BANGLADESH: Lighter vessel capsizes in Bay

A lighter vessel capsized with 950 tonnes of cement clinker in the Bay of Bengal near Patenga Sea Beach in Chittagong this morning.

All the crew of the vessel, numbering 7 to 8, were rescued by the staff of other ships soon after the incident, reports our Chittagong correspondent

Confirming the incident, radio control operators at the Chittagong Port said the vessel ‘Bristi’ sank in the Bay around 8:30am when it was going to a private jetty in Isanagar area of the city.

Bristi was returning to the jetty of Diamond Cement Limited after uploading clinker from a mother vessel named Xing Peng Da, the sources said.

Reason behind the capsize could not be known immediately, they said adding that Diamond Cement Ltd imported the raw material for making cement.

NIGERIA: Cement reclassification won’t increase the price

Investors in Nigeria’s construction sector need have no fear as the recent upward review of the quality standard of cement manufactured in the country by the Standards Organisation of Nigeria (SON) will not lead to a price hike on the commodity, Dangote Cement Plc said over the weekend.

The company said it was necessary to allay the fears of consumers that the upgrade of cement quality and the new classification of grades would affect prices, insisting that quality had nothing to do with price.

According to the Group Managing Director of Dangote Cement, Devakumar Edwin, those making such claims were doing so to blackmail the regulatory authorities into backing down on the new quality standard.

He explained in an interview with journalists that for any patriotic manufacturer with consumer interest at heart, there is no relationship between the new standard review and the price of the product except for profiteering.

To buttress his point, Edwin noted that his company started producing 42.5 grade for the past eight years at its Obajana and Ibese plants for about three years at the same with price of the lower grade of 32.5 produced by some other competitors.

According to him, the switch over to a higher quality of cement should not be a difficult process that will necessitate increase in price of the product.

The Dangote Cement boss added that his company has even gone ahead to produce the 52.5 grade of cement and that it would be uncharitable for anyone to claim that the new standard would lead to hike in the price of the product.

Edwin then pledged that much as his company would continue to cooperate with government and authorities in the regulation of the cement industry, it would ensure the price is not hijacked by profiteers.

SON, in the wake of incessant building collapse across the country and the attendant controversies on the quality of cement being produced in the country, summoned the meeting of stakeholders in the building and construction industry to ascertain the immediate and remote causes.

The meeting undertook a review of standard of quality of cement and came out with a classification of cement types and their appropriate uses as a means of stemming the suspected misapplication of the produc, which has contributed to building collapse.

SON in the new classification exercise warned members of the public to adhere strictly to the stipulated application of cement types and save the nation the embarrassment of incessant structure failures.

In the fresh review of standard, the organisation restricted the use of the 32.5 grade strength to plastering of structures only while 42.5 grade was recommended for the construction of buildings, beams, load bearing columns, pillars, block moulding and other structures and the 52.5 recommended for the construction of bigger projects like bridges, flyovers, and high rise buildings.

Edwin said the decision by Dangote Cement to embark on the high quality grade was to help Nigeria stem the tide of building collapse and commended SON for the bold move, pointing out that Dangote was ready to support the regulatory body in the onerous task of ridding the nation of structure failures.

He said: “After 28 days, the 32.5 grade gives a strength of 32.5MPA, whereas the 42.5 grade gives a curing of 42.5MPA i.e 30 per cent higher in strength.”

Edwin said that despite the high quality grade of Dangote Cement, it has not increased its price for the product and would not.

“China, the number one producer of cement in the world is phasing out the 32.5 grade by July. India, the second largest producer of cement phased out 32.5 grade cement 12 years back,” he added.

INDIA: Sharekhan maintains positive view on cement sector

"The demand environment has remained weak on account of a slower than expected execution of infrastructure and housing projects (especially rural housing demand has remained weak) in all regions except the eastern region. The major cities of the western, southern and northern regions witnessed a sluggish demand environment in June this year because of the absence of infrastructure projects and a slow recovery in the private housing segment. Cement dealers are of the view that the demand is likely to recover in the second half of the year.

"Outlook for demand environment:"The firming up of cement prices in the central and southern regions indicates an improving business environment which is positive for the south-based cement players like India Cements and The Ramco Cements . The price of cement is likely to remain stable at the current level or decline by Rs10-15 per bag in selected cities. The cement prices are stabilising (in fact, the prices are firming up in certain regions) and the demand outlook is also improving, given the cyclical upturn in the economy and the expected policy push by the new pro-development government at the centre that would drive investments in the infrastructure sector. Thus, the blended realisations could look up once the demand environment improves and the volume growth picks up, resulting in a better capacity utilisation level. We, therefore, maintain our positive view on the cement sector", says Sharekhan research report.

INDIA: A shot in the arm for Prism Cement

PRISM CEMENT, one of the biggest gainers in the cement mid-cap space, has seen its share price grow almost 2.5 times in last three months to Rs 76.50 levels. While the optimism on cement demand growth led by expected revival in economy has been key trigger for this stellar performance, the company’s overall profitability too has seen a turnaround. Prism’s March quarter performance indicated a good rebound in its cement and TBK (Tile, Bath and Kitchen) segments. Reacting on the March’14 performance, analysts at Espirito Santo observed that company’s operational performance vindicates their expectation of a turnaround in cement and TBK operations.

Not surprisingly, top mutual funds are also showing interest in the company’s stock. Of late, Prism’s shares worth Rs 175 crore (about five% of market capitalisation) changed hands in block deals. While around half of the same were bought by HDFC Mutual Fund, the rest was acquired by Prism Trust which indicates promoter’s confidence in the company.

Prism Cement that derives around 39% of its revenues from cement business is seeing the segment’s profitability grow even as costs are on the rise. The benefits of higher pet coal usage, better power efficiencies, and higher fly ash usage have started percolating. This has boosted cement segments’ per tonne Ebitda in March’14 quarter to Rs 615 versus a loss Rs 53 in previous quarter (Rs 549 in the year ago quarter), say analysts at Motilal Oswal Securities.

On the other hand, TBK segment, which also contributes about 38% to revenues, had been feeling the heat due to higher fuel costs. However, better fuel efficiencies are now helping, thereby boost investor confidence. TBK segment’s volumes, too, are expected to grow at a faster pace as fuel cost economics was limiting growth earlier.

The Ready Mix Concrete segment, the only business that continues to lag, should show improvement once the demand picks up, say analysts. Overall, analysts expect the company to post earnings per share of Rs 5.1 in FY16 compared to a loss (Rs -1.9 per share) in FY14.

However, after a sharp run up in the share price investors need to be cautious on the valuations of cement stocks. Analysts at J P Morgan state that Indian cement stocks are now among the most expensive in the world on two-year forward earnings, even as the RoE (return on equity) profile is relatively weak compared to SE Asian companies.

Further, though some analysts have upgraded their target prices (Espirito Santo to Rs 80 and Motilal Oswal to Rs 67) for Prism Cement, the same shows limited upside for the stock. Additionally, with the monsoon season setting in, it is likely to impact cement demand and realisations. Hence, investors with a medium term perspective may wait for some correction to enter the stock.

GHANA: Ghacem supports dev’t in schools, health institutions

About 300 health and educational Institutions in the southern part of Ghana have taken delivery of free cement bags from the Ghacem Cement Foundation (GCF) to aid their infrastructural development.

The donation, made last week in Accra, is the first of two distributions to be carried out by the Foundation this year.

The Western, Central, Greater Accra, Eastern and Volta Region were the areas which formed part of the southern sector of the country that benefited from the free cement under the Ghacem Cement Foundation as part of an annual benevolence from the country's leading cement manufacturer.

The Northern Sector, which consists of the Ashanti, Brong Ahafo, Northern, Upper East and Upper West Regions, will also receive their allocation of free cement bags by the last quarter of this year.

Present at the ceremony were top Council Members of the GCF including the its Chairman, Nana Prah Agyensaim VI; Mr. Morten Gade, Managing Director of Ghacem and member of the Foundation; Dr. George Dawson-Ahmoah, Secretary of the Foundation, who is also the Strategy and Corporate Affairs Director of Ghacem and Professor Audrey Gadzekpo (member of the Foundation).

Dr. George Dawson-Ahmoah commended the delegation from Pantang Hospital in Accra, who was one of the beneficiaries for turning out in their numbers at the handing over ceremony.

Addressing the gathering, the Managing Director of Ghacem, Mr. Morten Gade expressed delight about the strides Ghacem has made in infrastructural development across the country through the annual cement donation.

“The United Nations Millennium Development Goals clearly states, halting the spread of HIV/AIDS and providing universal primary education by 2015 and considering how close it is and looking at the whooping gap in infrastructural development in these two areas in the country it behoves on all of us to work hard to achieve these objective", he said.

Mr Gade reaffirmed Ghacem's commitment to continue to support health and educational institutions in the country and urged the beneficiary institutions to do their part by using the donation judiciously.

Chairman of the GCF, Nana Prah Agyensaim VI, noted that since 2002, the GCF has donated a total of 360,000 bags of free cement to over 3,800 communities in the country. “This means that within the twelve-year period of the running of the foundation, the company has invested about 8.2 million Ghana cedis into this project and “I believe this is very commendable and corporate institutions need to emulate to facilitate development in the country", he said.

Some of the beneficiary schools and hospitals included: Shallon Preparatory School in Agona Amanful; Konono D/A JHS in Akosombo; Youth Leadership & Skills Training Institute- Afienya; Kpando Aziave R.C Primary in Kpando; Sacred Heart Preparatory School in Supomu Dunkwa; Kushea Anglican School in Assin Kushea; MA Experimental in Kibi; Royal Priesthood Academy In Amasaman; Andoga L.A. Primary School in Hohoe; Atwereboanda D/A Junior High School In Aboso; Frankeve Human Development Foundation in Agona Swedru and St. Nicholas Preparatory School in Akyem Manso.