India Cement & Construction Materials (vol 1 / issue 33)

india A CemWeek Publication

issue 33

Cement

November/December 2016

& construction Materials

Q&A: Leaders

Amandeep Gupta Director & CEO Cement, OCL

feature Optimizing energy efficiency CW RESEARCH Shy recovery for the Indian cement sector

News

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Analysis

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Market Coverage

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Interviews

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People

FEATURES

DEPARTMENTS

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EDITORIAL LETTER

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NUMBERS IN BRIEF

optimizing supply chain management

Agile cement supply chain spurs growth by focusing on avoiding potential shortages and eliminating excessively stocked inventory.

Higher degrees of efficiency in supply chain and logistics are becoming increasingly important.

10 CW Research: Shy recovery for the Indian cement sector

Despite gray cement prices following the global, downward trend, Indian ex-works prices show an important recovery in the third quarter, according to 4Q2016 update of CW Research’s Global Cement Trade Price Report (GCTPR).

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Cement & construction Materials

www.cemweek.com/india

rOBERT MADEIRA

Accelerating growth

cemweek publisher head of cw group research

Performance of India’s Cement Sector

GABRIEL BURETE Content Editor & Online Coordinator

research and analytics 20 Cement Volumes 22 Cement Energy 40 ANALYST RECOMMENDATIONS

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Q&A Leaders: Growing responsibly

Mr. Amandeep Gupta, Director & CEO Cement, OCL, talks about the company’s growth path, future plans and social and sustainability practices.

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MARKET AND COMPETITION M&A and FINANCE

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letter from editor

Accelerating growth From new-comers to market leaders, cement companies try to find the path to growth while also navigating cost, environmental and sustainability obstacles.

esides being the fastest growing medium size cement manufacturer in India, OCL Cement is also a leader in adopting environment-friendly technologies and reducing the carbon footprint. Read more about the company’s growth path, future plans and social and sustainability practices in an exclusive interview with Mr. Amandeep Gupta, Director & CEO of OCL Cement.

Higher degrees of efficiency in supply chain and logistics are becoming paramount for India’s cement companies struggle to cope with market pressures and the need for cost reduction. Agile cement supply chain spurs growth by focusing on avoiding potential shortages and eliminating excessively stocked inventory. This issue of India Cement and Construction Materials (ICCM) journal covers measures taken by cement producers, in order to optimize the supply chain management.

show signs of recovery. The current issue of our magazine also features highlights from the 4Q2016 update of CW Research’s Global Cement Trade Price Report (GCTPR).

And as usual, India Cement and Construction Materials journal provides all the relevant news about the main indicators of the industry, including the latest facts and figures about cement volumes, energy prices, relevant people in the business, regional developments, equipment and construction projects. Don’t miss out the numbers and the trends laid out in the special sections.

Global cement demand is expected to increase and, even though prices follow a downward trend, some markets

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November / December 2016

India Cement and Construction Materials Journal

Gabriel Burete

Content Editor & Online Coordinator

numbersin brief Cement production: With energy typically accounting for 30 or even 40 percent of production costs in the cement industry, the task of finding the most efficient fuel mix becomes increasingly important and with direct impact on company results.

The fuel challenge Over the past months, petcoke prices have increased significantly, pressuring cement companies to adjust their fuel costs. On a per mmBTU basis, prices for high sulfur petcoke have increased more than 77 percent in December 2016 as compared to the same period in 2015, reaching $1.5 per mmBTU.

Comparative fuel prices ($/mmBTU) $3

Richards Bay coal 5,500 kcal/kg NAR

Bhavnagar Lignite 4,500 kcal/kg NAR

High sulfur (>5%) petcoke

$1

Dec '15

Jan '16

Feb '16

Mar '16

Apr '16

May '16

On the other hand, coal prices (Richards Bay coal 5,500 kcal/kg NAR) have also been on the rise, reaching in December 2016 $2.1 per mmBTU, up from $1.2 per mmBTU in December last year.

This has made petcoke an attractive fuel choice again, but the fuel cost increase is definitely impacting market prices and overall financial results for cement producers.

Jun '16

Jul '16

Aug '16

Sep '16

Oct '16

Nov '16

Source: CW Research

$2

In terms of petcoke discounts compared to burning Richard’s Bay coal, the discount rate at the end of 2016 is at a similar rate as last year, but over the past year, the figure has been as low as 6 percent (in August 2016) compared to discount rates of around 40 percent previously seen.

DISCOUNTs TO RICHARDS BAY COAL (% discount to RB coal on per unit of calorific value basis) 100

G8 grade domestic coal <5,200 kcal/kg >5% petcoke

Bhavnagar Lignite 4,500 kcal/kg <5% petcoke

80 60

Source: CW Research

40 20

Nov '16

Dec '16

Finding the right coal-petcoke fuel mix remains the challenge.

Although international coal prices have been on the rise, domestic

coal remains highly available in India, with pricing levels in the past six months below $1 per mmBTU.

India Cement and Construction Materials Journal

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feature

Growing

responsibly

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November / December 2016

India Cement and Construction Materials Journal

We discussed OCL Indiaâ&#x20AC;&#x2122;s growth path, future plans and social and sustainability practices with Mr. Amandeep Gupta, Director & CEO Cement.

India Cement and Construction Materials Journal

November / December 2016

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feature Q. The boards of Dalmia Bharat Limited and OCL India have recently announced the merger of the two entities, a move that will create the fourth largest cement maker in the country with an installed capacity of 25 million tons per annum and annual revenues of about Rs 10,000 crore. How do you expect this to affect your position on the Indian market?

A: Merger of OCL India with Dalmia Bharat will create a single listed entity, giving our shareholders, a true value of a pan India player. This merger will also help us to drive synergies further.

Q. Mr. Hennie Botes, CEO of Moladi, told us that the African governments have begun understanding how critical housing is for the fight against poverty. Is the situation similar in India? How important is the housing segment for the Indian market and for your company?

A: The housing sector plays a very critical role in every growing economy as it affects the countryâ&#x20AC;&#x2122;s GDP in multiple

Amandeep Gupta, Director & CEO Cement,

OCL India Ltd, is a senior professional with more than 25

years in various positions spanning the academic and corporate domains. He holds a degree in mechanical engineering, a masters in Industrial Engineering. In his present assignment, Amandeep is leading OCL on a growth trajectory to become one of the top three cement companies in East.

september November /- December october 2015 2016

Source: google.com

Housing for all by 2022 is a USD30 billion governement project that aims to provide affordable housing to urban poor

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ways, both directly and indirectly. With India being the second largest populous country, it is even more relevant here.

The Government of India has launched its Housing for all by 2022 mission last year, which envisages the construction of 2 crore houses pan-India, by the mentioned date. This will directly provide a boost to many sectors, from heavy industries, like Cement and steel, to others such as paint, furniture and even small scale industries. Also, the housing sector is one of the top five employment generators in

INDIA IndiaCEMENT Cement&and CONSTRUCTION Construction MATERIALS Materials MAGAZINE Journal

Source: google.com

OCL Eye Centre, a sattelite Centre of L. V. Prasad Eye Institute

India. Thus, the boost in housing also has a deeper indirect impact. Strong housing activities will remain a key to Indian market in the next 5-10 years.

Q. The construction industry has been seeing an increased focus on sustainability and environmental commitments. We know that OCL India inaugurated a 5.5MW captive solar power plant in West Bengal. What other measures could we expect to see?

A: Dalmia Bharat Group has always been a pioneer in adopting environment-friendly technologies and so is

OCL. We are a global leader in reducing in Odisha. We have started construccarbon footprint. OCL’s average CO2 tions of a waste heat recovery system emission is 330 kg/ton, as compared to to generate power from waste gases of global cement industry average of 612 Cooler (AQC Boiler) and of preheater kg/t. Renewable energy is another area (Preheater boiler), at our Rajgangpur we are focusing on now. Dalmia Ce- unit. We will look forward to newer ment has recently joined RE 100, with opportunities and technology that will a long-term commitment of 100% renewable energy.

OCL India has two captive solar OCL’s average CO2 emission is power plants – 330 kg/ton, as compared to global cement 5.5 MW at OCL Bengal Cement industry average of 612 kg/t.

Works near Medinipur in West Bengal, and another 2.5 MW plant at help us maximize the renewable energy Kapilas Cement Manufacturing Works, component in our overall energy mix.

India INDIA Cement CEMENT and & CONSTRUCTION ConstructionMATERIALS MaterialsMAGAZINE Journal

November september/ -December october 2015 2016

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feature Q. Surpassing the recession, the global construction market is expected to almost double in the next 15 years. Do you feel that the effects of the growth start to show in the Indian market?

A: Any recovery in global construction market will take its own time to trickle down to Indian market. The Indian market is certainly showing some resilience, but it is more driven by domestic factors, rather than global effects. Government planned infrastructure and housing sector developments, like smart city projects, Housing for all et al. have driven the hopes high.

Q. Not long ago, you were quoted announcing the opening of a second unit in West Bengal.

What are your plans for further expansion?

A: In the recently concluded Investors conclave organized by the Government of Odisha, we have announced the investment of Rs.2,000 crore in the State. The investment will be in capacity expansion of our 4 MTPA integrated cement plant at Rajgangpur.

OCL India clinker gate, Rajgangpur

higher potential and deliver even better results for our stake holders.

op and produce Portland slag cement in India, utilizing steel plant waste for high strength cement and IRST-40 Cement for Railway Sleepers. We are also the first to manufacture Oil Well Cement. Our commitment to create a better customer experience by innovative products through R&D will continue. In June-July this year we launched premium-grade Dalmia DSP Cement

Q. The importance of R&D activities in innovative Q. How has the company product development cannot performed during the last two be stressed enough. What years in terms of growth and investments are you planning product launches, especially for the nearin the context of the two term in this important mergers in the area? Are you cement industry, and your planning to We have increased gross revenue, imminent one? launch any new profit and, most importantly, overall A: OCL India is on a steady growth product in the path. We are not only increasing our market share geographical footprint, but also have in- near future? creased gross revenue, profit and, most importantly, overall market share. In fact, very recently we have been awarded as the fastest growing medium size cement manufacturer in the country.

This is third time in a row that we won this award. The synergy from the merger with Dalmia Bharat will help us unlock

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November / December 2016

A: Innovation has been our strength since the very beginning. Our R&D team has been contributing to constantly improving product quality and developing better grades, ultimately enriching customer experience. OCL was one of the first companies to devel-

India Cement and Construction Materials Journal

in Odisha, West Bengal, Bihar and Jharkhand and the response has been very positive. We intend to consolidate our position in markets we are operating right now before looking forward to introducing any new product.

Source: google.com

facilities to nearly 2000 students at our Dalmia Bharat Foundation has recent30 remedial centers operating around the ly signed an MoU with the National Skill plant areas. We had also provided schol- Development Corporation to impart skill arships to around 100 students to go for training to 60,000 youths in the next ten higher education. OCL Eye Center at Ra- years through ten skill centers. OCL aljgangpur, in association with LV Prasad Eye Institution, has been one of our key projects at Rajgangpur. It has already treated over 15,000 We focus our CSR efforts on four patients in the past key areas - Education, Health & two years. Recently, Sanitation, Skill development and we have also set up an eye center near our Infrastructure development mines at Lanjiberna, in Sundargarh district, in line with our aim to ready has a reputed industrial training make the district blind-free by 2020. The center at Rajgangpur and it is helping the health center at Lanjiberna too is doing Foundation to come up with two skill cenwell. It has provided free medical ser- ters at Rourkela and Cuttack in Odisha. vices to 22,200 patients and attended over The centers are expected to become opera14,000 through its mobile unit. tional very soon.

Q. CSR actions have been important for your company, in the past, ranging from healthcare services to investments in education. Could you give us some examples of ongoing projects that your firm has initiated?

A: OCL India Limited has always been a socially responsible entity. We have laid a keen emphasis on overall socio-economic development of peripheral areas and communities. We are now focusing on four key areas â&#x20AC;&#x201C; Education, Health & Sanitation, Skill development and Infrastructure development â&#x20AC;&#x201C; with multiple projects running simultaneously to channelize our CSR efforts.

OCL India plant, at Rajgangpur

India Cement and Construction Materials Journal

Source: google.com

In education, our focus is on helping the students aim for a higher education and a good career, rather than limiting themselves to basic studies. During the last financial year, we had provided coaching

November / December 2016

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feature

Optimizing supply

chain

management

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November / December 2016

India Cement and Construction Materials Journal

Source: google.com

Agile cement supply chain spurs growth by focusing on avoiding potential shortages and eliminating excessively stocked inventory.

India Cement and Construction Materials Journal

November / December 2016

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feature igher degrees of efficiency in supply chain and logistics are becoming paramount for Indiaâ&#x20AC;&#x2122;s cement companies struggle to cope with market pressures and the need for cost reduction. Most industry players are looking at ways to optimize not only the production processes, but also everything that happens outside the plant, that is directly linked to sourcing and delivery.

Supply chain management challenges

When dealing with customers, Indian cement makers have to consider the needs and preferences of two major consumer segments. First, the individual house builders. These are retail customers with limited technical knowledge of construction materials, which means that brand value and

durability are their top most criteria for selection. Second, the Infra-Commercial and Industrial segment, which consists of builders and big construction companies who have sufficient technical knowledge of product. Quality, price and service are the most important for these buyers.

september November /- December october 2015 2016

Sourcing of limestone, coal, fly ash and gypsum too poses certain challenges, while fuel and freight costs carry a significant amount of the final cost.

Then, cement makers have to take into account a full range of supply chain and lo- To the benefit of the cement industry, high gistic challenges. Regional pricing is one of grade limestone reserves are scattered unithem, meaning that there are non uniform formly all across India. Volume-wise, limeinput costs and zonal capacity imbalanc- stone accounts for almost 60 % of raw material. Since setting up plants near es. Moreover, quarries saves inbound transport the market is costs, proximity to reserve is the fragmented single most importamong many ant criteria. Mining regional playAs much as 95% of coal royalties imposed ers, while mining is still in control of the by the state govthere is a cycentral or state government ernment are paid clic demand, on a per ton basis. which hits bottom during monsoon season. Sustain- Dumpers and shovels used in mining conability is another issue, given the require- sume high quantity of diesel, making it the ments for mining site rehabilitation or second most important cost driver.

Source: google.com

Open cast coal mine in India

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emission control. Government control ads to the process, along with mining royalties and rail freight charges.

INDIA IndiaCEMENT Cement&and CONSTRUCTION Construction MATERIALS Materials MAGAZINE Journal

Source: google.com

JK Cement's thermal power plant (Nimbahera)

Domestic, low quality, high ash coal is As far as fly ash is concerned, thermal used for making cement, which accounts power plants across India produce plenty for the majority of consumption. Compa- of it. Fly ash prices are determined by the nies also use imported coal during peak local demand and supply equation. In this demand season to hedge supply risk. Coal reserves are found mostly in Eastern states. As much as 95 % of coal mining is still in control Most of the big industry players of the central or state governinstall captive thermal power plants, ment. Cement companies, along with steel and power using low grade coal as fuel producers are allowed to do captive or contract mining.

Government companies mined coal, also case too, the freight cost has a significant know as â&#x20AC;&#x153;linkage coalâ&#x20AC;?, is 15-20 % cheaper impact, therefore companies look for the than open market coal. Companies try to nearest sources of fly ash. maximize linkage off take by better liaison with railways and coal mining com- Indianâ&#x20AC;&#x2122;s gypsum reserves are concentratpanies. Since coal reserves are skewed ed in Rajasthan and Jammu and Kashmir towards the eastern zone, freight is the (J&K), where most reserves are either of biggest cost driver. Market coal prices are low purity or deep seated. Over 75 % of determined by the global supply and de- the gypsum requirement is imported from countries like Thailand, Oman and Iran. mand equation.

Since freight prices (sea and inland) are a major cost component, as a thumb rule plants near the west coast buy from Oman and Iran, while plants closer to the east coast buy from Thailand.

Manufacturing Strategy and Challenges As far as manufacturing logistics is concerned, there are two types of manufacturing units: the integrated plants where the entire manufacturing is done, including cement grinding and packing, and the grinding units, where clinker comes as raw material and only grinding and packing is carried out.

Cement plants receive material from various sources, which means that the composition may vary significantly depending on the origin. One of the main concerns

India INDIA Cement CEMENT and & CONSTRUCTION ConstructionMATERIALS MaterialsMAGAZINE Journal

November september/ -December october 2015 2016

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feature for cement plants is to achieve a consistent raw material chemistry , which is managed by blending different grades of material. Making the right mix not only improves the yield, but also saves corrective material costs.

However, power costs are the major component of the manufacturing expenditures. Most of the big industry players install captive thermal power plants, using low grade coal as fuel. Fly ash produced in these plants is consumed in-house, for blended cement. Using alternative fuels and raw materials is another new trend in cement industry. Tire chips, paint sludge and other industrial wastes are incinerated in the rotary kilns, to substitute traditional raw materials and fuels.

Apart from the regular productivity and efficiency related challenges, cement manufacturing faces challenges related to the environment, human resources and even labor unions.

The mining activity causes significant deforestation, noise pollution and emission.

As environmental laws are gradually getting more stringent, the cement sector faces continuous challenges in meeting those norms.

Government increases budget to fast-track road projects

accurate amount of inventory. Adding to that, construction activities in India slow down during the rainy season, which means that the cement demand is cyclic

Distribution Strategy and Challenges

Distribution is one of the key A fine balance needs to be cost drivers in the cement supply achieved between inventory cost chain. Transportation accounts and capacity utilization for 65% of that, with high freight charges from plants to warehouses and then to customers. Packing adds to the expense, accounting for 15% in nature. Therefore, a fine balance needs of the total, while another 20% of the dis- to be achieved between inventory cost tribution financial burden derives from and capacity utilization. personnel costs, clearing and forwarding costs at dumps, local taxes and so on.

Another distribution challenge is the shelf life. Cement has a useful shelf life of approximately 6 months, and customers also have a bias towards fresh cement.

That forces manufacturers to predict an

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November / December 2016

Better supply chains needed for a growing industry

Cement demand in India is expected to increase due to governmentâ&#x20AC;&#x2122;s push for large infrastructure projects, leading to

India Cement and Construction Materials Journal

45 million tons of cement needed in the next three to four years. India's cement demand is expected to reach 550-600 million ton per year, by 2025. The housing sector is the biggest demand driver of cement, accounting for about 67% of the total consumption in India. The other major consumers of cement include infrastructure at 13%, commercial construction at 11% and industrial construction at 9%.

To meet the rise in demand, cement companies are expected to add 56 million tons capacity over the next three years. The cement capacity in India may register a growth of 8% by next year end to 395 million tons, up from the current level of 366 MT. This may increase further to 421 million tons by the end of 2017. The country's per capita consumption stands at around 190 kg.

The Indian cement industry is dominated by a few companies. The top 20 cement

Source: google.com

cost. To improve market servicing ability and reduce the transportation of fly ash, a lot of split-grinding units have come up close to key markets and fly ash sources.

Thus clinker, which is again a bulk natured intermediate product, needs to be transported for long distances in bulk from the production centers to various grinding units.

companies account for almost 70% of the total cement production of the country. A total of 188 large cement plants together account for 97% of the total installed capacity in the country, with 365 small plants accounting for the rest. No less than 77 of these large cement plants are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

novate on the manufacturing side, while transportation, which is an important part of the logistics cost, is left to the transporter to decide the type of vehicle to be used.

A commodity market is characterized by perceived product equality in the eye of customers, resulting in a high preparedness to substitute one make of product for In the current another. Cement scenario road is one such prodIn the current scenario road carries about uct. The fact now 65% of cement is that the success carries about 65% of freight.

Even of brands depends cement freight in case of rail on the supply chain freight, last mile supporting it to connectivity is make it available at ensured by using road transport only. Thus the right time and at right place, but most it is paramount to ensure that issues ham- important at an optimum cost. The need of pering road transport are looked into and the hour is cost reduction. The researchers addressed as road shall continue to be the are therefore attempting to solve this â&#x20AC;&#x2DC;manback bone of cement distribution. Tradi- agement problemâ&#x20AC;&#x2122; through value engineertionally, cement industries only try to in- ing solutions in respect of material handling.

As with any other industry, the cement sector needs to focus on its supply chain for sustainability. Rating agencies today look for companiesâ&#x20AC;&#x2122; stewardship efforts across their supply chain, and frequently direct them to report on this aspect in their sustainability reports. Companies concerned with their cement supply chains can have a significant impact on the overall sustainability of the sector.

Some cement companies have already started assessing supply chain performance, but there is no universal agreement on which factors to consider or their relative importance.

Road transport is the back bone of cement distribution

India Cement and Construction Materials Journal

Source: google.com

With cement being a low value and high volume commodity, transportation costs form a significant proportion of its total

November / December 2016

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REPORT

cw research:

Indian cement ex-works prices show signs of recovery

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November / December 2016

India Cement and Construction Materials Journal

Even though the monsoon season affected demand, Indian cement volumes remain above last yearâ&#x20AC;&#x2122;s results. Gray cement prices follow the global, downward trend, while ex-works prices show an important recovery in the third quarter, according to CW Research analysts.

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REPORT Global grey cement trade prices are trending down and have been so, for the past two years

Ex-works prices decreased in most major cement markets

n 2016, global cement demand is expected to increase by about 2 percent, or even more, if China is not taken into account. The Chinese market is still highly influenced by overcapacity and, despite efforts by the authorities to counteract this by shutting down plants with outdated technology. Volumes, however, increased, albeit at a slower rate than before, according to 4Q2016 update of CW Research’s Global Cement Trade Price Report (GCTPR). In Pakistan we are witnessing strong, double digit growth in the domestic markets, in the first ten months of the year, compared to the similar period a year before. In the U.S., volumes saw a moderate, single digit increase in the first nine months of the year. However, a weaker development in demand in the third quarter has partially offset the growth that we have seen in the second quarter.

On the other hand, in Saudia Arabia, construction has slowed down, on account of lower oil revenues. This affected public spending and led to governmental cuts. The market is also influenced by rising clinker and cement inventories.

Brazil has seen very low volumes this

year, on account of the decreased construction activity, driven by economic downturn. Even though demand has actually increased in the third quarter, it wasn’t enough to offset the weak results in the first half of the year.

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India Cement and Construction Materials Journal

In India, in the third quarter, we have observed a lower amount of sales in almost all regions of the country. That was partly caused by an extended monsoon, that affected construction activity. Still, overall volumes this year remain higher than figures recorded in 2015.

GRAY CEMENT FOB PRICES TRENDING DOWN

Taking a look at export prices, the longterm trend tends to be on the negative side. A marginal recovery has been seen in recent months, however it was not enough to offset the steep decline we have seen in recent months. Prices have increased month by month, from the below USD60 per ton value, in January, registering a moderate recovery by October. We have been tracking the highest and lowest prices worldwide and we have noticed that prices for more expensive exporters have registered an important, two digit decrease. Bottom prices have also dropped, to a lesser extent than top ones.

“Global grey cement trade prices are trending down and have been so, for the past

two years”, said Stefana Abiculesei, CW Research’s lead analyst for the Global Cement Trade Price Report. Some moderate, single digit recovery has been observed in September and October. The main exporters of 2016 were China and Thailand, ac-

counting for about 11 percent of the global traded volume, each.

In India, gray cement FOB prices follow the global downward trend, with both import and export prices registering MoM decreases in the past three (imports) and seven (exports) consecutive months, respectively.

Prices are expected to remain under pressure, going forward, to the first quarter of 2017, with most regions projected to register further decreases. The most notable exceptions are North America and the Asia Pacific-Japan area, in which CW Research analysts predict a stable outlook.

quarter. Brazil has also seen a very modest quarterly recovery. On the other hand, in China quarterly prices fell further, lagging behind on a YoY basis also.

Overall, prices in India saw a marginal, single-digit recovery quarter-on-quarter.

In North India, ex-works prices registered a low double digit increase, of about ten percent, in the third quarter, compared to the previous one. In the South, however, prices decreased a further 6 percent.

CW Research analysts expect prices in China to increase, with improvements in the oversupply situation. Prices are also expect-

India: Cement and clinker export prices (USD/ton)

Overall, ex-works prices in India saw a marginal, singledigit recovery quarter-on-quarter.

About the report The Global Cement Trade Price Report (GCTPR) is CW Research’s benchmark price assessment for monthly gray cement, white cement, clinker and granulated blast furnace slag prices and volumes. The 200+ page report, with extensive coverage through tables and charts throughout, published on a quarterly basis, serves as the industry go-to source for monthly price data for about 70 individual markets worldwide, including multiple cornerstone data series: import, export, ex-works and market prices. Additionally, the GCTPR includes extensive discussion of key players’ pricing strategies as well as trading price forecast and select trade volumes for each country.

Source: CW Research

In India, predictions follow, once again, the global downward trend. In the first quarter of next year, we expect to witness marginal, less than one percent decreases in both gray cement import and export prices.

EX-WORKS PRICES INCREASED IN INDIA, NORTH AMERICA

While some of the markets experienced recovery, at least on YoY terms, ex-works prices decreased in most major cement markets. In the U.S., for example, we have seen an important, single digit recovery, in the third quarter of the year. In Argentina, prices started to recover in the second quarter of the year, carrying on to the third

Global average FOB prices for gray cement registered a single digit decrease YoY, in the third quarter. “Although global clinker volumes increased YoY, the situation was not to favorable, with FOB prices seeing a double digit decrease, when compared to the previous year,” added Stefana Abiculesei.

The Global Cement Trade Price Report also provides regional price indices and a review of notable trading dynamics and drivers in different regions. GCTPR is a must-have resource for all industry participants that need to know and track cementitious prices, including cement traders & exporters, accountants & controllers, producers, analysts and shippers. If you need to know pricing, CW Research’s Global Cement Trade Price Report is the go-to resource.

For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-744-67-44-11, or e-mail at ld@cwgrp.com.

More information about the report can be found at http://www.cwgrp. com/research/research-products/forecasts/product/1-global-cement-tradeprice-report

ed to grow in both the U.S. and India. In Russia, on the other hand, unfavorable exchange rates are expected to impact prices.

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CEMENT MARKETS

CW Research

CEMENT VOLUMES

In Saudi Arabia, demand for cement was 14.8 percent lower in October 2016 as compared to the same month last year. Volumetric sales in the domestic market have been negatively impacted by cuts in governmental spending, particularly in infrastructure investments. These have been triggered by lower oil-income. Furthermore, cement sales are expected to decline further and contribute to an increase in cement and stocks inventories as well.

Demand for cement in Colombia fell in October 2016 both month-on-month and year-on-year for the second consecutive month to 1.00 million tons. Meanwhile, October production of cement has fared better, increasing on a monthly basis by

5.1 percent. Despite the positive monthly result, cement production fell 11.1 percent year-on-year.

Spanish cement demand, standing at 0.94 million tons in October 2016, fell 8.6 percent year-onyear. This development brought overall volumes in the first ten months of the year to a level 0.8 percent below last yearâ&#x20AC;&#x2122;s for the same period.

Demand in Japan also fell in October 2016, further deepening the year-to-date decline in domestic sales. As such, overall sales in the domestic market fell 5.4 percent in the first ten months of the year, down from a 5.1 percent decline observed in the first nine months of the same year. On the other hand, the more moderate decline in cement production indicates that overall net exports have improved so far this year. Cement production in January-October 2016 were 1.7 percent below the cumulative volume reported in the same period last year.

On the plus side, the Pakistani market has seen a rather steep increase in cement volumes. With 3.0 million tons sold in the domestic market in October 2016, volumes rose 18.6 percent monthon-month and 15.9 percent year-on-year. During the first ten months of the current year, domestic demand for cement in Pakistan was 15.2 percent higher than in the same period last year.

October 2016 cement demand â&#x20AC;&#x201C; YoY change (%)

October 2016 cement production â&#x20AC;&#x201C; YoY change (%)

20%

25%

10%

15% 5%

0%

-5%

-10%

Source: CW Research

Source: CW Research

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-866-9474

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November / December 2016

India Cement and Construction Materials Journal

Vietnam

India

Ukraine

Japan

Belarus

Thailand

Peru

Cyprus

Italy

Russia

Saudi Arabia

Cyprus

Pakistan

Thailand

Peru

Japan

Spain

Colombia

Saudi Arabia

-15% Brazil

-20%

Colombia

In Saudi Arabia, demand for cement was 14.8 percent lower in October 2016 as compared to the same month last year.

In October 2016, cement demand in Brazil continued to decrease, falling by 17.6 percent year-on-year. Volumes in October hit 4.7 million tons, down 3.1 percent month-on-month. On the other hand, cement exports by Brazilian manufacturers have improved significantly as producers try to place their product in other markets. So far this year, Brazilian producers shipped abroad 93,000 tons of cement compared to just 22,000 tons in the same period last year.

However, the level of exports if not sufficient to counteract impacts of negative market conditions that hinder recovery for the cement industry.

CW Research

CEMENT PRODUCTION (million tons) Country

LM

MoM (%)

CEMENT CONSUMPTION (million tons) YoY (%)

YTD

YTD (%)

LM

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

CEMENT PRODUCTION MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

LM

YTD (%)

CEMENT CONSUMPTION MOM (%)

CEMENT EXPORTS (million tons) Country

Country

CEMENT IMPORTS (million tons) MoM (%)

YoY (%)

YTD

YTD (%)

Country

LM

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

CEMENT EXPORTS MOM (%)

YTD (%)

CEMENT IMPORTS MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates 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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21

CEMENT MARKETS

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.

CEMENT ENERGY MARKETS

CW Research

Energy Prices Update COAL: Average coal prices in October 2016 closed at $73.86 per ton, up 34.1 percent year-on-year

as compared to $55.09 in October 2015. On a monthly basis, average coal prices rose 18.8% from $62.15 in September 2016.

Steam Coal Fob Average Prices (us$/ton) US exported

Colombia exported

Australia Newcastle

Indonesian HBA

South Africa Richards Bay

110

90

70

Global trading volumes for six major coal countries decreased to 77.52 million tons in October 2016, dropping by 3.6 percent compared to September 2016’s 78.18 million tons.

50

Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep ’12 ’12 ’13 ’13 ’13 ’13 ’13 ’13 ’14 ’14 ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’15 ’15 ’15 ’16 ’16 ’16 ’16 ’16

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

COAL TRADING VOLUMES: Global trading volumes for six major coal countries decreased to 77.52 million tons in October 2016, dropping by 3.6 percent compared to September 2016’s 78.18 million tons. When compared to October 2015, global coal trading volumes rose 3.2 percent. An increase in coal trading volumes occurred in Indonesia and United States, while Australia, Russia, Colombia and South Africa posted volume decreases.

PETCOKE: US petcoke exports 20.8 percent to 2.8 million tons in October 2016 from 3.5 million tons in September, and rose 6.1 percent compared to 2.6 million tons exported in October 2015.

The US export price for petcoke in October 2015 was $64.55 per ton, up 27.0 percent from $50.81 per ton in September 2016 and up 27.0 percent compared to $50.82 per ton in October 2015.

Steam Coal Fob Average Prices (us$/ton) monthly price 80 70

Rolling 12-month average

60 50 40 30 20

S ‘16

O ‘16

A ‘16

J ‘16

J ‘16

A ‘16

M ‘16

M ‘16

J ‘16

F ‘16

D ‘15

N ‘15

S ‘15

O ‘15

A ‘15

J ‘15

J ‘15

A ‘15

M ‘15

M ‘15

J ‘15

F ‘15

D ‘14

N ‘14

O ‘14

10

Source: customs data

NATURAL GAS: The US Henry Hub spot price traded at $2.98 per mmBTU in October 2016, down 0.3 percent as compared to September 2016 and

up 27.4 percent as compared to October 2015’s price of $2.34 per mmBTU. Prices in Europe rose 1.9 percent MoM to $4.91 per mmBTU in October 2016.

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-866-9474

22

November / December 2016

India Cement and Construction Materials Journal

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.

COAL - EXPORTS (million tons) - Oct 2016 Country

LM

MoM (%)

PETCOKE - EXPORTS (million tons) - Oct 2016 YoY (%)

YTD

YTD %

Country

LM

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

YTD %

CEMENT ENERGY MARKETS

CW Research

COAL EXPORTS MOM (%) US PETCOKE EXPORTS PRICES MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

WWW.CEMWEEK.COM/SUBSCRIBE

COAL - IMPORTS (million tons) - Oct 2016 Country

LM

MoM (%)

YoY (%)

YTD

YTD %

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

PETCOKE - GLOBAL EXPORT PRICES (USD/ton) Country

COAL - GLOBAL EXPORT PRICES (USD/ton) - Nov 2016 LM

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE COAL EXPORT PRICES MOM (%)

MoM (%)

Oct 2016

YoY (%)

YTD

YTD %

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE Country

LM

WWW.CEMWEEK.COM/SUBSCRIBE

YTD %

NATURAL GAS PRICES (US$/mmBtu) - Nov 2016 Country

LM

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

YTD %

NATURAL GAS PRICES MOM (%)

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

Source: CW Group analysis estimates LM: latest month Jan 2016 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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November / December 2016

23

cement market and competition

M

arket and competition

Cement sales impacted by demonetization Cement sales are expected to drop by 10 percent during November. According to Sanjay Ladiwala, the chairman of Cement Stockists & Dealers Association of Bombay. Ladiwala says that the sector is suffering the impact of demonetarization, the decision from the Union government to remove banknotes with a face value of INR 1,000 and INR 500 from circulation. Small traders were the ones most affected by that measure, since much of the trade between large construction sites and suppliers are already made through bank transfer.

Demonetization has created a shortterm liquidity issue. Banknote collecting will continue until December 31, 2016. Until then, Ladiwala predicts that cement sales will continue to be impacted by demonetization. The fall in sales, he adds, may get worse as the deadline for withdraw comes closer.

He also predicts a small, but still unpredictable, impact on prices. The measure can have a further impact in 2017. In the rural real estate segment, if demonetization affects crop and sowing season, the individual housing sector may take a strong hit.

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November / December 2016

India Cements seeks to double export revenue

said N Srinivasan, Vice-Chairman and Managing Director of the company.

India Cements expects to double export revenue during the current fiscal year, due to strong demand in overseas market.

The company will continue to export products to overseas market. The company believes that the demand for cement to remain stable, despite currency demonetization.

"Last year our export revenue was INR 100 crore. This year during the last six months (ending September 30, 2016) the revenue was INR 70 crore. We will close export revenues to about INR 170-200 crore,"

India Cements reported a 62 percent jump in standalone net profits at Rs 62.41 crore for the quarter ending September.

Indian cement companies may lower prices Indiaâ&#x20AC;&#x2122;s Andhara Pradesh State Government has received assurance from cement companies to sell cement at lower prices for state proposed projects.

The cement companies will sell product at INR 230 (per bag) for CC roads and housing for weaker sections, INR 240 for other infrastructure schemes and INR 250 for the Polavaram project.

The cement requirement for Polavaram project is pegged at one million tons.

India Cement and Construction Materials Journal

The government officials asked the companies to change the cement bags color to red, which would be supplied to the government projects.

Telangana state to use fly ash for affordable housing projects

India wants to increase coastal shipping for cement

transportation to coastal shipment has the potential to save up to INR 4,000 crore per annum.

The Indian government wants to promote coastal transportation to the cement sector.

Apart from coastal shipment, the ministry also wants to promote freighting through inland waterways.

The objective is to increase waterways transportation from seven percent of the total currently moved volumes to 10 percent in 2020. The ministry adds that coastal shipping volumes could grow by five to six time current levels to around 400-480 million tons in 2025.

The Ministry of Shipping is promoting coastal shipment for six commodities including cement, coal, and steel in order to save around INR 40,000 crore per annum. According to the ministry, shifting part of the cement

Odisha state asked to meet rural road target The Indian Ministry of Rural Development (MoRD) has asked the Odisha state government to take appropriate action to meet the annual target for the construction of rural roads through the use of new and locally available materials.

Each Indian state is mandated to construct at least 15 percent of the annually targeted length using new or non-conventional materials, including jute and coir geotextiles. This is written under the central guidelines on the technology initiative.

In 2016-17, the Odisha state government has been given a construction target of 1,186 kilometers using non-conventional materials and technologies, out of the total length of 6200 kilometers. At the end of October 2016, the state had only constructed 177.82 kilometers.

The secretary for the Ministry of Rural Development, Amarjeet Sinha, requested

the Odisha Chief Secretary A.P. Padhi to review the road construction status and to give suitable instruction to the nodal department to achieve the target.

The government has been encouraging the states to use geo-textiles in rural roads due to their greater durability and reduced maintenance costs. Geo-textiles are permeable fabrics that have the ability to separate, filter, reinforce, protect or drain, mixed with the soil.

The state has also been advised to use fly ash, plastic waste, jute, iron and copper slag, marble slurry and waste construction materials as they are non-polluting and environmentally friendly, in light of the growing scarcity of raw materials and stone aggregates.

The government of the state of Telangana in India is contemplating the use of fly ash in the construction of proposed affordable housing projects for the poor, reports The New Indian Express. Housing department officials have reportedly informed the Pollution Control Board (PCB) and TS Genco officials that they will soon send a requisition to Genco for the material.

The projects aims to build twobedroom houses for the poor in Telengana through the use of the coal burning byproduct. It should likely also be used in the construction of roads and irrigation projects across the state. Officials of the forest and environment held a meeting with several other department officials, such as PCB and Genco, regarding the use of fly ash, presently being generated by 10 thermal power plants across the state. These units produce around 1 crore ton of fly ash per year.

Earlier, the center had issued notifications that the power generated fly ash should be used by construction companies within a 350 kilometers radius of the power plant.

The thermal power plant will supply fly ash to the companies without charging transport costs, up to 100 km. If the distance is more than 100 km between the beneficiary and the thermal power plant, they should split the transportation cost equally.

The state of Odisha generates around 25 million tons of fly ash per year, which are likely to be doubled in coming years after the commissioning of new power plants under construction. Over the last 3 years, fly ash has been used at a rate of around 58-60 percent in the state.

India Cement and Construction Materials Journal

November / December 2016

25

cement M&A AND FINANCE

M

&A and finance

LafargeHolcim boosts stake in ACC and Ambuja Cement LafargeHolcim is likely to increase its stake in ACC Cement and Ambuja Cement in India.

The company has aqcuired a four percent stake in ACC for approximately INR 1,209 crore and around two percent stake in Ambuja Cement for around INR 940 crore.

Earlier, LafargeHolcim held 61.62 percent stake in Ambuja Cement, which will increase to 63.62 percent.

The company held a 0.29 percent stake in ACC Cement, which will increase to 4.5 percent.

Meanwhile, Ambuja Cement owns around 50.05 percent stake in ACC, so Lafarge Holcim’s direct and indirect holding in ACC increased from 31.1 percent to 36.3 percent. However, the deal is subject to approval from Competition Comission of India. The move is a part of company's USD 3.6 billion divestment program.

Shree Cement may acquire stake in Shiva Cement India’s Shree Cement has submitted a preliminary offer to buy majority stake in Shiva Cement.

“The promoters of Shiva Cement have been in exit mode for a while now and have been in talks with several suitors and have mandated SBI Caps and L&T Finance to find a buyer,” said a market analyst.

Headquartered in Odisha, Shiva Cement has an integrated cement plant in

Birla Corp records an increase in profit

India-based Birla Corp recorded a 152 percent increase in profit to INR 58.43 crore in second quarter of 2016, as compared to the same period a year earlier.

The sales declined by 3.5 percent in value and by ten percent in volume, however, the input costs declined by 11 percent to INR 171.31 crore. The revenue earnings

26

November / December 2016

Rourkela, with a production capacity of 200,000 tons per annum, which is expected to increase up to 1 million tons.

India Cement and Construction Materials Journal

declined by INR 40.39 crore in the second quarter of 2016, as compared to the same period a year earlier.

In addition, the company benefit from ensuring petcoke supply in the ongoing quarter. Meanwhile, petcoke prices surged to USD 77 a ton in August from USD 45 a ton in January.

Ramco Cement records better profit India’s Ramco Cement recorded a 45.77 percent increase in standalone profit to INR 207 crore in the second quarter of 2017, as compared to the same period a year earlier.

Dalmia Bharat Group restructures cement business Dalmia Bharat Group is making another restructuring to simplify its structure and streamline costs.

(Bharat) together, which in turns owns 75 percent of OCL India. The new entity will have the capacity to produce 25 million tons of cement in units across eastern and southern India. The creation of Odisha Cement is currently waiting for approval of the courts.

It is already the third time the company undertakes such task this year. The group wants to consolidate all its cement assets under Odisha Cement. Right now, the group’s cement assets are hold under two companies, Dalmia Bharat and OCL India. The two own Dalmia Cement

In the eastern market, the company will hold 12.9 million tons of capacity and a 14-percent market share, making it the largest player in the region. The remaining 12.1 million tons in capacity are situated in the southern region, where it holds seven percent of the market.

Orient Cement acquires certain Jaypee Cement units India’s Orient Cement will acquire 75 percent stake in Jaiprakash Associates (Jaypee Cement) and Jaiprakash Power Ventures in deals around INR 1,950 crore.

The acquisition is expected to help Orient Cement to gain access to eastern and central markets in India. In addition, The acquisition is subject to negotiation

and execution of definitive agreements, approval from SAIL, the Competition Commission of India and other regulatory approvals.

The revenue increased by 13.9 percent to INR 1,172 crore in the second quarter of 2017, as compared to the same period a year earlier.

The EBITDA increased by 179 percent to INR 30.5 crore in the second quarter of 2016, as compared to the same period a year earlier.

The company is fifth largest cement producer in India. The company also produces ready mix concrete and dry mortar products and operates wind farms. Ramco Cement manufactures and markets Portland cement, blast furnace slag cement, white cement and Pozzolana cement.

The company has production facilities at Alathiyur, Chengalpet, Kolaghat, Medavakkam, Sriperumpudur, Vijayawada, Virudhunagar and Vizag regions in India.

The scope of assets acquisition includes cement units in Madhaya Pradesh, Chattisgarh, Bihar and Jharkhand.

Malabar Cement records higher losses India-based Malabar Cement recorded a loss of INR 6 billion in the first seven months of FY2016, as compared to the same period a year earlier.

unfavorable coal and flyash prices in the reported period. Malabar Cement is a public service undertaking in Kerala, India.

The cement production increased from 50,000 tons to around 55,000 tons over the last seven months of FY2016.

The company recorded losses due to

The company sells high quality cement and is well known for quality of cement.

The company has a production capacity of 4.2 lakh tons of cement.

India Cement and Construction Materials Journal

November / December 2016

27

cement projects and expansions

P

rojects and expansions

Nagpur region to get more cement roads

Birla Corp to expand cement production capacity

Nagpur region in Maharashtra, India will get more cement roads at an investment of INR 300 crore.

India-based Birla Corp envisages to setup three million ton cement plant in Mukutban, Maharashtra.

Two firms, Nagpur Municipal Corporation (NMC) and NIT will share expanses of INR 100 crore each.

The chief minister of Maharashtra has approved the construction of cement roads. "The CM had kept his words. He had approved cement roads worth Rs 300 crore in 2015-16.

Currently, same package has been okayed for 2016-17,” said Pravin Dakte, Mayor of Nagpur Municipal Corporation.

In addition, Birla Corp acquired Reliance infrastructure in the first quarter of 2016, and will increase the total production capacity to 15.5 million tons per annum from ten million tons per annum.

He added that “We are hopeful that he [the chief minister] will sanction more cement roads worth Rs 300 crore every year in next three years.

This will take the total expenditure on cement roads to Rs 1,500 crore during the BJP government's five year regime."

Meanwhile, the state government is expected to release its share of INR 100 crore in June. The NIT will also transfer its share of INR 100 crore to the NMC when the bills are raised.

28

November / December 2016

“The company's expansion potential will also be enhanced significantly by valuable mineral concession in several states, besides Madhya Pradesh. The mining lease at Mukutban will enable it to set up a three million metric tons of clinker unit in the foreseeable future," said an official from the company.

Meanwhile, the company recorded an increase in net profit to INR 58.43 crore in the second quarter of 2016, as compared to the same period a year earlier.

New cement plant in Tamil Nadu Indian manufacturer Maha Cements will open a new cement plant in Tuticorin, in the state of Tamil Nadu.

The plant, an investment of INR 250 crore, will produce up to 1.5 million tons of cement per annum. Together with Maha’s older factories in Nalgonda, Telangana, and Kurnoon and Vishakhapatnam, in Andhra Pradesh, the company will have a total capacity of 9.9 million tons.

India Cement and Construction Materials Journal

Maha Cement is a joint venture between My Home Group and the Irish company CRH. Its brand is sold in 12 different Indian states.

Emami Cement to setup greenfield cement plant in Andhra India-based company Emami Cement has envisaged to setup a greenfield cement plant in Andhra Pradesh and Rajasthan regions.

KCP Cement to focus on expansion India-based KCP Cement plans to invest around INR 400 crore in order to double the production capacity at the cement plant in Muktyala, Krishna district, Andhra Pradesh.

The planned investment will increase the plant’s production capacity from 1.86 million tons per annum to 3.52 million tons per annum. The company plans to increase production

Ambuja Cement to acquire stake in Holcim The Indian Cabinet has approved the proposal of Ambuja Cement to acquire 24 percent stake in Holcim India. The transaction is valued at around INR 3,500 crores. Additionally, these transactions would enable Lafarge Holcim group to create a linear corporate structure (with Ambuja and ACC becoming

capacity by setting up a second cement production line. The investment is a part of KCP Cement’s modernization and cost optimization program. The project is aimed at reducing costs and improving operational efficiency of the cement plant.

The company is currently focused on efforts to increase its market share by creating a distinctive position for itself.

The company will also be supply cement to several government proposed initiatives in Andhra Pradesh.

The cement plant will have a production capacity of around 20 million tons per annum. The company plans to improve its production capacity to around 20 million tons by 2019. “Emami Cement plans to have a manufacturing capacity of 1520 million tons per annum (MTPA) over the next 3-5 years, from around five now,” said Aditya Agarwal, Group Director of the company.

The cement company seeks to improve market share, as it is new entrant in the market.

parent and subsidiary) with a view to harvest significant synergies from India operations.

The move is also expected to help the company to increase its market share in the country. In addition, it will help in debt free balance sheet and cash flow generation, bringing in huge prospects for further expansion and creation of employment opportunities.

Malabar Cement resumes operation at Walayar plant India-based Malabar Cement has resumed operation at its cement plant at Walayar this week. The operations of the cement plant were halted due to non-availability of the raw materials. The production halt reduced the production capacity by INR 5 crore.

Meanwhile, the company has invited tenders for raw materials like clinker, coal, laterite, to normalize cement production at the plant.

Dalmia Cement to invest in Odisha India-based Dalmia Cement has planned to invest around INR 2000 crore in Odisha in the next three years.

The company expects the cement demand to increase in Odisha over the next few years due to several projects construction projects and several proposed infrastructure projects.

In addition, the company also plans to increase the consumption of renewable energy and focus in reducing its carbon footprint.

India Cement and Construction Materials Journal

November / December 2016

29

cement volume & pricing

V

olume and pricing

Increase in Pakistan cement demand on the Indian market The Indian market continues to witness an increase in demand for Pakistan, despite the tension across the borders.

The demand for bulk cement has increased significantly than the demand for retail cement in the market. The cement is being used for large scale construction works.

"There are people who have stocks and provide small orders but we deal differently and only deal in bulk orders. There is a demand for the cement as people have this notion that Pakistan cement is cheaper," said Nittin Jain, a hardware showroom owner on Ferozepur road, India.

The cement is being imported from Pakistan in Ludhiana region, however, the import volume differs due to high variation in prices.

30

November / December 2016

Sanghi Industries to boost production capacity India-based Sanghi Industries is planning to increase its capacity further by investing around INR 1,200 crore in a proposed expansion project.

The company recently increased production capacity of its Kutch cement plant by 1.2 million tons per annum to 4.1 million tons per annum. In the second phase, the company will further increase the capacity to 8.1 million tons per annum.

"Around INR 1,200 crore in investment

has been envisaged for the expansion, which is expected to be over in next three to four years," said Alok Sanghi, director, Sanghi Industries.

He added, â&#x20AC;&#x153;The company plans to raise funds through a mix of internal accruals, debt and equity (if required). However, the ratio of the mix is yet to be finalized," he said.

In addition, the company will also setup a 15MW waste heat recovery system, which is expected to begin operation over the next two years. The company plans to explore options for transport of cement.

Cement demand is expected to increase in the South Indiaâ&#x20AC;&#x2122;s Andhra Pradesh and Telangana region are likely to see an increase in cement demand due to the anticipated growth in cement consumption over the next two three years.

due to higher proposed cement projects in the region. There is a steady increase in housing schemes in Telangana and Andhra Pradesh and it is expected to have a positive impact on cement consumption.

The cement demand is expected to increase by 20 to 22 percent over the next few months. The demand is expected to increase

The government officials have sanctioned 272,596 houses for 2015-16 and 2016-17 for the poor.

India Cement and Construction Materials Journal

Sanghi Industries to boost production capacity India-based Sanghi Industries is planning to increase its capacity further by investing around INR 1,200 crore in a proposed expansion project.

Decline in Indian cement prices The Indian cement market witnessed an increase in cement prices over the last few months.

The prices increased due to higher supply in the market in the private sector. Meanwhile, Malabar Cement has discontinued production for the last two months due to scarcity of raw materials.

“MCL caters to only five to eight per cent of the Kerala market. Therefore, we are unable to intervene effectively in the market to rein in the prices. The

brands which have around 60 percent of the market pie in Kerala are Ramco, Sankar, Chettinad and Dalmia. ACC and Ambuja jointly have around 10 per cent share. The annual production of Malabar Cements was 5.5 lakh ton while the demand in Kerala was upwards of 100 lakh tons,” said an official from the cement company.

The cement is being sold at INR 420 to 430 per ton in the retail market.

However, the Malabar Cement (MCL) grinding clinker and producing around 300 tons of cement per day while earlier it used to produce 1,500 tons daily using raw materials.

Star Ferro and Cement posts increase in sales for 2QFY2017 Indian cement manufacturer Star Ferro and Cement reported a strong increase in sales during the second quarter of fiscal year 2017.

In the July-September quarter, the company sold 600,500 tons of cement, compared to 470,000 tons in the same quarter last year, an increase of around 28 percent. Shipments to Bengal, Bihar, and Jharkhand grew by 36 percent while sales in the North east jumped 23 percent.

During that period, the firm used 66 percent of its cement capacity and around 87 percent of its clinker capacity.

Overall in the North market, prices fell by around INR 10-15 per bag while demand grew by 13 percent in the North east and by two percent in Bengal, Bihar, Jharkhand, and Odisha. Cement and

clinker capacity utilization ratios stayed at 60 and 72 percent, respectively.

The CEO of Star Ferro and Cement, Sanjay Gupta, is confident that the company will repeat the positive results in the second half of fiscal year 2017, predicting a rise in cement prices and strong demand in the North region.

The company recently increased production capacity of its Kutch cement plant by 1.2 million tons per annum to 4.1 million tons per annum. In the second phase, the company will further increase the capacity to 8.1 million tons per annum. "Around INR 1,200 crore in investment has been envisaged for the expansion, which is expected to be over in next three to four years," said Alok Sanghi, director, Sanghi Industries.

He added, “The company plans to raise funds through a mix of internal accruals, debt and equity (if required). However, the ratio of the mix is yet to be finalized," he said. In addition, the company will also setup a 15MW waste heat recovery system, which is expected to begin operation over the next two years. The company plans to explore options for transport of cement.

India expected to witness surge in demand The Indian cement market is likely to witness an increase in cement demand to around 45 million tons over the next threefour years. The cement demand is expected to be generated by government’s push to infrastructure projects, friendlier laws, lower taxation, increased infrastructure spending. The cement companies and government officials are required to work together to control emission of carbon dioxide from concrete. A higher usage of flyash while making concrete is expected to reduce ecological emissions.

India Cement and Construction Materials Journal

November / December 2016

31

cement PEOPLE

P

eople

Cimencam (Cameroon) to appoint new manager Societé Cimenteries du Cemeroun (Cimencam) will appoint a new manager during a general assembly scheduled to December 19.

Last July, Lafarge Holcim Maroc Afrique acquired a 55-percent stake at Cimencam. The general assembly and the new appointment are two direct consequences from that acquisition. The Cameroonian state retains 43 percent of the company, through the National Investment Society, while the remaining two percent are distributed between smaller investors.

Cimencam has an annual production capacity of 1.7 million tons of cement.

It operates three plants, including a grinding unit in Bonabéri, an integrated production line in Figuil and concrete plant in Olembé.

Lafarge Zambia appoints new CEO & MD

like Cameroon, Guinea, Côte d’Ivoire, and Benin.

Vincent Bouckaert is the new chief executive officer (CEO) and managing director of Lafarge Zambia.

Bouckaert was the former CEO of Lafarge’s Indian Ocean cluster, compromising Reunion, Mauritius, Madagascar, Mayotte, Comoro Islands, Seychelles, and Maldives. He entered Holcim France in 1997 as assistant to CFO, and in 1998 became CFO of Holcim Madagascar. He was also CFO and CEO of Holcim Lebanon. He graduated in French territory from the Engineering and Economics at Centrale Lille.

The board of directors of Lafarge Zambia announced that Emmanuel Rigaux, the former CEO and managing director of the company resigned last August 24 to take place as the new head of the west Africa cluster for LafargeHolcim, managing operations in several countries

Angarsk Cement appoints new board member Russia-based Angarsk Cement has appointed Dmitry Kireev as a board member of the company. "Despite the decline in the cement market, we will continue to carry out repair activities in time, implement more efficient technologies and delivering storage

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India Cement and Construction Materials Journal

products, improve customer service process,” said Dmitry Kireev, newly appointed board member of the company.

Dmitry Kireev assumed a managerial position at Timulsky Cement, where he started working as a repair man.

cementnews

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egional news

Pakistan's cement producers fear higher coal prices Pakistani cement producers are worried about a hike in coal prices.

Thermal coal price have come down dramatically, from USD 54 per ton in May this year to above USD 100 per ton now.

At the time, China decided to impose strong measures to cut down excess capacity, but many factors have since aggravated the price increase, including stricter rules on coal transportation within China. The All-Pakistan Cement Manufacturers Association says that this will have strong impact on cement production costs According to some cement manufacturers, coal represents around 30 percent of production costs in the sector. Cement and coal are among the sectors benefited by increase public and private spending in the context of the China-Pakistan Economic Corridor, a program that includes several coal-fired power projects.

Lafarge Holcim merges Bangladesh units

Bangladesh,â&#x20AC;? said an official from the company.

Lafarge and Holcim have begun the merger process of their cement companies in Bangladesh.

The transaction is subject to due diligence and assessment of synergy potential and other regulatory approvals from the officials.

â&#x20AC;&#x153;A potential combination of Holcim Bangladesh and Lafarge Surma Cement is expected to create a significant synergy and further position both Holcim Bangladesh and Lafarge Surma Cement for future growth in

Meanwhile, Lafarge Surma Cement announced in the last week that it is starting discussions with LafargeHolcim to explore the opportunity of combining its business with Holcim Bangladesh.

Azerbaijan to invest in cement production in Afghanistan Azerbaijan could invest in a cement plant in Afghanistan, reports Vesti. The move is part of a development of economic relations between the two countries.

The Minister Shahin Mustafayev of Azerbaijan and the Afghanistanâ&#x20AC;&#x2122;s Ambassador Mohammad Khalil Tags

held a meeting to discuss the scope of economic relations.

According to the Ministry of Economy, the parties assessed the potential of cooperation in the field of transport, logistics, agriculture, trade and other sectors.

India Cement and Construction Materials Journal

November / December 2016

33

cement news Pakistan: Construction sector is thriving

Pakistan may witness increase in cement sales The cement market in Pakistan is likely to record a nine percent growth in cement sales in November 2016, on an annual basis. Domestic sales are expected to increase by 12 percent to 3.2

million tons in November, and by five percent on a month on month basis. The exports are likely to remain unchanged to 0.5 million, up by six percent on a annual basis and a decline by four percent on a monthly basis. The exports to Afghanistan are likely to decrease in November, affecting the overall export of the company.

Vietnam cement exports to Bangladesh increase in value In the first nine months of 2016, cement and clinker exports from Vietnam to Bangladesh reached USD 104.15 million.

This is 25 percent of the total export value from Vietnam. In May, cement and clinker exports to the Bangladesh market fell 35.87 percent when compared to the same period in the previous year, but the export value grew up to 25 percent of exports.

Demand for cement in Bangladesh is focused in governmental projects (approximately 40 percent of cement consumption in the country), while real estate projects represent 35 percent

of cement consumption, and housing construction 25 percent. Most materials serving the cement industry in Bangladesh are imported. Vietnam also exports other commodities such as fibers, yarns of all kinds, textile materials, leather garments, iron and steel, plastic products and materials, and rubber products.

In the second place of the value of exported goods are fiber, textile fiber types worth 49.19 million, improving 33.86 percent as compared to 2015. Animal feed and raw materials are up by 91.98 percent, while exports of machines, equipment, tools and spare parts increased by 64.88 percent.

Pakistan cement companies record surge in profit Pakistan cement companies recorded a 12 percent increase in profit to PKR 13.6 billion in the first quarter of FY2017, as compared to the same period a year earlier.

The sales increased by ten percent to PKR 58.3 billion in the first quarter of FY2016, as compared to the same period a year earlier. Excluding Fauji Cement, the majority of companies posted profitability

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November / December 2016

growth of 18 percent YoY in 1QFY17.

The sales increased significantly due to an increase in domestic cement demand.

The average gross margins of the company also increased by 18 percent in the first quarter of FY2016, on an annual basis. The market analysts expect China Pakistan Economic Corridor (CPEC) projects to boost demand in the market.

India Cement and Construction Materials Journal

The China-Pakistan Economic Corridor has ushered a new era of construction in Pakistan.

Chinese investors are exploring more investment and jointventure opportunities in the country, according to Wang Zihai, president of the Pakistan-China Joint Chamber of Commerce and Industry (PCJCCI).

According to Zihai, Pakistanâ&#x20AC;&#x2122;s construction sector is booming, as many mega residential, industrial and commercial construction projects were underway in major cities.

A seven-member delegation of Shandong SKL International Trade visited the PCJCCI, and expressed its desire to construct an energy efficient mega project on modern lines in Lahore. According to their leader, Shanfeng Xu, China is keen to develop infrastructure facilities in Pakistan.

The delegation also noted that the construction style in Pakistan was conventional and energy inefficient.

If more high efficiency technology and materials were used, Pakistan massively could save construction and energy costs, claimed the delegation.

Faheem Khan said that the housing and construction sector was identified as the driver of economic growth by the government, a large incentive for foreign investors.

orders & equipment highlights

O

rders & equipment

Lafarge Jordan to build captive solar power plant Lafarge Jordan will have its own solar power plant, with operation set to begin during the third quarter of 2017. A solar power plant will be installed by Adenium Energy Capital on the Rashadiya cement plant. It will have the capacity to produce 15 megawatt of electricity.

According to Wassef Sawaf, CEO of Adenium, this is the first project of this kind in the region.

The project fits in Lafarge Jordan's plans to reduce carbon emissions and with the national Jordanian strategy for renewable energy recently launched by the Ministry of Energy and Mineral Resources.

For the CEO of Lafarge in the country, Amr Reda, the new power plant will have a positive impact on the national economy on a macroeconomic level.

Khrew cement plant (Jammu and Kashmir) will be modernized Jammu and Kashmir Cements (JK Cements) will upgrade its Khrew cement plant. The plant will be modernized, following a direction issued by the Committee on Public Undertakings of the Jammu and Kashmir Legislative

Assembly. During the meeting of the committee, Shailendra Kumar, commissioner secretary for industries and commerce, briefed those present on the overall functioning of JK Cement and the possible ways of improving the institution. Among those attending the meeting were the managing director of JK Cement and several senior officers of concerned departments.

KHD Humboldt Wedag to supply equipment to Shree Cement Shree Cement awarded KHD with projects for three new kiln lines, each with a capacity of 6,000 tpd.

The third project will also be built using the above equipment. The location for the third project has yet to be announced.

The first project is for line two at Shreeâ&#x20AC;&#x2122;s Raipur site. The second new line will be built in Karnataka using a 3-string preheater and the below KHD core equipment: 3-String, 6-stage Preheater, PRZ 9575; 3-Pier Rotary Kiln Ă&#x2DC; 5.4/5.0m x 75m long; PYROJET Burner; PYROSTEP Clinker Cooler, PSC 3-154.16T. The project commencement date was September 02, 2016.

India Cement and Construction Materials Journal

November / December 2016

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CONSTRUCTION BUILDING MATERIALS BY BMWEEK.COM

C

onstruction & building materials by bmweek.com

LHOIST MALAYSIA OPENS NEW LIME PLANT A subsidiary of Loith Group, Loith Malaysia, has opened a new, fullyautomated, 34 hectare lime plant in Tapah. The investment, part of the company's expansion plan, reaches RM 704 million.

“Being a family-owned company, we pride ourselves with the most modern fully-automated plant in Asia.

When we decided to build the plant, we took into account the skills and professionalism of the local workforce.

The establishment of the state-of-theart lime plant also means significant knowledge and technology transfer,” said group chairman Baron JeanPierre Berghmans.

According to the company, they are expecting significant growth in Asia, and have forecasted a four percent compound annual growth rate in the global lime market, with the Asia Pacific region representing the largest and fastest growing regional market.

The plant is estimated to produce 1.5 million tons of limestone annually with 80 percent meant for export, and the remainder headed for the local market in various sectors, including steel production and construction.

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November / December 2016

QATAR: INFRASTRUCTURE TO GROW IN 2017 Qatar is investing USD 13 billion in mega infrastructure projects in 2017. These projects are part of the Gulf state’s bid to achieve its target of 3.4 percent growth rate during the coming year.

The new investments will be focused on projects related to the country’s hosting of

the FIFA World Cup in 2022, along with other sectors like education, healthcare and transportation.

Qatar is also raising the salaries of government employees in 2017, when most of its neighbors are undergoing spending cuts and austerity measures to combat a severe drop in oil and gas prices.

During 2016, the country’s non-oil sector grew by 5.8 percent.

Telangana state to use fly ash for affordable housing projects The government of the state of Telangana in India is contemplating the use of fly ash in the construction of proposed affordable housing projects for the poor. Housing department officials have reportedly informed the Pollution Control Board (PCB) and TS Genco officials that they will soon send a requisition to Genco for the material.

Officials of the forest and environment held a meeting with several other department officials, such as PCB and Genco, regarding the use of fly ash, presently being generated by 10 thermal power plants across the state. These units produce around 1 crore ton of fly ash per year.

The projects aims to build two-bedroom houses for the poor in Telengana through the use of the coal burning byproduct.

It should likely also be used in the construction of roads and irrigation projects across the state.

The thermal power plant will supply fly ash to the companies without charging transport costs, up to 100 km. If the distance is more than 100 km between the beneficiary and the thermal power plant, they should split the transportation cost equally.

India Cement and Construction Materials Journal

UK’S CONSTRUCTION SECTOR GROWING AT FASTEST PACE SINCE EARLY 2016

India: Fly ash brick producers see demand plunge Manufacturers in Andhra Pradesh affected by demonetization Demonetization in India is affecting the construction companies, with fly ash brick manufacturers facing a huge drop in demand. In Andhra Pradesh, demand has fallen by 40-50 percent. The Indian state has around 150 fly ash brick manufacturing units located in the district,

with 250 to 300 trucks carrying bricks made out of the material transporting it to different construction sites in and around the district. According to P Venkateswara Rao, general secretary of the Federation of Andhra Pradesh Fly Ash Brick Manufacturers Association, companies are struggling to make payments to laborers as banks are not providing cash as per the limit set by the government.

Fly ash bricks are used in a variety of areas, including home construction, compound walls and underground drainage systems.

Maharashtra adopts policies to curb transportation of fly ash The Indian government has invited cement industries near power stations to use their 1.8 crore ton ash produced annually, that should save exchequer INR 2,000 crore.

The new policy should allow for cluster development of ash-based industries, such as cement, in the vicinity of all thermal power plants. The industries, in joint venture with the government, will be given land, ash and tax incentives. The state of Maharashtra produces nearly 18 million tons of fly ash per year, one-third

SOUTH KOREA: CONSTRUCTION SECTOR GROWING AS ECONOMY THRIVES Economic growth in South Korea improved during the third quarter of 2016, and should grow further throughout the rest of the year and into early 2017 with support from the construction sector.

The construction sector in the country

of which remains unused. The rest of that is provided for free to cement companies.

Coal ash transportation means a INR 2,000 crore burden on the state exchequer annually, with power stations sharing that burden.

India’s Energy Minister Chandrashekhar Bawankule said, “We have already received some proposals from cement companies which are willing to purchase the coal waste.” About a third of raw material used in cement is fly ash. rose by 3.7 percent quarter-on-quarter, a robust growth, despite falling short of the expected 4.4 percent.

Annual construction growth in the third quarter was revised to 10.6 percent from the initially estimated 11.4 percent, compared with the second quarter. South Korea’s economy grew 0.6 percent during this period as well, boosted by growth in the sector.

Despite the high rate of inflation, the steepest on record since April 2011, the British construction sector fared better than expected in the month of November. Strong performance in residential projects helped to keep the sector afloat.

Performance indicator Markit/ CIPS UK Construction Purchasing Managers' Index stood at 52.8 in November, instead of the expected 52.2 points. In October, the index reached its highest level since March, recording 52.6. A reading above the 50.0 mark indicates growth, and October was the first time in four months the sector had reported signs of expansion. November also market the third consecutive month of growth for the sector in 2016. Back in July, the index registered its lowest reading in seven years, after Britain voted to leave the EU on June 23rd.

Business activity and incoming new work increased at a pace that hadn’t been seen since March, but expansion rates on both remained softer than those in early 2014. Commercial work picked up for the first time in five months, while civil engineering remained the weakest area of activity.

The house building sector remained the best performing category in the sector, despite pace falling to a threemonth low.

Average cost burdens rose sharply at the fastest pace in five years, but it was partially passed on to clients in the form of higher selling prices.

Output charges rose for the seventh successive month, with the growth rate being one of the highest in the last five and a half years.

India Cement and Construction Materials Journal

November / December 2016

37

PETCOKE PRODUCTION, SHIPPING AND PRICING BY PETCOKEWEEK.COM

P

etcoke production, shipping and pricing by petcokeweek.com

INDIA: PETCOKE PRICES TO AFFECT CEMENT COST Rising petcoke prices in India are affecting cement companies in the country, already hurting due to decreased demand in housing and demonetization. Petcoke prices rose 36 percent year-to-date when compared to the previous year, reaching INR 6,350 per ton after a surge in crude oil prices.

The fuel accounts for 30 to 40 percent of power and fuel costs of cement companies. In the coming quarters, this price jump should impact cement companies’ earnings further. 40 percent of the total cement demand in India is from rural housing, while the urban housing market makes up 20 percent of it. The demonetization has caused a scarcity of cash, which delayed construction activities. The slowdown in the sector is expected to impact the cement sector.

Cement demand contracted 2070 percent month-on-month during November after the demonetization.

In the southern region, the impact led to a smoother decline of 20 percent from October to September. Cement dealers do not expect a major recovery in cement demand or in prices throughout December.

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November / December 2016

Indian cement companies may record lower margins Indian cement companies are likely to witness a decline in margins due to an increase in fuel costs.

While input costs have risen, the price of cement has come down in southern and western markets. The cement prices have declined to around INR 300 per bag in Southern market. “Because of increasing

Indian demand and maintenance works at refineries in the US, supply has tightened and this led to a steep increase in prices during the latter part of the year,” said an official. The cement prices have declined to INE 240 per bag in the western market. In addition, the fuel prices are not expected to decline over the next few months.

In addition, Fuel accounts for at least 40 per cent of a company’s input costs and cement firms normally store enough to meet the requirements of 45 days.

Imported petcoke, thermal coal prices increase Indian cement manufacturers strained by high petcoke and coal prices.

Imported petcoke and thermal coal prices have come up sharply in the last month. Petcoke is now trading at an average pace of 95.75 per ton, up by 5.10 percent compared to USD 91.10 per ton, and a long way from the USD 72.13 per ton registered in July.

India Cement and Construction Materials Journal

Imported thermal coal is selling for USD 72.23 per ton this month, down by 7.99 percent compared to the month of November, when it peaked at USD 78.51 per ton. However, even with this latest decrease, thermal coal prices continue far from the USD 50.73 per ton average of last July.

Visakhapatnam Chennai Industrial Corridor to include petroleum hub

India: Cement sales impacted by demonetization Cement sales are expected to drop by 10 percent during November.

According to Sanjay Ladiwala, the chairman of Cement Stockists & Dealers Association of Bombay. Ladiwala says that the sector is suffering the impact of demonetarization, the decision

from the Union government to remove banknotes with a face value of INR 1,000 and INR 500 from circulation.

Small traders were the ones most affected by that measure, since much of the trade between large construction sites and suppliers are already made through bank transfer.

Demonetization has created a shortterm liquidity issue. Banknote collecting will continue until December 31, 2016.

HPCL is expanding its Visakh refinery from 8.33 million tons to 15 million tons in anticipation of a petroleum hub to be built in the region. The Visakhapatnam Chennai Industrial Corridor will be home to a new petroleum hub, in replacement of the one in the Petroleum, Chemical and Petrochemical Investment Region (PCPIR), which won't be built due to popular demand.

Loans and grants by the state government and the Asian Development Grant have already been sanctioned, rounding the USD 631 million. The state of Andhra Pradesh, where the hub will be located, is currently undergoing a series of investment programs in order to help development, which could bring in a further USD 215 million for the project.

SERBIAN REFINERY ORDERS COKING UNIT US-based CB&I announced that it was awarded a contract for the engineering, procurement and construction management of a delayed coker unit in Serbia.

The new equipment will be run at Naftna Industrija Srbije (NIS) unit in Pancevo, Serbia. CB&I had previously announced an award for the technology

license and front-end engineering and design for the delayed coker. This equipment will be integrated with the refinery’s’ existing CB&I fluid catalytic cracking unit and Chevron Lummus Global hydrocracker.

Chevron Lummus Global is a joint venture between CB&I and Chevron.

CHINA: MAOMING PETROCHEMICAL REACHES RECORD PETCOKE OUTPUT Chinese company Maoming Petrochemical reached a petcoke production of 73,200 tons in October, a 10,000 ton increase when compared to September, and a monthly record for the company.

In the second half of 2016, export sales of petroleum coke continued to decline. The company therefore opted to use its own production in order to save on input costs, burning one ton for CFB furnace, saving

more than CNY 100 compared to the usual coal fuel. Maoming Petrochemical is aiming to improve self-consumption, and will optimize coal linkage with petcoke.

It’s also optimizing its heavy oil balance through coker feedstock and optimizing its coking furnace operations. The company is also planning to expand the processing capacity of its two coking units, in order to increase its petcoke output.

Fuel demand increases in India Indian fuel market recorded a nine percent increase in fuel consumption from April to November, 2016. Meanwhile, the sales of petcoke increased 44 percent in April to November 2016, as compared to the same period a year earlier. The fuel sales increased 12.3 percent to 16.64 mt in November 2016 as compared to the same period last year.

The petcoke sales increased by 38.8 percent to 1.91 million tons in November 2016, as compared to the same period a year earlier.

India Cement and Construction Materials Journal

November / December 2016

39

analyst recommendations Ambuja Cement Geojit BNP Paribas is bullish on Ambuja Cement. According to moneycontrol, the company has recommended a buy rating on the stock, with a target price of Rs 272 in its latest research report.

“Given, Ambuja’s strong presence in northern and western markets, we

expect improvement in realization on account of sturdy demand outlook.

Hence, we recommend BUY on the stock. We value the company using SOTP by assigning 14x CY17E EV/ EBITDA to Ambuja and assign a value of Rs 62 to its stake in ACC, thus arriving at a TP of Rs 272.”

UltraTech Cement According to moneycontrol, Mr. Ashwani Gujral of ashwanigujral. com recommends selling Bharat Financial and UltraTech Cement. “ In my opinion, UltraTech is a SELL with a stop loss of Rs 3510, target of Rs 3380," said the analyst.

He added that “Bharat Financial Inclusion is also a sell with a stop loss of Rs 703, target of Rs 675.”

JK Cement Religare is bullish on JK Cement has recommended buy rating on the stock with a target price of Rs 830 in its research report. “We maintain our estimates and roll over to Sep’17 TP of Rs 830 (from a Mar’17 TP of Rs 720),

set at 8x one-year forward EV/EBITDA. JKCE’s recent 3mn tonne expansion in the region coincides with better prices in the north, auguring well for profitability.

Maintain BUY,” recommend analysts from Religare.

ACC According to moneycontrol, Mr. Mitesh Thacker of miteshthacker.com recommends selling ACC. "The cement stocks are clearly showing signs of weakness. ACC looks negative to me,

India Cements Mr. Ashwani Gujral, Fund Manager at ashwanigujral.com, opines that one can sell India Cements. " India Cements is a sell with a stop loss of Rs 114, target of Rs 102. DHFL is also a sell with a stop loss of Rs 247, target of Rs 232,” said the analyst.

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India Cement and Construction Materials Journal

so I would sell this with a stop loss at Rs 1,357 for targets close to about Rs 1,305.

The other sell call is on Grasim Industries which is a sell as well with a stop loss at Rs 870 for targets of Rs 820," said the analyst.

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BUZZ

Secil appoints a new CEO

4.

Cement prices drop in Central Congo

india

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Buzzi Unicem posts results for first nine months of 2016

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Algeria: New cement unit to open in Timegtane

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New cement plant in Owendo, Gabon

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Turkey continues to expand its cement production capacity

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HeidelbergCement concludes Italcementi acquisition

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UltraTech Cement merges with JP Group

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LafargeHolcim boosts stake in UltraTech and Ambuja Cement

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India: JSW Cement forms joint venture with Wagners

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New cement plant in Tamil Nadu, India

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India: Birla Corp to expand cement production capacity

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India: Coal imports decrease during September

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India: Emami Cement to setup greenfield cement plant in Andhra

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India: Cement sales impacted by demonetization

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India has a positive outlook for FY18

10. UltraTech may hike cement prices

region economic development

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10. China imposes moratorium on new cement capacity

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Goa Carbon reports petcoke production for November 2. US: New coker unit at Kansas refinery 3. Russia: petcoke refinery to proceed into second stage of expansion project 4. APCMA seeks incentives for cement export 5. Canada: New cement plant will run on petroleum coke 6. HC Trading and Interbulk trading merge operations 7. China: Petcoke prices in the province of Shandong on the rise 8. Coal shipments increase in the US 9. Cement sales decrease in Saudi Arabia during November 10. Tanzania: Dangote Cement halts Mtawara cement plant

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Egypt's cement sector to increase use of alternative energy

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TOP petcokeweek STORIES

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Elementia to acquire stake in Giant Cement

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Cemex sand mine in the US faces closure Researchers develop new glass aggregates DTIPL signs FGD contract with Wienerberger India 4. Lhoist Malaysia opens new lime plant 5. Researchers develop "programmable" cement 6. Cement demand expected to remain stable in France 7. India: Telangana state to use fly ash for affordable housing projects 8. India: Odisha state asked to meet rural road target 9. UKâ&#x20AC;&#x2122;s construction sector growing at fastest pace since early 2016 10. South Korea: Construction sector growing as economy thrives

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