CemWeek Magazine, Issue 23

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

OCTOBER/NOVEMBER 2014

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feature

CW RESEARCH

Worldwide cement trade markets remain active

CW Advisory supports Investment Corporation of Dubai on US$300mm investment in Dangote Cement

GCTPR 4Q2014

feature

AFRICA CEMENT FACILITIES

News

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Analysis

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Market Coverage

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Interviews

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People Moves

CONTENTS FEATURES 5 HIGHLIGHTS FROM THE GCTPRR 4Q2014 Worldwide cement trade markets remain active 11 CW Advisory supports investment Corporation of Dubai on US$300mm investment in Dangote Cement

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15 Africa cement facilities

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FEA

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DEPARTMENTS LETTER FROM THE PUBLISHER 1 Taking a quantitative look at the world

40 From our industry partner Construction and building materials update

numbers in brief 42 equipment 3 Global cement trade: Spring Equipment and notable projects shoots remain buried under snow 43 cw group meeting agenda research Group’s upcoming events 21 Cement Volumes 24 Cement Energy Markets 44 BUZZ Top 15 CemWeek and BM Week people stories 29 People on the move 30 33 34 37

regional reports Europe, Middle East & Africa Central & South-East Asia Asia Pacific Americas

EDITOR’S NOTE

Letter from the publisher and editor

Taking a quantitative look at the world

I

n this issue of CemWeek Magazine we are highlighting recent sypply-side research of Africa’s cement facilities, highlighting the regional concentration, plant size breakdown, the global reach, but also present the independent manufacturers as well as the notable cement makers.

In addition, we share selected insights form the recently released 4Q2014 update of the Global Cement Trade Price report. In this overview we highlight the closing of 2014 that sees Europe still relying on exports in order to rid of surplus, while the Asian cement producers continue to increase their production to meet the demand, both domestic and foreign. In general, the cement trade for the last quarter of the previous year has followed the trends set during the rest of the year.

The CemWeek Magazine is published by the CW Group LLC 132 Larchmont Ave, Suite 12, Larchmont, NY 10538, USA T: +1-702-430-1748 F: +1-928-832-4762 www.cwgrp.com www.cemweek.com

STAFFBOX ROBERT MADEIRA CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH

CRISTIAN DUMITRU DESIGNER

Finally, the last of the features deals with the Investment Corporation of Dubai, Dangote Cement, which has made its first foray in the African market by buying a minority share in the Nigerian Dangote Cement. CW Advisory assisted the investment group in completing the deal, making full use of its expertize on the cement market and on the African cement sector.

Do not miss CW Group’s analysis of energy and cement prices and volumes, as well as the latest news on regional cement markets.

LIVIU DINU ADVERTISING PROJECT MANAGER

LAURA GOLDNER RALUCA CERCEL STEFANA ABICULESEI CONTRIBUTING WRITERS & RESEARCHERS

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The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances.

Robert Madeira

PUBLISHER AND HEAD OF RES EARCH

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PROJECT MANAGER

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numbers

Global cement trade: Spring shoots remain buried under snow LONG TERM PRICE TRADING RANGE (USD/TON)

Long terms gray cement prices have been largely stable for the last four years.

The trading band for the “middle 60%� of traded prices moved in tight band and pricing declined by about US$5 per ton over the past four years.

LTM volume and price 2014 additionally saw a slight tapering in prices.

Although late-2014 numbers are still preliminary and subject to later CW Research update, global pricing slid about $4 per ton in the first 9 months of the year on somewhat weakening volumes.

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FEATURE

Highlights from:

GCTPR 4Q2014 Global Cement Trade Prices Report

Worldwide cement trade markets remain active

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ement trade for the last quarter of 2014 has mostly kept in line with the trends set during the rest of the year. The year closes with Europe still relying on exports in order to rid of surplus, and with the Asian cement makers continuing to boost their production to meet both domestic and foreign demand.

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FEATURE

Saudi Arabia cement makers green lighted for export

ASIA Cement exports from Vietnam to further increase The year which has just closed has been a fruitful one for the Vietnamese cement sector, both domestic and foreign demand rising month after month. Abundance of raw materials, as well as the country’s convenient position near important trade routes, have enabled the country to export both more cement and clinker than it had in 2013.

The main destination for Vietnamese cement has been Bangladesh, which bought more than 6.12 million tons during the first nine months of the year. Up until November, the country exported an estimated 19 million tons of cement and clinker, out of which 2.81 tons were white cement. The figure exceeds the target for the period by 4 million tons.

Though the situation of cement exports has been encouraging for cement manufacturers in Vietnam, the industry is making an effort to be better prepared for “longterm� cement exports. For instance, Tran Viet Thang, general director of the Viet Nam Cement Industry Corporation, mentioned that the company exported 1.8 million tons during the first 10 months of the year, and that his company is prepared to ramp up overseas markets. Other notable exporters from Vietnam are Son Cement, whose main foreign client is Bangladesh, and Ha Tien Cement, which has mainly exported to Cambodia.

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After the Ministry of Commerce and Industry had stopped issuing licenses allowing the export of cement in 2012, the chairman of the National Committee of cement companies in the Council for Saudi Chambers of Commerce and Industry, Jihad Rasheed, revealed at the beginning of December that cement manufacturers in the Kingdom have been granted permission to export the product.

The decision was long awaited as manufacturers have been struggling with surplus cement and clinker. For instance, Zamel Abdul, member of the National Committee of the Cement Council of Saudi Arabia, estimated that the clinker surplus of companies operating in Saudi Arabia would have reached 25 million tons had not the Kingdom allowed green lighted exportation, causing cement companies to register sharp losses.

With the new export agreement in place, cement companies in Saudi Arabia will export cement surplus to Qatar, Bahrain, Egypt, Iraq and Sudan.

Pakistani cement exports Pakistani cement companies have been exporting cement at the same price since 2012, namely at 300 Pakistani rupee per 50 kilograms bag. The price has remained unchanged, allowing Pakistani producers

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to better perform in the stiff competition with Taiwan, China, Iran and South Korea.

A sharp demand came from the Indian Punjab, where Pakistan exported with 0.5 million tons more than in 2013. Nonetheless, the non-tariff barriers are still preventing the Pakistani exporters from penetrate the market as much as they would like.

On another note, cement exporters from Pakistan have stopped procuring coal from South Africa. The decision came as no surprise in the context of the ongoing investigation initiated by the Trade Administration Commission on the alleged dumping of cement from Pakistan. Five to six local exporters of cement have been the biggest buyers of South African Coal, Pakistan being the third largest coal buyer from South Africa. Pakistani producers are now considering to import the coal necessary for manufacturing cement from Indonesia.

The anti-dumping case has most affected Lucky Cement, the leading supplier of Portland cement to South Africa. Lucky has been selling cement for a lower price than PPC, the most notable local cement manufacturer in South Africa, but the imposition of an anti-dumping duty of 48 percent has nullified the entire difference between the prices offered by Lucky and by PPC.

Iran boosts cement and clinker exports With Iran’s cement production being forecasted to reach 120 million tons of cement over the next 10 years, Iran has a shot at becoming the largest cement exporter in the world. At the moment, Iran is the third largest exporter of cement in the world, and the first one in the region. Currently exporting to 24 countries, among which more notable are Iraq, Russia, India, China, Pakistan and Turkey, the manufacturers in the country are planning on increasing the volumes shipped out of the country’s borders.

stan have also been on the rise. These illegal imports have been affecting not only the local industry, but also squeezing revenues of national exchequer. Cement imports are committing irregularities under the brand names of Sistan, Khash, Mumtazan, Kirman and Ghain, then selling the product on the local market at rates much lower than the Pakistani brands.

For starters, exports from Iran to Iraq have considerably augmented as result of a new trade agreement between the governments of the two countries. On the other hand, illegal cement exports from Iran to Paki-

Habei province in China to begin exporting cement The authorities in the Habei Province have made public their intention to transfer excess capacity from its cement indus-

The situation has become a source of stress for the cement industry in Pakistan, which is already dealing with issues like shortage of labor, slowdown of construction activity and low exports.

try abroad by 2023.By 2017, the province intends to export 5 million tons of cement, whereas by 2013 the proposed figure is 30 million tons. The Chinese cement sector has been struggling domestically, but exports have not proven to be as fruitful as in the past either.

The local government in China began encouraging cement producers to set up joint ventures and subsidiaries in South America, Africa, Southeast Asia and East Europe in order to remain afloat.

AFRICA South African PPC boosts exports to African countries Pretoria Portland Cement Company, the leading manufacturer of cement in South Africa, has increased its exports of cement

Global gray FOB average (USD / ton)

Global gray FOB average (USD / ton)

Global avg (all reporting set) Global avg (last available reporting set)

Linear Regression for Global avg (all reporting set) Linear Regression for Global avg (last available reporting set)

95 90 85 80 75 70 65 2014-07-01 2014-01-01 2013-07-01 2013-01-01 2012-07-01 2012-01-01 2011-07-01 2011-01-01 2010-07-01 2010-01-01 2009-07-01 2009-01-01 2014-10-01 2014-04-01 2013-10-01 2013-04-01 2012-10-01 2012-04-01 2011-10-01 2011-04-01 2010-10-01 2010-04-01 2009-10-01 2009-04-01 # U T

All available countries

Period Oct '14 Sep '14 Aug '14 Jul '14 Jun '14 May '14 Apr '14 Mar '14 Feb '14 Jan '14 Dec '13 Nov '13 Oct '13 Sep '13 Aug '13 Jul '13 Jun '13 May '13 Apr '13 Mar '13 Feb '13 Jan '13 Dec '12

# countries in set 14 36 36 40 38 39 36 39 36 34 37 41 40 40 41 39 39 41 42 40 39 36 35

US$/ ton 79.23 77.26 78.3 81.48 79.9 79.72 82.61 79.78 79.99 75.53 79.66 80.55 78.83 79.25 78.15 76.01 81.17 77.66 77.57 76.49 80.39 78.76 72.9

Last available country set

Trade vol (k ton) 2,150 5,544 5,573 6,216 6,346 6,477 6,143 5,808 4,126 4,706 4,721 5,426 6,095 6,394 6,309 6,075 5,973 7,104 7,078 5,982 4,515 5,374 4,214

US$/ ton 79.23 76.18 77.72 79.03 78.94 80.52 80.11 80.15 77.77 72.74 70.94 74.61 70.91 73.17 69.85 67.57 71.21 74.93 72.37 71.85 72.65 70.68 69.46

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Trade vol (k ton) 2,150 2,145 2,230 2,063 2,269 2,437 2,584 2,227 1,906 1,966 1,725 1,790 1,943 2,297 2,163 1,974 2,060 2,516 2,707 2,474 2,126 2,043 1,837

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Note: "All", "All reporting set" and "All available" indicate a variable set of countries that includes all available and reporting countries for a specific period, which may vary across periods and time. "Last available reporting set" and "Last available" indicate the set of countries that defines the most recent period in the "All reporting set", which is shown with separate pricing to give an indication of how the most recent period's price relates to previous price points for the same set that constitutes the las t period's

INTERVIEW

to the continent, particularly into the Democratic Republic of Congo, albeit a tough African trading environment.

PPC is working in making reaching other countries in Africa easier, being that the local South African market conditions are proving to be disappointing for the cement manufacturer. As such, the building plants in Rwanda, Ethiopia, Congo and Zimbabwe, with plans in development for a project in Algeria.

Volumes of cement imported by Egypt and Algeria grows The energy crisis Egypt has yet to solve has greatly affected the cement industry, the country being forced to boost its imports in order to meet the local demand. More so, the price at which Egypt is importing cement is lower than the one of locally produced cement.

million tons per year, whereas demand is bigger by 3 million tons. Nonetheless, officials expect local production to reach 20 million tons by 2016 and 29 million tons by 2019.

sector continues to push most of its production for export. At the moment, the country is exporting 53 percent of its cement production, being the leading cement exporter in the European Union.

Imports banned in Angola The Angolan government has banned cement imports for 2015 in order to protect local producers in the context of lowered demand. The country’s Minister of Construction, Waldemar Alexandre Pires, said that the decision was taken because the country’s installed capacity currently exceeds demand by 1.5 million tons.

Spanish Cementos Molins, for instance, saw its profit rise mainly on account of improved export volumes of clinker and cement.

Nonetheless, the ban does not apply to the provinces of Cabinda, Cunene and Kuando Kubango for these provinces, the government has set a quota of 150,000 tons each.

“Due to the investments made by various companies, the installed capacity of cement production in Angola is 8 million tons and demand is around 6.5 million tons”, said the minister.

Algeria has also reported an increase in cement imports. Though the figures have gradually increased over the year, the country’s Ministry of Industry and Mining expects the country to stop importing cement in the next three to four years, since national capacity will be strengthened when the ongoing work at about ten cement plants will finish. At the moment, Algeria produces about 18

EUROPE Spain compensates for weak local demand through exports With cement consumption in Spain reaching a historic low, the country’s cement

Facilitating exports from Spain has been a priority for the Spanish cement manufacturer Repsol, which occupied Spain’s Port of Las Palmas as logistical support to their surveys in the Canaries. The site will be used for cement storage and to ship large quantities of cement in the Canaries.

Russia to import more cement Russia’s exports of cement have weakened on account of the Ukrainian crisis, Russian cement manufacturers now having a hard time exporting to western countries. Most of the foreign shipments have been directed to countries in the Caucasus Mountains, like Kazakhstan and Azerbaijan.

The main supplier of cement to Russia has been Belarus, a country which intends to create a firmer bond with Russia in what cement trade is concerned.

Major exporters: Granulated Slag FOB average (USD / ton)

Major exporters: Granulated Slag FOB average (USD / ton) Japan FOB

Italy FOB

Germany FOB

China FOB

30 25 20 15 10 5 0

U

T

2014-10-01 2014-08-01 2014-06-01 2014-04-01 2014-02-01 2013-12-01 2013-10-01 2013-08-01 2013-06-01 2013-04-01 2013-02-01 2012-12-01 2012-10-01 2012-08-01 2014-11-01 2014-09-01 2014-07-01 2014-05-01 2014-03-01 2014-01-01 2013-11-01 2013-09-01 2013-07-01 2013-05-01 2013-03-01 2013-01-01 2012-11-01 2012-09-01

# Period Nov '14 Oct '14 Sep '14 Aug '14 Jul '14 Jun '14 May '14 Apr '14 Mar '14 Feb '14

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China

Japan 6.82 6.61 6.94 7.67 7.16 6.93 8.11 8.27 8.98 5.35

889,033 1,041,559 990,951 986,266 1,157,150 977,945 807,518 707,755 864,219 839,797

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0 0 11.09 15.61 13.98 14.91 11.9 11 12.48 12.06

Italy 0 0 33,000 36,190 89,083 80,401 80,278 41,000 66,909 166,790

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0 0 8.78 8.88 8.78 8.91 9.04 8.67 9.07 9.06

Germany 0 0 68,679 157,040 178,325 126,211 129,576 171,008 123,595 118,171

0 0 12.61 13.27 17.5 14.74 19.63 22.24 23.5 22.69

0 0 174,802 198,332 213,250 149,315 134,086 86,770 87,059 79,874

Belarusian cement mills and ZAO Eurocement Group have already signed a contract whose stipulation have yet to be met to the fullest. For instance, the exports from Belarus are about 30 percent behind the adopted schedule according to the contract.

Tajikistan and Azerbaijan to begin exporting cement Though traditionally a major cement importer, Azerbaijan is now moving to triple its capacity to become a net exporter by 2016. Holcim will launch a 2 million ton cement plant, Akkord plans to set up a 2 million tons plant, and Norm Sement will open a 2 million tons facility.

As a result, the country’s production capacity will reach 6 million tons, a figure which exceeds the domestic demand in Azerbaijan, allowing the country to export the surplus.

Tajikistan already plans to begin exporting cement after it has commissioned new capacities. Huaskin is developing two projects that will add a 1 million tons of cement per year capacity, and two companies are planning to add 0.6 million tons and 0.4 million tons new capacity in Java and Vahdat districts.

Just like in the case of Azerbaijan, the future capacities will allow Tajikistan to fully cover its cement demand and start exporting the product to other countries.

AMERICAS Peru increased cement exports During the first ten months of 2014, Peruvian cement producers exported cement worth US$39.7 in a surplus of 159.5 percent compared to the same period of the previous year. In comparison to the first ten months of 2013, exports of cement surged by 44 percent in the same period in 2014.

The main destination of Peruvian cement

has been Bolivia, the country having imported with 31 percent more during the 10 month period than in 2013. Cement demand has been growing in Bolivia on account of the boom experienced by the construction sector, the local producers being unable to keep up with the increasing request for cement. High demand has been registered in the cities of Santa Cruz, La Paz and Cochabamba.

Peru has also exported to Chile, Venezuela, Brazil, Uruguay, Seychelles, Ecuador, Columbia and Argentina.

Clinker trade The Caribbean Cement Company of Jamaica has received an order for 240,000 tons of clinker from Venezuela, now preparing to honor the request. The contract expands over a period of 18 months and is worth about US$20.5 million, extending a previous agreement under which Caribbean Cement shipped 100,000 tons of clinker to Venezuela in 2013.

Tough the company’s clinker exports have been steadily growing, the same cannot be said by its cement shipments, which have stagnated and even dropped in some months of the year.

On the other hand, Paraguay’s National Cement Industry is planning on purchasing 60,000 tons of clinker in order to continue production without interruption.

Paraguay has been meeting with a substantial increase of cement demand.

Increase in clinker imports has also been noticed at Brazil’s Port of Pecem. During the first eleven months of 2014, the port moved 7.6 million tons of clinker, more than it had been estimated for the full 2014 report, and exceeding last year’s figures for the same period by 20 percent. The ports is the leader in clinker imports, accounting for 35 percent of the total clinker imports at the Brazilian ports.

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Global Cement Trade Price Report - GCTPR The Global Cement Trade Price Report (GCTPR) is the source for cement and clinker prices, as well as for market information for most regions worldwide. This extensive quarterly report includes current pricing in comparable units for cement and clinker traded internationally through imports and exports, and compares price trends in five continents.

The Global Cement Trade Price Report, the source for global cement and clinker price data. Each report is approximately 80 pages in length and includes gray cement, white cement and clinker import and export prices from all major regions of the world.

The key factor determining a cement trader’s global price competitive position remains its pricing strategy. This applied to vertically integrated cement traders, independent traders, shippers as well as buyers.

Timely knowledge of global cement prices and trends remains a cornerstone for competent internal strategic planning within the cement industry. Join a global group of international cement companies, analysts and others in subscribing to the only publication that consistently tracks cement trade prices.

For questions, inquiries and orders please contact your CW Group Client Service Coordinator or sales@cwgrp. com .

For a complete table of contents of the report, please visit the CW Research website: http://research.cwgrp.com .

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FEATURE

CW Advisory supports Investment Corporation of Dubai on US$300mm investment in Dangote Cement Investment Corporation of Dubai has made its first foray in the African market by buying a minority share in the Nigerian Dangote Cement. CW Advisory assisted the investment group in completing the deal, making full use of its expertize on the cement market and on the African cement sector.

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FEATURE

stablished in 1981 as a trading business whose primary focus was cement, Nigeria’s Dangote Group has met with a great evolution over the years, now priding itself with a diversified range of manufacturing operations across the African continent. It was not until 1999 that the company made the transit from being a trading company to a fully-fledged manufacturing one. Doing so was a sheer necessity in a country where consumed goods mostly came from a foreign source and the population was growing vertiginously.

Dangote Cement a fast growing business Dangote’s ventures in the world of manufacturing cement began in 2000, when the group acquired Benue Cement Company, a state owned company. Three years later, Dangote Cement commissioned what is now that largest cement plant in Sub-Saharan Africa, the Obajana Cement Plant, whose capacity reaches 5 million tons per year, the company planning to expand its capacity to 10.25 million tons per year

cement capacity by 21 million tons by the middle of 2015, bringing the company’s total capacity to 60 million tons. The current output of the company is 35 million tons per year, Dangote also having a market capitalization of US$23 billion. More so, by 2017 Dangote is looking to expand in 13 African countries.

Investment Corporation of Dubai taps on Dangote’s growth Dangote Group’s record of successful expansions and its increasing capital output have not remained unnoticed, the Investment Corporation of Dubai (ICD) having closed an equity investment worth

It seems that Dangote has been growing alongside the Nigerian economy, its history showing a taste for evolving, expansion and calculated improvements. The company currently controls 60 percent of the cement market share in Nigeria, a percent that allows it to center on foreign markets and pan-African expansion.

Dangote is already manufacturing cement at its plants in Senegal and Zambia, having plans set in motion for South Africa, the Republic of Congo, Tanzania, Ethiopia, Gabon, Benin, Cameroun, Sierra Leone, Ivory Coast Liberia and Ghana.

Expansions across the African continent are expected to enhance the company’s

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US$300 with the public listed Nigerian company. As part of the deal, which was established with the aid of CW Advisory, ICD now owns 243,500 million units of the company, or a 1.4 percent stake. The transaction represents ICD’s first major investment in the African continent.

ICD was established in May 2006 as a means to consolidate and manage the Government of Dubai’s portfolio of commercial companies and investments. The investment group represents some of Dubai’s most recognized companies in sectors that are deemed strategic for the further development of the Emirate, namely sectors like financial services, transportation, energy and industrial, real estate, leisure and retail.

The venture on the West African market can be seen as a successful attempt on the

part of ICD to diversify its portfolio and to tap into the enlarging African market. “We have been looking at Africa for a long time.

We are looking to do more business with Mr. Dangote and we have some things that we are exploring at the moment,” said HE Mohammed Al Shaibani, CEO and Executive Director of ICD. ICD identified Nigeria as a country abundant in long-term investment opportunities that would allow it to act on other growth opportunities across Africa.

According to the International Monetary Fund, Nigeria’s gross domestic product is set to grow by about 7 percent in the coming years, its economy now being worth around US$510 billion, being the fastest growing economy on the continent.

Investment Corporation of Dubai identified Nigeria as a country abundant in long-term investment opportunities that would allow it to act on other growth opportunities across Africa

At its turn, Aliko Dangote chairman of Dangote Cement, expressed his content at adding the Investment Corporation of Dubai to its growing list of international shareholders, commenting that the group shares “our vision of Africa that will grow to become an economic powerhouse in the coming decades as its people rise to become prosperous members of the global economy.”

CW Advisory’s assistance CW Advisory has provided valuation opinion and due diligence consulting for ICD’s foray into African cement markets.

Relying on its unbeatable cement industry expertise and on its Africa advisory experiences, CW Advisory successfully assisted the Investment Corporation of Dubai in aptly evaluating market and competitive conditions across the African continent.

More so, formulating the investment case has been done by providing a unique out-

side-in perspective on the targeted company, namely Dangote Cement.

CW Advisory and Group CEO, Robert Madeira added.

“Over the course of the past years, we have had the privilege of supporting many of marquis financial and strategic clients around the world in not only the cement sector, but also in other sectors. Our data-driven, highly analytical capabilities are leveraged together with a global contact network that we regularly interact with to source opportunities as well as provide transaction and strategic support,” Managing Partner and

CW Advisory and its partners and principal advisors have extensive global experience, including with major industrial groups, including cement companies, financial institutions, consulting firms, investment funds and research houses. As such, CW Advisory team is able to provide high-quality and data-centric assistance to cement companies, hedge funds, private equity firms, investment banks and more.

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FEATURE

Africa’s cement facilities With local and multinational companies betting on the future of infrastructure development in Africa, the continent has become one of the fastest growing regions in the world in cement capacity

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Overview At the end of 2013, there were 204 cement manufacturing facilities and 235 production lines in Africa, their total annual capacity reaching 249.6 million tons for an estimated increase of 42 million tons (20 percent) since 2011. Eighty-six percent of the continent’s operations are integrated cement plants, whilst the remaining 14 percent are grinding facilities. Major global cement manufacturing groups such as Lafarge, Dangote, Italcementi, Holcim, and HeidelbergCement collectively account for 45 percent of the total production capacity.

Regional concentration Fifty percent of the continent’s cement capacity is concentrated in the northern region. The western region produces 21 percent, and the eastern region just under 17 percent. The southern region holds 8 percent, while the middle African region covers just 4 percent of the total capacity. The northern region of Africa has 45 percent of the continent’s total production lines, or 113 out of 235 lines. The eastern region holds 23 percent, or 54 lines, followed by the western region with 13 percent, or 30 lines, and southern Africa with 23 lines.

Across the continent, the average capacity per production line is 910,000 tons per year. Lines in the western region average 1.24 million tons annually, and northern lines average 1.09 million tons per year.

Due to new grinding units in the area, capacity numbers are currently increasing in the western region, where grinding stations currently produce 15.7 million tons and integrated plants contribute 37.7 million tons. For comparison, integrated plants in northern Africa produce over 122.9 million tons per year, with grinding facilities producing only 2.2 million tons.

Cement capacity per line in the rest of Africa falls below the total average. In east Africa, average capacity per line is 610,000 tons annually, whilst the southern and middle African regions average 570,000 and 500,000 tons, respectively.

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Plant size breakdown The annual production capacity of the 204 cement-manufacturing facilities in Africa comes close to 250 million tons per annum.

There are 81 large units (>1 mtpy) delivering 76.2 percent of the total capacity, producing about 190 million tons of cement.

Seventy-six medium-sized units (0.3 – 1 mtpy) are responsible for 20.8 percent of total capacity, or 51.9 million tons. Small units contribute three percent of total production. There are 47 such units in Africa, producing 7.6 million tons annually.

About 72 percent of the facilities continent-wide are integrated plants, and the rest grinding facilities. Thirty-four percent of the continent’s production facilities are located in northern Africa, the region holding the highest concentration of integrated facilities with multiple production lines. Thirty percent of the continent’s total facilities are found in East Africa, followed by the western region (18 percent), the southern region (10 percent), and the middle region (7 percent).

Of the total number of cement facilities operating in Africa, 93 percent manufacture grey cement. InterCement, Afrisam, and Pretoria Portland Cement each operate slag cement facilities in South Africa. There are six white cement facilities, three of which are in Egypt (operated by Cementir, Italcementi, and an independent producer). Lafarge has white cement facilities in Algeria and Morocco, while Colacem operates one in Tunisia.

Global reach Lafarge continues to hold the highest share of operations in Africa, producing cement in 17 countries and all regions. Out of the total Lafarge’s capacity, 59 percent is concentrated in the northern region, in Algeria, Morocco, and Egypt. The western and the eastern regions account for around 14 percent of the company’s total share in the continent, whilst the plants in the middle and southern region yield a smaller output per year. Lafarge’s African operations include 40 production lines.

Holcim operates all across the continent except the middle region. Fifty-two percent of its operations are based in the northern region. Holcim’s most productive facilities are located in Morocco and in Nigeria.

71 percent of HeidelbergCement’s in Africa are located in the western region of the continent. The company also operates in the eastern and middle parts. HeidelbergCement manages 14 facilities in Africa, including nine grinding units and five integrated ones.

Italcementi, with plants only in the northern and western regions. Ninety-seven percent of the company’s operations are concentrated in Morocco and Egypt. The company has six integrated facilities and one grinding unit. Dangote has operations in the western region, in Nigeria.

production. Meanwhile, smaller and independent groups control 31 percent of the continent’s cement production capacity, producing around 70 million tons per annum.

In East Africa, independent producers are responsible for an output of 17 mil-

Independent manufacturers Major groups like Lafarge, Dangote, Italcementi, and Holcim are responsible for the biggest share of Africa’s annual cement

About 72 percent of the facilities continent-wide are integrated plants, and the rest grinding facilities

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OCTOBER/NOVEMBER 2014

18

FEATURE

lion tons per annum, or 65 percent of the region’s capacity. The second largest production share in the region, at 15 percent, belongs to Lafarge.

West African companies are responsible for 21 percent of the continent’s production. Independent producers handle only 17 percent of that region’s capacity, whilst Dangote handles 39 percent. In the middle region of the continent, total capacity amounts to 4 percent of the continent’s total production.

Notable cement markets Sixty percent of Africa’s total capacity is concentrated in Egypt, Morocco, Algeria, Nigeria, and South Africa. The total combined capacity of these countries reaches 150.1 million tons per year.

19 OCTOBER/NOVEMBER 2014

The country with the most facilities is Egypt, home for almost a quarter of Africa’s total manufacturing capacity. The largest manufacturer in the country is Italcementi, with five facilities and seventeen production lines followed by Lafarge.

Titan Cement, Cemex, InterCement and Cementos La Union are other important players in the Egyptian cement market.

Morocco’s main producer is Lafarge. Other important groups in the area are Italcementi, producing 5.1 million tons per year, Holcim, and Addoha Group. Morocco has 16 grey cement plants and a white cement plant.

In Algeria, twelve independent operating facilities hold 37.5 percent of the country’s

Sixty percent of Africa’s total capacity is concentrated in Egypt, Morocco, Algeria, Nigeria, and South Africa.

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capacity. Lafarge has five plants, four integrated units and a white cement plant.

Nigeria’s production capacity is dominated

by Dangote which holds about 69 percent of the country’s output. Lafarge is the second largest player followed by Holcim and several independent groups.

There are 18 facilities in South Africa, 15 of which produce grey cement and the rest slag cement. Pretoria Portland Cement (PPC) holds an estimated 44 percent of the market. The company maintains seven integrated units, one grinding unit, and one slag cement facility. The second largest cement manufacturer in the country is Afrisam, with two grinding units, two integrated units, and a slag cement one.

largest share of cement production is held by independent groups whilst the rest is held by Austrian-based Asamer. In Tunisia, independent groups also hold the biggest share of the market. Other large global suppliers, like Valderrivas and Cementos Molins, handle the rest of the country’s capacity. In Ethiopia, cement production is entirely held by independent groups.

Notable mentions Notable cement production occurs in Libya, Tunisia, and Ethiopia, as well. The combined capacity of these countries reaches 35 million tons per annum. In Libya, the

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OCTOBER/NOVEMBER 2014

20

CEMENT MARKETS

CW Research

CEMENT VOLUMES United States cement demand continues to increase as the construction sector remains in the path of recovery from the crisis, mainly driven by growth in the resurgent homebuilding sector.However housing starts and permits dropped in November, but trend still remains positive. Despite the deceleration shown in November builders in the US remain confident on the recovery of the sector in the medium term.

Despite the deceleration shown in November builders in the US remain confident on the recovery of the sector in the medium term.

In Spain cement demand in the first 11 months of 2014 reached 10 million tons, in line with the same period of 2013, howeverNovember deliveries totaled 0.9 million tons, 2 percent up from November of last year. Spain’s cement industry is regaining momentum after struggling for many years to reach the level of the pre-crisis years, following an intense deceleration in public spending in infrastructure and housing development.

Cement consumption in France continues to contract.Volumein November declined 21 percent from October, andthe first eleven months arenow 6 percent down from the same period of last year. Housing starts in the country are now at historical lows.

Russia’s macroeconomic outlook is starting to worsen following the weakening of the ruble and the fall in oil prices. While the housing sector has remained relatively stable the cost of housing since the beginning of the year has increased by approximately 10% and the gov-

Jul 2014 Year-on-Year Cement Production Growth Rate (%)

-10%

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Source: CW Research

Argentina

Argentina

Japan

0%

China

Vietnam

10%

Colombia

20%

Saudi Arabia

30%

CW Research CEMENT MARKETS

ernment has launched many initiatives aimed at reducing the prices in order to boost demand.

Cement productionplunged 26 percent in November from the previous month and 10percent from November of last year. The year-to-date growth is now at 3 percent.

Cement consumption in France continues to contract.

Colombia’s construction sector remains solid, with and public investment in infrastructure is expected to support the cement demand in the short and medium term. Production remained flat in November versus October but yearly volume is up 10 percent from last year.

Jul 2014 Year-on-Year Cement Demand Growth Rate (%) Spain and US as of August

-20.0%

In Argentina, the cement sector continues to deteriorate following an unstable political environment and a falling oil industry. Cement productionis down 4 percent year over year as of November of 2014.

China’s economy slowdown has had his take on cement demand asconstruction activity remains weak.The country’s housing market still struggling and prices continue to drop, though at a slower pace in November. Decline reached 0.6 percent, an improvement compared to October’s 0.8 percent and September’s 1 percent. It is expected that house price decline will continue over next year, at a slower pace, but the slowdown in construction will have a negative effect in cement demand in China.

Source: CW Research

France

0.0%

Germany

Spain

Indonesia

Peru

Pakistan

20.0%

Saudi Arabia

40.0%

China’s economy slowdown has had his take on cement demand asconstruction activity remains weak.

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OCTOBER/NOVEMBER 2014

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MARKET DATA SNAPSHOT

CW Research

Volume variation analysis for selected countries that are major consumers, producer, importers and exporters of cement. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.cemweek.com to the market data section.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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CEMENT ENERGY MARKETS

CW Research

CEMENT ENERGY MARKETS Coal Market Update Coal volumes further decline in November Globalcoal trading volumesdropped for the second month in a row in Novemberfromthe previous month, with significant declines from Colombia and South Africa.

Colombian coal deliveries plunged almost 38 percent in Novemberto an 8-month low, the lowest since March of 2014 which recorded 3.3 million tons due to Drummond’ssuspended export operations in the port in early January. Year to date volume exported out of the country is now at 81 million tons, 20 percent over the same period of 2013.

Colombian coal deliveries plunged almost 38 percent in Novemberto an 8-month low, the lowest since March of 2014 which recorded 3.3 million tons...

In South African coal deliveries dropped 18 percent and reached to6.0million tons, still 2 percent up compared to November 2013 while in Indonesia’s coal exports raised 3 percent from the previous month.The head of the Indonesian Coal Mining Association (APBI) has proposed that Indonesian coal mining companies slash coal production in 2015 by 100 million tons, however producers are unlikely to cut production despite the price slump. The country is also raising its coal output in order to increase revenue from the mining sector amid plummeting global coal prices.

In China, the Government continues its efforts to cut coal usage to reduce greenhouse gas emissions. However, it is expected that China alone will still account for the majority of the demand growth in the future, despite the country’s plans to reduce coal consumption and build up renewable and nuclear energy sources.

Coal Global Trading (million tons) 120

Indonesia

Australia

Russia

South Africa

Colombia

US

Rest

40

Oct-14

Nov-14

Sep-14

Jul-14

Aug-14

Jun-14

Apr-14

May-14

Feb-14

Mar-14

Dec-13

Jan-14

Oct-13

Nov-13

Sep-13

Jul-13

Aug-13

Jun-13

May-13

Apr-13

Feb-13

Mar-13

Dec-12

Jan-13

Oct-12

Nov-12

Sep-12

Jul-12

Aug-12

Jun-12

Apr-12

May-12

Feb-12

Mar-12

Dec-11

Jan-12

Nov-11

0

Source: customs

data

80

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OCTOBER/NOVEMBER 2014

24

CEMENT ENERGY MARKETS

CW Research

Energy Prices Update Coal Coal prices remain resilient in most markets. The average for November closed at US$70 per ton, while outlook remains bearish on oversupply, with no effect still seen in the market from recent cuts in production.

Australian coal price lost 2 percent compared to October and 24 percent from one year ago, averaging US$70 per ton during the month. Exports remain affected by slowdown in demand from China. Price will remain subdued towards the end of 2014. Profitability has started to return to Australia coal producer, following a drop in oil prices. As reported

by Glencore, the percentage of Australian coalmines that were losing money had fallen to about 25 per cent. However, the companyannounced it has tol shut down its Australian coal operations for three weeks due to an oversupply of the commodity. The three week shut down was be carried out across all of Glencore’s Australian coal operations in December. Also reported that Australia could be supplying coal to Ukraine, in a move from that country to reduce its dependence on gas from Russia.

The average for November closed at US$70 per ton, while outlook remains bearish on oversupply

In Colombia, coal export price declined 3 percent from October to US$71 per ton. The coutry, whose export volumes plunged in February and March after Drummond was forced to halt its operation in the port in early January, is investing heavily in the industry.

Colombia’s Ministry of Mining and Energy has announced that coal production could reach a record high in 2015 after the extraction of around 100 million tons. However, officials said this increase will only be realized is all the projected infrastructure is completed along with other investments in the industry.

US exported

Colombia exported

Australia Newcastle

Indonesian HBA

South Africa Richards Bay

150 130 110 90

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

50

Nov-10

70

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Sources: EIA, Colombia Ministry of Mines and Energy, IMF, Indonesia Ministry of Energy and Mineral Resouces

Steam Coal Fob Average Prices (Us$/Ton)

CEMENT ENERGY MARKETS

CW Research

In South Africa, the average price remained relatively flat in Novemberbut it still at its lowest level since November 2009. CIL (Coal India)has announced it is considering a proposal to register a wholly-owned subsidiary in South Africa for acquisition and development of coal assets in that country.

In Indonesia, producers are unlikely to cut production despite the price slump while in Russia coal miner Kuzbassrazrezugol will cut its production by 2.3 million tons in 2015 due to unfavorable international market condition. Kuzbassrazrezugol produced 30.8 million tons of coal for export in 2014 from its mines in Siberia.

In China the Government released its comprehensive Energy Development Strategy Action Plan (2014-2020). A significant component of the strategy plan is the cap on annual coal consumption below 4.2 billion tons until 2020.

In the short term a decline is expected in coal prices,

In the short term a decline is expected in coal prices, at least in 1H2015 for US, EU while Asia to see premium to ARA. In the longer term price upside will be limited by structural factors -- not the least economic weakness and India demand. Lower crude may on the margin encourage higher volumes and consequently lower coal prices.

US Petcoke Export Price (US$/ton) rolling 12-month average 100 80 60

N-14

O-14

S-14

A-14

J-14

J-14

M-14

A-14

M-14

F-14

J-14

D-13

N-13

O-13

S-13

A-13

J-13

J-13

M-13

A-13

M-13

F-13

J-13

D-12

0

N-12

20

Source: customs data

40

Petcoke Price for the US Gulf Coast FOB 4.5% avg. sulphur declined slightly in November. Prices have been steady and resilient after the new 400,000 b/d Total-Saudi Aramco refinery in Saudi Arabia and BP’s new 410,000 b/d coker in Indiana begin to take up market share.

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OCTOBER/NOVEMBER 2014

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CEMENT ENERGY MARKETS

CW Research

In Mexico, ICA Fluor signed a contract with Pemex Refinación for the construction of an 86,000 b/d delayed coker unit that will be installed at the Miguel Hidalgo Refinery in Tula, Hidalgo. Also uncertainty about demand for high-sulfur petokce from China has been pushing prices down. Venezuela continues to experience logistics challenges.

It’s also been reported that crude slated for US Gulf refineries has caused petcoke to have lower sulphur. This has brought down the prices and has also reduced the spread between mid-sulphur cargo and high-sulphur cargo.

NaturalGas The Henry Hub spot price traded at $4.1 per MMBtu in November, increasing 9 percent month on month as the winter season starts to hit and temperatures drop dramatically during the month across the country. In Europe, prices declined 9% following a mild summer and winter this year. Major producers preserved stockpiles pushing prices down.

The Henry Hub spot price traded at $4.1 per MMBtu in November, increasing 9 percent month

Southern European markets (Spain, Italy) saw year on year declines in natural gas demand across all sectors. A steady and uninterrupted supply from Russia, Good storage levels, a moderate macroeconomic outlook and substantial hydro reserves in both countries point to a slow demand in the short term.

Natural Gas Prices (US$/MMBtu)

US

16

Europe

12

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Nov-14

Mar-14

Jul-13

Nov-12

Mar-12

Jul-11

Nov-10

Mar-10

Jul-09

Nov-08

Mar-08

Jul-07

Nov-06

Mar-06

Jul-05

Nov-04

Mar-04

Jul-03

Nov-02

Mar-02

Jul-01

Nov-00

Mar-00

Jul-99

0

Nov-98

4

Source: EIA, World Bank

8

Volume variation analysis for selected countries that are major importers and exporters of coal and petcoke. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.coalweek.com/ to the market data section.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates LM: latest month Nov except where specified; MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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OCTOBER/NOVEMBER 2014

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MARKET DATA SNAPSHOT

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people

Bill Lay now chairman of East African Portland Cement Company Kenya’s President, Uhuru Kenyatta, reappointed Bill Lay as chairman of the East African Portland Cement Company for a three year term, extending Mr. Lay’s term in office.

Bill Lay has previously been CEO and chairman of General Motors Africa for a period of ten years.

President of Semen Indonesia picked as head of energy firm Indonesia’s president handpicked DwiSowtjipto, the president and director of Semen Indonesia, as the new head of state energy firm Pertamina. In his new role, Soetjipto will be responsible for implementing reforms at the energy company. Pertamina has been struggling to stop declining domestic crude production, as well as cope with rising demand for oil and gas imports.

Over the next five years, the company plans to spend US$61 billion, 83 percent of which will be directed to upstream development, including merger and acquisitions.

Lafarge Africa appoints directors Adepeju Adebajo and Anders Kristiansson have been appointed as directors to the board of Lafarge Africa. Adepeju Adebajo, who is currently the managing director of WAPCO Operations, previously served as CEO and managing director at Mouka Limited.

Anders Kristiansson worked for Procter & 29 OCTOBER/NOVEMBER 2014

Gamble in Scandinavia and in Africa, and has served as global division controller for Eaton Automotive.

previously serves as Production Manager in Alicante since 2007.

CEO of Spanish FCC needs to be ratified After a pact has been signed between Esther Koplowitx and Carlos Slim, the office of CEO has been left open of Jan Bejar. Nonetheless, the Board of Directors of the company has to express its approval for the decision.

The Board of directors ratifying Mr. Bejar as CEO will consist of four representatives of each shareholder, as well as three independents that will be appointed by a company with experience in the selection of senior management.

FCC has the goal of repaying a deb tranche of EUR 1.39 billion.

Alfonso Conde appointed COO of Cemex in Aragon Alfonso Conde has been named Chief of Operating Officer of Cemex in Aragon.

In his new position, Conde will manage quarrying and operations at the Morata de Jalon integrated plant, as well as other mortar and concrete plants the company owns in the community of Aragon.

Alfonso Conde has a degree in Chemical Engineering from the University Alfonso X El Sabio and an MBA in Management of Human Resources from the IDE-Cesem Institute of directors of Spain. Having been with Cemex since 2002, Alfonso Conde www.cemweek.com

High level changes at South Africa’s PPC The joint managing director of South Africa’s Pretoria Portland Cement, Richard Tomes, has resiged, being replaced by Johann Claassen.

The news comes after KetsoGordhan, the company’s CEO resigned in September 2014, after his attempt to fire CFO TryphosaRamano was blocked by fellow directors. According to BhekiSibiya, the chairman of PPC, the company has been looking for someone who could “buy into the board’s strategy”, since there is no interest in changing the current strategy the company is pursuing. Darryll Castle, who was appointed as nonexecutive director of PPC on October 17, 2014 is thought to be the best fit for the position, being one of the three top candidates for replacing the former CEO.

REGIONAL REPORT:

EUROPE Lafarge’s plans in Romania and Hungary Lafarge future move in Romania is to make a takeover bid for the country’s Lafarge Aggregates Concrete (AGEM). Lafarge already holds control over 95 over the company, but it now plans to buy out the minority shareholders in a RON 2.5 million deal, and to gain complete control over the company.

The French company has two cement plants on Romania, at Medgidia and Hoghiz, and a grinding unit at Targu-Jiu. Lafarge will open a waste warehouse incinerating waste coming from its plant in south Hungary. Seven hundred million HUF have been invested in the structure, which will be used as storage for plastic, rubber and industrial and farm byproducts. The waste deposited will that be incinerated and the heat generated will be converted into energy for cement production.

Spain’s Repsol sets site for cement imports The Spanish company Repsol has occupied a second point at the country’s Port of Las Palmas after obtaining a temporary authorization to operate the plot of Reina Sofia dam. The point will be used as logistical support, for storage and shipment, to the company’s surveys in the Canaries This site is about 4,000 square meter, complete with docking point for boats, and can be used by the company under a temporary authorization until next March. By that time, Repsol expects to finish its surveys in the waters of the archipelago.

Spanish Cemex plant completes environmental improvement program Cemex’s cement plant on the island of Majorca has completed the environmental improvement program it had started in 2006, with a total investment of EUR 16 million.

Over the course of the program, the plant received works aimed at minimizing the environmental impact of its operations and harmonizing the activities of the plant with its neighbors.

CO2 emissions have been reduced by 3.8 percent per ton of clinker by means of increased use of alternative fuels and the introduction of more efficient burners.

Moreover, the replacement rate of fossil fuels with alternative ones rose from 5 percent in 2006, to 35 percent in 2014.

The cement plant, which has a capacity of 561,000 tons of clinker and 804,000 tons of cement per year has become one of the best equipped cement plants in Spain from an environmental standpoint.

Turkish Çimsa to open a new plant The Turkish cement manufacturer Çimsa has plans of building a new cement plant in Halimoru. The setting up of the plan will require a total investment of TRY 165 million, and would start operations in 2016. Çimsa is among the leading Turkish cement manufacturer, running five integrated plants and a grinding factory.

RUSSIA Russia boosts local production and imports of cement During the ten months between January and October 2014, Russia’s cement prowww.cemweek.com

duction rose to over 60 million tons of cement. In November, cement production grew by 3.9 percent when compared with the same month of 2013, while in October it dropped 1.6 percent, reaching 6.1 million tons.

Imports have increased over the ten months period as well, rising by 24.5 percent from the year ago period and reaching 1.82 million tons. Most of the imports came from Belarus, namely 56.8 percent of the total, being followed by the Baltic countries, which supplied 22.5 percent.

Exports, on the other hand, have declined by 1.9 percent during the first 10 months of the year, amounting 1.48 million tons.

Most of the shipments of cement from Russia had Kazakhstan, Belarus and Azerbaijan as destinations.

Russia’s Siberian Cement and Sibcem boost cement production Siberian Cement has produced 3.9 million tons of cement during the first 10 months of the year, its aim being of reaching a production of 4.3 million tons by the end of the year, keeping in line with the levels reached in 2013.

The company has been able to increase its shipments due to the commissioning of the package complex at the Timlyuyskom cement plant, touching a peak in July 2014, when its shipped consumers 66,000 tons of cement.

Sibcem’s output for the period has grown as well, amounting 3.5 million tons, up 3 percent from last year’s figures. The company has three production units in Russia, the largest amount of cement being manufactured at the Topkinsky plant, namely 2.4 million tons, followed by Kranoyarsk and Timlyuyskom.

OCTOBER/NOVEMBER 2014

30

EUROPE Company/Location

Overview

Lafarge/Hungary

The company will open a waste warehouse for incinerating waste produced at its plant in southern Hungary.

Cemex/Spain

Cemex Spain has completed its environmental improvement program at its Majorca plant. With an investment of EUR16 million, the company replaced the rate of fossil fuel usage with alternative ones by 35 percent.

Çimsa/Turkey

The company plans to set up a new cement plant in Halimoru by 2016.

The total investment is estimated at TRY 165 million.

Eurocement/Russia

Eurocement is to modernize three of its plants, namely two plants in Belgorod and one in Karachay-Cherkessia. The total value of the contract is of US$93.3 million

Production expansions in Russia A mini cement plant is to open in Kizilurt, the Republic of Dagestan, Russia. The cement plant will be favorably located in the vicinity of limestone deposits which would ensure the availability of raw material supply necessary for cement production. The plan drawn for the cement plant features a fully automated control system, is energy cost efficient and addresses pressing environmental challenges.

A new production line has been added to the Chiri-Yurt cement plant located in the Shali district of the Chechen Republic, Russia. The plant is one of the largest of its type in the Northeen Caucasus, its annual production being of 350,000 tons of cement. After being completely destroyed during two military campaign, the plant underwent restauration in 2001. The new production line added to the plant is completely environmental friendly, its operations being based on a waste-free cycle.

MIDDLE EAST Expansions in Saudi Arabia to meet growing demand In order to maintain their position on the market, several companies headquartered in Saudi Arabia are looking to became more prepared to meet the growing local demand. Expectation of greater demand surfaced after the Ministry of Housing announced a project under which 621,000 housing units will be built.

Twenty-three million tons of new production capacity will probably be added over the next three years for this purpose. Cement production has been growing steadily in Saudi Arabia over the last seven years, going from 33 million tons per year in 2007, to 57.8 million tons of cement in 2014.

31 OCTOBER/NOVEMBER 2014

With growing capacity come growing concerns over the environment and cost efficiency, cement companies in the Kingdom now taking steps to reduce cost of fuel consumption in production operations. In order to do so, the companies are aiming at making more use of alternative sources of energy.

New production line at Saudi Arabia’s Eastern Province Cement Company The Board of Directors of Saudi Arabia’s Eastern Province Cement Company is considering to establish a new production line at the Balnaguibah facility. The proposed production line would have an output of 10,000 tons of clinker per day. According to representatives of the company, the establishment of the new production line comes as a result of the obsolescence of other production lines inside the facility.

Cement shipment enters the Gaza Strip In the second shipment of construction materials within 50 days, 28 truckloads, each carrying 40 tons of cement, entered the sector through the Kerem Shalom crossing. The shipment is the largest to enter the region since the end of the Israeli attack on the Gaza Strip.

Though building materials will continue to enter the region in order to help residents and the private sector to rebuild the 25,000 houses demolished, the Ministry of Finance in Gaza will start to tax every ton of cement a fee of NIS 20. The undersecretary of the Ministry, Baha Awni al-Basha, stressed that the tax will allow the authorities to control the amount of material entering Gaza through Kerem Shalom.

New cement plant opened in Abu Dhabi The chairman of Abu Dhabi Crown Prince’s Court, Sheikh Hamed bin Zayed Al Nahyan, has inaugurated a new cement plant in Al Ain. The plant, which required an investment of AED 1.3 billion, will improve the capacity of Arkan Building Materials to 5.6 million ton of cement and 4 million tons of clinker.

The opening of the factory came as a response to the growing cement demand in the UAE and the Gulf region.

AFRICA

Saudi Arabian cement companies to export surplus The chairman of the National Committee of Cement Companies at the council of Saudi Chambers, Jihad Rasheed, said that consultations between cement companies and the Ministry of Trade and Industry regarding the possibility of exporting cement are still uncompleted.

Singapore’s Ambrian enters agreement with Mozambique company Ambrian has entered into an agency agreement with Mozambique’s Cimentos da Beira Limitada. The latter cement plant is expected to start production starting with early 2015, and have an output of 110 tons of cement per hour.

The issue at hand is the possibility of exporting the surplus of cement, currently surpassing 22 million tons, to countries such as Qatar, Bahrain, Egypt, Iraq and Sudan.

As part of the agreement, for a period of 8 years, Ambrian will be exclusively appointed as Cimentos da Beira’s worldwide purchasing agent, as well as supplier of raw

MIDDLE EAST Company/Location

Overview

Eastern Province/ Saudi Arabia

The company may add a new production line at the Balnaguibah factory, able to produce 10,000 tons of clinker per day.

Arkan Building Materials/ Abu Dhabi

Yhe company inaugurated its newest cement plant in Al Ain. The facility required an investment of AED 1.3 billion, being able to increase the company's cement capacity to 5.6 million tons of cement.

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materials for producing cement products at the clinker grinding and cement packing operations in Mozambique.

Tanzania to boost cement output Cement output in Tanzania is expected to double over the next few years, reaching 6 million tons per year, mainly because of the development of seven new plants able to meet the growing demand coming from the construction sector.

Last year, cement production in Tanzania rose by 18.9 percent, reaching 3 million tons. The most significant addition to the country’s cement consumption will come from a cement plant being

Gas shortages, the main outcome of the energy crisis which hit Egypt two years ago, prompted this change, the Egyptian government having reduced the quantities of gas to cement plants. The measure led to significantly reduces output volumes and great financial losses.

Egypt to build more plants to meet local demand In order to reduce cement imports, Ashraf Salman, the country’s Minister of Investment, stressed on the importance of more operating cement plants in Egypt. Local cement demand currently stands at more than 4.5 million tons per year.

Dangote cuts cement prices in Nigeria The company slashed cement prices in Nigeria to US$6 and US$7 per a bag of 5 kg of cement, depending on the grade of cement, in an attempt to consolidate its position as the leading provider for Nigeria. More so, the move to reduce the price of cement will support the government’s ongoing effort to shrink housing deficit, currently standing at 17 million

As such, the country is considering to set up ten new cement plants that would require a total investment of EGP 20 billion.

Seventy percent of the investment will be funded by the government, while the rest of the capital will come from the Insurance Commission, national banks and the Federation of Contractors. The cumulated capacity of the plants, which are expected to start production within three years, will be of 18 million tons per year.

The offer made by Dangote is 40 percent below the current market price, which is US$10.3 for a bag of cement.

Power cuts in Ghana reduce cement output Cement shortage threatens Ghana as the

Nigerian Bua Group invests in new plant Bua Group International invested over US$500 million in the Obu Cement Plant, a green-field cement plant in Okpella, Edp State. The plant, which will become operative starting February 2015, will add 3 million tons per year to the company’s capacity. Bua Group currently has a capacity of 2.3 million tons per year, coming from its plants in Sokoto State.

country’s cement industry has been severly affected by ongoing power cuts. For instance, weekly output of the country’s major cement producer, Ghacem, could see more than a 10 percent decline.

The power cuts came after the Electricity Company of Ghana announced that it would cut power supplied to manufacturing industries by as much as 25 percent in order to create an artificial reserve margin to stabilize the power sector.

Cement demand rises in Kenya Kenyan cement manufacturers have boosted production by 15.2 percent during the first nine months of 2014 on account of surging consumption levels, which grew by nearly a fifth over the same period in 2013.

The six cement makers operating in the country supplied 4.24 million tons of cement during the period, up from 3.68 million tons in 2013. The boost in production levels was sustained by the opening of new cement plants, such as Savannah Cement, National Cement and Mombasa Cement.

Nonetheless, demand is climbing rapidly, indicating that production, though increased by the new brands on the market, is being surpassed by demand.

Africa Company/Location

Overview

Dangote/Tanzania

Dangote's plant in Mtwara, Tanzania, will begin production of cement in June 2015. The company also plans to build a coal-fired power plant in the country.

Dangote/Cameroon

Dangote's Cameroon plant will produce 1.5 million tons of cement per year, being expected to begin production before the year ends.

Lafarfe Africa/Nigeria

The company plans to invest more than US$1 billion in Nigeria in order to add an additional capacity of 5.5 million tons of cement.

Egypt

The country's government is considering investing in ten new cement plants that would begin production within three years and have a cumulated capacity of 18 million tons per year.

Egyptian plants committed to burn coal The Egyptian Ministry of Environment and cement plants in the country are on the verge of completing the necessary final regulations for coal imports which would enable the cement plants to burn coal before the end of the next year.

suex Cement/Egypt

Italcementi, through its Egyptian subsidiary, Suez Cement, has signed a memorandum of understanding with the Egyptian government to build a wind farm on the Red Sea. The plant will have a capacity of 20 megawatt and will require an investment of US$200 million.

Atlantic Cement/Morocco

Atlantic Cement, in partnership with Chinese CDI-SINOMA Group, will build a cement plant worth MAD 3 billion in the Dettat region of Marocco. The facility will have an output of 2.2 million tons of cement per year and is expected to become functional by January 2018.

Kwanza Sul Cement/ Angola

The company will increase its capacity be means of adding a new production line able to add 1,500 tons a day to the current 4,500 tons per day capacity.

At the moment, there are 12 cement factories that are conducting special qualification for the use of coal, but within two year, all plants are to complete the conversion of equipment to working with coal.

Saoura Cement/Algeria

Construction works the Ben-Zireg plant in Bechar, Algeria, will be launched during the 1st quarter of 2015. The plant's capacity will be of 1 million tons per year.

Cimerwa/Rwanda

Works at the company's new cement plant, worth US$170 million, are 94 percent complete, the plant being expected to be ready for production by the end of the first quarter of 2015. The plant will add 400,000 tons per year to the company's current 600,000 tons per year capacity.

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REGIONAL REPORT:

assets in order to cover a debt which escalated to Rs 72,600 crore.

SOUTH-EAST ASIA India’s competition regulator concerned about Holcim & Lafarge merger India’s Competition Commission on India, the country’s main competition regulator, has expressed concerns regarding the coming merger of Holcim with Lafarge.

According to the Commission, the merger is worrisome because of the adverse effect it may have on competition.

Shree Cement plans in Bihar, India approved The Bihar administration has approved Shree Cement’s proposal to set up a cement plant in Aurangabad district of the state.

The company plans to set upaRs 337 crore production unit about 150 kilometers south of Patna. The plant would have an output of 2 million tons of cement yearly.

As such, both Lafarge and Holcim are to publish details of the merger to the public in all Indian editions of four leading daily newspaper, as well as aspects regarding the rival companies which may be affected by the merger.

On the location, Shree also plans to set up a biomass based 12 MW captive power plant that would meet the company’s energetic requirements, out of which 5 MW will be sold to the Bihar State Power Company.

Indian UltraTech Cement considers to buy Jaiprakash cement plants The Indian company is considering acquiring Jaiprakash cement plants located in central and southern India, more precisely in Uttar Pradesh, Madhya Pradesh and Andhra Pradesh. The combined capacity of the plants owned by Jaiprakash in those regions is of 18.25 million tons.

Nepalese government takes steps to facilitate cement production Electricity supply and road access have troubled cement plants, but the government of Nepal is said to be taking active steps to facilitate cement production by dealing with the said issues. First of all, access road will be extended to 11 cement plants, then the government plans to supply electricity to eight plants.

UltraTech is currently trying to boost its production to reach 100 million tons in a decade’s time, whereas Jaiprakash is selling

The budget allocated for the project is of Rs 850 million, the biggest part of the capital being earmarked for electricity grid connection.

South-East Asia Company/Location

Overview

Andhra Cements/India

The company commenced commercial production at two plants on December 1, namely at plants in Guntur and in Visakhaptnam.

Sarbottam Cement Industries/ Nepal

Sarbottam Group's cement branch, which needed an investment of Rs 6.5 billion, with an annual capacity of 400,000 tons of clinker, has began production.

Cherat Cement Company/Pakistan

The company decided to add a new production unit with a capacity of 1.3 million tons per year. With this new production line, the company's overall capacity will stand at 2.4 million tons of cement.

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Pakistani cement export prices unchanged since 2012 Pakistan has been exporting cement at 300 Pakistani Rupee per 50 kilograms bag ever since July 2012, while its local selling price has reached 540 Pakistani Rupee for the same quantity of cement. A cement maker in Pakistan has been cited saying that low export prices are necessary in order to face stiff competition coming from Taiwan, China, Iran, and South Korea.

On a domestic level, prices have been increasing because of increasing power and coal costs. More so, demand has been sliding in Pakistan for locally made cement ever since exporters marketed cement in the region for more affordable prices.

REGIONAL REPORT: The implementation of the collaborative kiln waste disposal is expected to accelerate the implementation of the recent key recommendation of Huaxin Cement BBMG, Conch Cement to stabilize prices as cement demand is declining on increasing prices of cement.

CHINA China acts to reduce emissions from cement plants The Chinese government has ordered some cement plants located in the Northern provinces to shut down production for four months starting with December 1. The measure is meant to reduce overcapacity, an issue with which China is currently dealing, as well as to help curb air pollution during the winter months.

One hundred and three production lines in Heilongjiang, Liaoning and Jilin have been affected by the move.

Cement production in the northern Chinese provinces during the winter months usually requires the burning of about 20 million tons of coal. As such, the provinces in the region are a major source of industrial pollutants, carrying part of the blame for the toxic smog that spreads to neighboring regions like Beijing.

Demand and prices for cement fall in China With the construction season coming to an end, China’s demand during the month of November dropped significantly when compares to the other months of the year.

in infrastructure worth 700 billion yuan, thus further supporting the increase of cement demand overt the following year.

The national cement process dropped during the last week of November by an average of 0.62 percent, though there have been regions which have posted increases.

The Zhengzhou, Jining, Shandong, Anhui Anqing and Tongling regions have posted rises of 10-20 yuan per ton of cement. On the other hand, in Liaoning region, southern Guangdong, Guangxi, Chongquing and Guiyang, cement prices have fallen by 10 to 30 yuan per ton. Prices are expected to further drop in December, when cement demand will decline with the ending of the traditional season.

Before the last week of November, the government was weary of the high cement prices on the market, planning to carry out an investment in stabilizing them.

The Republic’s National Committee held talks on the possibility of conducting a collaborative utilization of cement kiln waste disposal of garbage that would help ease the spikes in cement prices.

Cement demand is expected to drop further with the domestic real estate and infrastructure investment growth cyclical downturn.

Jiangsu Helin Cement completes projects The Chinese company has recently completed three transformation projects with a total investment of 1.69 billion yuan. Following the investment, the production capacity of the company reached 8 million tons of cement per year. More so, the company now has a cogeneration production capacity of 200 MW per year, representing 55 percent of electricity production.

Helin Cement has already put into operations these projects, now enjoying significant reduced dependence on coal, reduced production costs and carbon dioxide emissions.

Chinese cement manufacturer nterested in overseas opportunities China National Materials Group, a company which is one of the top three cement manufacturers in China, as well as the world’s largest provider of cement equipment for engineering services, is on the lookout for new business opportunities in Africa and in other overseas markets.

The waning economic growth China experienced during 2014 is now being addressed by the government, which has cut interest rates. The measure will make its effects felt gradually beginning with 2015, bringing improvements in cement demand. More so, the Development and Reform Commission approved investment

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The enterprise, which is state-owned, is looking to expand its operations outside of China as domestic business growth has been slow because of the over-capacity experienced on the market. The company’s new contracts for cement production facilities dropped by 43 percent this year, reaching 12.9 billion yuan, on account of sluggish domestic demand and weakness of the Asian market.

On the other hand, new cement production contracts in Africa have jumped, doubling the region’s share to 28 percent from 14 percent in the same period a year earlier.

Myint Investment Group teams up with Chinese firm Myanmar’s Myint Investment group has partnered with Chinese Anhui Conch Cement to modernize a cement factory in China. The two companies are to upgrade the No. 33 Kyaukse cement factory into a plant able to produce 5,000 tons of cement daily through a build-operate-transfer system. At the moment, the factory has a capacity of 400 tons of cement per day.

The joint venture, called Myanmar Conch Cement, was given the go signal on November 11.

JAPAN Tokyo Cement moves to merge with Fuji Cement Tokyo Cement and the fully owned subsidiary Fuji Cement will merge under the name Tokyo Cement Company effective February 2015. The move will enable both companies to realize benefits of greater synergies between their business, as well as avail of the financial resources.

million tons per year. Consumption is seen to increase as well, namely by 93 percent, reaching 65 million tons. Demand will rise on account of more infrastructure and construction projects.

More so, within a 15 year timeframe, Japan’s cement production is foreseen to be raised to 75.5 million tons per annum.

INDONESIA Cement sales in East Java, Indonesia rise Over the past years, cement sales in Gresik within the East Java Province have been steadily increasing, reaching 0.41 million tons in the first nine months of 2014. The figure represents a 10.3 percent increase over the year ago period.

Gresik covers Indonesian tourist areas such as Denpasar Bali, Karangasem, Klungkung, Tabanan, Singaraja, Jimbaran and Jembrana, tourism having aided greatly in the economic development in the area, thus encouraging greater cement consumption.

Indoncementposts good results for the third quarter For the third quarter of the year, Indocement reported revenue in the amount of 14.16 trillion rupiah, registering a 6 percent rise from the similar period in 2013.

The company also increased its production capacity: if last year Indicement’s capacity stood at 18.6 million tons per year, this year, Indocement reached a total capacity of 20.5 million tons.

Tokyo Cement has a capacity of 600,000 tons per annum at its Tincomalee plant, while Fuji Cement will come with a 300,000 metric ton per annum cement factory in the same location.

Semen Indonesia to invest in new plants The Indonesia-based cement manufacturer is prepared to spend more than US$ 700 million on new cement plants in order to meet the demand surge expected after the country’s president announced a boost in infrastructure spending.

Japan expects 2015 cement production to increase Japan cement production is expected to increase in 2015 due to a more robust construction sector, reaching more than 70

According to DwiSoetijpto, president and director of Semen Indonesia, demand will probably rise by as much as 8 percent over the next year due to the more politically stable climate the country will enjoy.

35 OCTOBER/NOVEMBER 2014

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Semen plans to build two new plant, one in Sumatra and one in either Kalimantan or Sulawesi. More so, Semen is looking to expand a packing facility in Papua in order to boost production capacity by at least 18 percent. For the Papua plant, whose capacity will be of about one million tons per year, Semen Indonesia is in talks to purchase five hundred hectares of land.

For the time being, Semen has received final approval for a new cement plant in Rembang, Central Java, despite being challenged by an environmental group. The plant will cost Semen around US$ 400 million and is expected to start operations in 2016, having a 3 million ton per year capacity.

THE PHILIPPINES Holcim Philippines strikes averted The Philippine cement market has seen strikes at two of Holcim’s four major plants having been averted through separate settlements. About a third of the company’s 1,700 employees have been caught in three separate labor disputes with Holcim, but all of them were settled amicably or have been voluntarily withdrawn.

According to a representative of the laborers, the resolution of the issues is best described as a win-win situation, given that harmony in the workplace has been assured and that the country can enjoy a steady supply of cement, essential in the growth of the construction sector.

Cement prices in the Philippines to drop With the country opening its cement market for products coming from other countries in Southeast Asia cement prices are expected to drop.

According to Louie Sarmiento, president of the Philippine Mine Safety and

Environment conference, the Philippine will soon be flooded with cheap and good quality cement as a result of a free trade agreement among the 10 member countries of ASEAN.

announced that will support the setting up of the cement plant. The project has been long delayed because the investment went up from VND 814 billion to more than VND 1,300 billion.

The ASEAN integration will open free trade to member countries that include Indonesia, Lao, Cambodia, Malaysia, Myanmar, The Philippines, Singapore and Thailand. In order to keep up with the foreign competition, the domestic cement manufacturers will have to step up their game as far as the production process goes by making use of the latest technologies.

The project debuted in late 2009, having been halted by mid-2012 because of lack of funds. At that moment, the construction of the plant was 70 percent complete, with 97 percent of the needed equipment having been acquired. For the completion of the project, an additional VND 500 billion are still needed.

VIETNAM Domestic and foreign demand of cement to rise in Vietnam Cement demand in Vietnam is expected to reach 62 to 64 million tons for 2014, rising by 1.5 to 3 percent from last year’s figured.

Domestic demand is forecasted to reach 49 million tons. During the first ten months of the year, cement production reached 56.54 million tons, out of which 41.45 million tons were consumed domestically and 18 million tons left for export.

Vietnam is expected to export by about 15 percent more cement and clinker this year than in 2013, namely 20 to 21 million tons worth US$ 1 billion.

YTL Cement Singapore turns Sin Heng Chan into subsidiary YTL Cement Singapore acquires Sin Heng Chan, turning it into a whollyowned subsidiary. The transaction for the company, which is involved in the business of cement terminal operations and trading in cment, was valued at RM 64.969 million.

Following this acquisition, Sin Heng Chan (Singapore) becomes a wholly-owned subsidiary of YTL Cement Singapore and an indirect subsidiary of YTL Corp.

Lafarge Malaysia cuts profits into half during third quarter Lafarge Malaysia has seen its profits slide

by more than 50 percent during the third quarter of the year, mostly because of high operating costs coming from the increase in electricity tariff and the removal of fuel subsidiary.

Net profits were lower by 52.4 percent this year when compared to last year’s figures, reaching Rm 73.9 million, while revenues amounted to Rm 664.6, down 8.7 percent than the corresponding quarter in 2013.

The weaker performance can be attributed to lower domestic selling prices that came as a result of keen competition.

Siam Cement begins works at plant in Myanmar Thailand’s largest cement producer, Siam Cement, has begun work at its first plant in Myanmar, aiming to start operations at the premises in the second quarter of 2016.

The decision to set up a cement plant in Mawlamyine, Mon State came in August 2013, as a consequence of the growing demand for building materials for residential projects in three key cities, namely in Yangon, Mandalay, and Nay Pyi Taw. Siam expects its sales in Myanmar to reach 2 million tons this year, while its plant in the country will have an output of 1.8 million tons of cement per year.

ASIA-PACIFIC Company/Location

Overview

Dong Lam Cement plant to start operations The Dong Lam Cement plant in PhongDien district, ThuaThien Hue province will officially begin operations in December, boosting cement supply in Vietnam’s central provinces.

JIANGSU HELIN CEMENT/CHINA

The company has increased its capacity to 8 million tons of cement per year following three transformation projects with a total investment of 1.69 billion yuan

CHINA NATIONAL MATERIALS GROUP/ CHINA

The company is looking for opportunities in Africa and in other overseas markets, following weakened demand on the Asian market

ANHUI CONCH CEMENT/CHINA

Conch Cement has entered a joint venture with Myanmar's Myint Investment group to upgrade the No. 33 Kyauske cement factory to a 5,000 tons of cement per day capacity.

The plant, which has a capacity of 2 million tons per year and 5,000 tons of clinker per day, was built on an area of 100 hectares with an investment of VND 4.7 billion.

The plant’s capacity is set to increase to 4 million tons of cement per year until 2020.

SEMEN CEMENT/ INDONESIA

Semen has received final approval for the set-up of a cement plant in Rembang, Central Java. The investment for the 3 million tons per year plant will reach US$ 400 million

SEMEN CEMENT/ INDONESIA

Semen Cement expands to the west with a cement plant in Aceh and with one in Papua plant. Each of the two cement plants will have a capacity of 3 million tons per year.

DONG LAM CEMENT/VIETNAM

The company's cement plant in Phong Dien will start operations in December. The plant has a 2 million tons per year cement capacity.

TAIWAN CEMENT CORP/TAIWAN

The Taiwanese cement manufacturer plans to acquire a counterpart located in Sichuan Railway Group

SIAM CEMENT/THAILAND

Sam is to set up four new cement plants in the next five years, the total investment costing a total of US$2.65 billion

Government supports plant construction in Vietnam The construction of a cement plant in Anh son district, NgheAn, has been delayed for years, but the Vietnamese government

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REGIONAL REPORT:

NORTH AMERICA Lehigh Hanson cement plants get ENERGY STAR certification Four of Lehigh Hanson’s cement plants have received the United States Environmental Protection Agency’s (EPA) prestigious energy Star for the year 2014. The plants, which are located in Leeds, Ala., Union Bridge, Md., Glens Falls, N.Y., and Redding, Calif., perform within the top 25 percent cement plants across the United States for energy efficiency by meeting the strict demands of energy performance levels set by the EPA. Dan Harrington, President and CEO of the company said that the company is committed to operating in a safe and environmentally responsible manner, and that the superior management efforts at the four plants awarded by the EPA are a clear reflection of this commitment.

Cement consumption in the United States to reach expectations Despite a late start to the construction season and a weaker than expected housing start numbers, Washington-based Portland Cement Association (PCA) expects consumption levels in the United States to reach the 2014 forecast expectations.

According to the PCA’s forecast, the United States’ cement market will grow by 8.2 percent in 2014, and by similar rates during the two following years. PCA’s Chief Economist and Vice President Edward Sullivan mentioned that minor adjustments having been made to PCA’s September forecast, mostly regarding the construction subsectors, which have been trimmed slightly.

37 OCTOBER/NOVEMBER 2014

Moreover, Sullivan noted that sustained gains in job creation, stronger state and local tax receipts, more favorable return on investments for commercial building, as well as stronger household formation are likely to lead to more significant construction spending during the following year.

Cemex to expand mining operations in Florida Cemex plans on expanding its mining operations in north of Brooksville, Florida, now awaiting on the county commissioners approval to do so.

Though an initial request in this sense was furthered in August, Cemex asked for a delay until December 9 so as to have the time necessary to prepare a presentation to help address concerns from residents and county staff.

In July, Cemex requested the reformulation of an amendment to the county’s future land-use map for the targeted 720 acres, but the request was turned down after the planning and zoning board determined that the expansion was inconsistent.

construction projects have been set back one or two months on account of the delays.

The harsh weather has been addressed by Lafarge North America representatives, who have said that the early onset of winter this year has led to a dramatic drop in construction activities and in the demand for cement.

Investigation requested for cement plant grant in Canada Two American senators, Schumer and Kirsten Gillibrand, have demanded the initiation of an investigation by the Office of United States Trade Representative on the US$450 million grant from the Quebec state to McInnis Company for the construction of a US$1 billion cement plant in Port-Daniel, Gaspesie.

The two New York State senators worry that the cement produced at the facility, which will be mainly imported by the United States, has been “unfairly subsidized”, hence could flood the American market through artificial prices and affect the American cement industry.

The expansion of mining operations in Florida is worrisome for residents who fear that the vibrations caused would be so intense their homes would shake. Cemex officials have addressed these fears, finding them groundless.

They have also pointed that the profitability of the cement plant largely depends on the lower cost exports to the United States, thus creating “potentially unfair commercial practices” in the detriment of Lehigh Hanson and Lafarge cement plants in the State of New York.

Cement shortages in Michigan delay construction works The harsh weather and the early winter experienced this year in Michigan have led to delays in the shipment of cement, troubling several construction sites in the state. Some

Lafarge opposed the construction of the project in Port-Daniel-Gascons from the very beginning, while environmentalists have also rose against the project, finding it highly polluting because of the production of greenhouse gas emissions.

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SOUTH AMERICA Venezuelan government developing mini plant In partnership with India, the Venezuelan government will erect a mini cement plant in a region rich in limestone, in the south of Yaritague, Peña County, in the Yaracuy state. The plant will have a capacity of 600 tons of cement per day, or 4.5 million bags per year.

The plant is one of the three mini plants to be developed in Venezuela, each of them being assigned a budget of US$15 million.

Costa Rican party asks for lowered prices on imported cement Otto Guevara, the president of costa Rica’s Libertarian Movement Party, has proposed changes in the 2014 regulations to allow a 25 to 50 percent cut of imported cement prices.

Guevara has sent a formal request to the Minister of Economy, Industry and Trade, Welmer Ramos, to be reviewed. The main issue at hand is the fact that imported cement, which currently costs about US$10.21 per bag, is more expensive, favoring companies operating in the country.

Dominican Republic to use more waste Omar Ramirez, a climate change expert has been quoted saying that as much as 40 percent of the fuel used in the cement industry during the manufacturing process will have waste as a source by 2018.

Ramirez, who is the executive vice president of the National Council for Climate Change and Clean Development Mechanism, said that in four years, the cement sector will use about 450 tons of waste to partly power its plants, meaning the carbon dioxide emissions could be lessened by 800 thousand tons annually.

The target, which has been set by the “Eco-

nomic Development Plan Compatible with Climate Change” program in the Dominican Republic, has been implemented starting this year.

Sales of Grupo Cementos de Chihuahua and Cemex rose in Q3 Both sales of Mexico’s Grupo Cementos de Chihuahua and Cemex rose during the third quarter of the year.

For Group Cementos de Chihuahua, the third quarter ended with sales amounting to 3.16 billion pesos, up 16.1 percent over the year ago period. The growth was due to higher volumes of cement and concrete sold in the United States and in Mexico. In

AMERICAS Company/Location

Overview

Cemex/United States

Cemex is to expand its mining operations in Brooksville, Florida, the company's request now pending approval from the county's commissioners.

Venezuela

"The Venezuelan government has entered a partnership with India to erect a mini cement plant in Yaritague, Peña County, in the Yaracuy state. The plant will have a capacity of 600 tons of cement per day, or 4.5 million bags per year, requiring an investment of US$ 15 million.

Venezuela

The President of Venezuela announced the opening of a new cement plant in the Mongas State.

Cementos Pacasmayo/Peru

The country's second largest cement company is expected to complete he construction of its Piura plant in July 2015. the investment in the new facility amounts to US$ 385 million, generating 2,000 jobs.

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the United States, the company increased its sales by 18.8 percent, while sales in Mexico grew by 8.4 percent. Cumulative net sales in 2014 were 19.4 percent higher than during the same quarter of 2013.

Higher volumes on the Mexican and North American market have also driven Cemex’s sales up during the third quarter.

The Mexican company’s net sales reached US$4.1 billion, standing for a 4 percent increase from last year’s third quarter. Operating EBITDA increased as well, growing by 3 percent to US$767 million.

Apart from the higher volumes in Mexico and in the United States, the profit for the quarter has also been driven by sales in South America, the Caribbean and Asia regions, and by the higher prices in most of Cemex’s operations.

Cementos Argos plans to use used tires in its Colombian plants Cementos Argos has made public its intentions to lessen the environmental impact of the seven million tires produced in Colombia, out of which a large percent ends up in landfills and streams, contributing to the country’s pollution.

Cementos Argos plans to perform logistical adjustments to use used tired in its production cycle as a replacement for coal or gas fuel in its clinker furnaces. The re-

39 OCTOBER/NOVEMBER 2014

placement rate envisaged ranges between 5 and 10 percent.More so, the company has installed adequate filtration systems that would ensure that the replacement of fossil fuels with chopped tires will not produce more emissions into the environment. The pilot project will debut in the Rioclaro plant in Antioquia, and will continue in Cartagena. The company hopes that the measure will reduce coal consumption by as much as 20 percent during the first phase.

The growth expected is in the range of 10 to 20 percent, mostly coming from cities such as Santa Cruz, La Paz and Cochambamba. Insumos Bolivia, a state cement company, reported that it imported 400,000 bags of cement up to September, and that 1 million bags are expected to be imported by December. Itacamba is also planning toimport cement from Brazil. At the moment, the plant is operating at full capacity, producing 380,000 bag of cement on a monthly basis.

Cementos Argos has enjoyed boosted revenues during the third quarter of the year.

The company posted profits amounting to US$111 million, representing a 68.7 percent increase in a year over year comparison.The company’s cement sector revenues grew by 16.2 percent, reaching US$2.19 million, most of the growth being driven by expansion plans in regional markets. Cementos Argos’ United States business reported a 44 percent increase in revenues, while volumes of cement expanded by 59 percent over the year ago period.

Cement consumption falls in Argentina Out of the 24 provinces of the country, only nine registered growth during the first nine months of the year. Demand grew in Santa Cru, La Roja, Neuquen, in Santiago del Estero, Chubut, Catemarca, Chaco and San Luis, only surpassing a growth of 10 percent in Santa Cruz and in La Rojia.

Bolivia will import cement in order to meet demand With cement demand in Bolivia continuing to soar, plans of importing cement are being made by companies which find themselves overwhelmed by the expected consumption levels.

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The steepest decline during the period was felt in Corrientes, where demand dropped by 19 percent, being followed by Fuego, where consumption fell by 15.3 percent, and by Misiones, with a 11.1 percent drop.

October, one the other hand, had been a good month in terms of domestic dement consumption, having exceeded 1.1 million tons, increasing by 5.3 percent from the September figures. The increase reflected the sustained pace of growth of private buildings and mass housing.

sector coverage : Construction & BUILDING MATERIALS by BmWeek.com

CONSTRUCTION & BUILDING MATERIALS

BY BMWEEK.COM AGGREGATES Peru approves aggregate extraction regulation Peru’s ordinance regulating the extraction of aggregate materials from river banks has been unanimously approved, thus putting an end to the indiscriminate extraction of aggregates in the country Part of the ordinance regulates that those who want to extract the construction material have to obtain a license indicating the volume, time, specific location and pay rights to the farmer owning the land.

Moreover, an environmental impact study ought to be submitted to ensure the conservation of the natural setting.

Breedom Aggregates expands asphalt operations Breedon Aggregates, UK’s largest independent aggregates company, has purchased asphalt plants at Canveham near Bury St. Edmunds and Wivenhoe near Colchester, thus extending its reach into Suffolk and Essex.

The Cavenham plant has a capacity of about 200 tons per hour, while Wivenhoe’s

capacity stands at 120 tons per hour. Both of the plants have been previously owned

by Hope Construction Materials.

CONSTRUCTION Real estate market boom in China tempered The boom experienced in the last couple of years on the Chinese real estate market has slowed down considerably, its effects being noticeable in the decline of steel and cement prices, as well as in that of retail sales of housing.

The slowdown is expected to continue in the future, a 1to 3 percent decline being predicted in the years between 2015 and 2025. Both diminishing of demand and the oversupply of housing have led to the slowdown.

Construction activity intensifies in Panama Panama’s construction sector is estimated to have grown by 6 percent during 2014. During the third quarter of the year, construction activity posted a 16.2 increase, making the construction sector one of the fastest growing ones of the national economy.

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Roderick McGowen, the president of Panama’s Chamber of Construction, stated that the drive behind the growth came from a combination of private sector and government initiatives.

Demand for building materials in Gaza increases Gaza is now demanding ten million tons of building materials to restore the damage made by the Israeli attacks. Since October, over 4,000 tons of building materials have been imported into Gaza, while 43,000 tons entered Gaza under the supervision of international organization.

With many people still homeless during the cold months of the year, Gaza officials are urging the international community to speed up the process of rebuilding the affected parts in the region.

UK construction sector dominated

by London For the month of November, London accounted for a quarter of the total value of construction contracted in the United Kingdom, dominating the sector for seven consecutive months. The value of the contracts awarded during November reached

OCTOBER/NOVEMBER 2014

40

sector coverage : Construction & BUILDING MATERIALS by BmWeek.com

GBP 1.2 billion, the same as the North West, North East and Yorkshire combined.

The figures show that the North-South divide in the United Kingdom still prevails in the industry, though this came as no surprise for industry professionals in the North, who have long deplored the share of construction activity held by London.

The Dutch construction sector to grow in 2015 The Dutch construction sector has been showing clear signs of improvement over 2014, indicating that the market is set to make a full recovery in 2015.

The positive forecast on the market is sustained by indicators such and consumer and business confidence, coupled with improving building permits and housing prices.

New Zealand increases investments in building and infrastructure projects The country’s capital city is getting ready to pump out more than US$10 billion worth of building and infrastructure projects over the next five to ten years.

In order to meet the building demand in Auckland, 32,000 more workers will be required by 2018. At the moment, 162,000 people work in the construction and infrastructure sector in Auckland. 2018 is the year in which the construction activity is expected to peak and increase by 44 percent when compared to the work completed in 2013. More so, new house buildings will more than double over the next decade.

The Brazilian construction sector expected to stagnate The growth rate of the Brazilian construction sector is expected to be close to zero during 2015. The estimation is justified by the adjustment phase of the housing market, the lowest growth in income and in the rates of household consumption.

According to the Union of Civil Construction industry of São Paulo, the positive conditions for the construction sector, such as the fact that new investments will

41 OCTOBER/NOVEMBER 2014

intensify towards the second half of the year, are not enough to counterpoise the negative factors.

CONCRETE U.S. Concrete acquires Diamond Concrete assets The company acquired the ready-mixed concrete assets and property of Diamond Concrete on Staten Island, New York.

With the acquisition, U.S. Concrete has increased its footprint to the eastern side of Staten Island, being now able to allow the company to more efficiently provide concrete to the increasing number of commercial and residential construction projects on Staten Island.

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Researchers to create environmentally-friendly concrete A group of Indian researcher collaborating with academics from the University of Bath are trying to come up with an environmentally-friendly concrete that would use plastic waste as a partial replacement for sand.

More than 10 percent of sand used in the mix for creating concrete is to be replaced with shredded plastic waster. The researchers are interested on how plastic will affect concrete’s strength, durability, fire and thermal properties. The development of the product is time sensitive given that India is dealing with two serious issues: rapid and unregulated sand extraction from riverbeds and the unprecedented level of plastic waste arriving in landfill.

equipment

FLSmidth to supply cement production line for Cemex plant The global engineering company based in Copenhagen, Denmark, has signed an engineering, procurement and construction contract (EPC) with Cemex for the supply of a new cement production line to be installed at the cement manufacturer’s Odessa plant in western Texas.

For the new production line, which is expected to have a daily output of 2,540 tons, the range of equipment supplied will include a 5-stage ILC preheater with a Low NOx Calciner, 3-pier kiln, FLSmidth CrossBar cooler, Duoflexburner, Pfister weighing and dosing system, gas analyzers and three Fuller-Kinyon pumps. An FLSmidth control system will also be supplied in order to help insure the efficiency of operations.

Algerian Calempa inaugurates NEW line for cement bag PRODUCTION The Algerian Company of Paper Packing (Calempa) has acquired a new fully automated production line from German Windmoeller&Holscher for manufacturing cement bags at its Zahana plant. The new line will supply over 100 million cement bags over the next few months, adding to the already existing manufacturing capacity.

The machine is able to produce 320,000 bag per eight hours, thus increasing the company’s production capacity from 65 million bags per year to 160 million. The investment in the line reached EUR 10 million, and was made in order to meet the

increasing demand for cement.

UK arm of Cemex signs contract with Motiva The United Kingdom arm of Cemex has signed a GBP 1.2 million contract with Motiva for the supplying of eleven 26-ton vehicles to Cemex The DAF CF 330 FAT Euro 6 machines, which are fitted with McPhee Mixers, are being supplied by Heathrow Truck Centre in Reading. Some of the vehicles, valued at GBP 108,000 each, are already being put to work in the United Kingdom as part of a 469-strong fleet.

FLSmidth’s president of cement division, Per MejnertKristensen, mentioned that the new production line will help Cemex keep up with the rapid pace of development and industrialization in western Texas.

Yacuses plant in Bolivia ordered FLsmidth equipment FLSmidth and Sociedad Boliviana de Cemento (Soboce) have signed a partnership to build a US$180 million plant in Yacuses to increase the company’s capacity.

The capacity of the plant will be of 800,000 tons per year, and the number of people working at the plant will probably be in the range of 2,000, out of which 1,500 will be indirect jobs for the benefit of the inhabitants of the region.

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OCTOBER/NOVEMBER 2014

42

FLASHBACK NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS (darker red shows higher news volume)

CW Group Meeting Agenda The CW Group will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry. To learn more, please visit http://research.cwgrp.com/meetings

CW Research Webinars:

Conferences where the CW Group will be presenting

Global Slag Markets: A quick look at the past year

FEB 5, 2015 at 2:00 PM GMT

Global Cement Volume Forecast Report: 1H2015 update and outlook

FEB 19, 2015 at 2:00 PM GMT

43 OCTOBER/NOVEMBER 2014

www.cemweek.com

Cement Business & Industry (CBI) Brazil & LatAm 2015

FEB 4-5, 2015

Sao Paulo, Brazil InterContinental Hotel

BrasCon 2015 Industry Conference

MAR 4-5, 2014

Sao Paulo, Brazil Hotel Radisson Vila Olímpia

AshTrade Europe 2015 Fly Ash Industry Conference

APR 22-23, 2015

Frankfurt, Germany

World Paper and Pulp (WPP) Brazil & LatAm 2015

APR 15-16, 2015

Sao Paulo, Brazil Hotel Radisson Vila Olímpia

buzz TOP CEMWEEK STORIES 1

India’s Dalmia Bharat to place a bid on Holcim and Lafarge European assets

2

China Construction and Lafarge Shui On Cement sign strategic agreement

3

Andhra Cements begins production at two new plants in India

4

Cement companies in Saudi Arabia to expand to meet growing demand

5

Cemex wants to expand mining operations north of Brooksville, Florida

6

India’s UltraTech Cement considers buying Jaiprakash cement plants

7

Lafarge Africa Plc expands production capacity in Nigeria

8

Atlantic Cement builds new plant in Morocco

9

Lafarge Canada to expand operation near Caledon village

10

New cement plant to be established in Angola

11

Chinese cement production rose in January-October

12

Holcim and Lafarge merger well on track in India

13

Holcim develops educational forest in Indonesia

14

Cement company in Saudi Arabia to establish new production line

15

Holcim and Lafarge name management for merged company

CEMWEEK.COM agreement

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annual arabia’s assets attributed average board boost boosted building bulk canada china coal concrete consumpcemex

tion

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Brazil’s building materials exports to the GCC region up

2

Cemex launches initiative for social and inclusive businesses

3

Itochu Corp to sell PrimeSource Building Products

4

Korean company signs deal for integrated steel mill project in Oman

5

Colombian building materials sector is growing

6

Kuala Lumpur begins new urban development project

7

Nicaraguan President met with HKND Group

8

Gaza engineer develops replacement for cement

9

Italian steelmaker to sell complex to Cevital

10

Azerbaijan building materials production up

11

Concrete products manufacturer in New Zealand admitted to contravening the Competition Act

12

Building materials prices stabilize in Argentina

13

U.S. Concrete subsidiary acquires Mobile-Crete

14

Arab contractors may gain memberships of EFCBC

15

Strabag subsidiary wins contract for hydroelectric power plant in Chile

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OCTOBER/NOVEMBER 2014

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A CEMENT AND LIME INDUSTRY CONFERENCE AND EXHIBITION BY

2015 June 25-26, 2015

Johannesburg, South Africa

REGISTER NOW! GLOBAL CONTACT Beatrice Ene Client Development & Marketing Director be@gmiforum.com +40 722 764 802

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