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Cement companies: Rate cut, high development spending spark interest
Karachi: The recent reduction of 50 basis points in the benchmark interest rate and a sharp increase in the release of funds for the government’s development schemes have helped spark significant interest in cement companies on the Karachi Stock Exchange (KSE).

According to a research report issued by Shajar Capital on Monday, cement companies recorded a high trading volume last week (Monday-Friday) at an average of 47.1 million shares, up 41% from a week earlier.

The rise in activities on the KSE was the result of mixed recent developments for the cement sector, the report added.

The State Bank of Pakistan (SBP) has cut the benchmark interest rate to 9.5% from 10%, which bodes well for the cement industry, especially heavily leveraged companies like Maple Leaf Cement, Fauji Cement and DG Khan Cement. This indicates a positive impact on their earnings of 1.4%, 0.4% and 0.3% respectively for fiscal year 2014-15.

Furthermore, with another expected rate cut in the second half of the fiscal year, these companies could see a further profitability surge, the report said.

According to the country’s fiscal operations, in the first quarter (July to September) the federal government released only Rs39.5 billion under the Public Sector Development Programme (PSDP) out of the budgeted Rs525 billion (approximately 8%). However, the figure has shot up to Rs111 billion, approximately 21%, in November this year.

The increase in the disbursement of funds will further push up cement consumption and support its manufacturers.

Meanwhile, international coal prices have also not picked up despite the commencement of winter season, providing the cement companies an opportunity to save much on their fuel consumption in coming months.

Gas tariff hike

Although, according to news reports, Prime Minister Nawaz Sharif has rejected plans to raise the gas tariff, it seems to be the case of delaying the inevitable as the International Monetary Fund’s directives are straight forward regarding gas tariff. Apart from this, there has not been any significant progress pertaining to the collection of Gas Infrastructure Development Cess (GIDC).

“With the talk of gas price hike at the forefront, we believe the tariff rise to have an impact of Rs2, Rs0.37 and Rs0.21 on earnings per share of Lucky Cement, DG Khan and Maple Leaf respectively,” the report said.
UAECEMENT.COM - Nov,25,2014

UAE: UAE s Arkan opens US$354m cement plant
Arkan Building Material Company has opened a US$354m cement plant outside Al Ain, with 4Mt/yr of clinker and 5.7Mt/yr of cement of production capacity. The company said that the cement plant will source its raw materials from its own queries in Al Ain and Oman. Arkan plans to sell 90% of its production on the domestic market and 10% will be exported to GCC countries.
UAECEMENT.COM - Nov,25,2014

Egypt: Loesche supplies the first two vertical roller mills for cement grinding to El Arish Cement
El Arish Cement is extending the clinker production capacity of its existing cement plant and will add two new lines with a clinker production capacity of 5500t/day.

El Arish Cement already operates two Loesche vertical roller mills, type LM 56.4, for cement raw material grinding within its existing two lines. The new type LM 56.4 mills will have 450t/hr of grinding capacity and a product fineness of 12% R90μm. As the new mills are of the same type as the existing ones, common spare parts can be used, keeping the spare parts demand to a minimum.

For cement grinding, El Arish Cement has also selected Loesche vertical roller mills of type LM 63.3+3. The table diameter of the mills is 6.3m and will be driven by a drive system with a rated capacity of 6800kW. The mills will grind various cement types, with capacities of up to 305t/hr.
UAECEMENT.COM - Nov,24,2014

India: CCI closes case against 11 cement companies
The Competition Commission of India (CCI) has closed a case of alleged cartelisation among cement companies for lack of evidence. An anonymous reference had alleged that the cement producers had increased prices by INR75/bag (US$1.21) within the period of a month, according to HN Mint news service.

The companies were named as Penna Cements, India Cements, Ramco Cements, Bharathi Cements, Dalmia (Bharat) Cements, Bhavya Cements, Zuari Cements, Ultratech Cements, Jaypee Cements, KCP Cements and My Home Cements.

The CCI said that the reference states that the price increased from INR230-250/bag to INR300-330/bag after the general elections in Andhra Pradesh, but had not supported its allegations with documentary evidence. Hence, the CCI considered an investigation inappropriate.
UAECEMENT.COM - Nov,24,2014

Tanzania: Tanzania Portland Cement agrees prisoner labour limestone deal
The Tanzania Portland Cement Company (TPCC) and the Tanzanian government have agreed to start producing limestone from mines within Boko prison territory in early 2015. Permanent Secretary at Ministry of Home Affairs Mbaruk Abdulwakil, Commissioner General of Prisons John Minja and TPCC Managing Director Alfonse Rodriguez have announced that a final agreement on the partnership will be sealed by the end of 2014.

"In principle, the government has approved this public private partnership, which is part of reforming and modernising the prison services," said Abdulwakil. The government will receive 1200 cement bags and US$58,000 to build Boko prison staff quarters and office facilities. In return TPCC will mine limestone within the Boko prison premises for use as raw material at its Wazo hill plant.
UAECEMENT.COM - Nov,20,2014

Competition Commission clears Shree acquisition of Jaiprakash unit
The Competition Commission of India (CCI) said it has approved a proposal of Shree Cement to acquire Jaiprakash Associates 1.5Mta grinding unit in Haryana, saying the deal will not raise anti-competition concerns.

The proposed deal involves the transfer of the cement grinding unit at Haryana s Panipat owned by Jaiprakash Associates to Shree Cements by way of a slump sale, a notification on the competition panel s website said.

"The proposed combination is not likely to have an appreciable adverse effect on competition in India in any of the relevant markets," said the order from the competition watchdog.
UAECEMENT.COM - Nov,20,2014

UAE: National Cement nine-month net profit up 2% YoY
UAE-based producer National Cement Company said on Wednesday its net profit for the first nine months of 2014 rose 1.97 per cent to AED77.5m (US$21.1m) from AED76m in the corresponding period of 2013.

Earnings per share (EPS) stood at AED 0.22, compared with AED 0.21.

Revenue of the building materials producer fell to AED161.9m from AED174m.
UAECEMENT.COM - Nov,17,2014

Fuel-price hike may boost cement demand
Major cement producer Semen Indonesia is confident about posting 6 percent growth next year, in line with growth in demand projected by cement associations.

The upcoming fuel-price hike, however, will be a key factor as to whether or not the company can put in a better performance than in 2014.

This year, the cement business has been slow due to political tensions as a result of the April 9 legislative election and the July 9 presidential election.

Semen Indonesia corporate secretary Agung Wiharto said that after this year s sluggish business the company hoped that political stability would eventually drive growth. He hoped its sales could match the country s projected 6 percent increase in cement consumption next year.

“We hope to score growth in line with, or above, the projected increase in national cement consumption,” Agung told The Jakarta Post over the weekend.

Semen Indonesia initially predicted that, in line with projections from cement associations, this year s consumption would increase by around 5 to 6 percent from last year s demand of 58 million tons.

The prediction was, however, later revised down to around 3.5 percent to 4 percent, as consumption slowed amid holdups in construction and infrastructure projects and an unfavorable investment atmosphere during the year.

Agung said growth next year, however, would greatly depend on the fuel-price hike expected to be announced soon by President Joko “Jokowi” Widodo. “Fuel prices have two effects on the cement industry. First, the hike is expected to reduce purchasing power and there will be higher inflation and so on. This will affect cement demand from retail consumers,” he said.

The fuel-price hike is part of the government s effort to reduce fuel subsidies and allocate the spending on productive activities and infrastructure development.

“The funding taken from the fuel subsidies will be channeled to infrastructure projects and there will hopefully be rising demand from infrastructure construction.”

Fuel-price hike will curb consumer spending

However, govt will allocate savings to infrastructure development to boost demand for cement

Cement sales estimated to rise 6 percent next year

Fuel subsidies are estimated to hit Rp 291 trillion (US$24 billion) next year, accounting for 15 percent of overall state spending. The ballooning subsidies are regarded as a burden on the state s current account, and economists say the subsidies should be channeled to more productive sectors, such as infrastructure.

Data from the Indonesia Cement Association (ASI) shows that cement demand, which is a key indicator of an emerging country s growth, grew by only 3.4 percent year-on-year (y-o-y) from 47.16 million tons between January and October last year to 48.75 million tons in the same period this year. The figure is below the growth experienced in the first ten months of 2013, when cement consumption rose by 5.7 percent on an annual basis.

Figures from the ASI showed domestic cement sales rose 14.5 percent in 2012, 17.7 percent in 2011, 6 percent in 2010 and only 0.9 percent in the election year of 2009.

Semen Indonesia s grip of the total cement market stands at around 44 percent.. The company s domestic sales rose by 3.5 percent y-o-y to 21.38 million tons, according to the company s documentation, far below the 14 percent in the same period a year earlier.

It rounded up the nine-month period with net profits of Rp 4.09 trillion, a 4.9 percent increase y-o-y. The firm s revenues surged by 10.9 percent during the January to September period to Rp 19.3 trillion from Rp 17.4 trillion in the same period last year.

The figures, however, are below last year s nine-month period growth of 15.2 percent in net profits and 27.2 percent in revenues.

Agung said Semen Indonesia would spend around Rp 5 trillion in capital expenditure (capex) next year, the biggest chunk, around 40 to 50 percent, of which would go to the company s under-construction $352-million Indarung VI plant in Padang, West Sumatra, and $400-million plant in Rembang, Central Java.
UAECEMENT.COM - Nov,17,2014

Government to facilitate cement production
Kathmandu: The government will expand access road to 11 cement plants this year and supply electricity to eight plants within this fiscal, to facilitate cement production. According to the Ministry of Industry (MoI), five of the factories were selected for both the facilities.

The move gives continuation to the policy introduced by the government in fiscal 2008-09 to build necessary infrastructure like access road, electricity grid connection and drinking water for big industries from the budget. The government has earmarked Rs 550 million for electricity grid connection and Rs 300 million for expansion of access road for this fiscal.

“Access road will be expanded from factories to the limestone mines of the respective factories,” said Jeet Bahadur Thapa, joint secretary of MoI, adding, “The government this year will expand access road to the iron ore reserves of Ramechhap district from the budget of access road.”

The Department of Roads and Nepal Electricity Authority are the implementing agencies for the access road and electricity grid connection, respectively.

MoI called on big factories to submit proposals for the access road and electricity grid connection last fiscal 2013-14 and received numerous applications. The technical team from MoI conducted site inspections of the cement plants that submitted the proposals and recommended required facilities.

“First we will provide them access road and then electricity grid connection when they set up machines in the factory,” Thapa said, “Only those cement factories which produce clinker by using local limestone are eligible for the facility.”

Likewise, Dang Cement of Dang, Laxmi Cement of Kathmandu, and Maruti Cement of Siraha are selected for electricity grid connection. The cement plants selected for access road facility are Sonapur Cement of Dang, Bhardeu Cement, Nigale Cement of Dhankuta, Sarbottam Cement of Nawalparasi, Butwal Cement and Palpa Cement, as per MoI.

Joint Secretary Thapa, however, admitted that some of the plants that received both facilities last year are yet to start production. Projects selected for both facilities of access road and electricity grid connection are Ghorahi Cement of Dang, United Cement of Kathmandu, Rolpa Cement of Dang, Cosmos Cement of Dhanusa and Subha Shree Jagadamba Cement of Dang district.

The cement manufacturers, on the other hand, allege that the government has been delaying in building access road and providing electricity grid connection to the cement factories that are ready for production.

Dhruba Thapa, president of the Cement Manufacturers Association, said that the government allocated resource for the purpose is insufficient.”Majority of the access road projects are being constructed on multi-annual basis due to lack of resources,” Thapa said, adding, “And the plants that have already installed machines are yet to get electricity grid connection.”

Altogether 42 cement plants have been producing cement in the country and total annual production amounts to four million tonnes. It is reported that the cement plants have capacity of producing six million tonnes yearly but they are operating under capacity due to lack of electricity supply.

UAECEMENT.COM - Nov,17,2014

Kenya: EAPCC begins US$11.1m upgrade at Athi River plant
The East African Portland Cement Company (EAPCC) has begun the process of upgrading its Athi River cement plant, a project that is expected to cost approximately US$11.1m. The upgrade will halt the plant s normal operations for six weeks.

According to EAPCC head of production, Joseph Kombo, the upgrade targets the kiln and the packing plant. "In the packing plant, we are upgrading the mechanical and electrical components of the packers as well as improving the bag conveying system, all geared towards improved the loading process and quick turnaround thus ensuring customer satisfaction," said Kombo. "We are installing a bag house to replace the electronic precipitators, retrofitting the raw-mill gear box, replacing three sections of the cement kiln shell and installing a radio link into the raw material handling sections, among others."

EAPCC plans to improve reliability, increase production and improve energy-efficiency. The bag house will reduce emissions from the plant to insignificant levels, complying with international emission standards.
UAECEMENT.COM - Nov,12,2014

Nigeria: Dangote Cement launches 32.5 grade cement
Dangote Cement has introduced 32.5 grade cement, intended only for plastering, into the Nigerian market. Dangote s managing director, Devakumar V G Edwin, said that Dangote has ventured into the production of 32.5 grade of the product because the regulatory agency, the Standards Organisation of Nigeria (SON), has clearly spelt out the different uses of the various grades of cement which must be complied with by the cement manufacturing companies.

Edwin said that Dangote had resisted requests from its customers to produce 32.5 grade cement and sell at a cheaper price because it didn t want the product to be misapplied. "Now the SON has stepped in. SON has taken controlling measures and they have re-emphasised that anybody producing the 32.5 grade cement must design their bags in a specific manner and the bags should carry clearly that this cement is meant for plastering only and not for any other application," said Edwin. "With these regulations in place, we have the confidence that we can now go into the production of 32.5 for plastering only."

According to Edwin, about 80% of cement produced by Dangote will still be 42.5R grade, which will remain Dangote s flagship product because of its superiority and varied uses.
UAECEMENT.COM - Nov,12,2014

Oman: Raysut Cement s profit hits US$60.2m in the first nine months of 2014
Raysut Cement Company has announced an increase in its profit by 8% to US$60.2m during the January - September period of 2014, compared with US$55.7m during the same period of 2013. Revenue was US$183m for the period, compared to US$182m for the same period of 2013.

"While there are positive signs of growth in Oman market, the same is not being translated into cement demand due to severe competition from UAE suppliers. The competition is also being experienced in the Yemen and east African markets," said Raysut Cement.

2.83Mt of cement was sold during the first nine months of 2014, compared with 2.79Mt during the corresponding period of 2013. Some 2.46t of clinker and 2.81Mt of cement was produced during the period, compared with 2.47Mt of clinker and 2.79Mt of cement produced during first nine months of 2013.
UAECEMENT.COM - Nov,12,2014

Venezuela: 600tpd cement works to be built in Yaracuy
To help alleviate Venezuela s cement shortage a new cement plant, Valeroso Peña , will be built in Peña, Yaracuy. The 600tpd works will be constructed with assistance from India in an area is rich in high-quality limestone.
UAECEMENT.COM - Nov,12,2014

Arabian Cement to set up Brazilian joint-venture
Egypt-based Arabian Cement Company, announced it will establish a grinding plant in northwest Brazil as part of a joint-venture agreement with local cement manufacturer Cementos Relampago, part of Cementos La Union.

The 2.3Mta facility is expected to involve an investment of €23m ($28.7m), of which Arabian Cement will contribute €7m.

Arabian Cement added that its contribution represents 60 per cent of the total paid in capital, noting that 50 per cent of the project’s cost will be financed through debt and equity.

In May, Arabian Cement held the first initial public offering (IPO) after the 25 January Revolution in 2011, with the company aiming to raise US$100m by listing on the Egyptian Stock Exchange.
UAECEMENT.COM - Nov,09,2014

Tajikistan 10-month output rises
Over the first 10 months of this year Tajikistan produced more than 1Mt of cement, an increase of 776,000t compared to the same period of last year, according to the Ministry of Industry and New Technologies (MoINT).

The increase in output has been possible due to the “operation of two large cement plants – the Yovon cement plant [Huaxin Gayur Cement Co] and OJSC Tojikcement [Dushanbe cement plant],” an official source at the MoINT told Asia-Plus in an interview.

According to the source, Huaxin Gayur Cement produced 760,000t of cement and Tojikcement produced 178,200t of cement over the review period.
UAECEMENT.COM - Nov,09,2014

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Arab Union for Cement and Building Materials
 The Nineteenth Arab International Cement Conference and Exhibition 
 11-13th November 2014, Le Centre International de Conférences de la Palmeraie, Marrakech, Morocco


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