AFRICA: SOUTH: S.Africa's PPC says cement outlook uncertain

Pretoria Portland Cement, southern Africa's biggest cement maker, warned of uncertain demand, sending its shares lower and underscoring the bleak outlook for construction in Africa's top economy.

PPC, which does most of its business in South Africa and Botswana, said on Tuesday volumes in its home market dropped for the third straight year, hurt by the lack of recovery in residential construction.

South Africa emerged from its first recession since 1992 last year, but has failed to post a convincing growth due to high levels of household debt and shaky consumer demand.

"We simply do not know what to make of the construction market, which is quite depressed," Paul Stuiver, PPC's chief executive, told Reuters, adding the outlook for cement remained "uncertain".

Shares in the company dropped 2.3 percent to 33.51 rand by 0926 GMT, underperforming Johannesburg's All-share index, which was flat.

"The results are rather disappointing. I think they have been pushed up a little bit too far ahead of the results," said David Shapiro, a trader at Sasfin Holdings. "The outlook is still quite negative."

REVENUE FLAT

PPC, which has been producing cement for the last 118 years and has been listed in Johannesburg for a century, said headline earnings per share for the year to end-September rose 28 percent to 217 cents, within its forecast range of a 20 to 30 percent increase.

Headline earnings, which exclude certain one-time items, are the main gauge of profit in South Africa.

While earnings were helped by the non-recurrence of a charge related to a black empowerment deal a year earlier, revenue was little changed, indicating slack demand.

PPC, is looking to further expand in southern Africa, as it faces tougher competition from new entrants into its home market.

Stuiver said PPC was looking for opportunities in Mozambique and other southern African countries. The company may buy existing operations or build new facilities over the next two to three years, he said.

The group may consider selling a stake in its Zimbabwe unit, Portland, to comply with a black ownership law in Zimbabwe.

PPC is gearing up for competition from a Chinese-South African joint venture, which is building a 1.65 billion rand cement plant in South Africa.

It could also face a battle with Nigeria's leading industrial conglomerate, Dangote Group, which has invested 779 million rand to more than treble its stake in local player Sephaku Cement.

Shrinking of the construction industry has already forced cement manufacturer Lafarge SA to initiate a 13 percent cut of its workers at its Lichtenburg plant in South Africa.

INDIA: Cement price up nearly 50pct in last five years

The average price of cement has gone up by nearly 50% in the last five years to INR 243 per 50 kg bag in 2009-10 buoyed by increased construction and real estate activities.

Quoting information provided by Cement Manufacturers' Association and two leading manufacturers, Mr Anand Sharma commerce minister informed the Lok Sabha that cement's average price was INR 163 per 50 kilogram bag in FY'06.

The price rise was the stiffest in 2006-07 as it became dearer by INR 43 per bag to stand at INR 206 but in 2009-10 it just went up by INR 5 a bag from INR 238 in 2008-09. During the 2007-08 fiscal, average price of cement was INR 238 a bag.

However, as cement is largely a regional product and the price of it depends upon the dynamics of demand-supply in that particular region, cement's price also varies from region to region.

This is evident from the fact that when a 50 kg bag of cement cost INR 234 in Bhopal in 2009-10, it was INR 262 in Guwahati, INR 252 in Chandigarh and INR 306 in Jammu.

India had produced 201.06 million tonnes of cement in 2009-10 and consumed 198.04 million tonnes during the year. Exports fell from INR 881 crore in 2008-09 to INR 665.73 crore in 2009-10.

AFRICA: EGYPT: Egypt's Torah Cement 9-month net profit up 1 pct

Egypt's Torah Cement (TORA.CA: Quote) posted a 1 percent rise in nine-month net profit to 270 million Egyptian pounds ($46.9 million), the stock exchange said on Thursday.

Shares in the company closed up 3.3 percent at 30.5 pounds before the results were published, as the benchmark Egyptian index dipped 1.1 percent.

Torah is a subsidiary of Egypt's largest listed cement maker, Suez Cement (SUCE.CA: Quote)(SUCEq.L: Quote), which reported an 8.5 percent dip in its nine-month profit on Oct. 28. [ID:nLDE69R0TD]

Suez, itself a subsidiary of Italcementi (ITAI.MI: Quote), holds a little more than a quarter of Egypt's grey cement market and 42 percent of its white cement market. (Reporting by Sarah Mikhail; Editing by David Holmes) ($1=5.753 Egyptian Pound)

INDIA: HC notices to SAIL on JK Cement petition

The central government and Steel Authority of India have been issued notices by the Delhi High Court seeking their response to a petition contesting the rejection of JK Cement's bid to partner the steel major on a joint venture slag based cement plant.

A Division Bench comprising Justices Sanjay Kishan Kaul and Valmiki J Mehta issued notices to the Centre and directing them to file replies to the JK Cement petition within three weeks. The high court has scheduled the next hearing on the matter on January 19th 2011.

JK Cement claims that its bid was rejected in an arbitrary manner despite being the most suitable.

In October, 2007, SAIL had invited bids for joint venture participation in a proposed slag based cement plant at Rourkela, in Orissa. However, the tender proceedings came to an abrupt halt due to some dispute. The matter was later taken to the Orissa High Court, which stayed the tender proceedings.

Later, the bids were opened in 2009 and JK Cement was found to be the highest bidder. However, SAIL did not issue a Letter of Intent and instead, rejected the bid on November 2nd 2010.

During today's proceedings in the Delhi High Court, SAIL gave an assurance that it will maintain the status quo and not invite any new tender in the near future.

Senior advocate Mr KK Rao appearing for SAIL said that "SAIL would not propose to invite any new tender in the near future, at least till next date of hearing.”

Meanwhile, senior counsel Mukul Rohatgi, appearing for JK Cement, submitted that the PSU has rejected the bid without reasonable justification, even though JK Cement was ostensibly the most suitable bidder.

AFRICA: KENYA: Athi River Mining 9-mth pretax profit up 12.6 pct

Athi River Mining (ARM.NR), Kenya's third-largest cement company, said the market remained buoyant when reporting a 12.6 percent rise in nine-month pretax profit.

"Going forward, the company expects margins to improve in the cement business with the increase in capacity," ARM said on Friday.

January-September pretax profit rose to 762 million shillings ($9.5 million), helped by 16 percent higher revenue.

Earnings per share rose 15 percent to 6.98 shillings.

Strong growth in construction -- 18 percent in the second quarter -- has been underpinning a recovery in east Africa's biggest economy where growth was seen around 6 percent in 2011, compared with a projected 5 percent this year. [ID:nLDE69K1U2]

ARM shares were untraded by 0900 GMT, having closed at 171 shillings on Thursday to be up 54 percent this year.

In October, managing director Pradeep Paunrana told Reuters the company planed to spin off its fertilizer business to focus on increasing cement sales fivefold over the next five years. [ID:nLDE6990HB]

It said borrowing increased in line with investment in a new clinker plant and cement grinding plant in Tanzania, as well as expansion projects in Kenya.