PACIFIC: CEMENT DEMAND

PACIFIC Cement Limited (PCL) has noted positive progress with its branded cement following an increase in demand for supplies from distributors.

PCL acting general manager Sonni Dutt said they had been producing cement for home brands for the past 12 months, whereby customers had been given the opportunity to select the brand.

He said the company's original brand, Pacific Cement, was well known in Fiji and the region for more than 40 years.

"The emerging market trend is that every distributor wishes to have the cement in his brand. We started with our distributor in Port Vila, Vanuatu. The distributor requested cement under his own brand and we supplied.

"After 12 months, response is extremely good and export from Fiji under the new brand has increased. The demand is increasing because we are branding it according to their brand and then we can identify the loyal customers," Mr Dutt said.

He said the biggest advantage under this business model was that they did not have to do any marketing.

The Fijian Holdings Group company had also commenced the same process in Fiji with two key distributors requesting cement under their own brand.

"We are trying to get more customers and we are in fact expecting a few more to come on board so that has become a loyalty between the supplier and the customer, and presents a win-win situation for both parties," he said.

He said the company produced a world-class cement as per Australian standard and received ISO 9001, ISO 14000 and ISO 17025 certification for its process.

Mr Dutt said they sourced major raw materials from Thailand and Australia, and imported high quality clinker, the main ingredient in making cement, from Mitsubishi in Japan.

CAMEROON: Dangote to Halt Cement Imports Into Cameroon With U.S.$140 Million Investment

The Dangote Group has so far sunk $140 million (about N23 billion) into its cement grinding plant in the Cameroonian economic capital city, Douala.

The investment, according to the company is to help the country to attain self-sufficiency in cement production and consumption and to halt importation of the commodity into the country, Nigeria as a reference point.

The grinding plant with a capacity of one million metric tons of cement a year and which will be upgraded to 1.5 million metric tons is located in an area called Base Elf on the shorelines of the River Wouri off the Atlantic coastline.

Investigation revealed that Cameroon imports about 500,000 metric tons of cement annually and that the yearly demand for cement is estimated at four million metric tons. Efforts by the government to boost domestic production saw supply increase from 1.6 million metric tons to an estimated 2.2 million metric tons leaving a shortfall of 1.8 million metric tons. To this end, the government invited private sector investment s in the sector. It was based on this that the government signed an investment agreement with the Dangote Group in September 2011.

Abdullahi Bada, General Manager of the Doula plant, noted that the entry of Dangote into the Cameroonian cement industry is premised on the fact that for long, Africa has been a dumping ground for products over which we have comparative advantages and we have seize this opportunity, taking the bull by the horn to make sure Africa has comparative advantage, especially in the area of cement manufacturing.

According to him, the first 50kg bag of 42.5 grade of cement from the plant will be available in the market from August this year.

"As a policy, Dangote Cement worldwide produces 42.5 grade cement because we take the healthy and safety of our people very seriously. We can't rule out the fact that most of the builders and contractors in the rural areas lack engineers to monitor what they do; however, if you have a good product they will be able to come out with standard constructions that will last and won't endanger people's lives."

Regarding competition, he noted, "The cement industry in Cameroon is largely dominated by the Cinmenteries du Cameroun, CIMENCAM, owned by the French group Lafarge, which has for a long time been the only firm in this activity. The presence of the Moroccan group CIMAF whose annual production capacity is 500 tons; a Korean firm is also

TRINIDAD: Cement price to go up by $5 from today

The price increase was disclosed by Trinidad Cement Ltd (TCL) whose customers can expect to pay around $5 more per bag.

The company stated: “TCL Premium Plus, which accounts for 95 per cent of local market share, will be adjusted by nine per cent, which is equal to a five cent increase per pound from $.53 to $.58 VAT inclusive. Ordinary Portland Cement (OPC), which is used by approximately five per cent of the market, will move by 15 per cent.”

This means the average price ($60 for a bag of cement) will go up at least $5. Hardware owners and contractors have already been informed of the increase by TCL.

TCL stated: “These price movements have resulted from continual increases in major cost components over the past 18 months, but more so, over the past six months, when there has been a steady rise in the price of equipment spares, raw materials, freight rates and supplier services.”

It said the entire local construction industry was facing increased costing in building materials and the last time the company’s cement price was adjusted was on January 2, 2013. A commitment was made then to not make any changes for 12 months.

The company stated: “In recognition of the fact that cement is a major element of local and regional economic growth, TCL has kept the adjustments to a minimum and is pleased to state, that its prices still remain close to the lower end of the tier when compared in a global context. Independent studies by Quantity Surveyors have confirmed the total cost of cement in a standard dwelling house is just five per cent of overall construction material cost.”

TCL stated that as is customary, all contractors registered with the Trinidad and Tobago Contractors’ Association (TTCA) will be offered a three-month waiver of the new price for fixed price contracts with their clients.

n An official with a major construction company in Chaguanas said the increase in prices of cement may result in less work being done privately, and some contracts may be fixed so contractors would be operating at a loss. He also said since cement was used to make concrete blocks, increased prices in those were also expected.

The official said: “With the construction sector and with people building their own houses, it is going to be a bit hard with the cement prices going up. It will be a bigger expense to the contractor and the people who have houses to build.”

However he added: “People would spend their money if they have a project going on. It may slow down the private sector but as for contractors, the job has to be completed no matter what.”

TANZANIA: Set to Be One of Africa's Top Cement Maker

CEMENT production is becoming an important manufacturing activity that would contribute immensely to Tanzania's economic growth, in terms of exports and job creation.

The cement industry has of late seen more key players coming in, the move that would lead to increased production to make the country the largest cement producer in Africa. Locally, the situation will stir up competitions that would force prices to decline, to benefit the local consumption thus becoming an important incentive in encouraging construction activities.

Adjourning the 14th session of the National Assembly in Dodoma at the weekend, the Prime Minister, Mr Mizengo Pinda, said the cement industry has positive prospects to become the largest contributor of revenue to the government as well as job creation.

He said the current production capacity in the country is 3.8 million tonnes per annum, but it is expected to more than double to 8.3 million tonnes per annum in the near future. Domestic consumption is also projected to increase to 3.9 million tonnes per annum from 2.25 mtpa.

Premier Pinda said there are ongoing five cement mills construction projects in Arusha, Tanga, Lindi and Mtwara regions to make a total of nine cement projects which will make Tanzania the largest cement producer on the continent.

"To ensure that Tanzania exploits fully the huge potential in the cement industry, Premier Pinda said the government will act strongly in curbing importation of 'cheap' cement which have been contributing to killing the local industries and deny the country revenue," he said.

Also, it is projected that construction of residential and commercial housing will continue to dominate local cement demand at around 85 per cent in the medium term. Construction and housing sectors will continue per same projections to be the main driver of cement consumption in the country.

Available reports from the cement producers show that by next year, Tanzania is projected to become a net exporter of cement - fully supported by projected strong demand from its (import dependent) neighbour countries of Burundi, Rwanda, and East DRC.

Even though the projections show a diminishing role of the mining sector (mine construction) in increasing demand for cement in the country, it is still foreseen an uptick of activities in other sectors (infrastructure and residential housing in particular).

Also the more key players enter into the cement industry, it is projected a decline in production costs (supported by falling energy costs and improving energy supply), and a decline in prices due to the expected entrance of new players (Lake Cement and Arthi River).

Factoring projected falling prices, it is also expected revenue growth to be largely driven by volume, riding on the expected increase in demand (internal and external) especially from neighbouring countries of Rwanda, DRC, and Burundi.

For example, the new Dangote Cement Factory now under construction in Mtwara, will be the biggest cement project in the country, East and Central Africa, is expected to ease pressure on prices of the product once the investment project starts production next year.

Mr Aliko Dangote, the Group President and Chief Executive Officer said during his visits to the country last week that when the plant starts work next year, the company would look at how to reduce pressure on the price of cement.

One of the measures he noted is to find ways of countering costs that arise as a result of distribution difficulties as one way of reducing pressure on cement prices.

The firm would first procure 250 trucks to handle distribution of the product across Tanzania. Similarly, to handle challenge of getting skilled labour in Tanzania for their operations, they would first take Tanzanian engineers to the Dangote Academy near Abuja for training.

The country is set to more than double its cement production capacity next year when the factory is completed. Currently, the price of cement per tonne remains relatively high averaging between 90 and 105 US dollars due to high energy costs and dependence on imported clinker.

The capacity of the factory is expected to be three million tonnes per annum, out of which he expects to get a good chunk of the market share. Mr Dangote hopes that the new cement plant would first satisfy the local market. Tanzania Portland Cement is currently the country's biggest producer with a production capacity of 1.4 million tonnes per annum.

Comparatively, Tanga Cement has a capacity of 1.25 million tonnes per annum while Athi River Mining Tanzania produces 750,000 tonnes per annum. Mbeya Cement Plant has an installed capacity of 350,000 tonnes per annum. Alhaj Dangote is a Nigerian business magnate who is ranked by the Forbes magazine as 43rd richest person in the world and first in Africa.

According to the company, they have set a goal of becoming one of the world's leading cement companies by 2016. The company's investment profile in the continent stretches from Nigeria, Tanzania, Cameroon, Senegal and Gambia to South Africa, Zambia and Ethiopia, to name just a few.

This is an opportunity to exploit the comparative advantage in cement production that will bolster construction sector and its contributions to economic growth and job creation.

BOLIVIA: Construcción crecerá este año en al menos 10%

El gerente general del Instituto Boliviano del Cemento y el Hormigón (IBCH), Marcelo Alfaro, estimó que la tendencia del crecimiento anual del sector de la construcción es del 10% aproximadamente.

“Típicamente la construcción ha venido creciendo (entre) 10% (y) 11%, este dato lo maneja la Cámara Boliviana de la Construcción (Caboco), pero la tendencia (para este año) entiendo que es similar, o sea todos los últimos años viene creciendo un 10% la construcción aproximadamente”, expresó.

El presidente de la Caboco, Cristhian Eduardo, mencionó en abril que el sector de la construcción el año anterior registró un crecimiento del 7,6% y este año, alcanzaría hasta el 9%.

Enfatizó que en el departamento donde más se construye es Santa Cruz.