PAKISTAN: Billionaire Mansha Plans $300 Million Cement Plant

Billionaire Mian Muhammad Mansha’s D.G. Khan Cement Ltd., Pakistan’s third-largest maker of the construction material, plans to build an $300 million plant near Karachi as economic growth boosts demand.

“There will be a shortage domestically in three years if there is 10 percent growth in demand each year,” Chief Financial Officer Inayat Ullah Niazi said in an interview at the company’s headquarters in Lahore on Thursday. The company’s two cement plants have operated near full capacity in the past two years.

The company is building its first plant since 2007 to tap economic growth that Prime Minister Nawaz Sharif’s government forecasts will be the fastest in seven years, even as the nation grapples with an electricity supply crisis and terrorism. Pakistan’s output is projected to expand 4.3 percent in the year ending June 30 and 4.75 percent in the following fiscal year by the International Monetary Fund.

The new plant near Hub, a city west of Karachi, will produce about 2 to 2.5 million tons of cement a year, Niazi said. Construction is targeted for completion late in 2018. The plant will be financed 40 percent through internal cash and the rest through debt, Niazi said.

“Expansion means the company will enter the southern region of the country,” Tahir Abbas, an analyst at brokerage Arif Habib Ltd. said by phone in Karachi. “This will impact the entire industry and could start a price war.”

Earnings Forecast

D.G Khan shares rose 2.9 percent to 128.63 rupees in Karachi Thursday. The stock has gained 48 percent over the last year, compared with a 32 percent gain in the benchmark KSE100 Index.

Cement sales in Pakistan rose to a record 34.3 million tons in the year ended June 30, 2014, according to the cement manufacturers’ association. Sales are on track for another record this year.

D.G. Khan is spending $30 million to generate electricity from coal to run its plant in Punjab province to decrease reliance on natural gas. South Asia’s second-biggest economy is struggling to meet gas demand and plans to import liquified natural gas.

The company forecasts net income will rise 25 percent to 7.5 billion rupees ($74 million) in the year ending June 30, Niazi said. Domestic sales with higher margins than exports will contribute to the projected gain. Net income was a record 5.99 billion rupees in the last fiscal year.

CANADA: Quebec to approve $1.1-billion cement plant without environmental review

Opposition parties and environmentalists slammed the Couillard government on Thursday for green-lighting a $1.1-billion cement works project without a review by Quebec’s environmental bureau.

The McInnis Cement plant in Port-Daniel—Gascons, in Gaspésie, could top the list of industrial polluters in the province.

The provincial government plans to exempt the project from an assessment by the Bureau des audiences publique sur l’environnement (BAPE), Quebec’s advisory office of environmental hearings. The company has said the project shouldn’t be subject to an environmental review because it was submitted in May 1995, a month before the law requiring such an assessment came into effect.

In the National Assembly, Economy, Innovation and Exports Minister Jacques Daoust said the project “isn’t an environmental dossier, it’s an economic dossier.” The opposition greeted the remark with jeers.

Coalition Avenir Québec environment critic, Simon Jolin-Barrette, said the government’s plan will encourage other companies to try to bypass an environmental review.

“From now on, lobbyists are going to line up outside the premier’s office to ask that other projects not be submitted to the BAPE,” he said in the National Assembly.

Last year, the Marois government announced that Quebec would invest $350 million in the project. The cement works on the shores of Baie-des-Chaleurs in Port-Daniel—Gascons would initially produce 2.2 million metric tonnes of cement annually.

Québec solidaire joined the CAQ in an unlikely pairing against the project.

Québec solidaire MNA Manon Massé accused the Couillard government of trying to “short circuit” the process.

“We know it’s extremely polluting because of the materials it will use. But we don’t have all the facts, so citizens can’t make an informed decision on the issue,” she said.

The plant would release 1.7 million tonnes of greenhouse gases (GHG) per year, according to an evaluation by a Canadian engineering consultant firm. That greenhouse gas output would make it the No. 1 industrial polluter in Quebec.

Yet in a statement on Thursday, McInnis said its plant “will become a model in North America for its environmental performance.” The company has said it will reduce global GHG emissions by replacing production of older, less efficient cement plants.

McInnis said the plant would create 400 jobs in a region plagued by chronic unemployment. The jobless rate in Gaspésie—Îles-de-la-Madelaine was 16.4 per cent in 2014, more than twice the provincial average of 7.7 per cent.

Last summer, two environmental groups joined one of McInnis’ competitors, Lafarge, in a legal challenge against McInnis to make sure it would undergo an environmental assessment.

The environmental groups dropped out after McInnis agreed to mediated talks and to form a committee in charge of monitoring GHG. Proceedings are nevertheless expected to go ahead in Quebec City in two weeks.

Michel Goudreau of Environnement Vert Plus, one of the two environmental groups that backed out of the challenge, said the Couillard government’s stance on the project shows its disregard for the environment.

“We’re reverting back to the old ways of reckless development we experienced in the 1950s and 1960s, when big projects were done without consultation or looking at the impacts on the environment,” he said.

Patrick Bonin, a spokesperson for Greenpeace in Montreal, agreed. “Quebec is doing all in its power to prevent the project from being submitted to the BAPE because the government knows it’s an extremely polluting project that would be indefensible from our current point of view on climate change,” he said.

PERU: Indecopi confirma multa de casi S/. 6 millones a Unacem

La Unión Andina de Cementos S.A.A. Unacem, y sus distribuidores: La Viga S.A., A Berio y Cia. S.A.C. y Manufacturas de Acero Comercial e Industrial S.A., fueron sancionados por la Sala Especializada en Defensa de la Competencia del Indecopi, por restringir la competencia y afectar el bienestar de los consumidores.

La resolución confirma las multas por un total S/. 5 973 687, a las empresas Unacem con 1 488,20 UIT; La Viga S.A. con 33,52 UIT; A. Berio y Cia. S.A.C. con 13,25 UIT; Manufacturas de Acero Comercial e Industrial S.A. con 17,04 UIT y a los directivos investigados con multas entre 2,5 y 5 UIT.

Entre agosto de 2007 y noviembre de 2008, Unacem y sus distribuidoras faltaron a la libre competencia en el mercado de cementos en la zona centro del país. Es decir, se negaron concertada e injustificadamente a vender cemento “Sol” de Unacem a aquellas ferreterías que compraran cemento “Quisqueya” de Cemex Perú S.A.

Con esta práctica Unacem mantenía su posición de dominio en la comercialización del producto. Asimismo, la práctica colusoria impedía que se desarrollen las condiciones de competencia en el mercado de cementos, evitando que los precios puedan disminuir en beneficio del consumidor.

Esta política tenía la capacidad de excluir a Cemex Perú S.A. del mercado, debido a la importancia del cemento “Sol” para las ferreterías, las cuales representan el principal canal de distribución en este mercado.

PERU: Consumo de cemento cerraría el año con una expansión de 3%

Tras cerrar el 2014 con una expansión casi plana –1,7%–, el consumo de cemento avanzaría hasta fines de este año un 3%, según la proyección de la Asociación de Productores de Cemento (Asocem). 

Según el gremio, tal resultado obedecería al incremento de la inversión pública –especialmente, desde fines del primer trimestre–, así como a la recuperación de la inversión privada.

Cabe precisar que el mercado cementero es el principal termómetro del sector construcción, pues aporta el 73,95% del ponderado del PBI sectorial. Este a su vez equivale al 5,1% del PBI nacional. Así, por ejemplo, la construcción aportó 0,12 puntos porcentuales al PBI del 2014 (2,35%).

Entonces, proyectar un crecimiento de 3%, si bien implicaría una mejora frente al año pasado, no es del todo optimista si tenemos en cuenta que este debe ser el año del inicio de construcción de megaproyectos de infraestructura como la línea 2 del metro, el gasoducto del sur, el aeropuerto de Chinchero y la modernización de la refinería de Talara. Todos consumidores intensivos de cemento.

La explicación a la cifra vendría por el impacto que podría tener en el sector construcción el que el 2015 es el año de inicio de gestión de los gobiernos locales y regionales. Tampoco ayudan el exceso de ‘tramitología’ y que este también sea el año en que empezará la campaña electoral hacia el 2016.

Aun así, el 3% bien podría ser el inicio de una nueva ‘cresta’ en el crecimiento del mercado cementero, ya que hacia el 2017 comenzaría un cambio cualitativo en los motores de la economía, en el cual la inversión en infraestructura reemplazará paulatinamente en importancia a la minera, según Apoyo Consultoría.

A SUS MARCAS

El resultado de enero está en línea con la proyección del gremio, pues el despacho total de cemento –consumo local más exportación– en el primer mes del año se expandió 0,9%.

El resultado es bueno para el mercado cementero si se toma en cuenta que históricamente el primer trimestre es el más bajo para el sector construcción por las lluvias en la sierra y selva. Sin embargo, el consolidado del sector no estaría en azul, pues al magro 0,9% se habría sumado una caída de 26,9% de la inversión pública (que representa el 23,29% del PBI sectorial).

CONSUMO INDIVIDUAL

Con el 1,7% de crecimiento del año pasado, el consumo per cápita del 2014 cerró en 368 kg/hab, variable que se duplicó desde el 2006 (168kg/hab). Así, el Perú es el tercer mercado con mayor consumo per cápita de cemento en Sudamérica, solo por detrás de Brasil y Ecuador.

Curioso dato el último si consideramos que tras la racha de inversiones –por más de US$1.000 millones– para ampliar todas las plantas de cemento locales; las dos cementeras más grandes del país –Unacem y Yura– han anunciado inversiones por US$747 en el mercado cementero ecuatoriano.

QATAR: Qatar National Cement Co. signs contract with Fcb Ciment for US$219.71 mn plant

Qatar National Cement Company has signed an agreement with Fcb Ciment of France for the construction of a QR 800 million (US$ 219.71 million) plant with a production capacity of 5,000 tonnes of clinker per day, media reports.

The new plant, the forth for the company, will allow Qatar National Cement Company (QNCC) to increase its output to 11,900 tonnes of clinker per day and 15,500 tonnes of cement per day, according to news reports in Gulf News.com.

Salem Butti Al Nuaimi, Chairman and Managing Director, QNCC, and Alain Cordonier, CEO, for Fcb Ciment, signed the deal on Sunday. QNCC also signed a consulting agreement for the project with Basse Sambre-ERI from Belgium, which is also the consulting firm for plant 3.

Al Nuaimi told reporters that once the plants reach their projected capacity, QNCC will be able to fully meet the cement requirement of the local market with prospects for export of the surplus to neighbouring countries. He said that the new plant will be established in two stages with one of the cement grinders to be commissioned in 17 months and the other in 22 months.