AUSTRALIA: Airs residents' concerns about limestone mine expansion

Residents concerned about the proposed extension of Cement Australia's East End mine site have had their views tabled in state parliament.

Member for Gladstone Liz Cunningham this week tabled letters from the East End Mine Action Group.

The State Government is processing an environmental impact statement from Cement Australia in relation to extending its extraction industry for the mine near Mt Larcom.

Mrs Cunningham told the parliament that over many years residents who lived near the mine site had expressed concern about the impact of mining on their properties, and in relation to dewatering.

"It would be correct to say that the previous government - the Labor government - dismissed their concerns, and it is with regret that the current government has also not given weight to their concerns either," Mrs Cunningham said.

"For people like Bill Geaney, who lives across the road from the mine, the impact of that mining extraction has been significant to his property.

"He has to purchase water. He has had to face the possibility of his stock not having an appropriate water supply." 

Mrs Cunningham said the East End Mine Action Group had been active for years, trying to give government an understanding of the impact of the Cement Australia project on properties.

"I have had to deal with both representatives of Cement Australia and these landowners, and I would have to say that each of them are wonderful people to deal with," she said.

"But I would ask the government today to consider these submissions and to understand that a farm without water is useless and that the concerns that these farmers have are genuine.

"They deserve to be considered in the context of an increase in the project and also the impact of that on their farms."

MOZAMBIQUE: Mozambican cement company’s sales rise 9.8 pct in 2013

Sales of cement and clinker by Cimentos de Moçambique, the Mozambican subsidiary of Cimentos de Portugal (Cimpor) rose by 9.8 percent in 2013 to 1.299 million tons, according to the group’s annual report and accounts.

Concrete sales increased by 49.8 percent to 172,000 cubic metres and the company’s turnover totalled 141.9 million euros, which was a year on year rise of 5.4 percent.

In 2013 two new cement mills came online in Dondo and in Nacala and the group noted that “a more aggressive commercial policy improved the company’s competitiveness in relation to imported cement.”

Last year Cimentos de Moçambique invested 24.5 million euros in Mozambique, mainly in installing a cement mill in Dondo, on the outskirts of the city of Beira.

PHILIPPINES: Cement industry growth ‘to continue’

CEMENT manufacturer Cemex Philippines remains optimistic that growth in the cement industry will continue to grow stronger this year on the back of the robust construction industry and high government spending.

“We expect the growth to continue this year,” said Paul Arcenas, Cemex Philippines vice president for strategic planning at the sidelines of yesterday’s Build Unity launching rebuilding program of Cemex Philippines Foundation for the communities in northern Cebu.

Arcenas said the industry logged six percent to seven percent growth per year over the last three years.

According to industry reports, cement sales in 2013 grew 5.9 percent to 19.445 million tons from 18.356 million tons in 2012. The last quarter of 2013 added 4.503 million metric tons (MT) in sales or 2.1 percent higher than the 4.409 MT in the same quarter of 2012.

Highest

In 2012, the local industry posted a 17.5 percent growth, its highest in 15 years, having sold 18.4 million tons of cement from 15.6 million tons in 2011.

Cement firms attributed the growth to accelerated government and private sector projects. They predicted growth will be sustained in 2014 with the growing list of infrastructure projects under the private-public-partnership program and the increase in budget of the Department of Public Works and Highways for infrastructure and housing programs.

In anticipation of the huge demand, Arcenas told Sun.Star Cebu that the company is allocating $80 million to finance the additional 1.5 million metric tons capacity in its Naga plant this year as well as the expansion of terminals and improvement of distribution facilities.

According to Arcenas, it will add 40 percent to the total Cemex Philippines capacity.

The Naga plant expansion will come on stream by the second or third quarter this year.

Cemex Philippines has two production plants in Antipolo, Rizal and Naga, Cebu.

Asked about the company’s preparation for the Asean single market, Arcenas said they have been tracking the progress of the integration and they see the opening of the single economy both as a threat and as an opportunity.

Although cement production in the country and in other Asean countries is meant to fulfill the domestic demand, the opening of the single market will mean they will have to constantly upgrade products to remain competitive in the market.

Accessibility

On the other hand, Arcenas also said the integration will mean more market accessibility and that the flow of capital will translate to more projects that would spur more construction activities.

But even without tapping Asean neighbors yet, Arcenas said the Philippines is already a huge market for cement with other key provincial cities growing faster in Western Visayas, Mindanao and Northern part Luzon.

“We are hopeful that construction will continue to grow because this is the key to nation’s growth,” he said.

Amid the growth and opportunities, Arcenas identified energy price and availability as one of the challenges faced by the industry.

“The high cost of power and its limited availability is affecting the production and distribution of this energy-intensive venture,” he said.

INDIA: Low demand pushes down cement prices in Gujarat

Despite the ‘development’ plank in BJP’s Prime Minister candiate and Gujarat chief minister Narendra Modi’s electoral campaign, cement prices, a major commodity that gets used in the infrastructure sector, have not seen much upturn in Gujarat this year. For that matter, last quarter, prices in the Ahmedabad market were rather down by 10-13 per cent owing to slowdown in demand from end user industries like real estate and infrastructure.

A recent report on the cement sector from market research firm ICRA highlighted that while average wholesale cement prices have increased by 8-12 per cent in select markets like Delhi, Chandigarh in North and Mumbai in West between September to December 2013, prices have actually declined by 13 per cent in Ahmedabad during the same period.

Cement dealers, stockists as well as companies agree that prices are indeed down by 10-12 per cent owing to slow demand. Alok Sanghi, director, Sanghi Cement admitted that prices were down in the region owing to lack of demand from user industries. A senior company official informed that average price of cement during the fiscal has been around Rs 250 for a bag, and at present prices in the Ahmedabad region were hovering around Rs 290 a bag, which is down by 10-12 per cent on a year-on-year (yoy) basis.

V Srinivasan, cement analyst with Angel Broking said that average capacity utilisation of cement plants across the country is around 66 per cent at the moment, which is the lowest in the last three years.

Right ahead of the assembly elections in the state last year, the state government had announced that it would build affordable houses every year (around 25,000-40,000 houses per year) for the lower and middle income groups.

However, demand from the real estate sector has failed to pick up. A senior official of the Builders Association of India (BAI), Gujarat chapter claimed that real estate demand is down around 20 per cent in Ahmedabad region.

The ICRA report further pointed out that cement production has grown by a modest 3.7 per cent during April-December 2013 primarily due to weak demand from end-user industries.

“Delays in environmental clearances for industrial and infrastructure projects and sand unavailability in some states contributed to slow growth. Contrary to expectations, cement demand failed to pick up even in the post monsoon season due to continuing weak demand from infrastructure and real estate sector. . In fact, as against year-til-date (YTD) growth of 3.7 per cent the production registered an even lower growth of 2.0 per cent during Q3 FY14 despite a low base (cement production had grown by 5.5 per cent in the corresponding period last year),” the report elaborated.

Lower demand has, in turn, affected the margins of cement companies. Companies had raised prices in September 2013 in anticipation of recovery in demand post monsoons, however, the price rise had to be rolled back in October due to weak demand.

At the same time, input costs have risen.The Sanghi Cement official pointed out that rising diesel prices have indeed impacted freight costs for cement companies. Cement being a bulky commodity, freight costs constitute almost 30 per cent of overall operating variable costs. Srinivasan said, “While overall input costs have risen by Rs 100-150 per tonne, freight costs have gone up by Rs 40-50 per tonne.”

The total operating income for companies in ICRA Sample (includes ACC Limited, Ambuja Cements Limited, JK Cement Limited, JK Lakshmi Cement Limited, OCL India Limited, Prism Cement Limited, Shree Cement Limited, The India Cements Limited, The Ramco Cements Limited and Ultratech cement Limited) declined by 2.4 per cent yoy in Q3 FY14.

"The operating profitability margins for ICRA sample declined from 17.1 per cent in Q3 FY13 to 14.6 per cent in Q3 FY14. Muted demand, pricing pressures and cost headwinds resulted in muted performance of cement companies in nine months FY14. Companies in ICRA Sample reported 3 per cent yoy decline in revenues in nine months FY14. The operating profitability also declined from 21.8 per cent in nine months FY13 to 15.4 per cent in nine months FY14," the report claimed.

GHANA: GIPC signs €60m agreement with CIMAF for cement production

The government of Ghana has signed an agreement with the Ciments de l’Afrique (CIMAF Ghana Ltd) to construct a 60 million euro cement factory in Ghana.

According to the terms of agreement signed on Monday, March 3, 2014, the factory would be located close to the Tema Metropolitan Area.

Mrs. Mawuena Trebarh who represented the Minister of Trade, Haruna Iddrisu signed on behalf of government with Mr. Saad Sefrioui, General Director of Ciments de l'Afrique (CIMAF GHANA LIMITED) signing on behalf of his organization.

“CIMAF Ghana Limited plans to build a cement plant in the Republic of Ghana with a capacity of one million (1,000,000) tons per annum,” a letter of intent between the two institutions stated.

The agreement follows a recent meeting when President John Dramani Mahama received a delegation from the Moroccan Real Estate Group Addoha, led by Director General of the group, Saad Sefrioui.

Mr Sefrioui described the meeting with President Mahama as very good, and explained to journalists that the President showed a keen interest in the project.

Ghana has about 1.7 million housing deficit. According to Mr Sefrioui, this is something that needed all the necessary attention to overcome.

“That is why Addoha, which has an enviable track record in Africa, is determined to play a key role in addressing the problem,” he said.

The two parties therefore agreed on Monday that CIMAF will complete the building of the cement plant within 18 months. The company was charged to take account of local content and also work in accordance with domestic laws and regulations particularly those related to the protection of the environment.

Government is also expected to facilitate the acquisition of ten (10) hectares of land as well as a lease of limestone quarry.

The Ghana Investment Promotion Centre has embarked on a number of strategic moves recently to boost investment in the country whiles protecting local content.

According to Mrs. Mawuena Trebarh, the overriding goal is to create jobs and sustain economic growth.

Last year, Foreign Direct Investment (FDI) inflows to the country declined marginally by 19.53 percent to $3.946.41 million compared to almost $4,904.41 million recorded in 2012.

The Addoha Group, with a turnover of one billion euros, had been operating in 17 major cities in Morocco until two years ago when it started penetrating Africa south of the Sahara.

It has now established its presence in seven countries outside Morocco.

Mr Sefrioui said the Addoha Group was determined to make a strong impact on the economy of Ghana.

In doing that, he said, it was targeting low and middle-income groups who were in need of housing most.

And in supporting such groups to own their own houses, he said, the group would be maintaining its leadership role in real estate in Africa.

He also said the group’s presence in the production of cement would be so enormous that it would put a stop to the shortages the country sometimes faced.