PAKISTAN: Cement sales fall 18% in Aug, prices still rising

KARACHI: Cement sales in August 2011 fell to its lowest level since September 2010 at 2.4 million tonnes, down 18 percent month-on-month (sharpest MoM fall in 21 months). 

Heavy rainfalls in the country along with lesser working hours during Ramazan were the key contributors towards this decline. Domestic demand stood at 1.6 million tonnes (down 19 percent MoM), while exports slipped to 714,000 tonnes (down 14 percent MoM). However, previous year’s low base owing to floods helped total cement sales in 2MFY12 to rise by 7 percent year-on-year (5.2 million tonnes). 

On the other hand, local retention prices have increased to Rs 290/bag (retail prices in the vicinity of Rs 410-420/bag) from last month’s average of Rs 251/bag. Recent rise in power cost of Rs 2/unit has been passed on by the manufacturers, well over and above our estimated impact of Rs 20/bag. Export prices (by sea) have gained some ground as well, rising up to $60/tonne from its recent mean of $52-55 per tonne. 

Analysts expect domestic cement demand to reach 23.3 million tonnes (up 6 percent YoY), while exports to remain in the neighborhood of 9.5 million tonnes.

Local cement sales fell by 19 percent MoM in August, with the decline led by a fall from the southern part of the country (down 38 percent MoM). The decline is attributed to heavy rainfalls in the south along with curtailed working hours during Ramazan. As a result, industry’s sales during 2MFY12 reached 3.7 million tonnes, an increase of 14%YoY – reflecting the low base of last year. 

Meanwhile, exports also declined to 714,000 tonnes in August (down 14%MoM) as logistical issues hindered sales to Afghanistan (down 26%MoM). This takes 2MFY12 sales figure to 1.5 million tonnes, which is 7%YoY lower than last year’s sales of 1.7 million tonnes. 

The local cement prices have increased up to Rs 410-420/bag, with retention for cement manufacturers reaching as high as Rs 290/bag (up 15% from August’s average of Rs 251/bag). The increase in prices is because of manufacturers passing on the impact of recent hike in power cost of Rs 2/unit. However, the Rs 35-40/bag increase in prices is well over and above our estimated impact of Rs 20/bag. Hence, earnings outlook for Q1FY12 remains bright for cement manufacturers (preliminary estimates: Lucky Rs 4.8/share – up 113%YoY and 4%QoQ).

Though overall demand in August witnessed a massive decline of 18%MoM, analysts expect this trend to reverse on the back of improvement in weather conditions. Hence, they also expect overall cement sales to reach 32.8 million tonnes in FY12, up 5% from last year.

AFRICA: MOZAMBIQUE: New Cement Plant to Be Built in Magude Next Year

The construction of a new cement plant in Magude district, in the southern province of Maputo, will begin next year according to the provincial director of Trade and Industry, Fanieta Manjate.

Initially, the construction work had been scheduled to start in June, reports the daily newspaper "Diario de Mocambique".

Budgeted at 78 million US dollars, the project is being developed by the Chinese company "Africa Great Wall Cement Manufacturer".

The factory will be built in Chichuo, about 11 kilometres from Magude, covering an area of 80 hectares. The region has huge limestone deposits, which is one of the key ingredients of cement.

According to Manjate, the company is currently mobilising equipment and building houses to accommodate the staff who will be involved in developing the project.

Manjate stated that the Environmental Impact Study has already been approved, and families living in the area are being relocated to make way for the development of the project.

The plant will have the capacity to produce up to 500,000 tonnes of cement per year when it starts operating at the end of 2012 or early 2013.

With this plant, the number of cement factories set up by Chinese investors will rise to three.

A cement factory at Salamanga, in the southernmost district of Matutuine, in Maputo province, is currently under construction at a cost of 72 million dollars. The Salamanga factory is also located in an area with massive limestone deposits, and is expected to produce about 800,000 tonnes of cement per year.

The third factory, GS Cement, will have the capacity to produce 550,000 tonnes of Portland cement. This factory will be developed at the industrial park in Boane with an investment of 100 million dollars.

The country's largest producer of cement, Cimentos de Mocambique, is currently upgrading its factories in Matola, Dondo and Nacala, to double production.

Along with the proposed new factory in Sofala province, the country's cement production could jump from the current level of 1.3 million tonnes per year to reach four million tonnes per year by 2013.

The significant expansion of cement production capacity in Mozambique is in response to the growing demand for building materials in the country.

PARAGUAY: INC garantiza entrega normal de cemento

Desde la Industria Nacional del Cemento (INC) afirman que esta semana se tendrá una provisión normal de cemento, a pesar del nuevo paro que tuvo el horno de clínker de la fábrica de Vallemí. El presidente de la cementera, Édgar Acosta, afirma que hay 975.000 bolsas del producto en stock.

El domingo último, la cementera registró nuevamente un paro no programado del horno de clínker de la fábrica de Vallemí (Concepción) por la falta de fueloíl. Es el segundo paro que se tiene en lo que va de esta actual administración, encabezada por Édgar Acosta Alcaraz.

El presidente de la cementera indicó que este nuevo paro obedeció a que ya no se tiene fueloíl. Esto, a consecuencia de que la carga que debió llegar el último fin de semana con este combustible tuvo un retraso, por lo que llegará recién este viernes 7 de octubre.

De acuerdo con los datos técnicos, la carga que debió llegar a la INC trae unos 6.500 m3 de fueloíl que servirán para reactivar el horno. 

Provisión normal

Según Acosta Alcaraz, la producción de cemento y la entrega de bolsas de cemento no se resentirán por esta semana, debido a que el molino en Villeta sigue trabajando con la cantidad de clínker que se tiene. Comentó que actualmente, la INC tiene en stock unas 975.000 bolsas disponibles para entregar en los próximos días.

Indicó que esta cantidad servirá para abastecer tranquilamente esta semana y si fuese necesario, la semana próxima. “Seguiremos haciendo una entrega normal. Toda esta semana se va a entregar, incluso en tercer turno”, afirmó el titular de la cementera.

Según Acosta Alcaraz, el promedio que viene despachando la INC es de unos 48.000 a 50.000 bolsas por día, que es la capacidad máxima de producción que tiene la fábrica. Reiteró que esta semana se cumplirá con el cronograma de entrega de cemento tal como ya se estableció para estos días.

Convenio con Petropar

Hoy a las 11.00 en el Ministerio de Industria y Comercio (MIC), la INC y Petropar firmarán un acuerdo mediante el cual la petrolera se compromete a entregar mensualmente unos 8.000 m3 de fueloíl a la cementera nacional.

COLOMBIA: Cementos Argos se agranda en EE. UU.

Cementos Argos anunció ayer que concretó la compra de parte de los activos para la producción de cemento y concreto en Estados Unidos, pertenecientes a la compañía Lafarge, por 760 millones de dólares.

La transacción se convierte en el negocio más grande que ha realizado una empresa o una industria colombiana en Estados Unidos e incluye una planta de cemento en Roberta, Alabama; otra en Harleyville, Carolina del Sur; una molienda de clinker en Atlanta, Georgia; 79 plantas de concreto en Georgia, Carolina del Sur, Alabama y Florida; 347 camiones mezcladores; cinco terminales férreos y un puerto marítimo en Mobile, Alabama.

Así, la capacidad instalada de la empresa colombiana en EE. UU. sube a 3,2 millones de toneladas de cemento y 10 millones de metros cúbicos de concreto anuales. Además, queda con una capacidad instalada de 16 millones de toneladas de cemento y 14 millones de metros cúbicos de concreto anuales.

AFRICA: NIGERIA: New Lafarge plant produces first 2.5m metric tons of cement

Lafarge Cement WAPCO Nigeria plc has announced that it has successfully produced its first 2.5 million metric tons of cement for the Nigerian market at its new Ewekoro II plant in Ogun State.

This achievement was attained eight weeks after the plant produced its inaugural clinker.

The greenfield cement plant will double the overall volume of Lafarge WAPCO’s products (including Elephant Cement and Elephant Supaset) supplied into the Nigerian market, from 2 million to 4.5 million metric tons.

Speaking on this achievement, Samy Abdelkader, the plant’s CEO, said “the importance of this historic milestone in our 50 years of quality cement production is that very soon enough cement will be readily available for Nigerians.”

Continuing, Abdelkader said “our company has fully keyed into the Federal Government’s Backward Integration Policy, which aims at self-sufficiency in cement production.”

In order to ensure continuous production without power interruption, the new Ewekoro II plant is supported by a 90mw power plant, commissioned June 2011, by the Ogun State Governor Ibikunle Amosun.

Upon the official commissioning of the plant, Lafarge Cement will be adding about 12,000 tons of cement to the Nigeria cement market every day.

“We are convinced that there will be an appreciable stability of supply in the cement sub-sector when there is more volume of cement made available to Nigerians.

“The new plant will also be a testimony to the company’s leadership in innovation as it has the capacity to produce four different varieties of cement to better serve customers’ special requirements,” the CEO stated then.

Lafarge Cement WAPCO Nigeria is a leading manufacturer and marketer of cement, which is also a subsidiary of France-based Lafarge SA, the world leader in building materials.