ROMANIA: Cement producer increases sales on all segments

Cement and aggregates manufacturer LafargeHolcim increased its cement sales in Romania by 15.3% in the first nine months of the year, especially due to the strong advance of the construction market in Bucharest.

The cement price went down by 0.8% in the first nine months of the year compared to the same period in 2014.

On the aggregates segment, LafargeHolcim reported an increase of 72.3% in the sales volume between January and September this year compared to the same period in 2014. The price of aggregates dropped by 15.1% during this period.

“The demand in Eastern Europe remained at a high level, especially in countries that are not oil exporters. Volumes have increased in most states in the region, with strong increases on all segments in Romania,” reads the company’s release.

The LafargeHolcim group was created following the merger of French company Lafarge and Swiss competitor Holcim. The new group kept Holcim’s assets in Romania and sold Lafarge’s assets to Irish group CRH.

ITALY: Italy's antitrust body opens probe into alleged cement price fixing

Nov 26 Italy's antitrust authority has opened an investigtation into four cement makers for alleged price fixing and, with the tax police, has searched the offices of the companies, it said in a statement on Thursday.

The companies under investigation are Buzzi Unicem, Cementir Italia, Industria Cementi Giovanni Rossi and Holcim Italia, the watchdog said.

"The case concerns the possibility of an agreement ... to coordinate cement sales price increases," it added.

Holcim Italia, part of the LafargeHolcim Group, confirmed the inspections. It said the company had always acted according to the law and has "policies and procedures in place that are designed to ensure compliance with principles and rules of fair competition prohibiting anti-competitive behaviour and the abuse of a dominant market position".

Buzzi said it is confident it will be able to demonstrate during the investigation that it had always acted in compliance with competition law.

Cementir declined immediate comment. Industria Cementi Giovanni Rossi could not immediately be reached for comment. (Reporting by Agnieszka Flak and Andrea Mandala in Milan and Oliver Hirt in Zurich; Editing by Susan Thomas and David Goodman)

INDONESIA: New Cement Factory Built to Fulfill E. Kalimantan Supply Needs

PT Semen Indonesia has prepared a cement factory in Rembang, Central Java, to meet cement supply needs in East Kalimantan. The factory is scheduled to be in production early next year with a production capacity of 3 million ton per year.

The factory has reserves of large raw material limestones, says Semen Indonesia Commercial Director Mukhamad Saifuddin. The factory’s age is estimated to be around 100 years with an estimated production of 3 million ton per year with an investment value of Rp 3 trillion.

Saifuddin said East Kalimantan will become a potential cement industry market in the future with several giant projects that requires cement supply including in Balikpapan-Samarinda toll road, Russian Railways railroad, and Balang Island bridge.

Gresik cement, said Saifuddin, tried to seize the opportunity by opening a cement packaging industry with a capacity of 1,700 ton per year. Balikpapan’s cement packaging industry is currently manufacturing 300-400 ton per day. “According to the demand, the production can be boosted,” said Saifuddin.

Head of Sales Department PT Semen Indonesia Bambang Djoko says cement market domination in the East Kalimantan region is still relativey small compared to its rivals of just 7 percent. Cement market in the area is still dominated by old brands such as Tonasa, 3 Roda, and Conch. “But in the future, we will strive to snatch the market in East Kalimantan,” said Bambang.

Semen Indonesia is still developing market in the vicinity of cement packaging area including Balikpapan, North Penajam Paser, and Paser. The company will aim for new market in Samarinda, Bontang, Tenggarong and North Kalimantan.

ALGERIA: Lafarge Group - Entry Into Production of Biskra Cement Works in 2016

The cement works, created in joint-venture in 2014 between Lafarge Algeria group and the private Algerian company "Souakri" in Biskra, will enter into production in 2016 said, Tuesday, an official of this group.

During the presentation of this group to journalists at the Oggaz plant in Mascara, the director of Public Affairs and Communications at "Lafarge Algeria", Serge Dubois, said that this cement works will produce 2.7 million tons per year, bringing the group's overall production to more than 11 million tons per year.

Currently, the overall production of group Lafarge Algeria made up of two cement works in M'sila and Oggaz, is 8.7 million tons per year.

Lafarge Algeria holds, in partnership with the public cement industry group of Algeria (GICA), the Meftah cement works (1 million tons/year).

With an investment cost of DZD30 billion, the project of Biskra is held by 51% by the company "Souakri," and 49% by the French cement works under the rule governing the investments between Algerian and foreign companies.

"We plan to invest in 2016 for all our activities: cement, plasters, ready to use concrete, aggregate and our supermarket chain, Batistore," said Dubois.

WORLD: LafargeHolcim sets strenuous targets even as sales decline

LafargeHolcim, the cement giant in the midst of a postmerger restructuring, lifted its proposed dividend and said it now expected to generate free cash flow of at least Sf10bn ($9.9bn) by the end of 2018.

The targets eclipsed Wednesday’s third-quarter sales and profit figures that missed analysts’ expectttations, although some analysts said the medium-term goals were too ambitious.

The tie-up between Switzerland’s Holcim and France’s Lafarge, announced last year, forged the biggest cement maker aiming to cut costs and counteract slumping demand for cement after the financial crisis depressed construction.

CEO Eric Olsen said the company was closing Chinese plants and combining management at businesses there to cut costs and ride out declines in demand.

"China is a fantastic example of … bringing Lafarge and Holcim assets together where we can do things in reducing costs that we wouldn’t have been able to do otherwise," Mr Olsen said. "We need to prepare ourselves for demand that’s not going to come back. In a situation like that, it’s low cost that wins."

Weakness in demand in China and Brazil was being partially offset by "positive trends" in the US, Mexico, Britain and the Philippines, the firm said.

The Sf10bn cash flow target would mark a turnaround from 2014, when free cash flow was Sf1.76bn at Holcim and €592m at Lafarge.

The company proposed a 2015 dividend of Sf1.50, up from the Sf1.30 it suggested in July.

"It’s my ambition that by the end of 2018, LafargeHolcim will have changed the game in free cash flow generation in our industry," Mr Olsen said. "We’ll be looking at returning value to shareholders through dividends and/or share buybacks."

The company’s shares were up 3.9% in early trade, after falling 18.6% this year.

Operating earnings before interest, tax, depreciation and amortisation (ebitda) declined 16.1% in the third quarter to Sf1.64bn, below the Sf1.75bn forecast by analysts.

Quarterly sales dropped 8.7% to Sf7.83bn, missing analysts’ forecast for Sf7.92bn.

"The mid-term outlook seems promising," J Safra Sarasin analysts said in a note. "The US, UK and most countries in Asia Pacific and Latin America showed good development."

LafargeHolcim said it was targeting operating ebitda of at least Sf8bn by 2018 and cumulative free cash flow of at least Sf10bn from 2016 to 2018.

Some analysts said these targets were too bullish.

"We find it difficult to reconcile the current poor operating performance with management’s optimistic medium-term outlook," Bernstein’s Phil Roseberg said in a note.

Third-quarter net profit rose to Sf812m, from Sf504m a year earlier, on asset sale gains.

LafargeHolcim expected divestments of Sf3.5bn next year.

JAMAICA: Caribbean Cement Reclaims Market With Tank-Weld Deal

Caribbean Cement Company Limited (CCCL) has recornered most of the cement market, having struck a deal with Tank-Weld Metals that sees the construction materials company exiting imports and signing up instead as a distribution agent for the local cement maker.

Tank-Weld will distribute Carib Cement's product from its cement bagging plant at Rio Bueno in Trelawny.

The Bicknell-controlled company was the last major holdout in cement imports that at one time had taken over about 15 to 20 per cent of the market that Caribbean Cement once monopolised. Caribbean Cement's share of the domestic market last year was just under 83 per cent, according to Wednesday Business calculation of industry data.

The room for competitors opened around 2005 when the company had placed faulty cement on the market and the Jamaican Government created space for importers while the local producer improved its processes.

Caribbean Cement began reclaiming the market in 2013 when it struck a deal with Arc Systems, which sells the product under its own brand, ArcPlus. At the time, Caribbean Cement said it had reclaimed eight per cent of the market through the arrangement.

Efforts to determine the size of the import market now through the Trade Board and Jamaica Customs Agency were unsuccessful, but at least one player remains - Buying House, the distributor of Anchor cement.

Tank-Weld, which in the past competed against Caribbean Cement with imports from the United States, started distribution for Jamaica's sole manufacturer of the product in October and has so far moved two shipments, Chief Executive Officer Christopher Bicknell told Wednesday Business.

As a result of the agreement, Tank-Weld no longer imports cement, Bicknell said. The company previously had an arrangement with Vulcan Materials of Alabama, United States, to distribute its bagged cement in Jamaica.

That arrangement caused conflict with Caribbean Cement and resulted in a complaint by the monopoly manufacturer to Jamaica's Anti-Dumping and Subsidies Commission (ADSC).

In 2010, the ADSC determined that the importation of Portland Blast blended cement, made by Vulcan Materials, was not a threat to the local industry, giving the green light to Tank-Weld Metals to continue selling the product locally.

Caribbean Cement had won previous anti-dumping cases, after which the Jamaican Government slapped heavy duties on cement imported from Indonesia, Thailand and China.

Vulcan Materials was sold last year, but Bicknell said those developments had nothing to do with its new arrangement with Caribbean Cement.

"The real issue wasn't anything to do with that. It was that the Government quotas were restrictive and went contrary to any agreement, because you would have to live under the quota system," said Bicknell. "It was more prudent for Tank-Weld to secure a more solid agreement domestically, hence the reason for the agreement with Carib Cement."

STORAGE IN TRELAWNY

Tank-Weld's facility in Trelawny will now be used to store Carib Cement for distribution, which will be transported via the coastline from Rockfort to Rio Bueno and will enter the plant already bagged.

"The most critical aspect for Tank-Weld was the continued utilisation of the Rio Bueno port and facility, which is a key component of the agreement," he said.

"This agreement will also have social and environmental benefits, as the use of maritime freight will see less wear and tear on the roads, less frustration for the travelling public, and less pollution in the air, through the reduction in traversing across the island by road of bulky and heavy cargo," said a joint statement by both companies that was issued after Wednesday Business reached out for comment on their distribution pact.

"Both companies believe that this agreement will benefit the Jamaican consumer as well as the local economy, as it increases the domestic production of cement, therefore, yielding greater production efficiencies, increasing use of assets, boosting the local market and using more indigenous resources," it said.

Last year, Caribbean Cement sold 598,165 tonnes of cement inside Jamaica in a market where locally made and imported supplies of the commodity totalled 721,987 tonnes.

Caribbean Cement's overall volume sales that year - domestic and exports - amounted to 830,931 tonnes, or more than 4,000 tonnes better than the previous year.

The trajectory into 2015 has shifted somewhat. At half-year to June, volume sales were tracking at around 10 per cent behind the 2014 period.

SAUDI ARABIA: Yamama Cement and ThyssenKrupp sign $1.1 billion plant deal

Saudi Arabia's Yamama Cement Company has signed a 4.2 billion riyal ($1.12 billion) contract with Germany's ThyssenKrupp Industrial Solutions to build a new cement plant, the company said in a statement on Wednesday. 

The new plant will be built over 39 months 100 kilometres outside of Riyadh, with daily production capacity of 20,000 tonnes of clinker, or nodules ground to make cement, Saudi state news agency SPA reported from the signing ceremony. 

The source of funding and start date of the project will be announced later, the company said. 

Yamama Cement currently produces six million tonnes of clinker and 6.3 million tonnes of cement.

INDIA: Gadkari Reiterates Threat to Import Chinese Cement

With the government pushing for investments in infrastructure, Union Minister of Road Transport, Highways and Shipping Nitin Gadkari on Wednesday reminded the construction sector of his earlier threat to import Chinese cement if local cement manufacturers do not rationalise prices.

The cement manufacturers had, according to Gadkari, increased the price of cement heavily when the Centre announced plans to turn most roads to cement roads a few months ago.

The Centre had planned to buy 9.5 million bags of cement for laying cement roads. He also advised the industry to refrain from profiteering as the rate at the which road construction was going on was very high.

Gadkari also advised the construction sector to introduce new technologies. The minister said he has constituted a team of experts to study road technologies in advanced countries like Germany, the United States and the United Kingdom. This, he said, will ensure faster travel. “I dream of travelling at 200 kmph on India’s express highways,” he added.

With only 96,000 km of the 4.8 million km of roads in the country being national highways, the Centre is aiming to increase the kilometreage to 1,50,000 km. This will bring down the number of deaths due to accidents. “The country sees about half a million accidents and 1,50,000 deaths in road accidents per annum... Good roads will help cut down the number of accidents,” he added.

PAKISTAN: Industry for examining quality of iranian cement

Cement manufacturers have asked the Ministry of Commerce to stop the import of Iranian cement via land routes and allow supplies at set tariffs and duties after quality check at the Pakistan Standard Quality Control Authority (PSQCA).

In a letter written to Federal Commerce Secretary Muhammad Shehzad Arbab, All Pakistan Cement Manufacturers Association Chairman Muhammad Ali Tabba pointed out that despite bringing the matter to the notice of customs authorities, the smuggling of Iranian cement into Pakistan through land had continued unabated.

“The Iranian cement is of uncertain quality as it does not have the approval or standards marked by the PSQCA,” he said. “The import volume has been increasing and has now reached the alarming level at about 2,000 tons per day.”

Coming through Taftan, Post 250 and Mand customs check-posts, he said, the consignments were being allowed without payment of customs duty and other federal levies, in connivance with the customs authorities.

These officers allegedly collected duties for only a small volume while the bulk came without any statutory levies.

As a result, Tabba said, the market in areas adjacent to the Iranian border as well as coastal areas of Balochistan was flooded with cheap Iranian cement. In this situation, the domestically produced commodity is fast losing market.

USA: Cement plant moving ahead in Brady

The Brady City Council voted to authorize two proposed sales tax rebate incentives for a proposed cement plant that would be built in McCulloch County, during a meeting Tuesday.

Houston-based U.S. Cement is proposing to build a plant and quarry on close to 500 acres 6 miles north of Brady along U.S. Highway 377 where it intersects with Farm-to-Market Road 1121. The plant would produce white cement, which is used in pool surfacing and kitchen and bath countertops.

The city sales tax rebate economic development incentive for the proposed plant would not exceed $297,000 over nine years, or up to $33,000 per year.

The Brady Economic Development Corp. incentive would be a one-time payment of $250,000, plus $34,000 up to nine years, which would be a total package of $556,000 over 10 years.

The vote passed 4-1, with council member Shelly Perkins casting the lone dissent.

The council has authorized the city’s director of community services and EDC Director Peter Lamont to pursue negotiations with U.S. Cement before it goes back to the city council for final approval.

“I’m sure there will be some back and forth on some of the qualifications,” Lamont said. “Once we get all the language, terms, conditions and all the attorneys agree, it will be brought to the council for final approval.”

Lamont said he wanted to get past Thanksgiving before holding a conference call with cement officials.

Some of the qualifications are that U.S. Cement generates a plant and quarry that improves the property value of its location by $175 million and provides 200 permanent and full-time jobs. There will have to be a 100-foot buffer zone away from anything it doesn’t own, and the plant will have to purchase all of its natural gas from the city.

Lamont sees the cement plant as a way to diversify Brady’s economy.

Those opposed to the cement plant are not against the plant itself, but where it will be located. There are 37 homes within 3,000 feet of the proposed plant and residents are worried about strobe lighting, blasting in the quarry, noise and dust pollution, truck traffic, emissions and a decrease in property values.

Residents living in the affected area have attended city council meetings and expressed their concerns during public comment.

“We still have hope that Royal White Cement (parent company of U.S. Cement) will look for another piece of property,” said Dale Matthews, an Austin-based attorney who is helping the opposition. “That there will be no approval of the incentive package if they insist on this location, and find one that isn’t disruptive to the people living here.”

Lamont said finding another location will be up to U.S. Cement and at present, there are no active offers of other properties on the table.

Those opposed were frustrated and disheartened by the council’s vote, Matthews said, but the fight will continue.

“There are still lots of steps before a permit can be issued by the Texas Commission on Environmental Quality for construction of a plant,” Matthews said. “We will be involved all through the process.”

CYPRUS: Profits for the cement industry

Vasiliko Cement Works Public (VCWP), a subsidiary of Cyprus Cement Public Company (CCPC), saw a recent increase in its exports to other neighbouring countries and a reduction in its cost of production. The Group however realised a slight reduction in its profits compared to last year’s respective period.

The Cyprus Cement Public Company (CCPC) presented today its interim management statement for the period between July 1 and November 20 in accordance to the rules and regulations of the Cyprus Stock Exchange regulated market.

The main activities of the Group remain the same as 2014 concentrating on the development of land, strategic investments in the hotel industry and cement manufacturing and distribution.

In its statement the company reaffirms that, as with any other company operating in Cyprus, the future performance depends heavily on the macroeconomic performance of the Cyprus economy overall. The statement adds that the markets’ fluctuations both domestically and globally create an unstable financial environment making it difficult to predict the future performance of any company.