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.