OMAN: Oman Cement profit hit by gas price increase

Doubling of the natural gas price from January this year has substantially pulled down the net profit of Oman Cement Company, the second biggest cement producer in the Sultanate, by 40 per cent to OMR5.44 million for the first half of this year, from OMR9.09 million for the same period of 2014.

On January 1, the Oman government doubled the natural gas price for industries to 41 baisas per standard cubic metre (cc) from 20.5 baisas per standard cc, with an inbuilt annual increase of 3 per cent thereafter.

The impact of the revision affected the net earnings of gas-intensive local industries like cement, ceramic tiles, steel and glass manufacturers, since a sizeable portion of their manufacturing cost is for fuel.

Oman Cement said that the fall in profits was mainly due to the higher energy cost.

“We have, however, continued our efforts to minimise the impact by better cost and selling price management,” said Oman Cement in its first half results.

The profit before tax for the six-month period also dipped by 39.26 per cent to OMR6.02 million for the first half of 2015 from OMR9.92 million for the same period of last year, which also included an amount of OMR2.1 million being income on sale for available-for-sale investments.

The company’s sales revenue was slightly lower at OMR25.53 million for the first half of this year against OMR25.68 million for the same period last year, while total income stood at OMR25.71 million, against OMR26.04 million during the period under review.

New cement mill

Referring to the progress on expansion programme, Oman Cement said its new cement mill of 150 tonnes per hour capacity (with supporting infrastructure of cement silos and bulk dispatches) is expected to be completed in the fourth quarter of 2015.

The company is also taking efforts to reduce emission levels and accordingly awarded a contract for upgrading pollution control equipment for line -2 to FLSmidth with a total value of $11.3 million. The work has already been started and the project is expected to be ready by the second quarter of 2016.

Oman Cement’s production fell by 2.33 per cent at 1,008,779 tonnes of cement in the first half of 2015, from1,032,898 tonnes for the same period last year, mainly due to limited availability of clinker.

“We had targetted higher levels of clinker production during the period. However, due to technical constraints resulting in the prolonged shutdown of our kiln 3 which was under planned maintenance shutdown, our clinker production remained lower than planned. With the efforts of our technical teams, the kiln has now commenced production and we expect better operational performance in future,” said the company.

NEW ZEALAND: Onehunga wharf to lose cement boats

Cement boats docking at Onehunga port are set to become a thing of the past.

Holcim New Zealand is constructing a new cement silo at the Waitemata port and cement ships will relocate from the Onehunga Port to the new site.

At present the Ports of Auckland-owned Onehunga wharf is closed to the public.

Despite the relocation, a Holcim spokesperson says Onehunga Port will continue to be used by the company as a bagging plant and the silos will remain operational.

The port is also used for shipping container storage and as a base for the Sandford fishing fleet.

Bronwen Turner from the Manukau Harbour Restoration Society says the relocation of the boats provides an opportunity for the development of the wharf as a community amenity.

Results from an AUT University survey on the use of tourism potential of the Manukau Harbour were released in November 2014, showing overwhelming support for the redevelopment of the wharf.

An 18-month investigation carried out by ferry giant SeaLink was completed in September 2014. It looked at whether a service could operate from Onehunga to areas like Clarks Beach and Waiuku.

However a ferry service would need access to the port, Turner says.

"Its the only wharf we have in the Manukau Harbour. It is really the lynch pin to having a ferry service operating in the harbour."

A spokesperson for Ports of Auckland said the wharf will stay closed to the public for now, but did not rule out a change in the future.

"There are a lot of heavy freight movements associated with these operations and it would not be safe to open the port to the public.

"It is clear that there is potential for the wharf to be developed along the lines of the Wynyard Quarter at some point in the future. 

"It will be important for the community to be involved before any plans are put in place."

The new Holcim Waitemata terminal is expected to be completed by mid 2016, with the relocation of the cement boats planned shortly after.

WORLD: Sustained Global Cement Demand Growth Expected

Global cement consumption is expected to record sustained growth in 2015, with further gains forecast for 2016, according to analysis presented in the recently-released Global Cement Report Eleventh Edition.

The report, which covers key cement market data for over 170 countries, reveals that total world consumption rose by 2.6 per cent in 2014 to 4140Mt, compared to the 7.7 per cent growth achieved in 2013. Global demand growth has been driven by the phenomenon of China, which has increased its share of world consumption to reach 59 per cent in 2014.

Closer analysis shows that steady growth has prevailed in the emerging markets where in 2014 consumption (excluding China) increased by 2.7 per cent 1387Mt. In the mature markets of Europe and North America, overall demand growth returned to positive territory in 2014, rising by 2.8 per cent to reach 290.6Mt.

Leading markets 

The top five consuming nations in 2014 were China, India, USA, Brazil and Russia. A total of 10 Asian countries are represented in the top 20, and while two east Asian nations - the Philippines and Malaysia - entered the top 20 for the first time, France and Italy fell out, reflecting the decline of western European consumption. 

Demand in China reached a record 2462Mt, translating into an annual increase of 2.6 per cent - the slowest growth rate in decades and well below the double-digit levels seen in recent years. These indicators suggest that the country is nearing peak demand for cement as the construction industry resets to a slower, more sustainable growth path.

In terms of regional performances, North America has been leading gains in the developed world where last year demand rose by a vigorous 8.2 per cent in 2014 versus 3.9 per cent a year earlier.

The best-performing regions across the world over the 2012-14 period have proved to be in the emerging markets of sub-Saharan Africa, led by central Africa with double-digit rate increases in each year.

Growth outlook 

Looking ahead, general improvements in global growth trends are expected in 2015 and 2016, with forecasted increases of 3.3 and 4.6 per cent, respectively. North and central Asia are set to excel, as will much of Africa. Overall growth in Asia is forecast to be around 3-5 per cent, partly reflecting China's expected lower growth course. The Middle East and western Europe are expected to rebound, but obvious downside and political risks prevail.

UK: New cement producer opens for business

Aggregate Industries has become the UK’s newest cement producer after taking control of major cement plants in Cauldon, Staffordshire and Cookstown, County Tyrone, Northern Ireland.

Becoming a cement producer and supplier is the final piece in the jigsaw for Aggregate Industries, allowing the firm to offer contractors a full range of heavyside construction materials.

Lafarge was required to offload its Tarmac business in the UK with the exception of two plants, a quarry at Cauldon Low and a cement terminal at Belfast Docks, as a condition of its global merger with Holcim.

The transfer was finalised yesterday and sees 250 staff switch to Aggregate Industries, itself part of new LarfargeHolcim group.

Irish rival CRH will take control of the rest of the Tarmac business.

Pat Ward, CEO, Aggregate Industries, said: “These are exciting times for Aggregate Industries. Along with the wider benefits of being part of the new LafargeHolcim group, the integration of cement production represents a significant strategic opportunity for us.

“We’re now able to offer our customers the full range of construction materials and solutions, while maintaining our high levels of customer service.”

Given the strength of the Lafarge cement brand, Aggregate Industries will continue with this branding for its bulk cement products, although some bagged products will be renamed in due course.

The new cement division will be led by Joe Hudson, managing director, Cement & Concrete Products. He joins Aggregate Industries from Lafarge, where he has worked in a number of key functional and operational roles since 2001.

USA: Local cement facilities under new ownership in the Quad Cities area

Continental Cement Company has closed the deal to exchange a Bettendorf facility and cash for a cement plant and seven cement distribution terminals from Lafarge.

Continental’s parent company, Denver-based Summit Materials, bought the facilities – collectively known as the “Davenport Assets,” from Lafarge North America for $450 million in cash plus Lafarge gets the Continental/Summit cement distribution terminal in Bettendorf, Iowa.

The purchase doubles Continental’s cement capacity, giving Continental 2.45 million tons of cement capacity and eight cement distribution terminals along the Mississippi River between Minneapolis and New Orleans.

The purchase includes Continental acquiring the cement plant in Buffalo, Iowa.

“The newly acquired cement operations are a complementary fit with Continental’s existing cement plant in Hannibal, MO and cement distribution terminal in St. Louis, MO. The combined business will operate as Continental Cement Company,” said a statement from Continental’s parent company.

The announcement comes a week after the announcement that the Lafarge-Holcim global merger was completed in mid-July.