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Sephaku Cement increases production towards steady state at both plants
SEPHAKU Cement, a Nigerian-backed newcomer to the regional cement industry, is ramping up production towards steady state at both its Delmas and Aganang plants as its 100%-owned concrete subsidiary Metier increases its footprint in Gauteng.

It said on Friday in its results for the year ended March that revenue had shot up 36% in the period as earnings before interest, tax, depreciation and amortisation rose 39% to R139m. Operating profit soared 44% to R109m, with profit after tax up 57%.

The group recorded a profit before tax of R72m and net profit of R47m.

Sales revenues came mainly from the Delmas milling plant that reached steady state production in November 2014. Clinker and cement production at Aganang commenced in August and October, respectively.
UAECEMENT.COM - Jun,29,2015

Cement market in North India likely to recover by FY18: report
North India s cement market, which currently accounts for 31 per cent of country s total consumption, is expected to make a recovery only by FY2017-18 on account of demand revival in the infrastructure sector, according to a report.

Historically, North India is a well-balanced market with high capacity utilisation, low fragmentation and little inward dispatch threat from other manufacturing regions. But a large proportion of the cement market is dependent on rural or retail sales, Ambit Capital said in a report.

"A confluence of growth impediments -- slowdown in rural sales, weak demand for organised housing and elusive infrastructure recovery -- have further deteriorated cement demand/pricing in north India.

"North India s large share in major infrastructure projects exudes hopes of demand upcycle, but we believe it will take until FY 18 for a meaningful recovery," it added.

In 2014-15, North India consumed 79 million tonnes or 31 per cent of India s cement consumption, the report said.

"While 2015-16 was mooted to be a recovery year, demand has worsened, as rural sales decline sharply, real estate inventory has hit an all-time high and infrastructure recovery remains elusive with weak government tendering," it said.

ALSO READ: India s cement sector not out of the woods yet

Increasing prominence of regional manufacturers in a market with limited logistic challenges (largely roads) has led to price wars. Now prices in north India are at a 35 per cent discount to south India, it added.

Regional players accounted for 51 per cent capacity share in 2014-15 as against 45 per cent in 2006-07.

North India is facing growth challenges, on account of infrastructure recovery remaining elusive and rural demand deteriorating significantly in the last one year due to poor rainfall, low subsidies, wage growth and paltry MSP hikes.

Besides, real estate business is facing liquidity constraints due to government s clamp-down on black money, the report said.

It has projected that North India will be a key beneficiary of the infrastructure ramp up in India, given a majority share in large infrastructure projects (roads, Delhi Mumbai Industrial Corridor, etc).

"However, a strong and sustained volume growth will take till 2017-18 as retail demand will recover with a few quarters lag to infra demand," the report said.

Regional manufacturers with scale and cost efficiencies will benefit the most in an infra-led cement demand recovery, it added.

Pan-India players trade at rich valuations, run earnings downgrade risks and do not have the best cost efficiency to meaningfully improve RoCEs, as volumes might grow but chances of a sharp pricing recovery are scanty, it said.
UAECEMENT.COM - Jun,29,2015

Qalaa Holding divestments will see it focus more on cement
Egypt/Sudan: According to Daily News Egypt, Qalaa Holding for Investment has signed an agreement with Financial Holding International (FHI) to sell FHI some of Qalaa s units. This is in line with Qalaa s aim to exit from some of its non-basic businesses and to reduce its consolidated debts of US$105m.

Qalaa will sell FHI its stakes in MENA Homes, Grandview and Dina Farms Land Companies, which will be separated from Dina for Agricultural Investments. In return, Qalaa will buy FHI s stakes in several affiliated companies, including cement producer ASEC Holding, as well as Taqa Arabia and Mashreq Petroleum in the energy sector. Qalaa will also buy FHI s stakes in Nile Logistics International in the Transport and logistics sector, Dina Farms Supermarkets in the retail sector and United Company for Foundries (UCF) in the metallurgical industry sector. The deal is expected to be finalised by December 2015, after the customary conditions and requirements are met.

Abdallah El-Ebiary, managing director of Qalaa s cement division, said that the cement sector is a main strategic area for Qalaa and that it has no intention of exiting it, nor the transport and energy sectors. He added that FHI plans to build a new pulveriser mill at the ASEC Cement plant in Minya, Egypt within the company s plan to convert to alternative energy due to the energy deficit and gas crisis. The cost will be US$30.2m and it will be built in the fourth quarter of 2015. "The company s strategy for the next period is to diversify to new and cheap energy sources instead of the traditional and unavailable sources. The investment cost is at US$30.2m, with US$1.31m for a pulveriser mill and US$11.8m for alternative fuel production," said El-Ebiary.

Qalaa also plans to increase the production capacity of its Takamol cement plant in Sudan from 430,000t/yr to 800,000t/yr in 2016. Qalaa aims to establish a new coal mine for the plant. The plant is 51% owned by ASEC Cement and 49% controlled by the Sudanese Social Security Investment Authority (SSIA), the entity that manages all pension funds in Sudan.

Global Cement - Jun,29,2015

Indonesia:Semen Indonesia lowers prices amid increased competition, weaker demand
Semen Indonesia, the country s largest cement producer, has reduced cement selling prices by around 10 per cent this year and is looking to increase exports against a backdrop of heightened competition in a weaker demand environment.

Following a presidential instruction in January this year calling on state-owned cement producers to lower their prices by IDR3000/bag, Semen Indonesia has so far adjusted its prices by around 10 per cent this year, the Jakarta Post reports. Cement prices had been around IDR60,000/bag at the start of 2015.

The company has reduced prices to adjust to current realities currently prevailing in the domestic industry and market. “A number of new facilities have started operating, new supplies are coming in. We have to lower our prices to keep up with the market with overall plunging domestic demand,” the Jakarta Post quoted Semen Indonesia s marketing director, Amat Pria Darma, as saying.

Target out of reach?

As well as new players entering the market, domestic cement demand has contracted since the start of the year on the back of the slowing economy. For the first five months of 2015, nationwide consumption contracted by 3.8 per cent to 22.873Mt.

During the period, Semen Indonesia s domestic sales (including group companies Semen Padang and Semen Tonasa) fell by 5.3 per cent YoY to 9.913Mt. Amat told the daily newspaper that he was pessimistic that the company could achieve its target of six per cent growth this year, or even maintain it at the same position as last year, despite the construction season that usually begins in the second half of the year.

Export strategy

In a bid to cope with unfavourable market conditions at home, the company is now looking to export markets as a way of maintaining utilisation levels. Semen Indonesia increased exports to 184,181t over the January-May 2015 period versus 22,155t in first five months of last year. However, the benefits of a rise in exports should be viewed in light of high transportation costs.

Semen Indonesia corporate secretary Agung Wiharto said that if the domestic economy fails to show signs of revival, the company would look to initiate contract-based exports in the near future, in comparison to its current spot sales. y relying on a six-month to one-year contract, the company could ship more product, thus ensuring a more certain market.

“We hope to see our exports hit 1Mta this year. The prospect is good, given some of our traditional markets have no cement producers,” he told the Jakarta Post. Among Semen Indonesia s major customers are Timor Leste, Bangladesh and the Maldives.

UAECEMENT.COM - Jun,27,2015

Lafarge Africa partners PINE to rebuild North East Nigeria
Lafarge Africa Plc has launched a partnership with the Presidential Initiative for the North East (PINE) on the rehabilitation and rebuilding of the region s economy following the Boko Haram insurgency, pledging to invest NGN100bn (US$502.5m) for the expansion of its business in the region.

He said the company had decided to partner with the Federal Government in rebuilding the ravaged North Eastern region as part of the company s committment to rebuilding the region, saying:

Guillaume Roux, managing director/CEO of Lafarge Africa plc, who declared the firm s intention to invest in the region s economy during Lafarge Africa s courtesy visit to the Presidential Initiative for the North East (PINE), said that the cement company lost NGN2.5bn to the Boko Haram insurgency that ravaged the North Eastern part of the country between November 2014 and April 2015. “We have had some difficulties in the last few months and we estimate we have lost about NGN2.5bn during that period,"

While explaining that Ashaka Cement Plc, a subsidiary of Lafarge Africa Plc has been in the North East for over 40 years and has been a major player in the economic development of the region, he affirmed: “We are committed to development of the region. We have a programme of NGN100bn to invest in. This is why this partnership is very key.”

He said as private investors, the company can bring quick solution to help the north east rebuild quickly. He said the company will be partnering with the government in six key areas of entrepreneurship, health, skills acquisition, coal to power solution, education and technology.

UAECEMENT.COM - Jun,27,2015

Mozambique: Two new cement plants for Mozambique
Mozambique: According to Agence de Presse Africaine, two new cement plants are planned for Mozambique in the coming years.

Turkey s Limak Holding plans to invest US$150m in a 2Mt/yr capacity cement plant in the Maputo Port area of Mozambique. Limak chairperson Nihat Ozdemir said that his company would create least 500 jobs during the first phase of the plant." Limak is also interested in entering the Mozambican energy sector and later intends to assess the viability of investment in ports, railways and tourism," said Ozdemir. Mozambique s Industry and Trade minister Max Tonela pledged the Mozambican government s support for Limak.

Meanwhile, Portugal s Cimpor Cimentos group, via its subsidiary Cimentos de Moçambique, has announced plans to build a new integrated cement plant in Nacala, Nampula for an estimated investment of around U$250m. It already owns an integrated cement plant in Matola and also operates four grinding units.

UAECEMENT.COM - Jun,27,2015

Indonesia: Indonesian president caps cement prices during peak periods
Indonesia s president has signed a decree allowing the government to cap prices of cement, staple foods and other basic goods during peak periods, a presidential spokesman said.

"This regulation gives the authority to the government to set special prices ahead of, on, or after religious holidays or during periods of price volatility," Teten Masduki, presidential spokesman, told reporters.

The government is imposing extra measures to ensure prices for food and basic goods do not spike during Ramadan, usually Indonesia s biggest shopping season.

UAECEMENT.COM - Jun,24,2015

Egypt: EGAS dues from National Cement plant hit US$131m
According to the Middle East North Africa Financial Network, Egyptian Natural Gas Holding Company s (EGAS) dues from the government-owned National Cement plant have hit US$131m. EGAS has demanded that its money be paid back, but it remains undecided when it will receive the dues.

"The total dues from the industrial sector are now more than US$1.57bn, for its natural gas consumption and the delay in paying monthly bills," said EGAS chairman Khaled Abdel Badie in a statement to Daily News Egypt. EGAS dues from public sector plants amount to 75% of the total debt, because they are not committed to paying the monthly consumption bills, the chairman added.

According to Abdel Badie, EGAS will not be able to cut its gas supply from the National Cement plant because the plant is government-owned and is linked to a gas line that comes directly from the field. Abdel Badie said that dues are continuously rising and that EGAS gave the industrial plants a debt re-scheduling, but only a limited number of private-sector plants took part. New committees were also formed to resolve financial obstacles between public entities, however, nothing has been resolved yet.

UAECEMENT.COM - Jun,24,2015

Russia: Cement industry in Russia needs development strategy
EY produced a report on The cement industry of the Customs Union 2014 – 2015 and presented the results during the St Petersburg International Economic Forum. Evgeny Khrustalev from EY said that factors including the drive to improve efficiency and productivity, source alternative raw materials and fuel, for example, are important to trying to forecast the development of the sector.

Discussing the report, Mikhail Skorokhod, President of the Eurocement Group, said he was in agreement with its findings, including the need for a development strategy for the cement industry in Russia and the countries of the Customs Union. He said that the cement industry cannot develop successfully without looking at how to place capacity in regions where there are shortages and to manage production according to demand. Cement consumption in Russia is expected to be 78 million t this year and 93 million t by 2018. A well thought-out strategy is necessary to meet that demand.

UAECEMENT.COM - Jun,24,2015

Dangote to start construction of Nepal cement plant in three months
Nepal: Dangote Cement Nepal has said that it will start the construction of a plant in Makawanpur in three months, when all of the preparatory works, licensing and permissions are complete. D V G Edwin, executive director of Dangote Group, said that the company would also acquire a license for an additional mine by then.

Dangote Cement Nepal plans to start production within three years with an investment of US$550m. It will be Dangote s 15th cement plant and will have 6000t/day of production capacity.

Meanwhile, Dangote Group has provided US$1m of to Nepal s Disaster Relief Fund. The support was provided through Dangote Foundation, the corporate social responsibility arm of Dangote Group. Zouera Youssoufou, managing director of the foundation, handed over the cheque to prime minister Sushil Koirala on 17 June 2015. According to company officials, Aliko Dangote, chairman of Dangote Foundation, has also sent a message of sympathy to the government and assured the foundation that support in the rehabilitation of earthquake victims would be provided.

Global cement - Jun,20,2015

Egypt: EGAS dues from National Cement plant hit US$131m
According to the Middle East North Africa Financial Network, Egyptian Natural Gas Holding Company s (EGAS) dues from the government-owned National Cement plant have hit US$131m. EGAS has demanded that its money be paid back, but it remains undecided when it will receive the dues.

"The total dues from the industrial sector are now more than US$1.57bn, for its natural gas consumption and the delay in paying monthly bills," said EGAS chairman Khaled Abdel Badie in a statement to Daily News Egypt. EGAS dues from public sector plants amount to 75% of the total debt, because they are not committed to paying the monthly consumption bills, the chairman added.

According to Abdel Badie, EGAS will not be able to cut its gas supply from the National Cement plant because the plant is government-owned and is linked to a gas line that comes directly from the field. Abdel Badie said that dues are continuously rising and that EGAS gave the industrial plants a debt re-scheduling, but only a limited number of private-sector plants took part. New committees were also formed to resolve financial obstacles between public entities, however, nothing has been resolved yet.

UAECEMENT.COM - Jun,20,2015

Cement consumption is up across the globe, but especially in North America


The world continues to use more and more cement each year, and North America is ahead of the curve when it comes to cement consumption growth.

A new report from the Portland Cement Association had good news for aggregate producers: Global cement consumption should continue to increase through 2015 to 2018.

“Most of the gains in developed world cement consumption is attributed to North America,” PCA chief economist and group vice-president Edward J. Sullivan said. “With an expected growth of more than 7.4 million metric tons, the North American region is expected to continue to expand at a faster pace than most other developed countries due to continued national economic growth.”

PCA found that cement consumption grew 9.2 million metric tons in 2014 and an additional 9 million metric tons in 2015.

Though, PCA added that while consumption is expected to continue to grow, the rate might slow down. Cement consumption is expected to grown 2.2 percent in 2015, 3.7 percent in 2016 and around 4 percent in 2017 and 2018. That’s down slightly from the nearly 5 percent growth from 2013 to 2014.

The Asian markets are contributing to the slowed down growth of cement consumption. China’s consumption is expected to grow 7 percent this year, but that’s down from double digits in 2010 and 2011.

Meanwhile, PCA said Europe cement consumption should grow slightly in 2015, but have a better year in 2016.

UAECEMENT.COM - Jun,17,2015

Siam Cement expects southeast Asia demand to boost
According to Reuters, Siam Cement Group (SCG) expects its paper and packaging business to rise by 5 – 10% in 2015 as higher demand from southeast Asia helps offset slow growth at home.

SCG expects domestic demand to rise by 1 – 2% in 2015 due to weak consumption and poor exports, said Roongrote Rangsiyopash, president of its packaging unit. "Domestic demand is not good. Growth in Vietnam should be around 5% and in the Philippines it will be around 6 – 7%," said Rangsiyopash. He said that he expects domestic demand to improve in the second half of 2015 on hopes of better economic conditions, while southeast Asian markets are expected to grow by 5% or more.

SCG had US$2bn of sales from paper and packaging business in 2014, accounting for 15% of its total sales. However, profit from the paper business fell by 30% year-on-year in January – March 2015 due to a weak margin and rising expenses.

According to The Nation, Rangsiyopash said that SCG Paper has been rebranded as SCG Packaging to reflect a shift of its business model to focus on offering a "total packaging solution." Rangsiyopash added that SCG Packaging would offer an integrated range of services for the evolving needs of consumers, primarily in southeast Asia. SCG Packaging is expected to contribute 80 – 90% of the combined paper and packaging sales in the next five years, up from 70 – 75% currently.

SCG, which has packaging production bases in Vietnam, Indonesia, the Philippines and Singapore, has invested to expand its packaging capacity in southeast Asia. In 2014 it acquired a 90% stake in PT Indoris Printingdo, which produces high-quality packaging in Indonesia. SCG is also investing US$122m to add 243,000t/yr of additional packaging paper production capacity in Vietnam. The expansion is expected to be complete in 2017 and will increase its capacity to 2.6Mt/yr in southeast Asia. SCG has also set aside a research and development budget of more than US$11.9m in 2015 to focus on high value-added packaging products that offer high margins.

According to The Nation, Siam Cement is also expanding in the non-paper packaging segment, such as flexible and rigid packaging made from plastics, among others. In 2015 it acquired a 22% stake in Prepack, a 14,000t/yr capacity flexible-packaging producer. Rangsiyopash said that the flexible and rigid packaging sectors were growing faster than the paper packaging market, by 6 – 7% year-on-year.

UAECEMENT.COM - Jun,17,2015

​HeidelbergCement announce new business plan
HeidelbergCement has announced that it would increase its dividend payout ratio and consider share buybacks.

The announcement comes as the company remains on the peripheral of the mega-merger between rivals Holcim and Lafarge.

The company also revealed a strong commitment to “disciplined growth in attractive markets”.

HeidelbergCement in intending on raising its dividend payout ratio to 40-45% by the close of 2019.

The company predicts a cumulative cash flow of approximately €8.8 billion between 2015 and 2019. Of the total, the company intends to invest approximately €2.5 billion in organic growth, utilise €1 billion to keep leverage low and more than €2 billion for dividends.

HeidelbergCement is targeting sales above €17 billion by 2019, an increase of at least 35% over 2014 levels.
UAECEMENT.COM - Jun,16,2015

INDONESIA - Investment in cement industry forecast to increase
The Indonesian Investment Coordinating Board (BKPM) has predicted that investment in cement industry will increase through the remainder of 2015, with the implementation of the government s massive program in infrastructure development.

“Cement consumption declined in the first quarter of 2015 , but with the start of work in government s priority projects especially infrastructure projects, demand for cement is expected to rise sharply,” BKPM chief Franky Sibarani told press on Tuesday.

Franky was visiting PT Cemindo Gemilang, a cement producer.

Based on data from the Indonesian Cement Association (ASI), the country s cement consumption fell 3.2 percent to 13.62 million tons in the first three months of the year from 14.08 million tons in the same period last year.

Franky attributed the decline in consumption in the first quarter of this to the fact that work had not started in the infrastructure projects.

Work is expected to start this month after disbursement of budget fund by the government.

“With the process of tenders had been wrapped up for a number of government s infrastructure projects in the second quarter, work is expected to start immediately.

Larger supply of cement is certainly needed. We, therefore, are optimistic cement consumption would rise soon this year,” he said.

He said the condition is in line with the policy of President Joko Widodo who has announced the budget fund for infrastructure projects had been available for immediate disbursement.

Cement would be needed in large quantity for projects like toll roads, smelters, power generating plants and seaports all over the country, he said.

He said this year the time is right for implementation of the projects to be completed in two years to three years when more new power plants expected to come on stream.

“In the next two years we would have larger power supplying capacity for new industrial facilities,” he said.

UAECEMENT.COM - Jun,16,2015


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