PHILIPPINES: Cement makers to raise prices

Cement companies are set to raise prices by P10 per 40-kilogram bag of cement within the week, at the start of the peak period for construction activities.

Three cement companies issued separate advisories to their distributors about the impending price hike for cement products.

Cemex Corp., La Farge Cement Corp. and Eagle Cement are poised to increase cement prices at the earliest possible time this week, according to the advisories.

Cemex’s Rizal cement currently sells for P198 per bag while Lafarge’s Republic brand sells at P197. Eagle Cement sells its product at P193 per bag.

Concerned cement companies could not be reached for comment as of press time.

Holcim Cement, which has yet to issue an advisory, said “prices normally move up and down depending on the season and usually summer is the peak of construction season.”

The planned price hike ran contrary to the Trade Department’s plea to manufacturers to reduce prices based on 50-percent reduction in fuel prices.

Trade Undersecretary for consumer welfare and protection Victorio Mario Dimagiba said his office had not yet received any notice for cement price hike.

The Trade Department and manufacturers have a standing agreement that a manufacturer should inform the agency first before implementing any price adjustment.

Dimagiba said its latest price monitoring report showed that retail prices of cement actually declined. “As you know all cement brands reduced prices in November 2014 from a high of P230,” he said.

The National Price Coordinating Council will meet Tuesday to review existing supply and price situation.

The Cement Manufacturers Association of the Philippines said cement robust sales were observed in all four quarters of 2014, but the fourth-quarter figure posted the highest growth.

Cement sales climbed 9.6 percent in 2014 to 20.2 million metric tons from 19.44 million MT in 2013, on the back of healthy growth in construction.

Fourth-quarter cement sales jumped 15.7 percent to 5.21 million MT from 4.5 million MT recorded in the same period in 2013 while third-quarter sales increased 11.9 percent to 5.4 million MT from 4.8 million MT.

In the first two quarters of 2014, cement sales posted a 6-percent incremental output, reaching 10.7 million MT from 10.1 million MT in 2013.

CeMAP said the ongoing public-private partnership projects also contributed to the rise in cement demand and sales.

It said infrastructure disbursements were channeled mostly to ongoing reconstruction and rehabilitation efforts in communities devastated by typhoon Yolanda.

USA: Cement Use To Grow 8% in 2015, But Low Oil Prices Won't Help Much

Growing job markets, consumer confidence and construction spending will contribute to higher cement consumption in the U.S. this year, rising an annual 8% to 93 million metric tons (MMT), according to the Portland Cement Association. Low oil prices will provide an added financial stimulus to consumers and contractors, but immediate cutbacks in the oil field are expected to offset any long-term gains in construction activity, PCA notes.

PCA expects housing starts to rise this year to 1.2 million units as 3 million new jobs are created, driving consumer spending and demand for residential construction, which is expected to account for nearly 60% of all cement consumption in the U.S. this year.

“There is broad based, and in some cases, unbridled optimism that has been absent for a decade,” said Ed Sullivan, the trade group’s chief economist on Feb. 3 as this year’s World of Concrete show was getting underway. “What we are seeing now is the healing of deep wounds.”

The Skokie, Ill.-based PCA forecasts cement use to grow another 7.9% in 2016 to 100 MMT. The two-year forecast comes on the heels of last year’s growth of 8.2% to 86 MMT, driven largely by nonresidential construction and public works, which combined accounted for 87% of U.S. cement consumption.

Visitors to the World of Concrete reflected optimism in PCA’s cement forecast. “Everything points to the market being good for awhile,” said Glen Teel, CEO of Baltimore-based Peri Formwork Systems Inc. Unlike prior shows, the company was exhibiting outside for the first time in a larger, 2,400-sq-ft booth Peri used to showcase new lines of form panels, slab systems and protective screens.

Crude Change

Low oil prices, if they continue, will help give “a little dose of extra” to consumers’ bank accounts, translating into increased construction spending, Sullivan noted. He cited data from the Energy Information Administration forecasting oil prices to average $55 per barrel this year and $71 next year.

“Without question, lower oil prices are good for the U.S. economy,” Sullivan said. However, he warned that the stronger economic growth will take a year or more to sink in and may have little effect on new construction starts.

“The timing for that to unfold is a long process,” Sullivan explained. “The positive impacts on construction activity occur next year, by and large, and they will be relatively small.”

In contrast, oil-producing states will be “harder hit” by the low oil prices, Sullivan said.

“When you have oil prices drop in half, you disrupt drilling activity immediately,” Sullivan said. “That will materialize in 2015. It’s a net minor negative, but keep in mind, not all regions will be impacted in the same way.”

State and local public works, benefitting from healthier tax receipts, is expected to contribute to some increasing cement use, accounting for 15% of consumption this year. If the federal government produces a long-term highway and transit bill, “that adds even more strength,” Sullivan said.

Low oil prices may not translate into low asphalt prices for paving roads, however. Crude oil this year is expected to cost 40% less on average than last year, but the cost of concrete pavements will remain competitive with asphalt, Sullivan predicted.

“What we are starting to see is a constraint in supply,” he said, because refineries are producing small amounts of asphalt overall from each barrel of oil.

“Asphalt prices aren’t going to fall very much,” Sullivan said.

ZAMBIA: $200m cement factory on cards

SCIROCCO Enterprises Limited has entered into an agreement with a consortium to construct a state of the art cement factory in Lusaka’s Makeni area at cost of US$200 million.

Scirocco Enterprise managing director Moustafa Saadi said at a press briefing in Lusaka yesterday that the modern cement factory will have the capacity to produce 2,500 tonnes of cement per day.

Mr Saadi said the company has been incorporated in Zambia and it will be known as Amaka Cement Industries Limited.

He said Scirocco has entered into an agreement with a Chinese firm and an international funder to carry out the multi-million dollar project.

“The agreement has been signed and feasibility study is being undertaken to establish the viability of the project. As soon as the exploration work that needs to be carried out is finalised, environmental impact assessment will be carried out to comply with the prevailing laws.

“We expect that the process can be concluded quickly without any undue delays. We are looking forward to the support of our community and various government institutions to facilitate the process in order to begin the physical work,” Mr Saadi said.

The factory that we will be put up will be a modern and efficient one that will exceed all the environmental regulations in Zambia and will have a positive impact on the economy of the area and the nation as a whole.

He said construction of the plant is earmarked to start in September this year and it is expected to be completed by 2017.

Mr Saadi said Amaka Cement Industries will be producing two grades of cement for local and international markets.

He said over 500 people will be engaged during the construction period while 200 people will be employed on a full time basis once production starts.

INDIA: Dalmia Cement partners with IFC for resource efficiency assessments

Dalmia Cement Bharat Limited (DCBL), a subsidiary of Dalmia Bharat Limited, has signed a co-operation agreement with the International Finance Corporation (IFC) to conduct resource efficiency assessments and mobilise investments at its manufacturing facilities. Under the agreement, Dalmia Cement has initiated phase-II, in which the feasibility study of 27 technical papers of the Low Carbon technology roadmap will be undertaken to establish the implementation potential. 

This initiative will help Dalmia Cement identify improvement opportunities in energy consumption, leading to lower GHG emission and contributing to sustainability and green cement. The phase I of the initiative (FY 2011-2013) was developed in partnership with World Business Council for Sustainable Development (WBCSD)'s Cement Sustainability Initiative (CSI) and the International Energy Agency (IEA), resulted in development of 27 technical papers on various aspects of manufacturing of cement and an overall GHG emissions roadmap for Indian cement industry.

As a continuation of phase –I, the phase-II part of the project entails taking up a feasibility study at DCBL’s Dalmiapuram plant for assessing the suitability of implementation of the various low carbon technologies. Dalmiapuram unit would be assessed on improvement opportunities in five areas namely energy efficiency, product mix/clinker factor/blending, alternate fuel & raw materials, waste heat recovery and renewable energy.

“Imbibing sustainable practices in our plants has been a key focus area for us at Dalmia Cement. This agreement will pave the way to making our Dalmiapuram plant even more energy efficient. We are looking forward to IFC’s guidance and advisory support to implement this,” said Mahendra Singhi, Group CEO Cement, DCBL.

“Reducing carbon emission is imperative for a clean, pollution-free environment. This can be achieved by implementing sustainable practices and using alternate fuels and raw materials. We are happy to be associated on this project and explore ways to implement green technology,” said Chandrasekar Govindarajalu, team leader, clean energy and resource efficiency South Asia, IFC.

NEPAL: Dangote starts preparations to set up cement factory in Nepal

A team of technical experts from Dangote Group recently visited potential sites in Makawanpur and Dhading districts to study the feasibility of opening a cement factory there.

A technical team comprising of civil engineers, geologists and mine experts visited different sites in the district, according to K R Rao, team leader of director of Dangote Group´s Cement Production Division. 

According to Rao, the team has sent limestone samples collected from the sites for laboratory tests. We will choose the project site and start land acquisition process within two months, he added.

The Nigerian business conglomerate plans to open a cement factory with daily capacity of 6,000 tons in Nepal.

Hikmat Thapa, chief of food production division of Dangote Group, said this is the largest group of experts that has visited Nepal since the registration of company in June last year. 

According to the group, Nepal will be the 15th country for Dangote´s cement factory operations.

The government has already approved the group´s proposal to invest US$ 550 million to establish a cement factory. For the purpose, the group has registered ´Dangote Cement Nepal Private Limited´ at the Office of Company Registrar. 

"We will start cement production by June, 2017. Our product will be of high quality as we will put in place high-tech quality control mechanism. Similarly, we are adopting ´vertical roller mill´ technology which is a modern and efficient technology," Rao told Republica.

Rao said the group has seen cement market in Nepal growing. "We expect the market to grow to 6 million tons a year by 2010," he added.

Nepal currently consumes 3.5 million tons of cement annually. It imports 1.5 million tons of cement every year. However, with big factories coming up, experts say the country will soon be able to start cement to neighboring countries.

“We are also eying the markets in Bihar and Utter Pradesh of India,” Rao said. 

As the government has prioritized infrastructure development, mega projects like hydropower, road, airport and irrigation projects are coming up in different parts of the country. These projects are likely to propel demand for cement and other construction materials in the near future.

Officials of Dangote Group said they have already started the process to procure cement plant for Nepal. They also said they would soon acquire license to operate limestone mine.

Investment being made by Dangote Group in Nepal is one of the largest Foreign Direct Investment (FDI) in the country´s manufacturing sector.

Dangote Group´s technical officials have not yet decided alternative power supply for the proposed plant. "Though our initial plan was to invest in hydropower project, we have aborted it as it takes lot of time to develop. We are thinking of investing coal or diesel-fed plants to arrange stable power supply," Rao said.

The proposed factory needs 35 MW of uninterrupted power supply. 

Dangote´s technical team returned to Nigeria on Wednesday after wrapping up their five-day study trip. 

Dangote Group is credited for expanding cement production in Nigeria. Nigeria produced 32 million tons of cement in 2014, compared to 2 million tons in 2002. Dangote alone produced 25 million tons in 2014. 

Along with cement, Dangote has factories producing sugar, salt refinery, pasta and noodles, among others, in different countries. It is also involved in real estate business. Aliko Dangote, the richest man in African continent and 23rd in Forbes´ billionaire list, is the owner of Dangote Group.