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LATEST CEMENT INDUSTRY NEWS
Kenyan cement manufacturers to benefit from Standard Gauge Railway project
China Road and Bridge Corporation (CRBC) has signed agreements with Kenyan cement companies for the provision of materials for the construction of the Standard Gauge Railway. The new East African railway line, which is expected to cost some KES327 billion, will run reportedly from Mombasa to Nairobi and will extend eventually to Uganda, Rwanda, Burundi and South Sudan.

He Yongjian, Procurement Manager of the Standard Gauge Railway project, said the company has already signed agreements with ARM Cement and Bamburi Cement, and is currently negotiating cement supply contracts with Savannah Cement, East African Portland Cement and other local cement manufacturers
UAECEMENT.COM - Dec,24,2014

UltraTech Cement acquires cement units
The Board of Directors of UltraTech Cement Limited, an Aditya Birla Group company, agreed to the acquisition of the following cement businesses of Jaiprakash Associates Limited in Madhya Pradesh on Dec 23th:

Integrated cement plant with clinker capacity of 2.1 million tpy and cement grinding capacity of 2.6 million tpy at Bela, Madhya Pradesh (MP).

Integrated cement plant with clinker capacity of 3.1 million tpy and cement grinding capacity of 2.3 million tpy at Sidhi, MP.

180 MW TPP of which 25 MW is situated at Bela and 155 MW at Sidhi.

This acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8 - 2.5 million tpy in addition to the 4.9 million tpy mentioned above. This acquisition will enable the company to increase its presence in the Satna cluster of MP.

The Board has approved the Memorandum of Understanding setting out the broad terms and conditions of the proposed acquisition. The Enterprise Value of this acquisition has been agreed at Rs.5400 crores.

The transaction is subject to customary due diligence, definitive agreements, and regulatory approvals as may be required.

With this acquisition, the company s cement capacity in India will increase from approximately 60 million tpy to approximately 65 million tpy and with projects underway, the capacity will stand raised to approximately 71 million tpy by 2016.
UAECEMENT.COM - Dec,24,2014

Saudi Arabia: Saudi City Cement starts trial operations of new production line
Saudi City Cement Company has started trial operations of a second production line. Without disclosing any financial details, Saudi City Cement said that the new production line will have a production capacity of 5,500t/day. The trial period will last about four months.
UAECEMENT.COM - Dec,20,2014

UltraTech said in talks to buy Jaiprakash cement plants
UltraTech Cement Ltd, controlled by Indian billionaire Kumar Mangalam Birla, is in talks to acquire Jaiprakash Associates Ltd’s cement plants in central and southern India, people with knowledge of the matter said. The company is discussing the purchase of Jaiprakash’s cement plants in the states of Uttar Pradesh, Madhya Pradesh and Andhra Pradesh, the people said, asking not to be identified as the matter is private. Jaiprakash has at least five facilities in those states with 18.25 million tonnes of production capacity, according to a December presentation on its website. UltraTech, India’s biggest producer of the building material, aims to boost capacity by 61% to 100 million tonnes in a decade, Birla said in November. Jaiprakash is selling assets after its debt jumped nearly fourfold in the five years through March to Rs.72,600 crore, data compiled by Bloomberg shows. Jaiprakash has a total capacity of 26.65 million tonnes, according to the presentation. UltraTech hasn’t made a final decision on which plants to acquire and may purchase only some of the assets under consideration, two of the people said. Pragnya Ram, a spokeswoman for UltraTech, declined to comment. A representative for Jaiprakash couldn’t immediately comment. Last year, UltraTech agreed to buy a Jaiprakash cement plant in Gujarat with 4.8 million tonnes of capacity for Rs.3,800 crore including debt. Jaiprakash plans to raise as much as Rs.21,180 crore by 15 March by selling cement and power plants, the December presentation shows.
UAECEMENT.COM - Dec,20,2014

Pakistan:Cement sector reluctant to reduce prices despite power rate cut
SBP criticised cement companies in its annual report for not passing on the reduced cost benefit to consumers

KARACHI: Cement manufacturers did not pass on reduced cost benefit to the consumers that came from declining fuel and coal prices. The sector seemed reluctant to share the expected gain from Rs 2.32 per unit cut in power tariffs, Daily Times learnt.

According to MM Securities’ analyst Farhana Shahid, report of Rs 5 to 23 per bag cut in cement prices were not true as cement manufacturers have not reduced the cement prices. There has been a change in region wise MRP (maximum retail price) and corresponding sales tax. Under the third schedule, sales tax was applicable on maximum retail price prevailing in the country not according to the zone wise (North/South). However, now the sales tax will be calculated on region wise basis ie on different MRP for both North and South zone, she added.

This will be positive for those operating in both the regions; however the magnitude of this positivity is still minimal. This change is applicable from December 16. There is still a possibility of reduction in cement prices by Rs 5-15 per bag by cement manufacturers in near term to pass on the impact of massive reduction in coal prices, oil prices, transportation cost and electricity tariffs to consumers, she said.

JS Research’s analyst Umair Vayani said due to reduction in electricity tariff by Rs 2.32 per kilowatts per hour Pakistan cement sector would be a major beneficiary because electricity charges accounts for 18 percent-28 percent of the total manufacturing costs for the cement companies. “We estimate 3.5 percent-12 percent earnings accretion for cement companies if the tariff benefits are not passed on to the consumers,” said Vayani.

All Pakistan Cement Manufacturers Association (APCMA) former chairman Aizaz Mansoor Sheikh said it was too early to forecast any downward revision in prices, as the notification of electricity tariff reduction has not been issued yet. He was of the view that the cement prices should remain stable in current dynamics as the economic circumstances aren’t much clear due to variation in commodities’ prices.

Mansoor said his company would not likely reduce the prices as when electricity price went up few months ago they did not pass on the impact to the end user, so now prices would remain same. However no company is bound to follow market trend while it depends on contemporaries’ response over the tariff cut – then it would be decided further. He said the transporters did not reduce freight charges despite steep decline in fuel prices; so manufacturers have to see all these factors.

The State Bank of Pakistan (SBP) also criticised cement companies in its annual report over not passing on the reduced cost benefit to the consumers. Cement sector has switched to energy efficient technologies that reduced their distribution cost by 11.3 percent during July-March 2014, SBP revealed. Both large and small firms have reduced their dependence on banks and thereby reduced their financing cost by 29.2 and 50.1 percent, respectively, during July-March 2014.
UAECEMENT.COM - Dec,20,2014

India: CIL to keep off initial rounds of coal block auctions in January 2015
The government has asked Coal India Ltd (CIL) to stay away from the initial rounds of coal block auctions due in January 2015 that are meant for the cement, power and steel industries. The state-run monopoly miner has, however, requested the government to reallocate a few blocks to it, including two that it had lost that were being jointly developed with private firms.

"We are a commercial producer of coal and we do not fit into the category for which the blocks are being auctioned," said a senior CIL official. "CIL will stay away from the first rounds of auctions." However, CIL is likely to participate in bidding when coal blocks are auctioned for commercial mining.

The company has requested that the government return the blocks that it lost following the Supreme Court s order rendering almost all allotments illegal because substantial investment has already been made by all parties in these blocks. CIL had floated majority joint ventures with two private companies to undertake mining projects in those two blocks.
UAECEMENT.COM - Dec,17,2014

Ghana: Cement shortage looms as power cuts to industry bite
The country s major cement producer Ghacem says the ongoing power cuts to manufacturing industry have reduced “significantly” its output level, prompting fears there will be a shortage of the commodity in the next few days.

The ongoing power rationing exercise means that the cement manufacturer s weekly output of about 58,000 could see a more than 10 percent decline.

The Electricity Company of Ghana (ECG) earlier this month announced that it is cutting power supplied to industries by as much as 25 percent in order to create an artificial reserve margin to stabilise the power sector, which it said is under immense pressure to meet rising demand.

Under the announced load-rationing regime for industries, manufacturers will have a blackout for 48 hours, before enjoying what the power distributor described as “uninterrupted” power for six days -- after which the process restarts.

But commenting on the impact of the power crisis, Dr. George Dawson-Ahmoah, Ghacem sStrategy and Corporate Affairs Director said: “This load-shedding management has reduced our production. We are not able to produce at our full capacity”,

Dr. Dawson-Ahmoah explained to the B&FT on the sidelines of a stakeholders meeting on power supply to industry organised by the Association of Ghana Industries that: “We all know the consequences of our inability to produce at full capacity. It results in getting supply to the market short, and thus resulting in an increase in the retail prices”.

A bag of Ghacem cement is being sold on the open market at an average price of GH¢30 and the imminent fall in supply could lead to an increase in the commodity s price in the coming days as the effects of the power cuts are fully realised.

The stakeholders meeting was called at the instance of the AGI, which invited stakeholders in the power generation, supply, and distribution chain to explain the nature of the power situation to its members.

The Planning and Business Development Officer of the Volta River Authority (VRA), Kofi Ellis, in explaining the power supply plan for 2015 to the Association of Ghana Industries (AGI) in Accra last week said: “2015 is going to be a relatively difficult year”.

According to him, the country s major power production plant, the Akosombo Dam, is already running below its capacity as it is running only five of its six units.

The situation, he said, has been worsened by an overdraft on the water reserves of the dam, which was done in anticipation of a rise in the water level to compensate for usage from the reserves.

UAECEMENT.COM - Dec,17,2014

Cement Consumption in Indonesia Declines in 2014
Growth of cement sales in Indonesia is estimated to have slowed in 2014 amid uncertainties brought about by the political year (referring to the fragmented results of the country s legislative and presidential elections and which led to the postponement of various infrastructure projects and other investments in Indonesia). Other factors that impacted negatively on cement sales this year were the central bank s higher interest rate policy, low commodity prices and weakening purchasing power.Chairman of the Indonesia Cement Association (Asosiasi Semen Indonesia, or ASI) Widodo Santoso said on Tuesday (09/12) that domestic cement sales rose by 3.4 percent year-on-year (y/y) in the January-November 2014 period to 54.6 million tons. The annual growth pace of cement sales in full year 2013 was 5.6 percent. Cement sales are a key indicator for construction activity (infrastructure and property development absorb most cement) and closely linked to a country s general gross domestic product (GDP) growth. Therefore, Indonesia s current economic slowdown appears in tandem with slowing cement consumption. In the third quarter of 2014, Indonesia s GDP growth was recorded at 5.01 percent (y/y), the slowest pace in five years.

Forecasts for Indonesian cement sales in 2015 are more positive as the new Joko Widodo-led government is expected to enhance infrastructure development, such as the Trans Sumatra, Medan-Kuala Namu, and Manado-Bitung toll roads, as well as a series of new (or renovated) seaports across the archipelago. The Indonesia Builders Association (Gapensi) recently stated that Indonesia s construction business (which includes the construction of roads, offices and houses) is estimated to grow by approximately 16 percent (y/y) in 2015. Andi Rukmana, Secretary General of Gapensi, requests the government to pay close attention to land-clearing as this matter is a well-known obstacle for infrastructure development in Southeast Asia s largest economy.
UAECEMENT.COM - Dec,13,2014

Saudi Arabia:Cement demand drops 5%
Demand on cement has dropped by 5 percent as production surplus hit 22 million tons, which cover consumption of five months, an expert told Al-Eqtisadiah daily.

Jihad Al-Rashid, head of the National Committee of Cement Producers, said total production of the national companies reached 57 million tons.

The committee is working with the Ministry of Commerce to allow companies export cement and, therefore, handle with the surplus quantities properly.

He attributed the existence of big surpluses of cement to waiting of people to the decisions of the Ministry of Housing and subsequent decline in the construction pace.

However, decline in demand came at a time when factory owners have predicted that demand would climb up by 5 percent but, ironically, the demand fell by 5 percent thus keeping an imbalance of 10 percent from the normal situation and sending the price of one bag of cement from SR13 to SR12, he said.

Cement prices cannot be reduced more than this figure as prices are fixed by the Ministry of Commerce unless cement manufacturers desire to compete with one another.

As a temporary solution, some of the manufacturers may tend to extend maintenance periods of the factories in a bid to reduce production and minimize losses, he said.

Abdulrahman Al-Qarni, deputy president of Abawain Holding Company, said cement demand normally drops by the end of each year where the majority of construction companies have finalized their works and begun to explore orders for the new year.

The year 2014 was free from any (cement) crisis compared to previous years, he said expressing fears over allowing cement companies to export products which, he said, will have adverse effects on the local market.

He said reduction of prices would be more suitable; however, production cut by factories would not be a solution as demand on cement still exists.
UAECEMENT.COM - Dec,13,2014

Gaza engineer invents cement alternative
An engineer from Gaza City in Palestine has invented a material which he claims is as an alternative to cement.

Imad al-Khalidi started developing the product due to a shortage of construction materials in his homeland.

This is partly due to the devastation caused by three Israeli invasions over the last six years, which have destroyed or damaged more than 84,000 houses.

In addition, an ongoing blockade by Israel aims to prevent construction materials from entering Gaza.

Many Palestinians are frustrated by the high cost and slow pace of rebuilding their homes, and find construction materials expensive and difficult to obtain, according to Al Monitor.

However, Khalidi may have found a solution which addresses the problem.

In 2008, he started experiments on materials that could be used in construction instead of cement, and claims to have created a product that can be used as an alternative.

Khalidi said: “We wanted to use local materials as an alternative, to save ourselves and provide the displaced with shelters, as nearly 5,000 housing units were destroyed in the 2008-2009 war.

“We examined various types of soil in Gaza, and found a suitable type rich in natural welding materials, such as potassium carbonate, magnesium, metal oxides, limestone and sand.”

He explained the natural materials he uses act like cement in its different stages, but they are more solid and can last hundreds of years.

Khalidi described the process: “We compose a homogeneous mixture by conducting a soil treatment through pressure, to which we add welding natural materials such as potassium carbonate, ground limestone powder and a small quantity of gypsum, to form an initial coherent product in the brick production.

“Yet, the strong cohesion begins after it is used and continues to solidify for hundreds of years, and to harden dozens of times more than its initial form. This means that the brick increasingly hardens with time.”

Khalidi established in 2009 his own factory to produce local bricks in different sizes. As demand has increased, he has boosted production capacity and can now deliver up to 50,000 bricks per day. He recently opened another factory.

At present, the material is being used only for construction of shelters, which Khalidi describes as a “great challenge” because of the recent devestation.

He charges the same price as cement to companies wanting to build new homes, but knocks 25% off for shelter projects.
UAECEMENT.COM - Dec,13,2014

Egypt:New licences will not boost steel and cement production due to energy shortages
The government s attempts to introduce new licences for steel and cement production will not succeed in boosting production due to a lack of energy supplies, steel and cement manufacturers in the Egyptian market have said.

The manufacturers claim that this is already an energy crisis afflicting existing plants.

The Egyptian government is seeking to introduce new licences for steel and cement production as part of efforts to meet the needs of the domestic market. According to Minister of Investment Ashraf Salman, studies confirm that the production gap may reach 30m tonnes of cement and 4m tonnes of steel by 2020, assuming production capacity continues at current rates.

Manufacturers who spoke to Daily News Egypt reported that existing plants have the ability to meet market needs in the coming years if the factories begin producing at full capacity. These rates have, however, declined due to a shortage of natural gas, they said.

In September, Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour said that the government will not offer new licences for operating in the steel and cement industries before solving the energy crisis, attributing a lack of new investments in these two sectors to the gas production shortage that pushed the government to approve the use of coal as part of Egypt s energy supply.

According to data from the Ministry of Investment, cement production capacity is estimated at 50m tonnes per year compared to the 80m tonnes of consumption expected by 2020. Total iron factory production reached 8m tonnes this year, compared to the 12.5m tonnes expected to be consumed after five years.

Jamal Garhi, Chairman of the Chamber of Metallurgical Industries at the Federation of Industry, objected to the government study on introducing new licences. He said: “Discussion about the introduction of new licences to investors in this sector without providing energy and leaving it to investors to take care of energy themselves is illogical…new investments in the sector are subject to solving the energy crisis at its roots.”

He stated that steel factories operating in Egypt will be able to meet market needs by 2020 by enhancing production capacity, as “bridging the gap between production and consumption lies in providing energy to factories”.

Ahmed Abou Hashima, Chairman of the Board of Egyptian Steel Group, said: “We do not know how the government is considering introducing new licences for steel and cement in light of the energy crisis we are experiencing…the government should solve the crisis of the existing factories that don t have energy to operate first before thinking about adding production lines.”

This comes as Jose Maria Magrina, CEO of the Arabian Cement Company, said the Egyptian market does not need new licences. He added that existing factories could meet the needs of the market for the next five years if operating at full capacity.

“There are 22 cement factories on the Egyptian market that are not working at their full capacity. Maximum capacity is 77m tonnes of cement while annual consumption does not exceed 52m tonnes. The Egyptian armed forces previously announced the construction of two new cement production lines in Sinai and Beni Suef, which would add around 4-5m tonnes, bringing total capacity to 80m tonnes annually in the coming years,” Magrina said.

He predicted that demand rates would not increase by more than 5% over the past year, adding: “Major national projects that the government is seeking to implement will not show results before 2016. Therefore there are no expectations for increased demand, nor is there a need for more production volume.”
UAECEMENT.COM - Dec,09,2014

UNICEM orders LM 70.4+4 mill from Loesche
United Cement Company of Nigeria (UNICEM) has ordered the largest Loesche mill to date, an LM 70.4+4. The new mill, with an output of 370 tph at 4700 Blaine, will be installed at the company s new line in Calabar, Nigeria. The delivery period is 14 months.

Cement producers requirements for mill output continue to increase, and as a result Loesche has adapted its module concept to meet this demand. Now, alongside mill types with 2+2 and 3+3 rollers, mills with 4+4 rollers are also available. Loesche has been building on this patented technology for over two decades. In the early 90s the 2+2 concept was patented, and later extended to the 3+3 module design. Now, a few years later, the company has developed the 4+4 grinding concept, which offers the customer outstanding flexibility. On the one hand, this allows the desired high throughput capacity to be achieved, and on the other hand, it offers the possibility of running just as well in 2+2 roller operation, thereby generating a mill output of 60%.

The Loesche mill type LM 4+4 not only includes the expanded module concept, but also the drive. The increasing performance requirements of cement producers led the company to rethink further developments in drive technology. Particularly for larger mill outputs, Loesche favours a drive system with multiple motors and gearboxes with milling force decoupling. The company will use the COPE gearbox developed in cooperation with Renk, which offers a redundancy of up to 8 motors at the motor end. With all 8 motors in operation, a capacity totalling 8.8 MW is achieved. The new COPE gearbox works without a variable speed drive and operates with a reduced number of motors. This means the new drive concept allows for operation with, for example, 7, 6 or only 4 of the available motors. Even in operation with only 7 motors, 100% mill output can be achieved.

As this drive train works with the normal dimensions, the system is also suitable for retrofit gearboxes in existing mills. With this drive concept, Loesche is able put a highly redundant, innovative drive system for the new mill type LM 70.4+4 on the market with short delivery times and low investment and construction costs.
UAECEMENT.COM - Dec,09,2014

Arghakhanchi Cement to start production of OPC cement this week
Arghakhanchi Cement, which had been producing and supplying clinkers to other cement factories for the past four years, is starting production of OPC cement from this week.

Pashupati Muraraka, one of the promoters of Arghakhanchi Cement, said they were starting cement production targeting mega infrastructure projects.

Arghakhanchi Cement, which has production plant in Mainahiya VDC of Rupandehi, brings raw materials from mines in Arghakhanchi and Palpa. The plant, which is spread over 20 bigha, has the capacity to produce 1,000 tons of cement and 1,200 tons of clinker every day.

Siddhartha Group, Murarka Group and Kedia Group of Nepal hold 35 percent, 30 percent and 17.5 percent stakes in Arghakhanchi Cement. Remaining 17.5 percent shares are held by Indian company Uma Cement International. The promoters first acquired Dynasty Cement, renamed it as Arghakhanchi Cement and expanded its capacity by importing modern machineries. They have invested Rs 3 billion in Arghakhanchi Cement so far.

All three Nepali promoters have their own cement factories.

The company has branded its product as ′Arghakhanchi Cement′ and it will come in 50 kg bags. It will be the second company in the country to use laminated cement bags after the Jagadamba Group.

Promoters say laminated bags ensure standard weight as well as have longer life.

Factory price for a bag (50 kg) of Arghakhanchi Cement has been fixed at Rs 630 exclusive of applicable taxes. The factory currently employs 600 people, according to the promoters.

Rajesh Kumara Agrawal of Siddhartha Group said they were willing to increase clinker production capacity to 2,400 tons. "But the authorities are hesitating to issue permission, saying that our plant is closer to a UNESCO World Heritage site," he said, adding, "We have used the latest technology to reduce pollutants and harmful emissions. The officials should take into account our efforts to reduce pollution and permit us for capacity expansion."

To ensure uninterrupted power supply, Arghakhanchi Cement has installed a plant of three generators with an investment of Rs 100 million. The plant consumes Rs 200 million worth of diesel annually. That brings the overall electricity cost at Rs 21 per unit, according to the promoters.

Though the government has announced a program to arrange power supply and build access roads to the site to attract investments in cement industries, Murarka said the company has not sought any support from the government so far.

Agrawal said they have also seen the prospect of exporting cement to bordering Indian towns.

UAECEMENT.COM - Dec,09,2014

Omani cement firms hit by gas price rise
Oman s two main listed cement manufacturers have reported that costs are likely to increase substantially following a decision by the Sultanate s Ministry of Oil & Gas to double gas prices.

The ministry has recently announced that it will double gas prices from $1.50 per million metric british thermal units (MMBTU) to $3.00 - effective from January 1. It also plans to conntinue increasing rates by at least 3% in subsequent years in a bid to cut costly fuel subsidies.

In statements to the Muscat Securities Market (MSM), Oman Cement s CEO Jamal Shamis Al Hooti said its costs are likely to increase by around $17.2mn (OR6.6mn) a year.

Raysut Cement s CEO Eng.Salem Alawi Mohamed Baboud, meanwhile, argued that its costs were likely to increase by $11.7mn (OR4.5mn) a year.

Al Hooti said that the company had "made a representation to the Government in this regard for a reconsideration of the decision".

In the meantime, he added that it planned to cut overheads by improving productivity and cost controls, as well as restructuring prices.
UAECEMENT.COM - Dec,09,2014

Saudi Arabia: Saudi City Cement Co to invest US$6.7m in alternative energy project
Saudi cement producer City Cement Company has announced that it intends to invest US$6.7m in an alternative energy project. The Chinese engineering company Sinoma will carry out the project, anticipated to be completed by 30 June 2015. Without providing further details on the nature of the project, City Cement said that it will use its own funds and/or Murabaha financing to fund it.
UAECEMENT.COM - Dec,06,2014


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