdessalam Bouchouareb, l’a reconnu : les groupes publics n’ont pu consommer que 18% des 9.5 milliards que l’Etat leur a consacrés. Le modèle de gestion n’ayant pas évolué, rien n’indique que ces groupes feront mieux durant le prochain quinquennat.

ANGOLA: Fábrica de cimento ‘Yetu’ prevê produzir 1, 5 milhões de toneladas até ao fim do ano

Se tudo correr como previsto, a fábrica de cimento Yetu vai aumentar os centros de distribuição pelo país e a sua produção para 1.5 milhões de toneladas, nos próximos três meses

Há um ano no mercado, a fábrica de cimento Yetu está a abrir filiais para expandir o produto e aumentar o volume de vendas nas 18 províncias de Angola. Actualmente, conta com uma capacidade de 4 mil e 200 toneladas de clínquer por dia e 4 mil e 500 toneladas de cimento.

Segundo o chefe de departamento de produção de energia eléctrica, Júlio Raul João, a fábrica, que detém a marca de cimento Yetu, é uma unidade autónoma com a capacidade de captação de água para os seus serviços, consumo, produção de energia local, produção, comercialização dos próprios sacos, produção do clinquer e cimento. “As nossas dificuldades têm a ver com a matéria – prima, como o minério de ferro que vem da província da Huila e a areia que é adquirida dos arredores do Cuanza Sul, passando pelo próprio combustível comprado fora do Cuanza Sul, “explica. No primeiro ano de produção, a fábrica de cimento Yetu está a 70 % da sua capacidade de produção que prevê subir até ao mês de Dezembro. “Até ao final do ano, temos de produzir o equivalente a 1.5 milhões de toneladas e a nossa previsão anual, menos 30% que corresponde à fase inicial “, explica. Segundo aquele responsável, a principal meta da fábrica passa por ter o produto em todo o país. Por essa razão, estão a ser constituídos os centros de distribuição ou armazéns.

“Temos centros de distribuição em Luanda, a partir de onde podemos fazer a distribuição terrestre, através do comboios ou de camiões para a região norte e para parte da região leste “, salienta.

Na opinião de Júlio Raul João, a fábrica de cimento Yetu encontra- se num ponto que não é estratégico, em relação à comercialização do produto e daí, a necessidade de criar mais postos de venda. Para a região leste, o carregamento é feito do Cuanza Sul para as províncias do centro. Já na região sul a empresa conta com agentes revendedores que levam os produtos até aos clientes.

Segundo aquele responsável, o cimento que a fábrica produz tem “muita qualidade.” O produto 42.5 é o ideal para a construção de obras da indústria, como a orla marítima e a construção de barragens, enquanto o produto 32.5 é recomendado para residências. Por esse motivo, a unidade fabril conta com grande número de clientes. “Tendo em conta a qualidade do produto apresentado, refiro- me ao produto 42.5 que é o cimento comercializado em sacos azuis e ao produto 32.5 comercializado em sacos vermelhos”, explica.

No que diz respeito às vendas, o responsável refere que a empresa vende 70 por cento da capacidade actual da produção mensal.

INDONESIA: Semen Tonasa to build Rp 3t plant in Papua

Cement manufacturer PT Semen Tonasa, a subsidiary of state-run publicly listed cement giant PT Semen Indonesia, is planning to build its first factory in West Papua, as the company seeks to meet increasing demand in the region and at the same time cut distribution costs to the nation’s eastern areas.

Semen Tonasa president director Andi Unggul Attas said the company would be investing Rp 3 trillion (US$246.3 million) in the construction of the plant, named “Unit VI”, as well as its private seaport to support distribution, which will be located in Sorong, West Papua. 

Currently, the company’s fifth plant in Pangkep, South Sulawesi, and its sister company, PT Semen Gresik’s plant in Gresik, East Java, are helping their parent company to supply cement to the Papua and West Papuan markets.

Demand for cement has increased by 6 percent each year in the eastern part of the country, especially in Papua and West Papua, where distributors charge Rp 1.6 million for each sack of cement, according to Andi.

In order to meet the provinces’ demand, the company was running four of its five plants at production capacity of 5.98 million tons per year, with 6.7 million tons its target for the end of this year, he added. 

“We expect to reach the target, as we had already produced 4.2 million tons of cement by the end of August,” Andi said.

Andi explained that distribution by air was the cause of cement being so expensive in Indonesia easternmost provinces, adding that demand in the region was rarely met, even though the company had established 10 packing plants in several cities in the eastern half of the country.

“The high price of cement [in eastern Indonesia] is because all cement must be delivered by air. Even if cement could be delivered by sea, vessels are 

reluctant to ship cement. This high distribution cost really affects [the company’s finances],” he added.

Therefore, the private seaport, which is to be developed together with Semen Tonasa’s first ever 

Papua plant, is also expected to tackle distribution costs and issues in supplying the eastern part of the country.

As demand increased, he said, the company planned to raise its current 45 percent market share in eastern Indonesia to 50 percent, which could increase its revenue to Rp 5.3 trillion by the end of the year, up from Rp 4.8 trillion in 2013.

Andi said the company aimed to reap Rp 1.6 trillion in next year’s earnings before interest, taxes, depreciation and amortization (EBITDA), an increase from the expected Rp 1.4 trillion by the end of this year, which represents a 75 percent increase from its earnings of Rp 800 billion in 2010.

Plant will be firm’sfirst in Papua

Private seaport alsoin the pipeline

Demand increasing in Papua, but costs are high due to distribution by air

Meanwhile, three Asian cement manufacturers – Thailand’s Siam Cement Group, China’s Anhui, and Vietnam’s Chinfon Cement Corporation – are planning to build cement factories in Indonesia.

The Siam Cement Group is currently building a Rp 34 trillion plant, which will have a production capacity of 55 million tons of cement per year, while Anhui is preparing to build a 3-million ton capacity plant worth $500 million.

Chinfon is currently constructing a 4-million ton capacity plant worth $600 million on 500 hectares of land in Banten. Chinfon is the parent company of PT Cemindo Gemilang, which produces Merah Putih, a local cement brand.

Semen Tonasa’s new plant in Papua is also expected to strengthen the company’s grip in the region ahead of the ASEAN Economic Community in 2015 that will create a single market in Southeast Asia and thus increase competition in the region.

INDIA: JK Cement Ltd commences Commercial production at Mangrol unit

JK Cement Ltd has commenced Production and dispatch of cement from its new cement manufacturing facilities at J.K.Cement Works, Mangrol, Dist: Chittorgarh, Rajasthan having grey cement production capacity of 1.5 Million Ton per annum.

Shares of J.K.CEMENT LTD. was last trading in BSE at Rs.545.5 as compared to the previous close of Rs. 557.8. The total number of shares traded during the day was 9489 in over 1690 trades.

The stock hit an intraday high of Rs. 569.65 and intraday low of 545.5. The net turnover during the day was Rs. 5258610.

BOLIVIA: Fancesa abrirá mercado con agencias en La Paz

En el transcurso de la próxima semana, la Fábrica Nacional de Cemento Sociedad Anónima (FANCESA) podría expandir sus ventas a los mercados de La Paz y El Alto. Las gestiones están avanzadas y sólo falta firmar contratos con tres agencias.

La información fue brindada por el director de FANCESA en representación de la Gobernación de Chuquisaca, Rolando Llorenti, quien manifestó que a un inicio se proyectó la venta de 15.000 bolsas de cemento mensuales por cada agencia.

Dijo que de acuerdo al plan de expansión, dos agencias se ubicarán en la ciudad de La Paz y una en la ciudad de El Alto, donde las perspectivas de crecimiento de las construcciones grandes y viviendas son importantes.

Llorenti dijo que la decisión de ingresar a esos dos nuevos mercadas es fundamental porque “se va a trabajar en la cancha del enemigo” y, con ello, se podrá saber cuál es el comportamiento de la Sociedad Boliviana de Cemento (SOBOCE).

Manifestó que la firma de contrato con las tres agencias tendría que realizarse la próxima semana, para después arrancar con la venta del producto.

Asimismo, informó que se tomó esa decisión de ingresar a los dos mercados para cumplir con la recomendación de la Autoridad de Empresas de no segmentar el mercado con la competencia. Recordó que FANCESA sostiene un proceso judicial por ese tema.

El ingreso a los nuevos mercados significará que la productora de cemento tendrá presencia en siete de los nueve departamentos. También dijo que se estudia la posibilidad de llegar a Beni, al aclarar que llegar a Pando es mucho más difícil por las condiciones geográficas.

El Directivo de FANCESA en representación de la Gobernación de Chuquisaca manifestó que están a la espera de un informe de la Gerencia Comercial para definir la variación de precios y con ello ejecutar la venta en los nuevos mercados.

En cuanto al transporte del producto, explicó que la Gerencia Comercial deberá negociar con el transporte para definir el precio del flete, pero consideró que al ser una apertura de mercado, los costos deben ser bajos porque, a la larga, beneficiará a las dos partes.

Otro elemento que se debe considerar para tal situación, manifestó, son las buenas condiciones de la carretera con asfalto desde Sucre hasta La Paz.

BRAZIL: EMPRESA CIMENTEIRA INICIA IMPLANTAÇÃO FÁBRICA EM SE

A empresa ligada ao grupo empresarial cearense M. Dias Branco, Cimento Apodi, iniciou na última terça-feira, (30) os estudos para a reavaliação da jazida de calcário, localizada no município de Santo Amaro das Brotas, que servirá de suporte para o abastecimento da fábrica. Nos próximos trinta dias serão realizados doze furos de sondagem, que totalizarão cerca de mil e oitocentos metros a serem estudados.

As amostras colhidas têm formato cilíndrico e diâmetro aproximado de 76 milímetros. O destino dessas amostras são os laboratórios da Cimento Apodi em sua fábrica/sede localizada na cidade de Fortaleza (CE). Lá serão realizadas análises químicas e funcionais, que servirão para a definição da qualidade química do calcário, assim como seus parâmetros físicos.

A Cimento Apodi, por necessidade de manter um rigoroso controle de qualidade de suas matérias primas e produtos, mantém em permanente funcionamento laboratórios equipados com o que há de mais moderno em termos de aparelhos para determinação de carbonatos e contaminantes.

Com os dados colhidos, A Cimento Apodi reavaliará a jazida de Santo Amaro das Brotas, fazendo o zoneamento das diversas faces de calcários. Para tanto, ao mesmo tempo em que está realizando as sondagens em profundidade, duas outras empresas estão fazendo o mapeamento superficial da jazida e a modelagem numérica do terreno.

De acordo com o geólogo e diretor de Recursos Minerais da Companhia de Desenvolvimento Econômico de Sergipe (Codise), a preocupação com essas ações de planejamento é justificada, porque uma fábrica de cimento depende fundamentalmente da disponibilidade de calcário, sua matéria prima mais importante, em termos de volume. No processo produtivo do cimento, entretanto, são utilizadas outras matérias primas minerais, tais como a argilas, cuja função é a correção dos teores de ferro e alumínio, e gipsita.

“O que chama atenção é a abundância de algumas substâncias minerais industiais, cujas concentrações se distribuem principalmente na faixa leste do Estado de Sergipe. São depósitos minerais de grande importância econômica. A abundância desses afores de produção, aliada à proximidade de mercados consumidores importantes, são condicionantes que levam grupos empresarias a investirem em território sergipano”, destaca.

O mapeamento e demais serviços de caráter geológico estão sendo realizados pela SIGMA – JC Serviços Integrados de Geologia, Mineração e Meio Ambiente Ltda., empresa radicada em Recife (PE). Os serviços de topografia e modelagem numérica do terreno estão sendo executados pela empresa ENGECON. Os serviços de sondagem em profundidade estão sendo executados pela empresa canadense Energold Drilling Corporation.

SENEGAL: Concurrence dans le secteur du ciment - Sococim bande ses muscles

Yougo Sow, le directeur général de la cimenterie rufisquoise a révélé hier, mardi 30 septembre, que son entreprise ne craignait pas la concurrence et qu'au contraire, « elle était assurée du soutien des employés et marchait directement vers le succès. « La volonté et la détermination de Sococim sont inébranlables et nous pour suivrons notre marche ».

Cette confiance en son avenir, Youga Sow dit la fonder sur les éléments de positionnement de son produit en terme de qualité et les nombreuses actions que l'entreprise mène dans le cadre de la RSE (responsabilité sociétale d'entreprise).

« Notre société est un concurrent redoutable et craint de tous », a dit le directeur général. Et de préciser : « Notre force réside dans la qualité de notre ciment certifié ISO 9001, ce qui nous offre une garantie supplémentaire et nous met à l'abri des concurrents »

C'est dans ce sens que le directeur général a assuré que sa société ne ménagera aucun effort pour maintenir son rang de référence technique et commercial dans le métier du ciment.

Le directeur général s'exprimait à l'occasion de la traditionnelle cérémonie de remise de moutons aux imams des villes de Rufisque et Bargny. A l'occasion, c'est une quarantaine de béliers qui a été distribuée aux imams. Pour les autres notables, la société a offert des aides sous forme d'enveloppes.

Au bout du compte, ce sont plus de 70 dix enveloppes de 70.000 F Cfa chacune qui ont été distribuées, sans compter celles offertes aux autorités coutumières des deux villes.

Expliquant ce geste de la société, M. Sow dira que « la fête de la Tabaski est un symbole de la confiance en Dieu et un moment de partage ». Dans le contexte de la psychose de la maladie à virus Ebola, il a invité les hommes religieux à prier afin que le pays soit épargné des menaces sanitaires.

ETHIOPIA: Leads the East African cement market

Amongst the countries in East Africa, Ethiopia leads in terms of regional cement output (12.6 million MT per year).

It has overtaken Kenya, which historically dominated regional output, producing the equivalent of 7.4 million MT per year in 2012-13.

At the same time, both Kenya and Uganda are regional export hubs, having exported a total of 1.4 million MT in 2012.

The output among East African countries is significant relative to other African regions, particularly when considering that Central Africa historically been a marginal producer, with a capacity of a mere 1.6 million MT per year.

However, this has been changing with the emergence of Angola as a major producer. Angola has rapidly built up its capacity to around 8 million MT per year, all of which it consumes.

Nigeria and South Africa remain the leading sub-Saharan cement producers, with 25% and 16% of the total market share, while Ethiopia and Kenya account for 11% and 6% of the total market share respectively.

Cement consumption per capita in East Africa is significantly below the global average of 500 kg, with the region's largest markets in Kenya (80 kg) and Ethiopia (61 kg) - both indicating significant potential for growth. This reflects high domestic prices, which have constrained demand.

By way of comparison, in sub-Saharan Africa, Nigeria remains the largest consumer, with an estimated 18.3 million MT consumed in 2013, followed by South Africa, with 12.2 million MT. Together these two countries represent half of sub-Saharan Africa's cement consumption.

Angola, Ethiopia and Ghana all together consume between 5-6.5 million MT, while Kenya (3.7 million MT) and Tanzania (3 million MT) are East Africa's leading cement consumers.

The rapid expansion of production capacity across Sub-Saharan Africa has led to a sharp drop in cement imports, reversing the deficit that has built up over the past decade.

Nigeria, which as recently as 2010 was importing $500 million worth of cement each year, has seen imports slump to $139 million in 2012, while Ethiopia's imports have fallen by 75%, to just $43 million over the same period.

This reflects the steady tightening of both countries' import regimes, where the governments are phasing out licences to import cement and encouraging investment in local production.

As a result of these policies, both Nigeria and Ethiopia are on track to become net exporters of cement in the near future.

PAKISTAN: Cement industry witnesses 9.85pc growth in local industry

During the first quarter of current fiscal year, the cement industry has posted a growth of 9.85 per cent in local sales compared with sales during first quarter of the last fiscal year. Exports, however, recorded a decline by 8.13 per cent compared with exports during the first quarter of last year. The overall situation during first quarter of current fiscal year showed 4.68 per cent growth compared to the same period of last fiscal year.

Cement despatches to domestic markets during the month of September 14 were 2.42 million tons compared with 2.12 million tons during same month last year showing an increase of 13.86 per cent. Exports during September 14 were 730,000 tons against 816,000 tons during September 13 showing decline of 10.6 per cent. Total despatches during September, 14 were 3.15 million tons compared to 2.94 million tons during same month last year showing increase of 7.08 per cent.

The cement industry that is already facing a lot of issues due to high duty/tax structure, impractical imposition of MRP-based sales tax, increasing import duties on coal, increasing power tariffs and axel load restrictions is now facing another grave issue related to smuggling of the commodity from Iran.

Domestic cement uptake in southern region is being seriously affected due to unregulated smuggling of cement from Iran. Statistics showed that against 10.8 per cent increase in domestic sales in northern region during the first quarter of current year, the domestic sales in southern region showed an increase of only 5.4 per cent.

A spokesman of APCMA pointed out that the despatches in the South should have been higher because the exports from this region during the first quarter of current fiscal year increased by a healthy 12.2 per cent to 782,000 tons against 697,000 tons during same period last year. On the contrary, exports from north declined by massive 17.3 per cent to 1.277 million tons during the first quarter against 1.545 million tons during same period last year. The spokesmen said such lopsided sales look puzzling at a time when the economic activities in the south have picked up appreciably. He said a deep analysis of the situation revealed that the consumption most probably had increased at par or higher than the northern region but the cheap Iranian cement smuggled without paying the duties and sales tax had penetrated into the southern market that is nearer to the Iranian border.

Still, he added, the local despatches growth in North was double than South because the Iranian cement factor had not impacted Northern region as much as the Southern region.

The spokesman of APCMA further mentioned that the association had drawn the attention of FBR towards the illegal import of cement from Iran. In a letter sent to the FBR, the APCMA has indicated that a serious irregularity is being committed by some importers who are importing Iranian cement under the brand names of Sistan, Khash, Mumtazan, Kirman, Ghain and selling it in the local market at much lower rates than the Pakistani brands by means of tax evasion. It has also been pointed out that the importers of Iranian cement are paying duties/taxes to the extent of 30 tons against the consignment of 60 tons, thus evading the duties/taxes by 50 per cent. This tax evasion is not only affecting the domestic market but also affecting the much needed government revenue.

The spokesman showed his apprehension that the local cement industry which was contributing Rs 2,000 per ton to the national exchequer in shape of indirect taxes would face severe issues if the threat of this illegal import of Iranian cement was not countered effectively by the government or relevant authorities.

“The local cement industry has been made to bear the burden of increase in the excise duty, high rates of electricity, continuous surge in the input costs, recent imposition of customs duty on coal import, and restrictions on trucks to load cement and coal according to the approved axle weight,” the spokesman added. This new threat of smuggling along with the above-mentioned issues would completely destroy the cement sector of the country in the near future; hence it is the responsibility of the government to save its local industries from such threats and curb smuggling.

INDIA: Soaring cement prices push up construction costs

With cement prices hitting the roof in recent weeks, middle-class families have been hit hard, with the budget for building homes zooming by a few lakhs.

Nagaraj, a resident of Vidyaranyapura, said while a fortnight back, a 50-kg bag of cement, cost Rs 360 to Rs 370, it was now Rs 390 – Rs 410. Four months back, it used to cost Rs 320 to Rs 350. 

Cement manufacturers are said to be creating artifical scarcity to increase their profits. The dealers are forced to increase the cement prices.

Kishore Kumar, a resident of Vijayanagar, who is getting a two-floor building constructed, said that he has to shell out Rs 5 lakh to Rs 6 lakh more due to hike in cement price. 

“The construction started four months back when cement cost Rs 340 and now it’s Rs 380 and above per bag. The total cost of my house project is Rs 30 lakh. Besides Rs 10 lakh from own resources, I have obtained Rs 20 lakh home loan,” Kumar said.

Cement manufacturers attributed the price hike to transportation and production costs. “The freight charges have increased by 35-40 per cent. Another reason is low consumption of construction materials including cement,” a cement manufacturer said.

TANZANIA: Dangote’s Surging Cement Activities Propel Tanzanian Coal Investment

Investment in coal production is gaining momentum in Dangote Group’s business drive across Africa as the company’s President; Aliko Dangote promised to invest an undisclosed sum in Mbinga mine, a major coal mine in the Southwest of Tanzania.

The new investment was made known by Aliko Dangote at a meeting with the Vice president of Tanzania, Dr. Mohammed Gharib Bilal during the Africa Global Business Forum in Dubai.

According to the reclusive billionaire, the coal produced from the Mbinga mine will be used to energize his Mtwara cement plant which is currently under construction. It will also be used to aid transportation of cement across Tanzania’s borders.

The Mtwara cement plant, which is expected to be a primary driver in Tanzania’s economic growth, will produce three million tonnes of cement per year while coal investment in the transportation sector will create about 3,000 employment opportunities; Tanzania’s Guardian newspaper reported.

This is not Dangote’s first investment in coal production as an alternative power source for his cement factories; In August, the business mogul announced a $250 million investment to build coal-fired power plants in its Obajana, Ibeshe and Gboko plants in Nigeria..

He is also planning to invest another $12 billion in the Nigerian economy, for which more power plants and a $9 billion refinery should spring up.

In his Eid-el-Kabir message over the weekend, the business magnate said he will invest $2.3 billion in sugar and rice production in Adamawa State to create about 180,000 jobs and combat terrorism in the North-East of the country. Another $4 billion will be invested in other parts of Africa in the next five years, he said.