CemWeek CemWee MAGAZINE
GLOBAL CEMENT INDUSTRY. KNOWLEDGE.
APRIL / MAY 2012
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TRADE IN CONFLICT Saudi Arabia Update
TURKISH CEMENT
Q&A with Mustafa Güçlü
Technical analysis Cement prices
AFRICA
Mombasa Cement Q&A Ethiopia Cement Prices
JAPAN REBUILDS Cement Sector at an Inflection
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Analysis
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Market Coverage
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Interviews
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People Moves
CemWeek EDITOR'S NOTE CemWeek CemWeek CemWeek BMWeek BMWeek BMWeek MAGAZINE
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Letter from the publisher and editor
To Build and Rebuild: Regions of Growth and Reconstruction Though someone said “there is always a bull market somewhere in the world,” many question marks surround the current global outlook for the cement sector. Again we turn to facts as a guide, sharing in this issue some of the metrics we track as analysts at the CW Group, such as our Equipment Vendor Order Intake and Backlog indices and cement price monitoring. With a qualitative practitioner’s experience, we additionally look at the fundamentals driving markets. Central to this issue of the CemWeek Magazine, we mark the one-year anniversary of Japan’s devastating earthquake and tsunami, looking into the aftermath of these natural disasters on the local cement industry. This issue’s feature article, “Rebuilding Japan,” reports on the dual roles played by Japan’s big cement players in demolition and reconstruction efforts (see page 4). A second area of interest highlighted in this issue is the Middle East and Africa region. In our Leader’s Comment feature, CemWeek speaks with Chairman of the Board of the Turkish Cement Manufacturers’ Association, Mustafa Güçlü, on Turkey’s pioneering cement industry, which stands as the primary manufacturer of cement for Europe and the world’s third greatest exporter of the product (page 12). Moving south for a second Leader’s Comment this issue, Director of Mombasa Cement, BT Shah, discusses the company’s marketing strategy for East Africa, sharing the story of how MCL first established itself in the market only five years ago (page 20). Keeping with the MEA region, “Saudi Arabia’s Cement Trade Conflict” (page 44) lays out the latest updates in import/export rules for the Kingdom, and Ethiopian cement’s recent price fluctuations in Ethiopia are highlighted on page 43. Finally, from the research arm of the CW Group comes an update on global cement prices, based on national retail price tracking for 23 countries around the world (page 24). And CW Group MD and Head of Research (and CemWeek publisher) Robert Madeira shares insights from the recent Argus Americas Coal Summit, marking the complex dynamics that affect fuel pricing, consumption and demand among diverse regions (page 17). To participate in our Leader’s Comment series or to comment on content from this issue and others, we welcome your feedback at editor@cemweek.com.
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CONTENTS FEATURES 4 Rebuilding Japan One year after a devastating earthquake and tsunami, the cement industry’s dual roles in demolition and reconstruction Leaders Comment 12 The Rise of Turkish Cement, a conversation with Mustafa Güçlü of TCMA 20 A Housing Enterprise for East Africa, discussion with BT Shah, Director of Mombasa Cement
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DEPARTMENTS Numbers in Brief 2 New Lows for Order Intakes and Backlog Research 17 Opportunities for Coal in the Cement Sector 24 Technical Analysis: Global Cement Prices Mixed Regional Focus 43 Ethiopia’s Cement Price Fluctuations 44 Saudi Arabia’s Cement Trade Conflicts
Regional Reports 26 Europe, Middle East & Africa 30 Asia Pacific 31 South Asia 32 Americas From our Industry Partner 36 Building materials update Projects & People 40 Notable projects 42 People on the move Data Share Performance 45 Overview of stock performances for cement companies
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The two day interactive program, which is organized by US-based GMI Forum, supported by CemWeek and India Cement & Construction Materials, will cover key aspects of India’s cement industry. Sessions will center on the principal issues facing the Indian cement sector today and in the future. In particular, industry leaders will take a closer look at the evolution and direction of the market, balance views on the ever critical fuel sourcing situation, new policies and legislation, infrastructure plans, and technology maximization.
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NUMBERS
IN BRIEF
CW Group Research:
New Lows for Order Intakes and Backlogs The cement plant equipment tracking indices launched by CW Group in the 4th issue of CemWeek Magazine turned negative again in the last quarter of 2011.
A moderate recovery is expected to take place in 2012, fueled by growth rates in countries like Russia, Indonesia or part of South America. Estimates point to a global ex-China demand for new cement kiln capacity of 50 to 60 million tons in 2012, whereas the same indicator closed 2011 at 46 million tons.
Cement Equipment Order Intake Index (CEOI)
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Cement Equipment Order Backlog Index (CEOB)
Cement Equipment Order Backlog Index The Cement Equipment Order Backlog index followed the evolution of CEOI and hit in the end of 2011 the lowest value since the 1st quarter of 2010. At 104.1, the Q4 2011 index signifies a 9.6 percent decline compared to 115.2 registered in Q3 2011, the largest decline since its calculation. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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Cement Equipment Order Intake Index After the promising evolution registered during the 2nd and 3rd quarters of 2011, the Cement Equipment Order Intake index (CEOI) lost its advance almost entirely in the end of the year. On the back of sluggish demand coming from traditionally large cement markets such as India, companies had to settle for lower order intakes that lagged behind predicted volumes. CEOI dipped by 41.8 percent from the Q3 2011 level of 126.2 and reached in Q4 2011 the second lowest value since its reference quarter (Q4 2009): 73.4. The 4th quarter negative evolution contributed to the overall 2011 decline of 15.4 percent in order intakes versus 2010.
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FEATURE
Rebuilding Japan
One year after a 9.0-magnitude earthquake and resulting tsunami struck mainland Japan, CemWeek takes a look at the disaster’s lingering effects on the Japanese cement industry, including the key role cement companies played in ridding the island of nearly 25 million tons of debris. 4
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On 11 March 2011 at 14:46 pm local time, a devastating 9.0-magnitude earthquake hit the northeastern coast of Honshu, the main island of Japan. The earthquake unleashed several massive tsunami waves with highs up to 20 feet. The toll was devastating, with widespread damage and destruction and tens of thousands of dead and missing. The three worst-hit prefectures, Miyagi, Fukushima, and Iwate, were left under 20 to 25 million tons of building debris, amounting to decades-worth of waste that the prefectures were ill-prepared to dispose of. With 11 of the affected region’s 55 nuclear power units off-line and supplies of oil, gas and coal often unable to be delivered as scheduled, power supply has also been seriously affected by the disaster, with frequent (and partly scheduled) power cuts happening across the nation. The World Bank estimates the rebuilding costs at around $US235 billion, or 2.5 to four percent of Japan’s 2010 GDP. As a consequence, across 2011 the Japanese economy has remained severe, and these conditions persist against factors such as government-sponsored macroeconomic countermeasures meant at increased consumer spending, and a rise in exports as a result of rebounding foreign economies.
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Effects on Cement Sector From the point of view of the cement industry, this disaster translated into various levels of damage at the country’s 15 active cement plants, which hold a total capacity of more than 23 mtpy. The coastal regions most affected by the disaster hold four plants with a combined 4.3 mtpy capacity. Here, all operations stalled, with three able to restore operations by June 2011. The fourth and most affected plant, Taiheiyo’s Ofunato, resumed operations in November 2011. Ultimately, even the several months of stalled operations amounted to only around 2.5 million tons in capacity loss, or less than five percent of total Japanese production capacity, as mentioned by the Japan Cement Association in a postearthquake interview. There have even been cases where affected cement compa-
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nies, after their plants were damaged, were able to approach other players in the industry in order to fill cement orders. One such cases is Taiheiyo Cement, Japan’s largest cement producer, who approached Ube-Mitsubishi and Sumitomo Osaka to help fill orders for lowheat cement after its plant in Iwate Prefecture was damaged. Despite cement manufacturing escaping the earthquake and tsunami in relatively good condition, the greatest damage to the industry was suffered in the distribution area. Indeed, distribution equipment (cement silos), port facilities and roads and bridges have been damaged, requiring restoration work. Fortunately, existing production and shipment facilities were able to adequately cover ce-
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The coastal regions most affected by the disaster hold four plants with a combined 4.3 mtpy capacity.
ment demand in the affected region, not increasing the need for cement import. Overall, the Japanese cement sector has continued its standstill position for the last couple of years, motivated by severe cutbacks in public works and a quiet private sector. With an overall production of 56.4 million tons and consumption reaching about 41.4 million tons by the end of calendar year 2011, the sector registered rather similar figures with the ones of calendar year 2010, still far away from the good-old-days of high internal consumption from 2009 and before.
vestments in reconstruction works starting with 2012 for the medium-to-long term, supported also by forecasted economic recovery. These investments have been registering serious declines since the 1990’s. Currently, important attention is being given to improving the earthquake resistance of major structures and coastal defenses, together with general reconstruction work. Sorting Through the Rubble Besides supplying cement for reconstruction, the cement industry has played a key role in debris removal. The more than 20
million tons of debris that resulted from the earthquake and tsunami constitute a major barrier to reconstruction, and Prime Minister Yoshihiko Noda asked the private sector to help dispose of tsunami debris from Iwate and Miyagi prefectures. Cement plants are equipped to handle rubble since waste is often included in the cement manufacturing process. Taiheiyo Cement began incinerating debris from the Iwate prefecture cities of Ofunato and Rikuzentakata starting June 22, 2011. In fact, Taiheiyo began incinerating local debris even before the central
According to the Japan Cement Association, cement production decreased 0.4 percent from the 56.6 million tons value of 2010, while internal consumption grew 0.5 percent from 41.2 million tons in 2010. The main events on the consumption side of the industry in 2011 have been a significant reduction in the national public works-related budgets that offset a rise in private-sector demand following a recovery in private housing investments. Exports decreased almost five percent to 9.8 million tons, most likely reflecting the downward trends of exports to India and the Middle East, which could not be canceled out by significant increases in exports toward China, Taiwan and South Korea happening in the last halfyear. Thus, total cement sales volumes declined slightly (0.5%) to 51.2 million tons for the calendar year 2011. However, even if the post-earthquake and tsunami reconstruction has been slow during 2011, it is set to boost Japanese in-
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mand will likely translate into pressure on export volumes. For now, no significant plans for capacity expansion have been announced because cement manufacturers acknowledge the temporary character of this higher demand. In the end, the way these companies choose to respond to the increased demand and deal with their long term challenges will finally determine the health of this industry.
government passed a supplementary budget to fund the work. The company’s Ofunato plant was also hit by the disasters and could only use its single undamaged kiln. Cement production resumed there in November 2011, at which point it was also possible to increase the quantities of rubble burned. Slowly, Taiheiyo has also started to dispose of debris from other cities in the prefecture. Due to the tsunami wave that swiped the affected regions, a high content of salt in the debris has put pressure on the process: higher temperatures are required in the burning phase in order to prevent the release of toxic elements such as dioxin. These temperatures put an additional burden on the kiln. For this reason, in addition to the need to pre-sort the rubble, companies such as Mitsubishi Materials (who also has cement plants in the affected prefectures) have not been as proactive as Taiheiyo in incinerating the debris. Nonetheless, by the end of March 2012, Environment Minister Goshi Hosono announced that 97 percent of the debris from the northeastern prefectures of Iwate, Miyagi and Fukushima had been removed.
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Immediately following the disaster, the government engaged a consortium to start building at least 33,000 temporary housing units for the affected population, and work on 5,000 units was already under way in the first half of April 2011. The request puts pressure on Japan’s existing spare capacity to come into operation. By the end of 2011, this additional capacity had not yet come on-line, motivated in part by the slow release of government finances for the program. Financial Impact The situation is set to improve starting with fiscal year 2012, as reports from the fiscal year ending March 31 show the money from supplementary reconstruction budgets has finally begun to flow, setting the stage for several construction projects in coastal areas. However, Japan’s cement manufacturers and general contractors will see the influx of money after the trillion-yen construction projects start in fiscal year 2012-2013. Due to the tightened supply-demand situation in Japan, which was only worsened by production capacity reductions in 2010, the increase in public sector de-
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On the prices front, Japan’s cement companies had planned to implement a 1,400 to 1,500 yen price hike in April 2011, motivated by the soaring costs of raw materials and fuel. However, in the wake of the Great East Japan Earthquake and Tsunami, the companies were hesitant to follow through with the planned hike. Nevertheless, with the supply-demand equilibrium tightening, Japan’s cement industry moved forward with price negotiations. This situation, combined with a price increase for fuel coal imports, allowed cement manufacturers to implement price increases of 400 to 700 yen in several regions. For example, in Tokyo cement prices grew in August 2011 to around 10,600 yen a ton from the original 10,100 rough price, marking the first price increase in two years. Looking Forward On a rather positive note for the future, the 2012 financial year should bring higher profits and revenues for Japan’s cement companies because the industry is set to see an ongoing recovery in both the private and public sectors as demand from post-earthquake reconstruction works hits full stride. For the Japanese cement industry, the key for future growth will be to focus on reducing costs and improving production technologies so that the industry can play an active role in disaster reduction and disaster prevention infrastructure projects, which are unsurprisingly a significant focus following the natural disaster of 2011. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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Japan cement manufacturer profiles
The Japanese cement sector consists of 18 cement companies controlling 32 integrated cement plants. All plants in Japan use dry-process kilns, and 90 percent of them are operating NSP calciners. Overall domestic cement production reached 56.4 mtpy in 2011, or around 91 percent of the 61.5 mtpy installed capacity. Local demand increased slightly to 41.4 million tons, while exports decreased to 9.8 million tons in the same year. The lion share of the country’s cement production comes from four top manufacturers: Taiheiyo Cement, Sumitomo Osaka Cement, Mitsubishi Materials and Tokuyama. Taiheiyo Cement Group is the largest cement producer in the country, and its cement business is in fact one of four inhouse companies for the group, the other three focusing on mineral resources, environmental and international businesses. In Japan, the Taiheiyo cement business includes six integrated plants (Kamiiso, Ofunato, Kumagaya, Saitama, Fuhiwara, and Oita), its Chichibu subsidiary and another five plants from affiliated companies (DC Cement, Kokusai Kigyo, Myojyo, Sanyo White Cement and Tsuruga Cement). In addition, Taiheiyo participates in ten overseas cement operations in the U.S., China, Thailand, Vietnam, Papua New Guinea, Philippines and South Korea. The current in-country installed capacity of the Group’s 11 plants and its Chichibu subsidiary is 21.4 mtpy. Given the weak demand of recent years, Taiheiyo Group announced in 2010 the reduction of capacities in several of its own and associated plants, totaling a 3.6 mtpy capacity cut from an original capacity of 24 million tons. At that time, the company also closed the last of its five
production lines at the Saiki plant. About 70 percent of the company’s cement is used in ready-mixed concrete, and the Group leverages its own ready-mixed concrete companies to achieve higher business synergies. Japan’s second market player, Sumitomo Osaka Cement, is also engaged in non-
cement businesses including mineral resources, construction materials, optoelectronics and advanced materials. The company operates four fully owned cement plants (Ako, Kochi, Tochigi, and Gifu) and two cooperating cement companies (Wakayama Blast Furnace Cement and Hachinohe Cement). The company has recently been operating under capac-
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ity cuts of around 20 percent, bringing Sumitomo Osaka to a current capacity base of 9.1 mtpy. The company has also invested its cement business in emerging markets, with a joint venture with Davao Union Cement in Philippines (currently the biggest cement company in the country, as Holcim Philippines) and with investments in China at Yunnan Kungang & K.Wah Cement Construction Materials, which operates a five million ton annual production capacity in Yunnan Province. Mitsubishi Materials Corporation is the third largest player in the Japanese cement market. The corporation is active also in several other businesses, such as metals, advanced materials, aluminum, electronic materials and components, energy, precious metals and recycling. On the cement front, Mitsubishi operates five domestic cement plants—including the Kyushu Plant, the largest cement production facility in Japan—for an annual production capacity of nine million tons. Its national cement businesses are
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supplemented by construction materials and cement operations in several locations in China and throughout the Pacific region—in Vietnam, Singapore and other Southeast Asia locations—as well as operations in the United States. Mitsubishi Materials started a joint venture with the diversified chemical, metals, cement and machinery provider Ube Industries, forming Ube-Mitsubishi Cement Corporation, which focuses on marketing cement and related products manufactured by its parent companies. If considered together with Ube Industries’ combined 7.3 mtpy production capacity over its three plants, the Ube-Mitsubishi Cement Corporation positions itself as the second cement producer in the country, ahead of Sumitomo. The joint venture also operates a cement research institute in Tokyo and, as a first for a Japanese company, started to export cement products to Russia in 2008. The fourth largest player in Japan, Tokuyama, has a single cement production facility: Nanyo Plant. The Nanyo facility,
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located at Tokyuama-Kudamatsu Port, has one of the largest capacities in the country at 4.6 mtpy. The main applications of Tokuyama’s cement are found in general civil engineering, dams and bridges, as well as in cold weather projects. In addition to local sales, the company exports its products principally to countries in Southeast Asia. Besides its core cement businesses, Tokuyama is active also in the building materials fields, chemical business and specialty products. The other smaller cement producers in Japan encompass companies like Tosoh Cement, with a production capacity of 2.6 mtpy at its Nanyo plant. Tosoh Cement has been consigning its marketing and sales to Taiheiyo Cement. Other small producers include Denki Kagaku Kogyo Kabushiki Kaisha, with a 2.6 mtpy cement capacity at its Omi plant, Lafarge Aso Cement with its Tagawa and Kanda plants, Hachinohe Cement, and several other cement manufacturers whose facilities have annual cement capacities lower than one million tons. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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LEADERS
COMMENT
A conversation with Mustafa Güçlü
The Continued Rise of Turkish Cement
Turkey is the world’s third greatest exporter of cement by volume and is the main manufacturer of cement in Europe. Turkey was among the top ten cement producers in the world as of the end of 2008, with a production capacity of over 56.8 million tons of clinker and over 94.3 million tons of cement. Turkish exporters sell cement to both developed and developing countries such as Russia, Italy, France, Israel, Spain, Syria and Iraq. CemWeek spoke with Mustafa Güçlü, Chairman of the Board of the Turkish Cement Manufacturers’ Association (TCMA), about export markets, environmental regulations, and the domestic outlook for Turkish cement. 12
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How would you describe the current state of the Turkish cement sector? Will 2012 and 2013 see continued domestic growth? The cement industry holds a special place in the Turkish economy with its US$4 billion turnover, US$900 million in exports, and direct and indirect employment for 15,000 people. In 2011, 55.7 million tons of total domestic sales were realized with 52.2 million tons made by member plants of TÇMB. This amount was about 50 million tons in 2010, of which 47.7 million tons of cement sales belonged to TÇMB member plants. Owing to the increase in domestic markets, we have faced a considerable decline in export rates. According to data from 2011, cement and clinker exports dropped around 23 percent and 11 percent and totaled 12 million tons and 2.4 million tons, respectively, at the end of 2011. According to 2011 year-end data, clinker capacity reached around 65 million tons and equivalent cement capacity was realized at around 80 million tons. The cement industry developed new markets in exports because of narrowing European markets with the global financial crisis. Algeria takes place in these markets. Exports to the Middle East and North African countries declined dramatically due to the Arab Spring in 2011. It is expected that as the negative impact of the Arab Spring decreases, exports directed toward these countries will rise again. In 2012, it is possible to mention industry growth by taking into account urban transformation and housing projects together. Decisions in respect to reducing energy costs for the next years are of great
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importance. Also, focusing on urban transformation projects is a crucial issue for both the construction and cement industries. In Turkey, where infrastructure and housing deficits add up dramatically, the construction industry has a promising future. In 2012, sales are expected to move at a rate four to five percent higher than domestic sales in 2011. On condition that total exports don’t reach a sustainable level of 18 to 20 million tons, the negative pressing effects of overcapacity on the industry will increase. With close to 70 cement plants in Turkey, it seems like a lot of production units for the country. What is the reason for this and also the high mix of grinding and integrated units compared to many other countries? Cement plants are homogeneously located all over Turkey. The underlying reason is that the cement industry was primarily established and built with the full support of the government. The government set up plants in many places of the state with the objective for both investing in different regions and developing industry. How did Turkey become a major global force in cement exports and what is its competitive advantage? What are the traditional Turkish export markets and how competitive is Turkey versus, for example, China?
During economic crises in Turkey, cement manufacturers turned towards exports. Especially during the intensive construction period beginning in Iraq upon the collapse of Saddam’s regime, Turkey has taken advantage of this neighboring country and launched massive investments in Iraq. Turkey’s most distinctive competitive power is that it is located nearby such export markets. How are producers faring as many traditional export markets are slowing and / or seeing big capacities come online? Exports to North Africa are more likely to slow down in consequence of political turmoil in this region. However, an expected increase in West African and Russian markets may relatively compensate for the decline. Turkey has a wide mix of very modern plants and older units. What is the industry as a whole doing to reduce emissions? What regulations for CO2 do Turkish companies operate under and does it affect exports to Europe? There are 48 integrated cement plants in Turkey which produce clinker and final product cement.
In Turkey, about 98 percent of the cement kilns are based on dry systems performing modern production technologies with high energy efficiency. The remaining two percent covers older units that are semi-wet (Lepol) or wet systems. In Turkey, the cement sector is regarded as a pioneer in terms of responsiveness to environmental demands, demonstrating a good record of compliance with national environmental regulations. All the plants have dust abatement systems and environmental monitoring tools. Currently, there is no legally binding implication on CO2, but it could soon become a key concern of the sector. The carbon credits and emission trading schemes (ETS) implemented in the EU have had an impact on the competitive position of the cement industry in Europe. As a result, plants in Europe had to reduce their production and increase clinker imports, impacting the cost of production. Increasing pressure on Turkish producers to comply with comparable emission obligations is likely to become a future challenge. The cement industry in Europe is keenly aware of the implications of the Kyoto Protocol and of emission trading schemes and has responded to
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due to the state’s dependence on external fuel resources. Cement is produced with the most advantageous alternatives such as natural gas, fuel oil, coal and petcoke in foreign markets. Therefore, the sector is trying to ensure appropriate costs. Furthermore, exports are carried out with the objective of meeting variable costs because of the overcapacity problem in Turkey. As the main profit is obtained primarily from domestic markets, exporting prices can be kept low.
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The cement sector is regarded as a pioneer in terms of responsiveness to environmental demands.
the anticipated developments by exploring the possibilities for improving energy efficiency and making necessary investments We're seeing consolidation in Turkey and big groups getting bigger, yet there are several smaller groups in the country. How do you see the structure evolving going forward and do you expect more mergers? No mergers/acquisitions loom on the horizon in 2012. However, it could be possible for some undertakers to leave the sector or initiate joint undertaking agreements in a fierce competition environment resulting from the overcapacity problem. A country with limited natural fuel sources (e.g., no oil, gas and limited coal) and new plant assets still being depreciated, how is it that Turkish ex-works and export FOB prices are so low compared to other markets? Investments by the cement industry in Turkey are carried out in a way of enabling waste utilization
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What will be the biggest challenges for the Turkish cement sector in the next 12-18 months? Our main priority is to lay emphasis on spurring all sectors, notably industry, to make technologic investments and to fill the infrastructure deficiencies in accordance with Kyoto Protocol that Turkey supported, too, and the European Union’s environment negotiations. The Turkish cement industry promotes the studies carried out with the aim of reducing greenhouse gas emissions on a global scale. Yet we are in belief that these efforts should be restructured in accordance with the conditions of our industry and developing country. Within this framework, our industrial suggestions are as follows: »» Appropriate measures should be taken to increase consumption of blended cement. »» Necessary precautions should be taken to boost waste utilization. »» Investments on energy efficiency should be supported. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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RESEARCH
CW Group conference presentation
Opportunities for coal in the cement sector The CW Group’s Managing Director and Head of Research, Robert Madeira, shares the Research Group’s views on cement sector fuel opportunities for the coal sector at the 2012 Argus Americas Coal Summit in New Orleans. Read the full story on the following pages
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RESEARCH ajor steel, coal and cement producers, as well as traders and analysts, consultants and transportation specialists met in New Orleans this April for the 2012 Argus Americas Coal Summit. The focus of this year’s summit was competing in the export markets for coal products. Robert Madeira, Managing Director and Head of Research of the CW Group, the global cement sector insight and advisory firm and CemWeek’s parent company, was invited to present on the implications of cement’s demand-supply dynamic for fuel needs and possible opportunities within the cement sector for the coal industry. In exploring the cement sector from the coal-suppliers’ perspective, issues familiar to cement manufacturers were highlighted but turned 180-degrees to review the needs of the global cement sector. In carving value propositions and developing commercial strategies to more effectively tap into the cement sector, the session turned the cement sector, though beleaguered in many parts of the world, into a powerful buyer. This was a refreshing perspective for the heavy construction materials analysts. When asked why putting cement energy use in perspective was important for the coal industry, Madeira told the coal in-
dustry executives, “You are responsible for up to 40 percent of the cement industry’s direct costs. Understanding how the cement sector thinks and realizing the regional fuel differences allows the coal sector to be an efficient supplier.” Coal Segment Driver Madeira’s presentation highlighted cement as an important coal fuel segment driver, with global cement consumption anticipated to rise from 3.56 billion tons in 2011 to 3.78 billion tons in 2012. Regionally, China takes the lion’s share of cement consumption with 2.22 billion tons at the end of 2012.
Typical opex breakdown (based on spend)
Energy accounts for approximately 20 to 40 percent of cement production costs, and fuel selection is multifaceted. FOB pricing is of course of key concern, as well as the delivered costs, including freight and landing, etc. Other factors, however, were discussed with the coal executives to provide a perspective on what else enters the larger equation. Some of the mentioned criteria included the security of the fuel supply, consistency and reliability of the product, the ability to hedge prices, and the need for pricing transparency. Environmental costs and production process cost implications were also shown as having a central role.
Share of fuel (thermal energy share) Gas Depreciation
Petro fuels
Labor, maint. & other
Petcoke
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Energy
Biomass Alt fuels & mixed wastes
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Gas Fuels Petcoke Coal
Despite global buzz and growth around alternative fuels, Madeira points out that coal is still king in many regions of the world. In the thermal energy mix, fossil fuels account for 90 percent, with coal maintaining somewhat more than half of the cement market’s traditional energy needs. That said, regional patterns of fuel sourcing paint a widely varied picture. In North America, coal provides the majority of the cement industry’s energy needs, but petcoke reigns in South America and Europe. Meanwhile, China’s cement industry still relies almost exclusively on coal for its fuel supply. Focusing on coal’s principal competitor, petcoke, the discussion returned to pricing. Madeira presented research from the CW Group on fuel price benchmarks, comparing the FOB costs of South Africa bituminous coal and uncalcined U.S. petcoke between April 2007 and January 2012. The proprietary CW Group pric-
ing benchmarks for coal and petcoke reveal how the cement sector’s frustration with high petcoke prices in 2010 and into 2011 has ebbed as petcoke prices have declined. The evolution has been to the detriment of the coal industry, which has not seen as big of a drop in pricing, making for a less attractive option based on traded or spot prices. Complex Territory It cannot be ignored that the landscape for coal in the cement sector is not smooth terrain. While lingering pockets of discontent toward petcoke may have some companies considering a switch to coal, any such change at a cement plant requires complex and capital intensive investments, even for multi-fuel equipped plants, as the fuel switch can lead to lower output and productivity loss at switchover. And another facet to consider: the CW Group coal analysts contributed research that shows how regional supply
shortages are prompting shifts away from coal across industries. Where does this leave the coal industry? According to Madeira, “The devil is in the details and the case complex. It is not possible to look at coal as a product from Hampton Roads (major U.S. coal export port) and ask whom to sell coal to. You need to construct your value proposition around cement sector needs, understand who is buying what and why and what the infrastructure is to allow companies to actually consider coal. Then you can devise your marketing structure.” Individual coal providers must make a choice between developing new markets for themselves and fighting for shares in developed marketplaces. The coal industry must now allocate resources not just toward high-growth cement demand regions but to the fertile ground of emerging cement markets as well. BMWeek CemWeek BMWeek BMWeek
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LEADERS
COMMENT
UNDER ONE ROOF
A HOUSING ENTERPRISE FOR EAST AFRICA B.T. Shah, Director at Mombasa Cement, spoke with CemWeek about plans for expansion and how MCL established itself in the Kenyan cement market
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Could you tell us a bit about MCL’s history as a producer of African cement? Mombasa Cement Limited (MCL) was founded in 2007 to cater for the building construction segment as one of the top quality cement manufacturers in the East African community and beyond. The firm installed the mother plant at Vipingo, Mombasa for cement clinkerization with a one million ton capacity and a cement grinding unit at Athi River, Nairobi. MCL is one of East Africa’s leading cement producers with an annual capacity of 800,000 tons. From 2012, production capacity will enhance to 1.6 million tons. The company produces cement under the “Nyumba” logo. “Nyumba” means house in Swahili. Before producing cement, we were into manufacturing and trading various steel products across Kenya and the region. We saw an opportunity to offer the building blocks of a house or building all under one group and took it. In the years, our “Nyumba” brand has become a symbol of quality and durability. What roles do new technology and environmental regulations play at MCL? MCL is dedicated to providing high quality cement to its customers using the latest technology in its production processes. MCL produces under the technical support of Japan’s Taiheiyo Cement to fulfill its local demands prior to exporting to regional markets. MCL boasts of itself by being awarded the superior Diamond Mark of quality certificate by the Kenya Bureau of Standards symbolizing excellent, consistent performance on quality and compliance to standards. MCL produces the most technologically advanced and environmentally friendly cement in Eastern Africa. The products of MCL pass through round the clock stringent quality controls standards of both the Kenya Bureau of Standards and International specifications.
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While setting up the plants, we have taken care of this issue of environmental regulations. We anticipated that down the line the norms are going to be more and more stringent, and we implemented state of art technology which can meet the future stringent norms. We have an efficient bag house and an electrostatic precipitator at our main plant to control particulate emission and meet the stringent environmental regulations of the National Environmental Management Authority. As a relatively new company, what has MCL’s strategy been in order to establish itself in the market? The basic idea is to have a single point for all major construction items so that customers need not go looking for various products required to build a home. As mentioned earlier, the strategy was to have all construction components made available to the customer at one loca-
tion. Thereby the customer is benefited in terms of transportation, volume discounts, etc. Again, our main strategy is to make all construction materials available at one point. We have therefore used our existing distributor network of steel division for cement also. This has achieved smooth introduction of our product into the market. Another important strategy is to maintain the best quality at affordable prices. These basic principles gave us a niche in the market. Africa is now the center of development, and a lot of business opportunities exist in the region. It is natural that the entire world is looking to take advantage of this situation. This leads to competition but also leads to development, which means increasing construction activity. The growth rate increases, thereby increasing the demand for goods.
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TECHNICAL
ANALYSIS
All over the map:
global cement prices mixed After a quieter end of 2011 that closed the year with a slight decline in global average cement prices, January 2012 reversed the course; the CW Group Research set of core markets, tracked at the national level, saw one percent growth in nominal retail cement prices.
February 2012 left global cement prices nearly level, with a growth rate approaching zero compared to January 2012. For March, the CW Group’s preliminary index calculations showed a price decline of 0.1 percent. Compared to last year, February and March 2012 showed a severe slowdown in growth rates; the same period in 2011 registered one percent growth with large intervals between minimum and maximum growth rates and high diversity between countries. Looking at the 12-month period (April 2011 – March 2012), monthly average growth rates indicate price stabilization, with the majority of markets trending changes from -0.5 percent to +0.5 percent. However, only three of 23 analyzed countries— the EU markets of Belgium, Germany and Greece—were truly flat, with some price variance appearing for Germany in early 2012. On the back of decreasing demand, Greece still managed to stage a notable and surprising push forward. A larger set of countries—including Canada, India, Malaysia, and Turkey—showed early 2012 prices similar to those seen in the same period last year. However, price stability was not maintained from month to month. Rather, the year was defined by cyclical price corrections composed of short periods of increasing prices followed by decreasing months. SOME MARKETS RISE However, not all markets have fared poorly, and some of the world’s major cement markets continue to see increasing cement prices. This set of countries includes Australia, France, Mexico, Pakistan, Poland, Russia, Singapore, the United Arab Emirates, United States and United Kingdom. The most notable price surge was registered in Russia, where the average consumer price expanded by 20.8 percent between April 2011 and March 2012. The two main factors affecting Russian cement prices were the seasonality effect of the market and disruptions experienced in railway transport that considerably reduced the number of monthly freight car deliveries and their average turnover. In Russia, cement prices climbed considerably
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during the peak demand period of April 2011 through October 2011. After prices peaked in October 2011, cement prices hovered at an average 2.2 percent below October levels. Trends in Pakistan were unusual, with cement prices expanding 0.94 percent on average per month between April 2011 and March 2012 despite a seasonal effect that was expected to lead prices downward. Instead, prices climbed constantly, though at a slower rate in the off-season months, as the country registered consistent cement demand of 1.8 million tons per month from July to October 2011 and two million tons per month from November 2011 to March 2012. SLOW GROWTH and PRICE DECLINES Among the countries on a negative trajectory, Egypt takes the lead as the country with the highest cement price decrease calculated between February 2011 and February 2012. In Egypt, prices declined 20.3 percent for a ton of gray cement. On the heels of a challenging 2011, with public and private investments put on hold, Egypt faced a big slide in cement consumption, especially in the first eight months of the year. In the end, the country squeaked by and managed to level out YoY cement demand growth, with demand firming up between September and December when consumption was 14.9 percent higher than the volume reached in the same months of 2010. Brazil, Thailand, the Czech Republic, and Slovakia also reported cement price declines. The four countries experienced comparable negative monthly average growth rates between 0.21 percent and 0.35 percent. Among them, Brazil showed the highest variations from month to month, impacted by a major cement price cartel investigation that concluded in February 2012. For cement producers, it is encouraging to see cement prices decline in a quarter that was predicted to increase if 2011 trends were to continue. Though perhaps not a harbinger of an uninterrupted trend for 2012, and admittedly still based on the CW Group Research’s preliminary estimates for March, it is nonetheless a positive starting point for pricing in 2012. BMWeek CemWeek BMWeek BMWeek
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MoM AVERAGE CEMENT PRICE EVOLUTION (%) 1.2%
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Jun-11
Jul-11
Aug-11
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Nov-11
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Feb-12
Mar-12P
MONTHLY AVERAGE GROWTH RATES (%) 2%
United States
United Kingdom
United Arab Emirates
Turkey
Thailand
Slovakia
Singapore
Russia
Poland
Pakistan
Mexico
Malaysia
India
Greece
France
Germany
Czech Republic
Canada Brazil
Dominican Republic Egypt
-2%
Belgium
Australia
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REGIONAL REPORT: Meanwhile, Portuguese construction company Teixeira Duarte is currently gunning to acquire three Cimpor plants with a combined annual capacity of 5.4 mtpy. The plants are worth an estimated EUR 1.1 billion and include Alhambra in Portugal and the Cezarina and Campo Formoso plants in Brazil. The plant purchases are part of a deal which would have Teixeira sell its stake in Cimpor to Camargo Correa. Spanish cement consumption continued to drop in February, down 32 percent. The country used 1.2 million tons of cement in the month, equivalent to 1967 consumption levels. In the first two months of 2012, the country’s consumption declined 28.03 percent to 2.34 million tons. Cement production also fell 25.1 percent to 1.37 million tons. The industry is bracing for more shocks given the government’s announcement to reduce public spending by 40 percent. One bright note was an increase in cement exports, which rose 27 percent in the first two months of the year to 776,142 tons. Irish-based CRH plans to increase its presence in China after its sales there beat expectations. CEO Myles Lee indicated CRH is keen to initiate discussions "promptly" about raising its 23 percent holding in the Jilin Yatai Group. In 2008, CRH paid about EUR 200 million to buy into Jilin Yatai.
Courtesy of Eurocement
Europe Camargo, which owns 32.9 percent of Cimpor, bid EUR 5.5 per share to buy the rest of the company. The outstanding shares are estimated to be worth around 2.4 billion euros. Cimpor’s board believes the EUR 5.5 bid undervalues the company and that Camargo’s offer does not lay out critical aspects of the future of Cimpor, including commitments to its stakeholders. Thus, the board declined to issue a recommendation to sell or hold
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the company's shares. However, two of the Portuguese company's shareholders, Caixa and Millennium BCP bank’s pension fund, who control 9.58 and ten percent respectively, have expressed their intention to sell. In related news, Secil parent company Semapa suggested that major shareholders in Cimpor not sell their stakes to Camargo but instead create a joint holding company.
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Dyckerhoff reported a 2011 profit of EUR 65.6 million compared to the previous year’s EUR 6.4 million. The company also announced plans to spend EUR 4 million to upgrade its cement plant. For the first time in fifty-eight years, Greek-based Titan announced no dividend would be paid. The company, struck hard by the plunge in private housing investment and drastic cutbacks in public infrastructure spending, is hoping that growth in new markets like North Africa and Turkey will help pick up the slack seen in U.S., Greek and Egyptian markets. However, it is bracing for a difficult 2012. Holcim is expected to further invest in
Slovakia in order to increase its internal efficiency and customer value. The EUR 32 million investment is in addition to EUR 15 million already invested in the operation. Last year, Holcim Slovakia sold about 1.2 million tons of cement, 1.03 million tons of aggregates, and 339,000 cubic meters of concrete.
Artūras Zaremba. The company, which in March had 50,000 tons of cement stored in warehouse, also expected a 15 percent increase in coal prices to negatively impact cement firms this year. The company hopes to expand its export market into neighboring countries such as Russia.
Lithuania's construction market may shrink as much as ten percent this year, according to Akmenes Cement director
Cement manufacturers in Romania posted better results in 2011. Holcim increased sales by 7.3 percent even as
select PROJECTS IN THE WORKS: middle east & africa COMPANY (LOCATION) Dangote (Zambia) American Investors
PLANT
OVERVIEW
Masaiti District
Dangote's new plant in the Masaiti district is on schedule, with equipment arriving this month. The plant will be the largest in Zambia at a 1.5 mtpy capacity.
Ebonyi State
Cross River International Consulting and CALIFCO Group will begin work on a 1.5 mtpy cement plant and 600 megawatt coal-fired power plant in Nigeria's Ebonyi State. 100 megawatts from the power plant will be sold to the national grid.
CAMCE (Chad) Jidong Development (South Africa) Rhino Cement (Tanzania)
The new CAMCE cement plant has been inaugurated in Chad with a 700 tpd Portland cement capacity for a total installed capacity of 700,000 tpy.
Limpopo Province
China's Jodong Development Group will build a new cement plant in Limpopo Province for a total investment of 1.65 billion rand.
Tanga Region
Bartin Cement (Turkey) (Afghanistan)
Table available in the CemWeek Magazine Print Edition.
Rhino Cement is completing a plant in Tanzania with commissioning set for 1Q 2012. The integrated plant will have a 1.5 mtpy capacity.
Bartin Cement has announced a US$150 million investment to quadruple production by installing new equipment and technology. The upgrade to 1.4 mtpy capacity is 80% complete.
Heart Province
www.cemweek.com/subscribe An unnamed Iranian company has been approved to build a cement plant and develop coal deposits in Heart province. COST: US$ 150 million.
Iraqi Gov't (Iraq)
Falluja
The Iraqi government will bid out a contract to reactivate a cement plant in Fallujah. The plant has been idle for two decades. Current production capacity is 600 tons, but the government anticipates a 1.5 mtpy capacity once modernization has occurred.
Yanbu Cement (Saudi Arabia)
Medina
Yanbu Cement announced plans to build a new plant in Medina, easing cement demand in the city. According to the government, the cement must be sold at 15 riyals/bag.
Russia & the Baltic Countries Cement producers in Russia remain confident that the consumption of building materials will increase this year by nine percent. The optimism is driven by rising construction work in the country. Recently, road construction projects have increased, as has the pace of construction in St. Petersburg. The sector is not out of the woods, however, potentially facing transportation difficulties in the future.
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cement prices registered a decline of 1.4 percent. Lafarge reported a 5.5 percent hike in volumes in 2011, thanks to higher infrastructure spending. Looking forward, German HeidelbergCement, through their local subsidiary Carpatcement Holding, expects growth between two and five percent this year.
A shortage in building materials, including cement, is projected for Russia’s northwestern region this year, caused by rapid growth. Analysts project the region’s cement demand will hit eight million tons by 2020 compared to the current four million ton regional production capacity. To meet this growing demand, new and modern cement facilities will have to be built. Among the new facilities under construction is the two million ton capacity Babinov cement plant to be completed in 2014. The facility will be able to meet 15 to 20 percent of the region’s cement demand. The facility’s production cost is expected to be low because the company operates modern and efficient equipment and has a lime quarry nearby. Dyckerhoff announced plans to build a cement factory in Akbulak in Russia. The facility will take three years to build, but the company refused to disclose its projected capacity. Dyckerhoff says it is seeking to add capacity in the country as its cement industry begins to recover. A new cement plant is also slated to be built in Novorossiysk by Verkhnebakansky. The company says the plant will have a capacity of 2.2 million tons and will boost the region’s cement output by 150 percent.
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facturers' Association (TCMA) noted the industry sold 55.7 million tons in 2011, 52.2 million tons of which were sold by its members. Cement makers in Turkey are scheduled to face an investigation into alleged collusion and market manipulation charges, according to the Competition Authority. Kars Cement Industry, Tic, Askale Cement, and International Cement Industry are among those who will testify at a hearing to determine if the companies are liable for fixing cement prices in the country. Siberian Cement paid the London branch of ING Bank more than EUR 4 million following a decision by the arbitration court. In 2008, Sibtsem entered into an agreement with ING Bank regarding financing the purchase of the Turkish division of Ciments Fransais, a subsidiary of Italcementi Group. When the deal did not materialize, ING sought compensation for costs incurred by Siberian Cement. Cement manufacturers in the Ukraine increased sales by 12 percent to about 10.3 million tons in 2011. Exports of cement were 1.7 percent of total sales, or 175,600 tons. The largest consumer of cement in the domestic market remained the country's northern region, where 25.5 percent of products were sold. The European Union (EU) imposed sanctions on cement manufacturers in
Belarus, banning all cement trade between the country and members of the EU. The sanctions are due to charges of cement dumping: 29 companies were accused of dumping 70,000 tons of cement into the EU. Apart from banning trade, the EU also blacklisted 12 individuals. Most of the affected companies are owned by businessmen associated with the ruling Lukashenko regime. The sanctions will prevent the companies from pursuing business transactions in the EU as well as freezing their corporate bank accounts. The Belarusian government has yet to respond. Middle East Turkey's cement industry is expecting a four to five percent increase in sales volumes this year. Infrastructure investments were expected to drive cement sector growth. The Turkey Cement Manu-
select PROJECTS IN THE WORKS: EUROPE & RUSSIA COMPANY (LOCATION)
PLANT
OVERVIEW
Table available in the CemWeek Magazine Print Edition.
Eurocement Group (Russia)
Samara
Oborontsement (Russia)
Krasnogvardejskiy
Belgorod Cement (Russia) Atrus Cement (Russia)
Work has begun on a new, environmentally friendly cement facility in Samara, scheduled to come online by 2015 with a 2.5 mtpy capacity. COST: 16 billion rubles.
Construction will start on a new cement unit in Belgorod with a 3 mtpy capacity at a cost of 60 billion rubles. There are plans to develop 3 cement plants for a regional capacity of 9 mpty. Belgorod will spent 170 million rubles to modernize its production unit, including new packaging equipment, drive gear replacement, new vacuum switches and the development of fuel storage and refueling points.
Kuban
Atrus Cement AG will build a new facility in Kuban with a 2.1 mtpy capacity.
www.cemweek.com/subscribe The project is applying now for permits, and operations would begin in 2016. COST: 12.7 billion rubles.
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Turkey's largest cement maker, Cimsa, received approval to own a majority stake in Afyon Cimentos. Thus, Cimsa can now move forward with acquiring a 51 percent stake in rival cement maker, Parcib. Iranian cement production rose eight percent to over 66.4 million tons of cement in the year ended March 19, compared with the previous year. Iran’s current cement production capacity stands at 74 million tons, and the industry is expected to reach 110 million tons by 2015. The government also announced that it is set to open six new cement plants in 2013, boosting the country’s cement capacity by six million tons. Another five cement plants are set to open by 2014. Iran currently has 66 cement plants. Most of these facilities are located in Tehran, Isfahan, Qazvin, Khorasan-Rezavi, Hamadan, Kermanshah, and West Azerbaijan. Cement consumption in Jordan reached 9,000 tpd. Cement prices in the local market have stabilized due to intensified competition between producers, the current status of supply and demand, and mild weather. Currently, there are four local cement plants in Jordan capable of producing up to 12 million tons of cement per year. Last year, the Kingdom saw its cement consumption reach around 750.3 million tons. Cement demand in Saudi Arabia is expected to keep growing, hitting 60 mpty
Cement Company (TCC) projects cement consumption in the region will hit 17 mtpy by 2014. Governments in the region, embarked on an infrastructurebuilding spree, are driving the cement boom. The region currently produces 11 mtpy of cement but only consumes eight million. Kenya is the largest market for cement in the region with an annual production of 53 percent of total capacity. Tanzania and Uganda contribute 30 percent and 15 percent, respectively.
In March, Saudi Arabia reportedly shortlisted four countries it would allow to ship cement to the country when it opens its market for imports: the UAE, China, India, and Sudan. The Omani cement industry is also expected to benefit from government infrastructure spending. Total ongoing projects in Oman are estimated at RO 33.5 billion, indicative of stronger domestic cement demand. In its Eighth Five Year Plan, the total government allocation towards project investments is estimated to be around RO 13.7 billion. Allocations for the first and second years (2011 and 2012) and projects carried over from the Seventh Plan will amount to RO 8.555 billion. Of this, RO 1.634 billion will be for new projects scheduled to commence this year. Additionally, an upsurge in construction projects in Yemen and East African countries is expected to benefit Omani cement firms, especially Raysut Cement whose exports stood at nearly 32 percent of its sales volume for 2011. Demand is projected to grow seven percent in the current year to six million tons, with a major portion covered by local producers. Last year, imports—mainly from the UAE, where a weak construction sector resulted in an excess supply of cement—covered 25 percent of Oman’s cement demand. Cement prices in the UAE have increased 21 percent to 241 dirhams since January, the fastest increase in three years. Cement prices have increased due to high energy and raw materials costs as well as high freight rates. The increase also follows a move by most of the country’s cement makers to boost exports to coun-
tries like Saudi Arabia. Cement prices in the UAE are expected to reach 300 dirhams in the coming months. Some cement plants within the UAE, however, have refused to supply Saudi Arabia until the end of 2012. According to one source, Saudi Arabia has made several requests for cement supplies from UAE companies, but the companies rejected the requests due to tie-ups with Iraq and countries in Africa. Currently, cement factories within the UAE have a total production of 24 mtpy, with 50 percent of production exported annually. Local consumption ranges from 10.5 to 11 mtpy. Africa The Egyptian government has blamed cement market monopolization for the country’s high cement prices. To address the problem, the government plans to increase oversight for the industry by declaring it a strategic commodity. They will also limit the price of cement to around 400 pounds and increase competition in the market by making it easier for companies to acquire cement licenses. By March, the government had issued licenses to build 14 new cement plants. The cement industry in East Africa is expected to attract SH320 billion in investments in the next two years. Tanga
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by 2013. Production reached 23.8 mpty in 2005 and hit 48 mpty in 2011. The Kingdom’s plan to spend US$400 billion on infrastructure has hastened the need to double cement production capacity. It is reported that the country needs to build 1.65 million new homes by 2015 to meet growing demand, an average of 275,000 units each year.
The South African Competition Commission reached a settlement with Lafarge Industries South Africa over its cartelization case. The company was accused of price fixing and market sharing. In the settlement, Lafarge admits that it entered into agreements and arrangements with PPC, Afrisam and NPC to divide the market through the allocation of market shares, thereby indirectly fixing the price of cement. Lafarge has agreed to pay a penalty of R148.7 million, representing six percent of its 2010 annual turnover in the Southern African Customs Union region (South Africa, Botswana, Lesotho, Swaziland, and Namibia). The cement market in Chad continues to suffer a cement shortage. Construction projects remain frozen due to a lack of affordable cement. Currently, cement is imported with prices reaching up to 12,500 CFA francs. The shortage has been attributed to the inability of local cement companies to meet demand. Shipments of imported cement have also seen delays. Meanwhile, cement importers were accused of hoarding cement in an attempt to increase their market share. Turkish-based Askale Cement announced that it is looking to establish a cement plant in Ghana. The proposed facility will help meet the country’s growing cement demand. The company made the announcement following the government’s invitation to Turkish companies to send a delegation to discuss investments in the country’s economy. BMWeek CemWeek CemWeek CemWeek
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time soon. According to the Vietnamese Ministry of Construction Building Materials Division, in view of the downturn, the government is recommending that cement firms postpone investment in any new cement projects. Indonesia's cement market is projected to grow at a slower rate compared to last year but is still projected to top its ten year average. Annual growth between eight and 11 percent is estimated, following surging demand (up 17.7%) for domestic consumption in 2011. An April fuel-price hike is viewed as unfavorable for the cement industry, given transportation accounts for 16 percent of the cost of goods sold. Cement firms, however, still have some room to navigate without affecting margins. Cement makers in Malaysia may be in for a good year as construction projects gain momentum. Infrastructure spending is ramping up as the government pushes through plans to ensure the next phase of economic growth. The building materials industries, including cement, are expected to benefit.
Hanoi, Vietnam
The China Cement Association expects the industry to record new highs this year, growing six to eight percent. The country is expected to produce 2.09 billion tons of cement in 2012. Meanwhile, investments in the Chinese cement industry increased by 20.9 percent to 4.78 trillion yuan in the first quarter 2012. On a year-on-year basis, investments in the sector declined by 0.6 percent for January and February but were up 0.64 percent for March. The government’s recent announcement of a massive housing program to build millions of homes in the coming years is lifting cement demand. Cement output for the quarter increased by 7.3 percent to 398 million tons, and cement output in March increased by 7.9 percent to 179.28 million tons.
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Sagging demand, large inventories, and higher production input costs are taking a toll on Vietnamese cement manufacturers. As a result, many continue to struggle under heavy debt burdens, and things are not expected to improve any
New rules announced by the Department of Environment and Conservation are expected to affect the Cockburn Cement plant in Munster, Australia. According to one report, new environmental conditions imposed on the company’s operating license will include the obligation to install expensive pollution control equipment, known as the bag house filter, on the second of its lime kilns by the middle of 2013. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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select PROJECTS IN THE WORKS: ASIA PACIFIC COMPANY (LOCATION)
PLANT
Holcim (Indonesia)
East Java
Siam Cement Group (Indonesia)
West Java
Indocement Tunggal Prakarsa (Indonesia) SIDC (Indonesia)
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OVERVIEW
Table available in the CemWeek Magazine Print Edition.
Holcim will increase cement production in Indonesia by 1.7 mtpy with its new East Java plant, bringing Holcim's total Indonesian production capacity to about 10 million tons. COST: US$450 million.
Production will start in mid-2012 for a 5,000 tpd cement plant in West Java. Construction will take 2.5 years.
Indonesia's 2nd larget cement producer will build two cement plants with an annual capacity of 2 to 2.5 mtpy. COST: US$500 million.
West Java
www.cemweek.com/subscribe China's state-owned SIDC has announced a cement plant, power plant and seaport in West Java. Plant capacity will be 1.5 mpty. COST: Rp 1.6 trillion.
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India's competition authority, the CCI, finished hearings in late February against 42 cement companies regarding accusations of cartelization. An assessment of penalties is expected by April. Penalties of about seven percent of total revenue, equal to five to six percent of market cap for every year of investigation, are expected. Meanwhile, in March, cement manufacturers revealed plans to increase the country’s cement prices by Rs 7 to 10 per bag. With the latest round of hikes, cement prices in India will now hover between Rs 280 and 300 for a 50 kg bag of cement. Companies argue the increase in pricing was necessitated by the government’s increase of the base excise duty rate from ten to 12 percent. Pakistani cement manufacturers in Sindh and Balochistan increased prices by Rs 10 per 50 kg bag in April. The news comes on the heels of a price increase by Rs10 to Rs15 per 50kg bag on March 26 in anticipation of summer and a January increase of Rs 2.5. Cement trade resumed in April between Pakistan and India after the opening of the Attari-Wagah joint check post, and
regional report: asia pacific & south asia
REGIONAL REPORT:
Indian traders started placing orders with Pakistani cement companies. The news was welcomed after Pakistani cement companies looking to export cement to India had ran into some problems due to the Bureau of Indian Standards’ (BIS) reluctance to issue licenses for their products. Uzbekistan-based Uzstroymateriali will construct a one million ton cement plant
in cooperation with a U.S. partner. The plant will be under the Uzbek-U.S. joint venture Rahnamo-Nur and should be completed by 2013. A new cement plant is also being planned for the Kostanai region of Kazakhstan. The project is being developed by LLP "Rudny Cement Factory” and will be built at a cost of 9.5 billion tenge. BMWeek CemWeek CW Group Coal Week CemWeek CemWeek
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select PROJECTS IN THE WORKS: south asia COMPANY (LOCATION)
PLANT
OVERVIEW
HeidelbergCement (Bangladesh)
Chittagong
HeidelbergCement has inaugurated a new cement mill by Chittagong seaport. The ball mill's grinding capacity is 800,000 tons. COST: US$16 million.
Mongolyn Group (Mongolia)
Ulaanbaatar
FLSmidth was awarded a EUR 86 million contract to supply a greenfield cement plant 330 km from the capital Ulaanbaatar. Capacity: 3,000 tpd.
ACC (India)
Chhattisgarh
Shree Cement (India)
Rajasthan
Birla (India)
Rajasthan
JK Cements (Oman)
Karnataka
Table available in the CemWeek Magazine Print Edition.
ACC will set up a 2.8 million ton clinker unit at Jamul, Chhattisgarh for an estimated cost of Rs 800 crore. Commissioning is expected in 3 years.
Shree Cement has ordered a new kiln from KHD Humboldt for its Rajasthan unit. Capacity will reach 4,500 tpd or 1.5 mtpy. The total cost of orders has been Rs 700 crore. Birla will expand installed capacity over the next two years, spending Rs 1,500 to 1,600 crore. Plans include a 1.2 mpty brownfield expansion to be commissioned by the end of the year.
www.cemweek.com/subscribe India's JK Cement has plans to build a 3 mtpy cement plant in Karnataka in order to help increase output to 17 million tons (from a current 7.5 mtpy) by 2017. COST: 5,000 crore (mostly financed through loans)
Sonapur Cement (Nepal)
Dudhrash, Gogli of Dang
Nepal will commission two new cement units in Dudhrash and Gogli of Dang with a target capacity of 700 tpd.
APRIL / MAY 2012
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REGIONAL REPORT: Cemex is trying to renegotiate its debt to avoid a potential confrontation with creditors in 2014. The company has been trying to work itself out of debt for the past three years since the U.S. housing market collapse. The company has tightened its belt with cost cuts and non-core asset sales, but doubts linger regarding its ability to meet year-end obligations and to rework the terms of its US$8 billion in debt due in 2014. North America The Cement Association of Canada welcomed the news that the government of Ontario plans to spend US$35 billion over the next three years on infrastructure development, as the boost in spending should help drive cement demand upward. Cemex is confident that its U.S. sales volume grew by as much as 20 percent in the first two months of 2012, based on early industry estimates. The news comes despite a company price increase of US$5 per ton in January. A comparable increase is expected in April.
securing its permit to burn peanut hulls and wood chips at its Brookville South plant in Florida. The state EPA was expected to grant the company a permit for its Kiln 2. Mexican cement sales increased by one percent in 2011, thanks to a moderate economic recovery in the country. Previously, two of the largest cement producers, Holcim and Cemex, noted sales increases, with Holcim registering a 1.4 percent increase and Cemex a one percent rise. Both also reported price increases. Cemex prices rose three percent while Holcim’s saw an increase of 1.5 percent.
In related news, Cemex agreed to pay at least US$361 million in back taxes to the Mexican government after losing its legal challenge. The company had contested changes in the law in 2005 that required Mexican companies to pay taxes in Mexico on certain income from foreign subsidiaries where income taxes were less than 75 percent of the corresponding tax in Mexico. Holcim inked a deal with Wal-Mart to sell its cement in the retailer’s 231 stores in Mexico. The move will allow Holcim to penetrate a significant chunk of the self-help construction market. The com-
Lafarge’s US$300 million modernization project at Ravina is underway. The threeyear project will run from 2011 to 2014 and pump US$170 million in revenues into the local economy. The news was not as rosy for Lafarge’s Illinois plant where the company decided to shut down Kiln 2 production, resulting in the loss of 36 jobs. Lafarge will, however, continue to operate the plant and quarry and manufacture specialty well cement at Kiln 1. In April it was also confirmed that Lafarge would relocate its North American headquarters from Virginia to Illinois. The manufacturer was said to have selected the state because of its transportation network, central location, and skilled workforce. GCC Rio Grande moved closer to realizing its plan to burn old tires as fuel at its cement plant in Pueblo, Colorado. State officials have issued a draft permit. In similar news, Cemex was on the verge of
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regional report: americas
pany expects to sell 111,000 bags of cement at 99 pesos per bag every month through Wal-Mart. Central America & Caribbean The Venezuelan government will make additional investments of 129 million bolivars in Cuba’s Venezolana de Cemento. Forty-three million will be allocated to the development of the company’s quarry, with another 117 million bolivars allocated by for a special cement fleet. According to a report, another Cuban company, Cementos Cienfuegos, is facing economic, financial, and technical difficulties. Initially, the company intended to sell 662,000 tons of cement but was only able to sell 80 percent of that due to low materials acquisitions from Nightjar. Ecocem, authorized to sell the company’s product, was to export 453,400 tons but failed to do so because of export obstacles and lack of demand. Cement consumption in the Dominican Republic fell 15 percent in the first few months of 2012. The Dominican Association of Portland Cement Manufacturers (Adocem) reports that in the past five years the country’s cement consumption has slid 26 percent, eight percent in 2011 alone. The downturn in the country’s tourism industry, which in turn affected the real estate industry by reducing demand for new hotel projects, and high interest rates and a lack of liquidity in the residential construction arena, are to blame. In March, Trinidad Cement announced plans to import cement from Barbados and Jamaica as strike action kept its Claxton Bay plant shut down. The strike occurred after workers rejected the company’s 6.5 percent wage increase offer. The union was demanding a 12 percent increase. The company arranged to import cement from its Arawak plant in Barbados and its Caribbean Cement subsidiary in Jamaica to minimize the strike’s impact on the market.
Havana, Cuba
South America Colombia’s Cementos Argos reported a strong 2011 in which both volumes and earnings reached new highs. Volumes hit five million tons of gray cement and operating income increased 59 percent. The company also announced plans in April to issue bonds worth US$168.6 million to help cover its liabilities and capital requirements. Government officials in Bolivia expect that the local cement production this year will not be enough to meet domestic demand, especially in the months of September, October and November. The country plans to import cement from countries like Argentina and Peru in order to meet local demand. Bolivia is currently importing 10,000 tons of cement every month in order to cover a portion of local demand, but a deficit of 300,000 tons was likely for 2011.
Local companies are ramping up production in response to the deficit. Soboce announced plans to increase its production capacity by 50 percent by investing in a new grinding plant at El Puente. And in March, Coboce began work on installing a new production line in one of its cement plants. The new line will have the capacity to produce 460,000 tons of clinker annually. A Bolivian builder’s organization has asked cement maker Fancesa to move forward with the installation of a new factory in Maragua. In 2011, Fancesa launched an international call for tender for the turnkey project, and by January 2012 four proposals were received. However, elections and a change of mayors in Sucre put the evaluation process on hold. With the new plant, cement production would increase in the area by 150 percent.
select PROJECTS IN THE WORKS: americas COMPANY (LOCATION)
Table available available in the CemWeek Table in theMagazine CemWeekPrint Edition. www.cemweek.com/subscribe Magazine Print Edition. PLANT
Ozinga Brothers (U.S.) Cemex (U.S.)
Elementia (Mexico)
OVERVIEW
Ozinga Brothers has announced plans to set up a 1 mtpy capacity cement plant outside of Chicago, using a former grain facility near Lake Calumet. Completion is scheduled for 2015. COST: US$250 million.
Balcones
Cemex seeks to change existing state and federal air permits in order to boost production by 10% at Balcones Cement Plant near New Braunfels. With the upgrade, capacity would reach 3.8 mtpy.
Hidalgo
Elementia will enter the cement business by building a US$250 million plant in Hidalgo state with a 1 mtpy capacity.
APRIL / MAY 2012
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regional report: americas
coming online this year, increasing Venezuela’s cement production by one million tons. Furthermore, improvements at the Cumarebo plant and San Sebastian de Los Reyes cement plant will potentially raise cumulative production to 11.5 million tons.
Images courtesy of Coboce
Cement importers in Paraguay saw a 33 percent decline in consumption, with 60,000 bags dispatched per day, down from 90,000 bags. Representatives of the importing firms said that the decline is due to reduced construction sector activity. In Argentina, the National Chamber of Criminal Appeals rejected a challenge by cement makers Loma Negra, San Martin, and the Portland Cement Association against prosecutor Javier de Luca for an investigation that ultimately fined them almost US$310 million for alleged cartel behavior. Judges endorsed the intervention and applied the fines assessed.
The Venezuelan government acknowledged that 2011 was a difficult year for the cement industry. Overall, cement production sat at 7.2 million metric tons, exceeding cement production in 2010 by seven percent, but the industry continued to face challenges. Among the hurdles were delays in the extraction of raw materials, including limestone from quarries. Equipment challenges included the failure of several kilns and the delayed arrival of imported replacement parts. Despite the setbacks, the government announced a cement production goal of 8.3 million tons for 2012. The goal appears doable with the Cerro Azul cement plant
select PROJECTS IN THE WORKS: latin america COMPANY (LOCATION)
PLANT
OVERVIEW
Tasso Cement (Paraguay)
Villa Hayes
Tasso Cement has begun production at its Villa Hayes plant. Production was estimated at 100,000 bags from January to February.
Intercement (Brazil)
Bodoquena
Intercement will hike production 15% at its Bodoquena cement unit, expanding to 750,000 tpy. COST: US$40 million.
Cemento Andino (Peru) Oruro City Gov't (Bolivia)
Cemento Andino will expand clinker facilities by 60% or 70,000 tpy, with work completed this month. Total installed capacity is 2.1 mtpy.
Bengal Vinto
Coboce (Bolivia)
Cementos Avellaneda (Argentina)
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Oruro city is conducting feasibility studies for a cement plant in Bengal Vinto with a planned capacity of 600,000 tpy. Limestone would be supplied from Ladislao Cabrera. COST: US$90 million.
Coboce is installing a new production line with a 72 m x 4.2 m kiln. Capacity will reach 460,000 tons of clinker per year, or an addidtional 40,000 cement bags per day.
www.cemweek.com/subscribe Cementos Avellaneda has unveiled a new 2.5 mtpy capacity cement plant, the country's largest. COST: US$85 million CW Group CemWeek BMWeek CemWeek CW Group BMWeek CemWeek BMWeek APRIL / MAY 2012CW Group
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Cement sales in Brazil increased 13.3 percent during the first quarter of 2012 compared to the corresponding quarter last year. The country’s continued strong growth, however, has made it susceptible to potential cartel behavior. Last year, six companies, including Cimpor, Votorantim, Camargo Correa and Holcim, were accused of price collusion and dividing customers according to their areas of expertise and interest. The companies control roughly 80 percent of Brazil’s cement market. Also in Brazil, Holcim is looking for areas to expand its operations beyond the Southeast. With two plants in Ontario and one inside the Rio, the company is contemplating building a new facility or partnering with a company already established in the South, Midwest or Northeast. In August, Holcim announced plans to expand its plant in the mining town of Barroso, adding a new production line by 2014. Semapa also announced plans to invest EUR296 million in a Brazilian facility. The company intends to acquire a 50 percent stake in Supreme Cement’s plant in Santa Catarina in Southern Brazil and then boost production levels. Finally, in April, the CADE scheduled a meeting with Camargo Corrêa to request more details about the takeover bid for Cimpor, as the transaction could force the sale of assets in Brazil. The Public Offer (IPO) launched by Camargo Corrêa for Cimpor worries the organization that oversees the rules of competition in Brazil because the cement industry is already on the radar with price fixing and cartel allegations. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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RESEARCH
The CW Group publishes a series of unique data-rich reports on a periodic basis for the global cement sector. These must-have reports for cement traders, analysts, investors, equipment vendors are indispensable in understanding changing market conditions, monitor the latest cement prices, stay up to date on new cement capacity projects among many other key outlook and competitive dimensions. The reports are available on an annual subscription basis. Contact us at sales@cwgrp.com to learn more. Global Cement Market Data Service
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Current and outlook for cement volumes
Tracking new cement plants and expansions
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in the world was reportedly finalized in Vladivostok. At a length of 1104 meters, it is a single cabled bridge which links the Russian city to Russky Island. The project was completed by Freyssinet, a Vinci subsidiary. India’s construction market is also on the rise, with analysts expecting it to overtake Japan as the world’s third largest (behind China and the U.S.) by 2020. India’s share of the global market is expected to increase from five percent in 2010 to seven percent in 2020. One of the main factors to sustain this increase is India’s infrastructure construction program. The Indian government recently announced an aggressive 7,000 km road project, with the plan to build about 20 km per day. Meanwhile, the Chinese government has revealed a massive housing plan that seeks to build 36 million new housing units at a cost of US$800 million. The project is expected to boost the country’s cement, steel, and metals industries. China needs to build ten million units a year to meet its current housing shortfall.
Emerging markets are driving forward the global construction market, while Europe and the U.S. continue to struggle. The so-called BRIC states (Brazil, Russia, India and China) could push the global building industry to a four percent annual increase through 2015, according to recent estimates. Construction & Building Materials Construction output in the European Union registered the third consecutive month with negative growth in February (-3.7 percent compared to January and -9.4 percent on a year-on-year basis). In the United States, construction spending saw its largest decline in seven months after a 1.1 percent drop in February, with office construction, home building and government projects all suffering declines. According to industry estimates, Brazil,
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China and India will play an increasing role in the global construction industry as they continue to build up their infrastructure. During 2011, sales in Brazil of construction and infrastructure equipment increased 18 percent compared to the previous year. Russia is also full of opportunities. In the first two months of the year, residential housing construction increased 13 percent in terms of square meters built and by 9.2 percent in terms of revenues generated. In April, the largest bridge
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Meanwhile, the Kingdom of Saudi Arabia revealed that more than US$1.1 trillion will be spent on 1,026 projects planned for 2012. And the United Arab Emirates will host a US$1 billion soccer theme park on an artificial island. The project belongs to Real Madrid, one of the richest soccer clubs in the world. South African president Jacob Zuma projects a possible US$72 billion a year on infrastructure. There remains however a $480-billion shortfall over the next decade, he added. Concrete In Russia, the yearly rise of ready-mix concrete consumption was between ten and 20 percent in 2011 compared to 2010 at about 3.8 million cubic meters, leading industry executives to say that the market has returned to pre-crisis levels. Over in the United Kingdom, a group of engineers has announced a new concrete additive which may increase road
(thousands)
Employment
Table available in the CemWeek Magazine Print Edition.
Mass Layoff events
Unemployment rate
Dec. 2011
Jan. 2012
Feb. 2012
Mar. 2012
5,546
5,564
5,558
5,551
402
194
81
N/A
17.1%
17.2%
16% 17.7% www.cemweek.com/subscribe
Source: U.S. Bureau of Labor Statistics
durability while making construction projects cleaner and “greener.” The new material, presented by a joint partnership between Consultancy Rodgers Leask and PowerCem GB, also helps stabilize certain soils, making them easier to build on, thus reducing the construction costs. In Canada, Carbon Cure announced that it has developed technology to use carbon dioxide to make cheaper, stronger concrete products. The company could bring the technology to market within 18 months. Meanwhile, the opening of the Panama Canal’s third set of locks, a project worth US$3.2 billion, will be delayed by at least three months due to the inability of Grupo Unidos por el Canal (GUPC) to offer a concrete mix capable of lasting at least 100 years. The Panama Canal au-
thority will bring in outside help to assist the firm in making the correct concrete mix. GUPC could be fined up to US$54 million for delaying the project and up to US$200 million if it fails to meet agreed upon quality standards. Gypsum and Lime A new method of lime cement production might prove cheaper, according to a team of researchers at George Washington University in Virginia. Their method releases zero carbon dioxide and costs less than traditional methods, they say. Rather than CO2, the process would produce useful industrial chemicals as byproducts. A team of researchers from the University of Leeds and the CSIC-University of Granada in Spain may have discovered a first step for more efficient plaster pro-
duction. They have successfully reproduced the early stages of gypsum crystals in laboratories, finding a new way to produce raw materials for plaster. New business opportunities are open in Jamaica, where the government announced that it will promote limestone mining in an effort to “unleash the potential of Jamaica’s limestone.” Mining and quarrying have been identified as one of the strategic priority areas of the Vision2030 Jamaica - National Development Plan, which aims to attract US$1 billion in investment in the limestone sector in the next five years. Limestone is the country’s most abundant mineral resource.
sector coverage: construction materials
Slight rise of unemployment in U.S. constructions
Aggregates The Spanish government plans to convene a meeting between various key industry players to find solutions to current problems in the aggregates sector. The building material is seen as having a major impact in the construction industry during a “critical” phase of the country’s economy. Meanwhile, illegal aggregates extractions are expected to diminish in Argentina after the government decided to cancel aggregates extraction permits in a number
APRIL / MAY 2012
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CONSTRUCTION & MATERIALS BY BMWEEK.COM
Europe continues to lose ground Construction output, comparison with previous month (%)
DEC 11
JAN 12
FEB 12
United Kingdom
-9.7
-13.6
5.7
Romania
-0.1
-5.9
1.7
Table available in the CemWeek Magazine Print Edition.
Sweden
-0.4
0.1
0.0
Portugal
-0.5
2.4
-0.3
France
-0.5
0.6
-0.4
Spain
-1.0
-3.4
-1.5
Poland
2.4
-0.9
-2.0
Slovakia
2.1
-7.4
-2.4
Czech Republic
22.7
-24.7
-2.5
‌
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Hungary
-4.4
-1.3
-7.2
Italy
1.1
-7.5
-9.9
Slovenia
-9.9
15.1
-10.3
Germany
-6.5
4.7
-17.1
EU 27
-3.5
-3.9
-3.7
Source: Eurostat
of river beds in the country. A number of extraction projects have been criticized for alleged damage to waters, landscapes and the general environment near the operations. On the other hand, Cemex USA announced that the National Stone, Sand and Gravel Association recognized 16 of its aggregate facilities for excellence in environmental stewardship and community involvement. The company says the awards are a reflection of its on-going commitment to be responsible stewards of the environment. Green and innovative building The use of environmentally friendly materials continues to rise in India. The use of fly ash bricks has increased, replacing mud bricks which are not considered environmentally friendly because of their use of top soil. In Canada, architect Michael Green recently revealed plans for a 30-story wooden skyscraper in Vancouver. Modern wood products have been around for 20 years, but until recently wood has been implemented usually for low-rise build36
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ings, the architect said. However, builders have changed their mentality and are now considering the aspect of climate change, he added. Large panels of laminated strand lumber, a composite made of strands of wood glued together, will be used for the project. A possible cement substitute developed using volcanic ash is being studied in Iceland. The new material is seen as a potential replacement which could make cement obsolete in the country. A cement-free concrete would be more environmentally friendly than tradi-
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tional concrete since it does not produce carbon dioxide. Last but not least, Dubai intends to make green building practices compulsory by 2014. The authorities intend not only to ensure that new buildings are ecofriendly, but also to make sure that existing buildings are upgraded to become environmentally friendly. Sustainable building practices could, for example, reduce the use of air-conditioning by ten percent, helping reduce Dubai’s carbon footprint. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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the need for the system to have the ability to interface with the Lafarge’s existing ERP system, JD Edwards Enterprise One. There was also a requirement to feed information back to Lafarge's customer service team regarding the status of goods to be delivered. It was important to ensure that the system could handle additional route optimization requests in order to incorporate indirect customer orders at a later stage.
New SLV Bag Counting Module Cachapuz Bilanciai Group has revealed the new SLV Cement Bags Counting Module, which improves the bags loading and counting processes in cement plants. This new module, which relies on a proprietary algorithm to ensure automatic and accurate counting, even in abnormal situations, can be applied in both truck and wagon loading machines and can be seamlessly integrated with the customer's ERP. Cemex River Port in Bangladesh Cemex in Bangladesh has inaugurated a state-of-the-art fly ash unloading system at the company’s newly constructed river port in Narayangaj city, 40 minutes from capital city Dhaka. The US$1.8 million investment will upgrade Cemex’s operations in the country and strengthen the company’s commitment to sustainable development and environmental protection, according to a company statement. The fly ash unloading system will minimize the dust emissions created during unloading, an improvement from the previous manual fly ash materials handling process. The new system is in line with the Bangladeshi government’s initiatives towards air and water protection. “Our sustainability model ensures that we concentrate our efforts and resources on the issues of highest relevance to our business and greatest concern to our
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stakeholders, and our commitment to sustainability in Bangladesh, in the Asian region, and globally ensures that we meet the needs of the current generation, without compromising the future ones,” says Cemex Asia Regional President Joaquin Estrada. Sinoma Deal with Najran Cement Recently, Sinoma and Saudi-based Najran Cement signed an agreement for a waste heat power generation project. This follows similar deals inked by Sinoma in Angola, Mozambique and the United Arab Emirates, and this is the first waste heat power generation general contracting project in Saudi Arabia. Najran Cement chose Sinoma, a well-known supplier of cogeneration equipment, as the general contractor based on Sinoma’s years in the field of energy saving, a report said. LAFARGE OPTIMIZES ROUTE PLANNING Reinert Logistic has chosen Ortec to implement a transport optimization program for its client, Lafarge Gypsum. The company selected its advanced vehicle routing and dispatch solution, Ortec Transport and Distribution. The system can be used to automatically assign incoming transport orders to routes and then re-optimize them in real-time where necessary. The company stated that it prioritized
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Basel Cement to Build 500 Rail Cars Basel Cement announced that it will spend a billion rubles to build 500 new cement rail transport cars to transport the company’s cement from its Krasnoyarsk plant to Siberia. The new cars are designed to meet growing demand for the company's products in the Siberian Federal District. They will also address the traditional shortage of rail cars in the region during the summer. Construction of the hoppers is part of the company’s investments to solve its logistical problems and boost production. The company says the hoppers will have reinforced walls and peaks in the upper part of the wagons, modifications that will allow the company to increase structural integrity while preventing contamination in surrounding areas. The company aims to increase its market share from 4.7 percent to ten percent by addressing logistical problems, expanding its sales network and the gradual modernization of its facilities. Lehigh Conveyor at Union Bridge Lehigh Cement announced that it is looking to build a conveyor belt in Carroll County to ship raw materials as its local quarry gets depleted. The half-mile conveyor system would run under roads, rails and streams and over acres of protected farmland between the quarry and its Carroll cement plant in Union Bridge. The company says the belt system is the best way to keep its plant running without severe disruption to the town. The plant needs a steady supply of stone—
about 12,000 tons daily—to stay in operation. The project is expected to cost tens of millions of dollars, require permits from federal, state and county agencies, and numerous public hearings. New Malmo Cement Terminal HeidelbergCement has opened a new cement terminal in the North Harbor of Sweden’s Port of Malmö. The facility is connected to the port’s road and rail network and will accommodate ships carrying cement from plants in Slite and Degerhamn. The terminal is equipped with 90 foot tall silos with a capacity of 30,000 tons of cement. Port authorities say the silos were designed to integrate themselves with the local skyline. The silos are painted with white concrete paint and are topped with three meter high blue glass structures.
CORPORATE NEWS KHD Shares Fall, Orders Improve Shares of KHD Humboldt Wedag International declined around six percent on Frankfurt's Xetra after the company said its fiscal 2011 profit softened due to project delays amid "difficult" market conditions. Looking ahead, the company anticipates lower fiscal 2012 revenue and EBIT margin but sees an improvement in order intake. For FY2011, net profit declined to 13.5 million euros, or 0.28 euros per share, from last year's 15.8 million euros, or 0.47 euros per share. However, KHD succeeded in maintaining a largely unchanged EBIT margin of 7.5 percent mainly due to the completion of a large, high-margin order and a one-time effect related to the takeover of a Russian subsidiary. The prior year's margin was 8.7 percent. Revenue for the year fell 18.2 percent to 234.6 million euros as a result of project delays. Order intake was 224.7 million euros, down from 268.9 million euros.
Courtesy of FLSMidth
The company has said it does not intend to pay a dividend for 2011. For FY2012, revenue and the EBIT margin will be impacted by anticipated further delays in executing current projects, while orders should benefit from KHD’s improved position in the EPC market. Fives Acquires CBL Combustion On January 10th, Fives acquired CBL Combustion Systems, an Indian company specializing in the design and supply of combustion equipment used mainly in the energy (burners for industrial boilers and thermal power plants) and minerals (cement) sectors. CBL, headquartered in Mumbai, also has a burner production and assembly workshop located in Vadodara, in the State of Gujarat. The company, which has approximately 100 employees, has a turnover of about US$5 million. CBL, given regulatory approval, will change its name and adopt the Fives Pillard Group’s visual identity. The acquisition marks a new stage in the Fives Group’s development in India and the growth of its local operational footprint. FLS Opens New Brazil Facility FLSmidth announced that it has opened a new laboratory in Calle Jose Dolles in Brazil. The laboratory will be used to test ore samples and will be attached to the Votorantim Cement plant in St. Helena. The company says its testing unit currently employs 200 people, including 150
engineers. The laboratory is expected to help serve the needs of the company’s other facilities in Brazil. FLSmidth, China Air Pollution FLSmidth has achieved approval of its first acquisition in China. Together with a minority shareholder, FLSmidth has started a company to market and sell air pollution control products to the cement industry in China. The founder company, Chinese Sino Environment Engineering Development (SEPEC), continues as a minority shareholder and brings a large reference base and contact network from the Chinese cement industry both on a corporate and a plant level. FLSmidth's strong technological platform coupled with SEPEC's strong organization, reputation and customer base in China will enable us to develop air pollution control products, which are uniquely designed together with the Chinese customer and fit his specific requirements," Group CEO Jørgen Huno Rasmussen comments. The local company will market FLSmidth's highly efficient air pollution control products and thereby help Chinese cement manufacturers fulfill the new and stricter emission standards imposed on the industry. As the majority shareholder, FLSmidth will retain the IP rights to the technology. The Chinese market accounts for half of the total world market for air pollution control equipment.
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PEOPLE Lafarge Canada Appoints President and CEOS
The Lafarge Group has appointed René Thibault and Bob Cartmel as its senior leaders for all markets and product lines in Canada, bringing all of Lafarge Canada’s businesses together under a single leader each in two geographies. Mr. Thibault will oversee the four Western Provinces and three Territories, as well as the Pacific Northwest and United States’ Dakotas. Mr. Cartmel will oversee the six Eastern Provinces. The President & CEOs responsibilities’ include all operational, marketing and functional elements of the aggregates, asphalt, cement, concrete (ready-mix, pipe and precast) and construction and paving businesses in their markets. The Western Canada teams will be led from a head office in Calgary, AB. The Eastern Canada head office is in Toronto, ON.
Buzzi Replaces Director Ester Faia replaces Elsa Fornero as Director of Buzzi. Fornero resigned in November 2011 upon taking the office of Minister of Welfare. Ester Faia received a degree in Economics from Bocconi University and a Ph.D. from New York University and has held several academic positions and affiliations with international organizations. She is now a professor at Goethe University Frankfurt, senior fellow at Center for Financial Studies and research professor at Kiel Institute. FLSmidth appoints new EVP Carsten R. Lund will be appointed new Group Executive Vice President of the bulk division at FLSmidth. He will also be a member of the Group Executive Management as of July 2012, when Mr Christian Jepsen resigns to join Alcoa, one of FLSmidth's global mining customers. Lund will head the new global Bulk Materials Division that was formed as part of the new FLSmidth Group structure announced on 21 February 2012 and will be relocating from the head offices in Denmark to the global technology center for material handling in Wadgassen, Germany.
Carsten Lund, age 49, is a Danish citizen, Executive MBA and Mechanical Engineer (BSc.), who has been employed by the FLSmidth Group for 24 years in varying managerial positions. Most recently, Lund has headed the implementation of a major business system program for the entire FLSmidth group as Program Director. Prior to that, he was CEO of FLSmidth Airtech from 2007 to 2011 and responsible for growing and developing FLSmidth's Air Pollution Control (APC) business. PPC seeks CEO South African cement maker Pretoria Portland says it needs a successor to CEO Paul Stuiver as his three-year contract ends at the end of May. Stuiver had agreed to stay on until the end of the year to allow for the completion of critical commercial projects. Dangote May Step Down The Chairman of Dangote Cement, Alhaji Aliko Dangote, says he may step down from the cement maker if his plan to offer shares of Sub-Saharan Africa's biggest cement maker in London next year goes as planned. Dangote has stated that the move would loosen his personal control over the company, specifically saying that he intends to free-float a 20 per cent stake in Dangote Cement to finance its rapid expansion. The plan, if successful, would become the first listing of one of Dangote’s companies outside the country.
Mr. Thibault has over 20 years of experience with Lafarge, spanning Canada and including an assignment at Group headquarters in Paris, France. He has an Engineering degree from Queen's University and has completed executive studies at Harvard Business School.
“We want to list in London next year. By then the upside to our business will be much bigger than today. My plan is to have different faces (on the board). The face of the chairman will not be Aliko Dangote, it will be somebody else, a professional who is well-respected within investment circles,” he said. BMWeek CemWeek CW Group
Mr. Cartmel has over 25 years of experience with Lafarge, spanning Canada, the United States and Latin America. He has a Bachelor of Business Administration degree from Wilfrid Laurier University.
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FOCUS
Snap-view Ethiopia:
Flight of the Icarus Supply side constraints and increased construction activity have brought fluctuations to the retail cement market in Ethiopia.
he average retail price of cement in Ethiopia sky rocketed in the first, second and third quarters of 2011, up to to 500 Br/Quintal in 2Q2011. But as cement production capacity has come on-line, prices have slid, falling below 300 Br/Quintal in 1Q2012. Such fluctuations are mostly fueled by the imbalance between supply and demand in Ethiopia’s cement market. Somali tops the cement price list with the highest average retail price of cement at over 240 Br per bag, followed by Gambela. The average price in the capital, Addis Ababa, was a whole 25 percent lower, but the lowest retail price was reported in the Tigray region. Cement prices in Ethiopia are widely expected to continue facing significant pressure resulting from increased domestic cement production. Specifically, cement prices in Ethiopia are expected to fall to their lowest levels in years once the Derba Midroc Cement plant—both the country’s largest cement plant and biggest single private investment— ramps up production. The plant was inaugurated on January 29, 2012 and has a cement capacity of 80,000 quintals per day. But the plant is just one of the many production units that have recently come on line or will start up in the near future.
Ethiopia's Millenium Dam under construction
Once cement from the plant begins to fill the market, the resulting drop in prices may force retail prices back to their normal levels following increases up to 40 percent in recent months. Cement from the new plants will rapidly fill a wide gap in Ethiopia’s cement sector, meeting demand from government construction projects such as housing development, roads, hospitals and universities. The outlook for cement prices in Ethiopia remains fundamentally changed and operators and traders will rapidly need to adapt to a new reality. BMWeek CemWeek CW Group BMWeek BMWeek
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FOCUS Saudi Arabia cement trade:
The CONFLICT Continues Following a complete ban on exports, Saudi Arabia’s Ministry of Commerce and Industry has cleared the path for renewed imports. Although fuel supplies have now been guaranteed, disagreements persist over pricing, production capacity and competition under tight controls. Meanwhile, the government asserts a cement deficit nearing 12 million tons, but some numbers hint an oversupply should government plans fail to materialize and sustain over the medium term. Ever since 2005, when King Fahd intensified efforts to diversify the Saudi economy and promote private enterprise and investment, the cement sector has known a remarkable increase in demand, from values lower than 20 million tons in 2005 to the 49 million tons registered in 2011. Today, demand growth expectations have settled around ten to 12 percent for 2012 and a further eight percent in 2013. Starting in March 2012, Saudi Arabia’s Ministry of Commerce and Industry has removed its import restrictions on cement, noting that it "has adopted several decisions to ensure the stability of the price of cement and its provision in the local market." One key price stability measure was the 2010 conditional ban on cement exports, which culminated in the complete ban on cement exports effective February 18, 2012. (There is a single exception for Bahrain, which receives about 25,000 bags of cement per week.) Other measures include mandating cement plants to work at full capacity, obliging producers to support freight costs to areas with increased cement demand, freezing cement prices and activating inspection teams to make sure companies and merchants comply with
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the government’s directives. The government hopes that these actions will ensure that consumers can benefit from reasonable cement prices. These measures became necessary following a construction boom that has created a huge increase in cement demand in the Kingdom. Saudi Arabia has an estimated US$163.5 billion invested in concept phase construction projects. According to government officials, Saudi Arabia will spend, as part of the 2011-launched Five Year Development Plan, an estimated US$400 billion on large infrastructure projects from 2012 until 2017. Additionally, plans to build 500,000 low cost housing units, along with increased economic activity which translates into private construction projects, will further fuel stronger cement demand for the next half decade. Analysts point to construction activity shifting now from the central region to the western part of the Kingdom, including the Red Sea port city of Jeddah and the
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Islamic holy cities of Mecca and Medina. The region is now the center of significant projects, such as the Haramain railway, Jeddah’s new airport, and major drainage and other several infrastructure projects. Meanwhile, the central region’s cement demand remains strong and stable. Ordered to Expand Since the beginning of 2012, Saudi cement factories have been ordered to open new production lines, aiming to add an extra six million bags to the country’s monthly production to reach a total monthly output of about 80 million bags. According to the Saudi press, this order seeks to increase supply by 15 percent annually and follows an agreement by the ministries of petroleum and commerce to provide the fuel to operate the needed expansions at existing plants. Current cement demand is expected to reach 55 million tons next year while capacity from the Kingdom’s 18 cement producers stands at 59 million, thus still
ensuring some excess production. However, the government cites scientific studies stating that the Kingdom’s current intrinsic cement deficit reaches 12 million tons. The studies are contested by some cement manufacturers, which have requested that independent studies be undertaken to confirm the government’s claims. Pricing Controls The most recent government pricing measures follow rising complaints by cement consumers in the western and southern areas of the Kingdom that cement prices have recently skyrocketed, with some accusations pointing at artificially fixed high prices. Recent cement prices may have increased by an average of 14.1 percent. In response to these accusations, in midMarch the government set the factory price for one bag at 12 riyals (US$3.20) and the retail price at 14 riyals, on the order of the Minister of Commerce and Industry, Tawfiq al-Rabea. The price for one cement ton has been set at 240 riyals. Several exporter nations are expected to benefit greatly from the new import liberalization. Among them, the government favors the UAE, China, Egypt, India and Sudan, while exporters like Turkey, Egypt, Pakistan, Korea, Taiwan, and the Philippines are also very likely to receive attention from construction companies. While the UAE and Egypt have already begun exports to the Kingdom, there are voices saying that the UAE will not be able to respond to the demand, as its cement production is already divided between internal consumption and exports, mainly to African countries. Industry Reaction Saudi cement manufacturers’ opinions are divided when it comes to the government’s decision to ban exports and give way to imports. Local newspapers Al Ahsa and Al Riyadh report that a group of Saudi cement makers have opposed opening the Kingdom to imports, as an
Courtesy of Al Jouf Cement
ample domestic supply still exists and noting that some companies work at low capacity utilization due to the export ban. These manufacturers have also requested independent studies to confirm whether the country suffers from a cement crisis or if actual production exceeds the requirement, as the group of producers believes. The Saudi cement makers add that companies with facilities near the border are most affected by the export ban because they will not be able to cater to high export demands from nearby countries such as Qatar, which is building its infrastructure for the forthcoming World Cup. This move, the companies say, will benefit cement producers from India, Pakistan and China who will fill the vacuum. The competitive advantage of cost that Saudi producers enjoy is thus set to be eroded by the export ban.
At the same time, companies like Yanbu Cement and Southern Cement welcome cement imports as a means to boost supplies in the Kingdom, although they recommend that importation be controlled in order to protect local cement companies who might prove to be less competitive due to the lower prices of imported cement. Indeed, the current cement import duties are set at only five percent. Engineer Mohammad Dhafeer from Southern Cement cites a scientific study that shows increasing cement demand will lead to a shortage of more than 18 million tons by 2015, despite expanding capacities at local plants. He says that the viability of local cement operations will therefore not be affected by new imports, due to massive government and private projects in the pipelines. BMWeek CemWeek BMWeek BMWeek
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LEADERS COMMENT
continued from page 21
This competition forces us to look for avenues of cost reduction without compromising quality. We plan to introduce new products to be available to the reach of the common man along with innovation. We are also looking into other avenues of cost reduction. What is MCL’s greatest strength, and what challenge is the company currently facing? Our grinding plant started production in May 2009 and was able to take more than
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20 percent market share within one year of operation. Our strength is the distribution network and quality production. We have a very strong distribution network for our entire steel products and this helped us conquer the cement market as the same distributers market both steel and cement products. The biggest challenge is to get the experienced work force. We are aware of the government’s policy of maximum local employment. Hence we targeted to achieve near 100 percent local employ-
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ment in the span of the next five years. We recruit experienced and highly professional key personnel from abroad, and continuous training of local manpower is one of the prime responsibilities of these expatriate employees. Lectures, training in the field and job-on-hand training are the tools we use for upgrading the skills of the local work force so that they can take over plant operation in the targeted period. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek
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DATA PERFORMANCE Company (Exch)
52 WEEK HIGH
52 WEEK loW
% from 52Hi
% from 52Lo
50d Mov Avg
200d Mov Avg
% from 50d Mov Avg
% from 2000d Mov Avg
ADEL BRTN FPO (ASX)
3.27
2.22
-6.73%
37.39%
2.92
2.94
4.34%
3.75%
BORAL LTD FPO (ASX)
4.93
3.13
-23.33%
20.77%
3.94
3.86
-3.94%
-2.08%
TITAN CEMENT (Athens)
18.36
9.32
-20.21%
57.19%
-
-
N/A
N/A
INDIA CEMENT (Bombay)
118.50
62.10
-29.11%
35.27%
102.39
84.82
-17.96%
-0.96%
JK CEMENT (Bombay)
176.10
96.05
-21.89%
43.21%
148.58
122.42
-7.42%
12.36%
PRISM CEMENT LTD. (Bombay)
57.15
35.75
-15.75%
34.69%
50.72
45.14
-5.07%
6.67%
SAGAR CEMENT(BSE (Bombay)
197.70
125.00
-12.67%
38.12%
163.17
149.77
5.81%
15.28%
SHIVA CEMENT (Bombay)
8.42
4.12
-34.68%
33.50%
5.11
5.37
7.57%
2.45%
FLSMIDTH & CO. (Copenhagen)
479.90
255.20
-17.69%
54.78%
395.08
376.99
-0.02%
4.78%
WEST CHINA CEMENT (Frankfurt)
0.32
0.09
-50.94%
71.43%
0.15
0.14
2.27%
15.36%
overflow
SHANSHUI CEMENT (HKSE)
10.20
4.25
-38.33%
48.00%
6.04
5.95
4.21%
5.80%
ASIA CEMENT CH (HKSE)
7.34
2.81
-47.82%
36.30%
3.92
3.84
-2.42%
-0.33%
ANHUI CONCH (HKSE)
41.00
17.90
-36.59%
45.25%
24.66
25.26
5.44%
2.92%
INDOCEMENT TUNGGA (Jakarta)
19,050.00
10,700.00
-5.25%
68.69%
18,257.60
16,880.20
-1.14%
6.93%
HOLCIM INDONESIA (Jakarta)
2,700.00
1,650.00
-4.63%
56.06%
2,535.61
2,220.18
1.55%
15.98%
SEMEN GRESIK (PER (Jakarta)
12,950.00
7,400.00
-6.18%
64.19%
12,139.40
10,796.40
0.09%
12.54%
TONGYANG CEMENT & (KOSDAQ)
4,185.00
797.00
-27.36%
281.43%
3,448.79
2,246.09
-11.85%
35.35%
ASIA CEMENT (KSE)
53,900.00
31,100.00
-9.93%
56.11%
46,836.40
38,672.60
3.66%
25.54%
LAFARGE MALAYAN C (Kuala Lumpur)
8.11
6.06
-11.34%
18.65%
7.75
7.52
-7.23%
-4.43%
YTL CEMENT BHD (Kuala Lumpur)
4.85
3.80
-1.44%
25.79%
4.76
4.40
0.40%
8.52%
CIMPOR R (Lisbon)
5.65
4.50
-2.28%
22.64%
5.25
5.12
5.18%
7.86%
STEPPE CEMENT (London)
43.25
23.60
-37.57%
14.41%
26.81
31.78
0.70%
-15.04%
CEMENTOS PORTLAND (MCE)
15.49
5.37
-65.59%
-0.74%
6.78
8.28
-21.41%
-35.63%
GRUPO CEMENTOS (Mexico)
46.99
38.11
-1.83%
21.04%
44.12
43.27
4.56%
6.61%
BUZZI UNICEM (Milan)
10.51
5.45
-26.88%
41.01%
8.40
7.60
-8.46%
1.06%
CEMENTIR HOLDING (Milan)
2.26
1.28
-34.01%
16.59%
1.66
1.66
-10.44%
-10.48%
ITALCEMENTI RSP (Milan)
3.86
1.68
-40.62%
36.10%
2.40
2.20
-4.53%
4.33%
ASSOCIATED CEMENT (NSE)
903.60
415.05
36.91%
198.07%
786.51
618.19
57.30%
100.13%
ANDHRA CEMENTS LI (NSE)
15.00
8.05
-39.00%
13.66%
9.94
10.63
-7.91%
-13.91%
BURNPUR CEMENT LI (NSE)
9.90
5.60
-34.85%
15.18%
6.68
6.94
-3.42%
-7.10%
DECCAN CEMENTS LI (NSE)
194.00
122.10
-11.24%
41.03%
171.35
153.79
0.49%
11.97%
ITD CEMENTATION I (NSE)
239.50
106.00
-25.70%
67.88%
173.25
150.19
2.71%
18.48%
MADRAS CEMENTS LT (NSE)
168.90
76.00
-12.17%
95.20%
149.53
122.81
-0.79%
20.80%
MANGALAM CEMENT L (NSE)
128.00
46.25
4.73%
189.84%
112.25
73.90
19.42%
81.39%
SHREE CEMENTS LTD (NSE)
3,295.00
1,520.00
-13.99%
86.45%
2,947.77
2,341.37
-3.86%
21.04%
CRH PLC AMERICAN (NYSE)
25.16
14.17
-19.20%
43.47%
20.38
19.54
-0.23%
4.06%
CEMEX, S.A.B. DE (NYSE)
8.46
2.18
-14.55%
231.24%
7.31
5.96
-1.04%
21.38%
EAGLE MATERIALS I (NYSE)
37.18
15.36
-5.27%
129.30%
34.23
27.80
2.88%
26.69%
TEXAS INDUSTRIES, (NYSE)
43.09
21.89
-22.00%
53.54%
35.30
31.75
-4.79%
5.85%
CIMENTS FRANCAIS- (Paris)
77.49
47.50
-37.54%
1.89%
51.26
57.23
-5.59%
-15.42%
LAFARGE (Paris)
48.76
22.29
-39.59%
32.17%
33.19
30.19
-11.26%
-2.45%
ANHUI CONCH CEMEN (Shanghai)
39.22
14.40
-55.46%
21.32%
16.75
17.17
4.30%
1.75%
FUJIAN CEMENT CO. (Shanghai)
14.70
6.91
-43.95%
19.25%
8.44
8.76
-2.42%
-5.97%
CHINA SINOMA INTL (Shanghai)
39.79
14.10
-51.82%
35.96%
19.41
18.83
-1.23%
1.79%
HUAXIN CEMENT CO (Shanghai)
5.00
1.51
-61.73%
26.60%
1.85
1.90
3.61%
0.88%
SIAM CEMENT -F- (Stuttgart)
10.54
6.58
-6.13%
50.46%
9.87
9.31
0.25%
6.32%
TAIWAN CEMENT TWD (Taiwan)
49.45
29.00
-29.52%
20.17%
34.93
35.34
-0.22%
-1.38%
ASIA CEMENT CORP (Taiwan)
48.30
28.25
-27.23%
24.42%
35.96
34.95
-2.25%
0.59%
CHIA HSIN CEMENT (Taiwan)
20.30
11.15
-33.99%
20.18%
13.58
13.41
-1.32%
-0.08%
LUCKY CEMENT TWD1 (Taiwan)
9.20
5.05
-35.22%
18.02%
5.93
5.75
0.57%
3.58%
HOLCIM N (VTX)
76.15
42.11
-25.80%
34.17%
58.24
54.60
-2.99%
3.49%
HEIDELBERGCEMENT (XETRA)
52.81
23.92
-21.35%
73.68%
43.40
36.33
-4.30%
14.33%
KHD HUMBOLDT WEDA (XETRA)
7.32
4.17
-20.03%
40.38%
5.94
5.39
-1.46%
8.61%
APRIL / MAY 2012
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FLASHBACK News flow on CemWeek.com last two months (darker red shows higher news volume)
The United States, India and Saudi Arabia are making headlines, with cement powerhouse China close behind. Brazil, Mexico, Russia and Spain are also grabbing our attention at CemWeek.com.
IN THE NEXT ISSUE
Feature The Expanding Chinese Influence in Africa Research Country Snapshot on the Moroccan Cement Industry Highlights from the 3rd Annual CemWeek India Cement Business Sentiment Survey
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BUZZ TOP 15 STORIES
CEMWEEK.COM
The Middle East, India and demand ups and downs. Here’s what’s trending on CemWeek.com: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Pacasmayo taps JP Morgan for ADR program ACC looking to build new cement plant Ambuja to continue expand capacity India's ACC unveils expansion plans until 2015 Spanish demand slides to levels not seen since 1960s Indian cement demand set to increase Report: UltraTech looking to buy Adhunik plant in Meghalaya Oxbow Carbon sues petcoke executives for fraud 14 new cement plants planned for Egypt Jidong secures project in South Africa Egyptian gov't moves to prevent monopoly in cement sector Indocement looks to sustain momentum this year Omani cement exports seen climbing this year Saudi approves transfer of Yamama cement plant Egypt: Former Cemex workers threaten to takeover facility
argos rise
yuan annual
coming agreement
materials
factory
colombia
cemex
economic
dividend area industrial change continue boost coal cimpor order
general
change
sector facility project director analysts
government fuel
products profits
cementos
national
strike
executive workers country’s waste debt meeting equipment increased units growth rate times following shareholders concrete pakistan building shortage costs board losses consumption
investment
imports
protection
india
installation countries
plants
secil
produce
heidelbergcement
expansion loss reached egypt previously siam
likely
statement recently lafarge week plans revenue seven semapa pollution control makers environmental bank issue financial contract results operations post environment rising
volume
nigeria
loesche despite material
TOP 15 STORIES
energy
BMWEEK.COM
New tech, new plants, new solutions. The most popular stories on BmWeek.com: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Spanish aggregates sector falls on hard times Vietnam: Thach Anh Company launches new technology Ecologistas en Acción airs concerns over Cemex plans in Spain Tarmac pledges commitment to sustainability Two groups win tender from Ukrainian construction firm Castile and Leon board rejects quarry proposal in Spain New cement substitute developed Heidelberg plans to sell North American brick operation Pre-mix concrete output suffers in Australia Canada: MTO tests photocatalytic concrete Thailand: SCG mulls HMPRO acquisition US Concrete develops new ready-mix concrete solution Hormigones Pamplona files for bankruptcy Summit Materials buys Norris Quarries Grenzebach develops new gypsum plant in Russia
national
equipment
deal
declined
contract sustainable concerning road costs builders plans
energy cemex
despite developed
martin
expansion
units
price
china
ready rise
country’s
world
work
operating
water
facility recently produce products government growth
concrete project
markets
activity
need countries
remain share using
planning aggregates
spending steel
rate
real
plants
home sector product residential development recovery infrastructure global limestone housing reportedly process given results sales
public vulcan
says quarry green outputoperations order include environmental association
lafarge marietta continue sand asphalt
offer bricks known gypsum economy
investment permits
decline
continues
areas impact precast
mining facilities
mixed
meters
financial
homes
operation
economic
APRIL / MAY 2012
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