PHILIPPINES: Mayor asks firm to suspend coal, cement imports

Saying he feared the impact of coal on community health, Mayor Jesse Concepcion urged a company operating in the coastal village of Lucanin here to suspend the importation of coal and cement.

Concepcion, in a letter to Maria Isabel Tapan, port operations manager of the Seafront Shipyard and Port Terminal Services Inc., said the company should first consume its stock before resuming importation.

Seafront supplies power plants in Bulacan, Pampanga and other parts of Luzon with coal and cement from Indonesia.

Concepcion made the appeal as two cargo ships loaded with imported coal and cement docked at Seafront’s port here recently.

But Carlo Virgilio Ignacio, Seafront vice president for operations, informed the mayor, through an emissary, that his company would adopt safety measures to protect the health of residents.

In May, Byron Lisanin, Mariveles sanitary inspector, ordered Seafront to contain its coal supply that are stored in an open facility.

Lisanin urged the company to install an ambient air quality monitoring system and to put up a windbreaker at the coal yard to contain dust and smoke.

Concepcion said Seafront should also build a sanitation lagoon where wastes could be treated first before these are discharged into the sea.

The Mariveles government’s action was prompted by complaints from neighboring communities whose residents claimed they suffered asthma and other respiratory diseases.

However, no health report had been presented by residents to validate these claims.

Danilo de Guzman, 62, a resident of Lucanin, said his neighbors complained of exposure to coal dust from trucks ferrying coal into the facility.

VIETNAM: Cement consumption up

Domestic cement consumption has improved even as Vietnamese cement exports have been faced with competitive pressure from neighbouring countries.

Statistics from the construction ministry showed that in the first half of the year, the country's cement consumption was estimated at 34.16 million tonnes, posting a 6 per cent year-on-year rise and meeting 47 per cent of the whole year's target. Of this, domestic consumption was 5 per cent higher than the same period last year, reaching 25.97 million tonnes. Viet Nam shipped 8.19 million tonnes of cement to foreign markets, representing 8 per cent year-on-year increase.

Last month alone, cement consumption was estimated at 5.68 million tonnes, or 12 per cent higher than the corresponding period last year, including 4.63 million tonnes in local market and 1.05 million tonnes for exports.

The ministry said the exports of cement and clinker in H1 decreased in comparison with the previous years due to difficult conditions in some import markets, especially Bangladesh. However, domestic consumption has been on an increasing trend.

Nguyen Quang Cung, chairman of Viet Nam Cement Association, observed that there was no concern about the cement consumption in the 2015-16 period thanks to a rising domestic demand.

This year alone, domestic cement consumption was estimated to increase to 5 million tonnes, Cung said.

Cung said cement consumption in the domestic market has risen thanks to improvement in the real estate market, while rural infrastructures have been actively developed.

The ministry calculated that cement consumption this year will reach 72-74 million tonnes, increasing 1.5-2 per cent over last year. Of this, local consumption will be 53-54 million tonnes, while 19-20 tonnes will be exported.

This year, the country will have two new projects, including Song Lam 2, with the capacity of 0.6 million tonnes a year, and Cong Thanh Cement, with 3.6 million tonnes a year capacity. This will bring the country's total cement production lines to 76, with 81.56 million tonnes designed capacity.

Viet Nam's cement sector has been listed as one of top 5 in the world in terms of capacity, after China, India, Iran, and the US.

Cement supply next year is expected to meet domestic consumption demands and 15-16 million tonnes for exports each year, in addition to a reserve of 10-15 per cent to stabilise the market, especially the southern region.

He added there would not be any new cement project in 2016. However, a number of major projects would be carried out during the 2017-18 period.

TANZANIA: Cement producers raise alarm on import ‘cheats’

Revenue authorities in the East African region have reported over 60bn/- loss through misinvoicing and other malpractices, a study by the East Africa Cement Producers Association (EACPA) has stated.

The Tanzania Portland Cement Company (TPCC) Managing Director and Area Manager East Africa, Mr Alfonso Rodriguez, said the matter has been reported in several occasions to relevant authorities.

"However, cement consumption per capita still remains low in the region comparing with West Africa and other emerging markets," he said in an interview with the Daily News in Dar es Salaam.

He said importation of substandard cement is mainly a threat to the end user and security of buildings and infrastructure in the region, especially Tanzania.

"Lack of proper quality certification at origin and permissively of Tanzania Bureau of Standards (TBS) officials has allowed uncertified cement to dump products in the domestic market. creating unfair competition situation that needs to be addressed," he said.

He also said East Africa region has become an overcapacity market, with over five million metric tonnes over capacity year to date. Yet the EAC governments lack of strategic vision to protect its key industrial sector and continue granting licences for new production capacity building bringing industry utilisation to lower than acceptable rates.

Mr Rodriguez called upon for an open and honest dialogue between the industry representing body, the East Africa Cement Producer Association and the competent authorities at country and regional level to sort out issues in cement business.

"Strategic priorities should be set to guarantee the viability of an industrial sector that is key for the further development of our countries," he said.

However, with expectation of some industry consolidation as new capacity comes on line and the market becoming more competitive, East Africa cement supply will be fully guaranteed by the local industry for the next 10 to 15 years.

He said that biggest markets in EAC are Tanzania and Kenya, with the major drivers being the fast growing population and urbanisation.

RWANDA: Cimerwa unveils Rwf126.7b modern cement plant, targets regional market

Cimerwa, Rwanda’s sole cement manufacturer, is targeting the regional export market following the completion of works on a new plant.

Cimerwa based in Rusizi District, Western Province, was previously producing 100,000 tonnes of cement per year compared to 450,000 tonnes needed to meet the market demand.

However, the $170 million (Rwf126.7 billion) new cement plant that came on line last Thursday is expected to increase the firm’s output by 500,000 tonnes to 600,000 tonnes of cement per year.

“This will be 150,000 tonnes more than what is required by the country currently. Therefore, we will export about 30 per cent of our total production to the neighbouring Burundi and the DR Congo,” said Juvenal Rutaganda, the operations manager and acting chief executive officer.

Rutaganda said the current demand across the three countries is about 900,000 tonnes of cement.

“Our job will be to ensure a competitive product that is available to everyone in the region,” Rutaganda told The New Times during a tour of the project last week.

The project will significantly support efforts by government to reduce Rwanda’s trade imbalance by increasing exports by at least 28 per cent annually by 2018.

wanda’s trade deficit narrowed by 6 per cent to $6779.22 million during the first five months of 2015, down from $722.56 million over a similar period last year.

Therefore cement exports to regional nations could further improve the country’s balance of payment position.

High cement prices

Meanwhile, there is hope among market players that increasing local production could help reduce cement prices and facilitate the growth of the construction and real estate sectors.

Currently, 50-kg bag of cement goes for Rwf11,000 at Cimerwa compared to imported cement that costs between Rwf8,500 and Rwf9,000.

Ephraim Karekezi, a Kigali-based structural engineer, is hopeful the new plant will help bring down cement prices.

“The cost of construction is high simply because of high prices of raw materials including cement. Therefore, the new cement plant offers sector players a green light in addressing the question of affordability,” said Karekezi.

Statistics from the National Institute of Statistics of Rwanda (NISR) indicate that there has been a significant increase in the sector’s contribution to the national economy.

The construction sector contributed Rwf109 billion to GDP during the first quarter of 2015, up from Rwf106 billion during the same period last year. Real estate activities added Rwf91 billion compared to Rwf83 billion during the first quarter of 2014.

These figures could increase once most of the raw materials are produced locally, sector experts say.

More employment opportunities

Frederick Harelimana, the Rusizi District mayor, said the new plant will create more new jobs for residents and other Rwandans across the country through dealerships.

Vivens Kalinganire, the human resource manager Cimerwa, said the new plant is expected to create over 100 new direct jobs by the end of the year besides the current 126 workers employed at the firm.

Under the second Economic Development and Poverty Reduction Strategy (EDRPS II), the government seeks to create 200,000 off-farm jobs annually.

ZIMBABWE: Cement firm brings hope to Redcliff

Redcliff is set to get a new lease of life after a cement manufacturing company sets up a $10 million plant in the town.

The town had been forgotten after its prized possession, Ziscosteel closed more than five years ago and attempts to revive the giant plant yielded nothing.

Redcliff mayor Freddy Kapuya told Standardbusiness last week that his council had a special meeting on Monday where it finalised a deal with Mortal Investments which is owned by Chinese and local investors.

The Chinese investors have 25% shareholding with the remainder owned by a local consortium.

“We sold them nearly 100 000 square metres of industrial land which they are expected to turn into a giant cement manufacturing plant next year and employ nearly 400 workers,” Kapuya said.

Council said it had by end of Tuesday received a payment of $600 000 for the land deal and was now expecting work to start soon.

Kapuya said the investment had already been approved by the Zimbabwe Investment Authority (ZIA) and his council, reeling from financial difficulties owing to the collapse of Ziscosteel, had offered Mortal Investments a three-year rates rebate.

“We are so excited that the ZIA approved investment will take shape here at a time hope for the re-opening of Ziscosteel is fading. Redcliff will now be looking elsewhere,” he said.

Cement companies are attracted to Redcliff because it brings them closer to slag, which can be found in mountains at Ziscosteel. Slag is one of the major raw materials needed in the manufacturing of cement.

However, Kapuya believes that Ziscosteel could have run its course and his town will now have to rely on other investment opportunities such as the cement project.

Redcliff has vast tracts of land which continues to lie idle as land developers don’t see themselves realising value if Ziscosteel is not resuscitated.

INDONESIA: June sales breath of fresh air for Semen Indonesia

After constantly plunging throughout the year, a slight increase in national cement consumption in June has instilled hope that Semen Indonesia will at least maintain its sales at the same level as last year.

Semen Indonesia corporate secretary Agung Wiharto told reporters on Thursday that the cement giant was optimistic about matching last year’s cement sales after a good June result indicated that large-scale infrastructure projects had begun to get into gear.

Data provided by the Indonesian Cement Association (ASI) showed that cement demand drove a slight yearly increase in June’s sales, up by around 2.7 percent from 4.83 million tons last year to 4.96 million tons this year.

It was the first year-on-year (yoy) increase in monthly sales the country had witnessed since the start of the year, with May sales alone slipping by nearly 8 percent yoy.

With June’s updates, cement consumption along the year has declined yoy to 28.09 million tons, trimming a 3.8 percent yearly decrease in the first five months of the year after a prolonged fall in demand growth. 

“Although the growth is very small, it’s a sign that infrastructure projects have gradually started and that we can now expect higher sales in coming months. However, we may see a historical decline this month on constrained demand during Idul Fitri, with projects on hold and logistics trucks banned from operation for around two weeks,” he said.

Despite the forecasted decline, which Agung said might lead monthly consumption to fall by around 40 percent, he said positive June results served as a basis for growth in the following months.

“Our target for this year is zero growth, and reaching the target requires hard work given cement consumption has grown in the negative along the year. We have to at least book 6 percent growth in the next semester to make it happen,” he added. The publicly listed firm sold 26.15 million tons of cement last year.

Agung said Semen Indonesia’s cement sales were also pushed up with higher June demand, although not as high as growth in domestic consumption as a result of the entry of four new players, including Semen Merah Putih and Thailand’s Siam Cement. Semen Indonesia’s domestic sales declined by 5.3 percent yoy to 9.92 million tons as of May. 

Cement demand — often seen as a key economic growth indicator in emerging markets — has contracted throughout the year with Indonesia’s gross domestic product (GDP) growing at the slowest pace since the start of the global financial crisis in 2009 and slow government spending on infrastructure projects, which Agus put down to the merger of two infrastructure-related ministries.

The state-run cement producer said, however, that it was confident its revenue would be higher than the previous year despite sluggish domestic demand, particularly thanks to promising income from Vietnamese unit Thang Long Cement Company, which was acquired by Semen Indonesia in 2012 for US$157 million.

“At least in terms of top sales, we are optimistic that our sales will be higher than last year with an increasing contribution from Thang Long. It is now running at full utilization, compared with only around 40 percent when we first acquired it,” he said. Thang Long’s current production capacity stands at 2.5 million tons per year. 

Semen Indonesia booked Rp 27 trillion ($2.03 billion) in revenue and Rp 5.56 trillion in net profit last year. It posted a 2.6 percent increase in revenue to Rp 6.34 trillion yoy in the first quarter, while its bottom line slipped by 9.09 percent to Rp 1.19 trillion in the same period.