WORLD: Cemex says CEO Lorenzo Zambrano died in Spain

Lorenzo Zambrano, who transformed Cemex SA de Mexico from a regional cement producer into a global player, died Tuesday in Spain, the company said.

Zambrano, 70, died in Madrid of natural causes, the company said without giving other details.

Trained as an engineer, Zambrano was considered one of the most important businessmen in Mexico. He became Cemex's chief executive officer in 1985. A decade later he added the title of chairman of the board of directors.

With Zambrano at the helm, the Monterrey-based company expanded beyond Mexico and now has operations in 50 countries on five continents.

Cemex has been the world's largest supplier of cement, and possibly the biggest building materials supplier, since 2007, when it won a controlling stake in Australia's Rinker Group Ltd.

The company said in a statement that "the operation and administration of the group will continue to develop normally" and that in the coming days the board of directors would meet to decide how to proceed.

"My condolences to the family and friends of Mr. Lorenzo Zambrano, a man of great commitment and love for Mexico," President Enrique Pena Nieto said in a message on his Twitter account.

Pena Nieto noted that Zambrano "made @CEMEX the number one cement producer in the world."

Zambrano studied mechanical engineering at ITESM, a private university in Monterrey, his hometown, and he earned an MBA at Stanford University.

Cemex produces and sells cement, concrete and other construction materials, with about 43,000 employees worldwide. It reported annual revenue of more than $15 billion in 2013.

TUNISIA: Voilà comment seront octroyés les permis

Le ministère de l’Industrie, de l’Energie et des Mines a publié un cahier des charges fixant les conditions d’octroi (entre 2014/2017) des permis de réalisation d’usines de fabrication de ciment gris et blanc, lit-on dans un communiqué publié, hier, par le ministère.

Selon la même source, ce cahier des charges, publié le 28 avril 2014, s’inscrit dans le cadre de l’application des recommandations issues d’une séance de travail ministérielle tenue le 25 septembre 2013.

Le document met l’accent sur cinq principaux volets; à savoir: 

- Le volet économique qui accorde la priorité à l’approvisionnement du marché local, et financier garantissant une participation tunisienne d’au moins 35% dans le capital de la société.

- Le volet énergétique mentionne l’utilisation des énergies renouvelables, outre l’obligation d’utiliser le coke de pétrole ou autre source d’énergie en tant que source principale d’énergie thermique.

En matière de développement, le cahier des charges met l’accent sur la nécessité de renforcer et d’encourager les investissements dans les régions, conformément aux dispositions du code d’incitation aux investissements.

S’agissant du volet environnemental, le cahier des charges impose le respect des exigences de préservation de l’environnement (l’étude des impacts environnementaux devra être soumise à l’approbation de l’Agence nationale de protection de l’environnement /Anme).

Le contenu du cahier des charges peut être consulté et télécharger sur le site Web du ministère : www.tunisieindustrie.tn ou sur sa page officielle sur le réseau social « facebook ».

INDIA: Cement firms scout for overseas mines to secure gypsum supplies

Indian cement companies are on the lookout for overseas mines to secure supplies of gypsum, a key ingredient for manufacturing the building material.

Domestic supply of gypsum is limited, say industry executives, which is forcing Indian cement makers to look for acquisitions of overseas mines or even look at producing a synthetic form of the raw material.

In the first such acquisition, one of the top three cement makers in India is likely to announce an acquisition of a gypsum mine overseas, which will act as a captive mine for the company, said a top cement firm executive on condition of anonymity.

Details of the acquisition will be announced soon, the executive said.

One tonne of gypsum in a reserve typically costs around $26-30 (Rs.1,560-1,800), and the average size of a mine overseas ranges between 30 and 40 million tonnes (mt), he added. This takes the minimum total cost to roughly $780 million.

Indian companies are eyeing reserves located in Thailand, Oman, Iran and other countries in close proximity to India.

According to a research report jointly published on 30 April by lobby group Confederation of Indian Industry and consulting firm AT Kearney, India has a paucity of gypsum resources, which does not bode well for the cement industry.

The production deficit in the domestic market has led to increased dependence on imports and synthetic gypsum to meet production demand, the report said. Manufacturing one tonne of cement generally requires 4-5% of gypsum as a raw material, it added.

In India, gypsum reserves are found in Rajasthan, Gujarat, Jammu and Kashmir, Himachal Pradesh, Tamil Nadu, and Uttar Pradesh. About 90% of the total Indian production of gypsum comes from western and north-western Rajasthan.

The report said that at present, usable gypsum reserves in India amount to 140-150 mt, of which around 125 mt is available to the industry. These numbers are for Rajasthan and Gujarat, as reserves in other states are unusable.

This available supply will be enough to support the cement industry for the next seven-eight years, beyond which the sector will need to rely on imports, the report added.

Vinod Juneja, managing director of Binani Cements Ltd, said that the shortage of gypsum domestically has forced the company to consider the possibility of overseas mine acquisitions, but the high cost of such acquisitions is a deterrent.

“We have looked at gypsum mines for acquisition in the Middle East, South Africa, and Iran, but the prices are too high so it does not prove to be viable since the returns are also not high,” he said.

“Gypsum is a very important raw material for cement production and we don’t want to depend totally on imported gypsum,” Juneja added.

Some others like JK Cements Ltd are yet to take a call on how to tackle the shortage of the raw material. “Gypsum is in shortage and we are working out a solution for it,” said Madhavkrishna Singhania, special executive at JK Cements.

“There are two options—either we acquire a mine overseas or produce synthetic gypsum, so right now we are contemplating these options and in a year or two we will have to figure out what needs to be done,” he added.

Analysts say that the acquisition strategy is feasible only for companies that have cement plants located close to a port.

“As far as overseas acquisitions are concerned, the logistics costs would be very high, specially to transport the material from the port to the plant and so it will only favour companies who have plants in close proximity to a port, however for others it will be a challenge,” said Rakesh Arora, managing director and head of research (India) at Macquarie Capital Securities (India) Pvt. Ltd.

“The cement industry has already started moving away from natural resource gypsum to chemical gypsum and phosphorous gypsum because of the limited reserves in India,” he added.

The most common solution to tackle the shortage is importing gypsum. However, imports attract a 2.5% duty, thus escalating costs for an industry which has been facing headwinds in an economic downturn. High transport, logistics and raw material costs have hit margins across the sector.

NIGERIA: Dangote Moves to Reduce Cement Price in Nigeria

The President of Dangote Group, Aliko Dangote, said that nine million tonnes of cement have been released into the market to stem the escalating cost of the product.

Mr. Dangote, who disclosed this to journalists on Friday at the premises of Obajana Cement Company in Kogi State, said that the move was to make the product available in all parts of the country and stabilise its prices in the open market.

The businessman, who spoke after conducting the visiting President of Tanzania, Jakaya Kikwete, on a facility tour of the plant attributed the scarcity of cement in recent times to low production between January and March.

He said the low production followed the yearly turn around maintenance of the plants at Ibeshe, Obajana and other parts of the country.

He assured Nigerians that the price of cement will drop to its normal price of between N1, 450 and N1, 550 very soon.

Mr. Dangote said that the president of Tanzania was at the cement plant to see things first hand and to enable him have a fore-taste of the kind of cement plant the company was replicating in his country.

He said the plant, being established in Tanzania at a cost of $600 million, would have the capacity to produce three million tonnes of cement per annum.

He said the construction work at the plant has reached 30 per cent completion stage and work is being intensified to ensure its completion and inauguration in 2015.

In his remarks, President Kikwete said that he took time off the World Economic Forum holding in Abuja to visit the plant to have an idea of what his country would experience after the completion of the plant.

He described what he saw as "wonderful," saying that his country was looking forward to seeing the same or better facilities.

He said the visit had further convinced him that Tanzania has a great partner in Mr. Dangote.

INDONESIA: Elections, Low Demand Slow Cement Sales in Indonesia

Cement sales in Indonesia stalled in April due to the legislative elections and slow infrastructure development in the first four months of the year.

Cement sales in Southeast Asia’s largest economy declined 0.4 percent year-on-year in April to 4.52 million tons, according to data from the Indonesia Cement Association (ASI).

“Demand for building material was low throughout the legislative campaigns, which is why cement sales were down last month,” said ASI chairman Widodo Santoso on Friday.

Figures for the sales of cement have declined throughout the archipelago. According to data collected by ASI, 934,000 tons of the building material was sold in Sumatra last month — a 4 percent drop from the same period last year.

Kalimantan saw an 8.7 percent decline in sales to 355,000 tons, while Sulawesi’s fell 3.4 percent to 322,000 tons. Cement sales in Bali and the Nusa Tenggara islands fell the most, with a 13.8 percent decline to 230,000 tons.

Only Java and some eastern parts of the country experienced some improvement; Java saw sales rise 3.1 percent to 2.57 million tons of cement.

Despite the slump reported in Kalimantan, Sulawesi, Bali and Nusa Tenggara, Widodo remained confident that business would pick up by 8 percent to 62 million tons nationwide this year.

“We hope to see a better performance next month. Hopefully, the presidential elections won’t have any negative effects on cement sales, which have fallen across the country, with the exceptions of Java and Maluku and West Papua,” he said.

Indonesia’s cement makers are also preparing themselves for the hike in electricity tariff, which starts in May.

Widodo said the association estimates the tariff increase to bring production costs up by 3 to 5 percent.

The government approved a decree to raise the tariff for exchange-listed companies in medium-scale industries by 38.9 percent, while large-scale industries will see a 64.7 percent rise.

Widodo said the country’s cement industry has requested incentives from the government — including a zero import tax for imported machineries — to compensate for the rising electricity costs.

Indonesia’s biggest cement producer remains state-owned Semen Indonesia, although units belonging to foreign companies, like German HeidelbergCement’s Indocement Tunggal Prakarsa and Swiss-based Holcim’s Holcim Indonesia, are creeping up to secure a close second and third place respectively