India Cement & Construction Materials (vol 1 / issue 24) by CemWeek

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Cement

MAY - JUNE 2015

& construction Materials

CW RESEARCH

Indian Cement Industry to Benefit from Cheaper Petcoke, Diversified Import Supply

FEATURE

RISK Management in Construction Contracts FEATURE

WRAPPING SHRINKING OR STRETCHING? COMPARING PACKAGING TECHNOLOGIES

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IndiaN cement INDUSTRY TO BENEFIT FROM CHEAPER PETCOKE, DIVERSIFIED IMPORT SUPPLY

EDITORIAL LETTER

RISK MANAGEMENT IN CONSTRUCTION CONTRACTS

NUMBERS IN BRIEF

Part 3 of 3

Wrapping shrinking or stretching? Comparing packaging technologies

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Positive outlook for India’s cement industry based on lower energy prices and change of import-export dynamics

rOBERT MADEIRA

India’s Economy exhibited solid growth during the first quarter of 2015

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letter from the editor

Positive outlook for India’s cement industry based on lower energy prices and change of import-export dynamics n the new issue of the India Cement & Construction Materials (ICCM) magazine, we cover several industry trends shaping up in the region, as a result of some of the international developments. The petcoke industry against lower energy prices and a comprehensive technical analysis of packaging solutions are some of the key topics covered in the new issue of the magazine. The Indian cement industry is still enjoying the impact of the lower crude oil prices, which, in turn, reduced energy prices in the first quarter of the year. The petcoke industry is the focus of a full feature in this issue of ICCM as cheaper oil and a diversification of import sources have changed the dynamics of this field. The year began with a decline in the price of fuel-grade petcoke, while April brought about a mild price increase of around 1 percent. End-users have been looking to cover cargoes for the upcoming monsoon season, and probably the most impactful development has been the appearance of new foreign providers, such as the Middle Eastern producers that have started shipping petcoke to India. Another major topic of this new edition of ICCM covers a technical question that cement producers have to consider at the

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various stages of their business, development: wrapping, shrinking, or stretching – what is the most suitable packaging solution. The magazine details the advantages and disadvantages of each technology, presenting some of the new packaging solutions that are available to producers. The magazine includes a detailed section about the stock market analyst recommendations, with a focus on the major Indian cement producers. Some of the outstanding analyst opinions outline the fact that earning expectations are quite high currently, because of the optimism about growth, while concerns about the monsoon could further dent rural demand. Stock market traders quoted by ICCM say that India is still the most overweight market in the region in terms of the holdings of overseas investors. This is also reflected in high valuations, which are likely to adjust downwards. However, there are some producers such as Ultra Tech Cement or J. K. Cement, for which analysts recommend buying or holding on to stocks, based on positive prospects for the following weeks. Speaking of prospects, the new issue of ICCM heralds some significant additions to India’s cement production capacity, as several companies are adding new production facilities to their portfolios.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Emami Group, Rashtriya Ispat Nigam, or Kerneos India are some of the industry players that have announced new plants, which are now at various stages of development. Other companies such as JSW Cement and Rashmi Group have announced new additions to their existing units, as part of their efforts to increase production capacity or to boost efficiency. The details are laid out in the specialized Projects and Expansions section of the new issue of ICCM. And as usual, ICCM provides all the relevant news about the main indicators of the industry for India and the whole region, including the latest facts and figures about cement volumes, energy prices, relevant people in the business, regional developments, equipment, and construction projects. Please don’t miss out the numbers and the trends laid out in the special sections.

Robert Madeira

Publisher and Head of Research

NUMBERS in brief India’s Economy exhibited solid growth during the first quarter of 2015 Real GDP rates in India rose 7.5 percent year-on-year Economic growth is expected to perform well over the coming quarters, after registering a 7.5 percent growth over the course of the first quarter of the year. Real GDP growth has been primarily driven by real consumption expenditures, which increased by 7.9 percent on an thea year-on-year basis. Fixed investment spending has also fueled India’s economic performance, having risen by 4.1 percent in the analyzed period.

10%

8.4%

6.7%

6.6%

7.5%

Oct - Dec 2014

Jan - Mar 2015

6% 4% 2% 0% Apr - Jun 2014

July - Sept 2014

Source: Central Statistics Office Ministry of Statistics & Programme Implementation Government of India, CW Research

Real GDP constant prices growth rate

The services sector, backed by consumer spending, accounted for two-thirds of the growth in overall value added for the first quarter. The industrial sector made for the other third of growth in value added. India’s economy is also sustained by a stable rupee and by the decline in oil prices, both of which have led to a receding of the Consumer Price Index inflation. India Consumer Price Index (CPI) 122 120 118

114 112 May-14

Jun-14

July-14

Aug-14

Sept-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Apr-15

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Source: CW Research

116

feature CW Research

Indian Cement Industry to Benefit from Cheaper Petcoke, Diversified Import Supply

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INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

ower crude oil prices have exerted a positive impact on the Indian cement industry, which has reported increased savings led by lower costs for energy and packaging polymer in Q1 2015 vs. Q4 2014.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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feature

fter the initial decline in fuel-grade petcoke, April brought about a mild price increase of around 1 percent, as Indian interest in imported petcoke (fuel grade petroleum coke) held up. End-users are looking to cover cargoes for the upcoming monsoon season, although their price expectations remained low. Sources of petcoke imports further diversify, as new producers in the Middle East start shipping the product. Low Freight Costs Stimulate Buyer Interest Indian end-users showed buying interest for imported fuel-grade petcoke amid falling dry bulk freight rates, which had made landed cost economically viable. Imported petcoke was attracting buyers from other industries too due to low prices and high energy. The Baltic Dry Index (BDI), which measures the rates for chartering ships for transporting bulk commodities, has been near its all-time low for the better part of FY2015. The demand for ships is much lower than supply thereby driving down prices accordingly. Faced with the risk of leaving vessels idle for long periods, ship owners started charging low charter rates and are expected to continue doing so. This, when combined with the impact of lower fuel prices, results in a period of cheap freight that is expected last

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until older vessels have been scrapped in sufficient numbers to balance the market. However, freight expenses continue to be a concern at the local level in India, based on an increase in rail transportation costs. A price hike of INR 2.37 per liter of diesel fuel on April 30, 2015 is likely to affect overall margins. In April 2015, the CFR West Coast price of imported, mid-sulfur (below 5% sulfur content), HGI 40 petcoke increased by only 1% month-on-month, to $79.3/ton. Similarly, the price of high-sulfur (over 5% sulfur content) HGI 40 petcoke went up by

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

1% month-on-month, to $75.8/ton. The price of the HGI 70 petcoke increased by 0.9% for both grades, up to $84.8/ton and $81.3/ton, respectively. As for the East Coast CFR price in April 2015, mid-sulfur, imported HGI 40 petcoke gained 0.9% month-on-month to $80.3/ton, while the price of high-Sulphur, HGI 40 petcoke went up by 1% to $76.8/ ton in the same period of time. As for HGI 70 petcoke, the price increase followed a similar path, gaining 0.9% for both low sulfur and high sulfur grades, up to $85.8/ ton and $82.3/ton respectively.

The relatively higher affordability of petcoke will further support the cement industry by lowering production costs. That comes at a time when the Indian cement industry is quite optimistic about the increase in overall demand and capacity utilization in FY16. The industry is expecting an increase in production by around 7-7.5 percent in the upcoming months of the current financial year. The production of cement continued to increase in January and February 2015, before falling by around 4.2 percent in March 2015 to reach 23.43 million tons. The growth in production was backed by an improvement in demand from real estate and infrastructure sectors. The cement demand during FY16 is likely to improve on account of higher government spending on infrastructure as announced in the Union Budget.

tageous, as Saudi-to-India freight rates can be as low as $6/MT for delivery in summer 2015. The Jubail refinery, also known as SATORP, a joint venture between Saudi Aramco and Total, is expected to ship out between three and five cargoes per month. At the Yanbu facility, a joint venture between Saudi Aramco and Sinopec, production is expected to begin in May with two cargoes initially, but that could increase and reach to the same production levels as Jubail. In another move, Oman Oil Refineries & Petroleum Industries Co, a refining and

petrochemicals company, is investing to set up a handling and storage system that will allow for the export of petcoke produced upon the completion of the companyâ&#x20AC;&#x2122;s multibillion dollar Sohar Refinery Improvement Project. International engineering firms are expected to compete for Orpic's contract to construct the facility at Sohar port. Following the completion of its expansion and modernization, Sohar Refinery will be upgraded into a high conversion refinery with the majority of products being high value transportation fuels or petrochemical feedstock. Crude oil refining capacity will be ramped up from

Foreign Petcoke Supplier Competition Stiffens India is finding new sources for petcoke imports as the international market is becoming more competitive. The Yasref refinery in Saudi Arabia, a joint venture between Saudi Aramco and Chinaâ&#x20AC;&#x2122;s Sinopec has exported its first shipment of the 49,000 tons which, according to an industry source, is going to India. Another source for Indian buyers will be the Saudi plants at Jubail and Yanbu, which could begin producing more than 4 million MT of 7.5%-8% sulfur petcoke. Transportation to India and Egypt will be highly advanINDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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feature the present 116,400 barrels per day (bpd) to 198,000 bpd). The upgraded refinery is due for commissioning in 2016. Coal More Competitive than Petcoke, Yet Demand Drops The increase in the value of US dollar is hurting petcoke’s competitiveness against coal. Since the majority of the global petcoke production comes from the US and most global coal supply is in Asia-Pacific, Africa and Latin America, the appreciation of the dollar’s value is posing more challenges for US petcoke shippers as well as overseas buyers. Consequently, the real cost of petcoke in the importing countries is rising at the same time as the cost of competing coal production is declining. Although high and mid-sulfur petcoke prices have dropped by 10-15 percent from January 2014 to January 2015 on an FOB US Gulf basis, one coke buyer in Brazil said his real costs had increased by 25 percent over that period. Other major buyers like Turkey have also seen negative impacts to their buying power. At the same time, costs for coal suppliers like Australia, Columbia, Russia, South Africa and Indonesia remain relatively steady even as the selling price in dollars has fallen.

the same period last year. According to Indonesian Coal Mining Association, of 14 publicly listed companies whose production makes up around 80 percent of the national output, only five reported net profits last year. The Australian coal market too is experiencing oversupply and weakening demand from its major customers, like China. China’s consumption of coal-fired electricity has dropped 10 percent in the first quarter of 2015. Coal imports from Australia, excluding lignite, fell 27 percent to 15.96 million tons in the first quarter from a year ago. Australian coal exports have fallen from a high of $46 billion in 2011, to $38 billion in 2014. While volumes have been rising, the coal price has more than declined by more than half over the past five years. Environmental policies also lead to a

The coal competitiveness against petcoke is further strengthened by the low price of the former. That however does not mean that coal producers are expecting higher profits. Many coal mining companies have been struggling to survive in the industry amid low prices for the commodity, largely due to slower demand from major coal consumers, attributed to the sluggish global economy of the past few years. Coal output in Indonesia fell by 21 percent in the first quarter of 2015 as low prices for the commodity forced mining companies to reduce their production in order to cut costs. Data from the Energy and Mineral Resources Ministry’s directorate general for minerals and coal shows the total output for the first three months of the year amounted to 97 million tons, down from 124 million tons in 7

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INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

decrease in coal consumption. According to a report released by the Australian Climate Council, 90% of the country’s current coal reserves will not be mined for Australia to play its role in limiting global warming. Concurrently, one of the biggest Australian energy companies, AGL, has pledged to shut all its coal-fired power stations by 2050. The company announced that it would not build, finance or acquire new conventional coal-fired power stations in Australia or extend the operating life of any of its existing stations. More detailed information and analyses are available in the latest bi-monthly price assessment and monthly price index for fuel-grade petcoke, published by CW Research, the research desk of global industry advisory and analysis boutique CW Group, based in Greenwich, CT USA.

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feature

Risk Management in Construction Part 3 of 3

By Er. Ashis Kumar Chakraborty

MAY - JUNE 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Each construction project includes multiple contracts, all of which should be consistent and complementary.â&#x20AC;?

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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feature Principal Contractors and Subcontractors Those contractor and subcontractor entities performing construction work on the project should be required to carry automobile liability, commercial general liability (CGL) and workers compensation/ employers liability policies, as well as an excess liability policy providing coverage over the automobile and CGL policies’ limits. For those contractors and subcontractors performing any design-build functions, professional liability coverage also should be required. Property/Builder’s Risk Coverage While the liability coverage referenced above covers most project accidents resulting in (i) bodily injury and (ii) damage to property other than what is being constructed, in most cases it does not cover damage to the structure being built or the materials being used. This damage, however, can be covered by obtaining a “builder’s risk” policy. While it is sometimes possible to cover damage to construction projects under an owner’s existing property policy.

Owners and contractors should require all downstream contractors and/or subcontractors to add the owner and contractor as an additional insured under the downstream parties’ liability policies. Additional insured status adds a layer of protection not only to an owner’s or contractor’s indemnity requirements but also to its own insurance coverage. Many parties to a construction project fail to adequately confirm that the project insurance requirements have been satisfied, either upon execution of the contract or

throughout the duration of the project. Required coverage limits, additional insured status and waivers of subrogation provide no benefit if they were not obtained or are permitted to lapse. The Delay and Disruption of work must be keep in mind while executing the contract that may be due to late handing-over of the site by the employer/ supplier, late supply of working drawings, instructions, issued by the engineers, contractor’s inefficiency, breakdown, or lack of machinery and equipment, Nominated sub-contractor’s inefficiency and delay outside both parties’ control, Labour disputes, etc. Delay and time waste due to Defective Materials or Workmanship of Contractor In proper Direction and Supervision by the Employer or the Engineer that effects the execution of the project. This may be contributed as per below: ➜➜One-sidedness of the employer or the engineer ➜➜Incompetence ➜➜Inefficiency ➜➜Unreasonableness ➜➜Lack of communication ➜➜Ambiguity or contradiction between documents prepared by the engineer or misleading description in the bill of quantities etc. ➜➜Dispute on Methods and Measurement

Source: stmedia.startribune.com

Surety Bonds Are Also Used to Manage Risk The risks of nonperformance and of nonpayment are shared by owners, contractors and subcontractors of all tiers. Both of these risks can affect the timely and

on-budget completion of the project. For this reason, owners often require contractors to post a performance bond, which typically obligates the issuer of the bond (known as the “surety”) to complete the project if the contractor is terminated, and a payment bond, which typically obligates the surety to make payments due from the contractor to subcontractors if the contractor does not do so. Likewise, contractors will require payment and performance bonds from subcontractors to mitigate the risk of subcontractor nonperformance and failure of subcontractors to pay sub-subcontractors or suppliers. In some instances, contractors will use “subcontractor default insurance” that will reimburse the insured contractor for damages incurred as a result of the subcontractor’s failure to perform.

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INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

manent works by owner or consultant, contractor or domestic or nominated sub-contractor or supplier.

Consider the Damage and Injury to Persons and Property and effects: ➜➜Due to negligence or breach of warranty of contractor in designing or in temporary works, building permanent works or otherwise ➜➜Due to negligence of consultant or owner in design or supervision ➜➜Due to nominated subcontractor’s or supplier’s negligence or breach of warranty

➜➜Due to matters outside the parties’ con-

trol but which are insurable ➜➜Due to uninsurable risks – war, riots, rebellion, etc. ➜➜Consequential losses arising from above ➜➜Exclusions, gaps and time limits in insurance cover Monitor properly to avoid Shortage of Resources: ➜➜Shortage of staff, labour, plant, materials ➜➜Shortage of finance and liquidity One has to regularly apprised of Government Policy and Change of Legislation like Taxes, labour, safety or other laws, Delay or refusal of planning approval for

works or temporary works, Foreign Exchange Restrictions and Financial constraints by the Government. The Labour Demands and Unrest need to be handled properly to avoid any loss of time that may leads to disrupt the project schedule. The followings are the vital points experienced in a construction engineering project. Payment in time is to be maintained as top priority and need to be considered as fixed cost and liabilities. ➜➜Devaluation ➜➜Delay in settling claims and certifying

➜➜Delay in paying certificates ➜➜Legal limits on recovery of interest ➜➜Insolvency of contractor, sub-contrac-

explored in the contract to address arbitration and law. The contractor is exposed to considerable risks during the execution of the work by encountering unforeseen physical and site conditions or obstructions leading to delay of the works and extra costs. Such risks frequently occur, although not always with severe effects, for example high ground water, underground rocks, underground pipes and crossings, mines etc. These risks become more real due to the fact that the employers/owners often do not undertake a full site investigation Source: upwordstranslation.com

➜➜Defective design of temporary or per-

➜➜Governmental delay in payment and

before announcing tenders.Moreover, in an attempt to deprive the contractor from the right to claim compensation for costs and time resulting from such risks, conditions of tenders often place an obligation upon tenderers to make site and soil investigations and fully inform themselves before the submission of their tenders.

Delay in resolving disputes, uncertainty of result due to lack of records, unfair or ambiguous contract, or inefficiency of legal process, and even lack of the due process of law, costs of arbitration and litigation and enforcement of the decision take a longer period and expensive need to be

In order to avoid uncertainties there should be provision of clause in the contract to initiate a claim extension of time and costs under this clause, the contractor must prove three matters: ➜➜That he has encountered physical obstruction or physical conditions apparently on site.

tor or owner

➜➜Funding constraints ➜➜Shortcomings resulting from the mea-

surement and valuation process budget deficit

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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feature ➜➜The climatic conditions, these Condi-

tions could not have been foreseen by an experienced contractor. ➜➜They have caused him additional costs and delay and in addition to the above, the contractor must give notice of his intention to claim to the employer. ➜➜He must also submit detailed particulars to the employer/site engineer within 15 days. The Contact should be covered with Compensation for Extension of Time: ➜➜The contractor with a right to claim extension of time only. ➜➜The contractor has no right to claim additional cost unless he can justify

his claim under another provision of the contract or under the general law that deals in a comprehensive manner with the right of the contractor to compensation in case of delay due to the project owner. A number of clauses can be identified which provide the contractor with a right to claim costs or extra payment for delay as stipulated under the following reasons: ➜➜Cost of delay by the engineer in issuing the approved drawings ➜➜Cost of suspension of work by the engineer/contractor ➜➜Cost of delay by the employer in handing over the site/protocol

➜➜Cost resulting from adverse physical

conditions or obstructions./interference

Contracts are to be reviewed by a knowledgeable experienced legal expert. Each construction project includes multiple contracts, all of which should be consistent and complementary. For example, dispute resolution provisions should be harmonized so that all parties involved can be in the same proceeding at the same time; this will avoid inconsistent results that may arise if there are several different cases addressing the same issues.

Brief of author: Er. Ashis Kumar Chakraborty is a Mechanical Engineer completed Environment Management System (EI & EA) at IIT –Kanpur &Certified Trainer on TQM from Juran Institute USA. He had specialization trainings at USA, Japan, France, UK, Austria etc. and also associated with McKenzie Inc. USA as Tandem Manager. He is Advisor- Group Corporate Affairs&Chief HRM & Business Excellence for Murli Cement.

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feature

Wrapping,

shrinking or

stretching

Source: directindustry.com

Comparing packaging technologies A technical report by Beumer

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INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

ccording to Beumer for many companies in the chemical, building material or food industries, the efficient packaging of their palletised goods is a deciding competitive factor. Some of the crucial factors are transport security, anti-theft protection, display characteristics of the packaged goods, as well as weatherproofing for outside storage. Further key factors are process efficiency and cost reduction (energy and material consumption), as well as the system output (the number of pallets that can be packaged during a specific amount of time). All of these factors need to be taken into account in order to determine the best packaging technology. Stretch hooding has proven to be particularly efficient in comparison with other techniques.

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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feature alletising and packaging play a particularly important role, in any industry, for delivering goods in optimum condition. If the required stability is not provided, goods such as glass, stone or bricks stacked on trucks can detach from the palletised unit and break. This can cause tremendous costs, depending on the product. Materials such as cement, flour or cocoa powder need special protection against atmospheric influences and humidity during transport and storage. To accommodate this, there are different packaging solutions available. There are currently three different palletising packaging techniques on the market: shrink hooding, stretch wrapping and stretch hooding. Efficient packaging with shrink film The film is produced as a tube using blow head extruders with tubular dies, which are then further processed or slit open to become a flat film. Hot air heats the film during the shrinking process up to the softening point. The film is shrunk to fit perfectly around the palletised goods,

which, after cooling down, creates the necessary stability to secure the load. The heat required for the shrinking process is produced by the packaging system either electrically or with gas. If required, the pallet can be packaged leaving its base open for the skids of the fork-lift. This allows high-bay storage. It is also possible

to draw the film over the pallet base. The shrinking method is particularly suited for products that are sensitive to elastic packaging stacking, such as glass. The goods are reliably protected against environmental impacts such as snow, rain, UV radiation, dust and insects. A downside effect of the shrinking process is that the film becomes milky, which makes it difficult to see the packaged goods or imprinted barcodes. Additional disadvantages: polyethylene (PE) bags might weld to the packaging film and the heat effect can be a fire hazard. The solution of wrapping The stretch wrapping technique is one of the most popular solutions with many companies due to the low initial investment costs for the machines compared to shrink or stretch hood systems. The consumption of stretch wrapping film in Europe alone is estimated to be 1.4 million metric tons per year. This technique, however, requires a lot of material which means that the operator has to change the film roll frequently, which makes wrapping suitable for low production rates. The stretch wrapping film's elasticity allows solidifying the palletised goods during packaging. This technique provides low vertical tension force to the load, which makes it suitable for the transportation of goods that donâ&#x20AC;&#x2122;t need a stability-providing

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packaging. This technique is not suited for materials with sharp edges, such as stones or bricks. Additional plastic film may be required to protect the goods against environmental impacts and humidity. The film overlay prevents an optimal display of the products and barcodes on the film cannot be read easily. And because the film is wrapped, it cannot be printed. The film attracts dirt particles due to its adhesion properties and the products collect dust during longer storage periods. The film also does not offer any protection against theft. Another problem: projecting film remnants, typical with this packaging technique, can disturb the sensor system of the conveying technology or the rack feeders. This causes repeated error messages. Due to the many setting parameters, the quantity of the film required for the packaging can be difficult to calculate exactly. High transport security with stretch hoods This technique provides a higher load stability, and the packaging film does not

get glued to the product during the process. The smooth film surface ensures the visibility of the packaged goods, and therefore provides a proper display of the packed goods at the point of sale, as because barcode labelling becomes consistently recognisable. The used film is

recyclable and stretch hooding does not use heat, which reduces the fire hazard. In many industrial and consumer product applications, stretch hooding can offer the best possible protection for palletised goods. A sheet placed on the pallet offers additional protection on six sides against external influences with this packaging solution. It allows a clean and dry outdoor storage, as goods are protected against environmental impacts, humidity, insects and UV rays. Stretch hooding solutions Besides load securing, another important factor for most companies when choosing the perfect packaging method is the protection against environmental impacts. According to tests carried out by producers, systems that use shrink hooding to package palletised items can process 35 to 70 pallets per hour. With this process, the film strength lies between 120 and 180 micrometres. By using the stretch hooding method, throughput is nearly doubled with 100 to 120 pallets per hour. The film that is used is also thinner, only 70 and 140 micrometres. Less material is required due to the elasticity of the film. In 2014, the market price for shrink film was at 1.70 EUR per kilogram. The packaging costs for a film hood were approx. 1.02

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feature

EUR. The film costs for 300,000 pallets per year were approx. 306,000 EUR. The film used for stretch hooding is currently slightly more expensive with 1.90 EUR per kilogram. To form a film hood, materials cost up to 57 cents. This leads to a difference of approx. 159,000 EUR for the same amount of pallets per year, accounting for savings of approximately 52 percent. The systems also differ in regards to their energy demands. The gas consumption for shrink hooding is at approx. two kilowatt hours per pallet. The energy required to form a stretch hood costs six cents. For the calculated 300,000 pallets per year, the total cost is 18,000 EUR. Due to the fact that the stretch hood system works without gas and the costs for energy consumption are almost identical for both techniques, the user can save those costs by implementing the stretch hood method. Maintenance costs are also lower, averaging 4,000 EUR per year for shrink hooding and 2000 EUR per year for the stretch hooding technique.

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CEMENT RESEARCH

CW Research

GLOBAL cement VOLUME FORECAST REPORT DATA-ORIENTED FORECAST REPORT, PROVIDING EXTENSIVE DETAILS ON THE OUTLOOK FOR KEY CEMENT MARKETS WORLDWIDE PRODUCT DESCRIPTION The CW Group’s Global Cement Volume Forecast Report is a twice-yearly update on projections for cement volumes at the national, regional and global basis. The report brings together the CW Group’s principal research team to provide the latest insights on the evolution of cement volume trends for 55 key cement markets worldwide. Provides the latest insights for 55 important cement markets worldwide Presents a 5-year outlook on national cement consumption, production, net-trade estimates, Industry-wide utilization rate, and cement production capacity This benchmark study brings a global forecast report to the industry with a new level of analytical rigor, enabling industry professionals to shape their perspective on markets’, priorities and what may be around the bend.

SLOVAKIA

COLOMBIA

WHY BUY? National cement consumption (tonnages) National cement production (tonnages) National net-trade estimates (tonnages) Industry-wide utilization rate (%) Cement production capacity (integrated & grinding tonnages)

WHO IS THIS REPORT FOR? Business leaders Strategic planners Business development professionals Investment analysis Equipment suppliers Fuel and cement traders

The Global Cement Volume Forecast Report has two updates a year: Extended (September): a September each year extended update (includes briefs on the 55 key markets with principal supply-demand impacting drivers and CW Research's analyst market assessments presenting a detailed numerical worldwide analysis, as well as the regional and global supply-demand model). Quantitative update (February): a February each year quantitative update (only includes the numerical sections of the report, not country write-ups).

RELEASE DETAILS Twice per year:

(two updates included in subscription):

February: 40+ pages Quantitative update (abbreviated) September: 150+ pages Extended with qualitative analysis for key countries

research.cwgrp.com •

CW Group

inquiries@cwgrp.com • +1-702-866-9474 PO Box 5263 • Greenwich, CT 06831 • USA

CEMENT MARKETS

CW Research

CEMENT VOLUMES Cement demand in Argentina posted the steepest growth in April 2015, consumption of the building material growing by 15.4 percent as compared to that in the same month in 2015. The increase was largely driven by the intensification of the country-level construction activity, which started being more noticeable in March. Furthermore, cement production in Argentina grew in line with demand, posting a 15.6 percent YoY (Year-on-Year) expansion in April 2015. Spain seems set on its path to recovery as cement sales rose in April 2015 by 12.0 percent as compared to the same month last year. Cyprus saw its construction activity hit a record low last year with a resultant 5.8 percent drop in demand. However, the country saw a 4.5 percent rise in cement production in April 2015 as compared to that in the same month in 2014.

Cement demand in Argentina posted the steepest growth in April 2015.

Saudi Arabia remains once again one of the countries to see high demand and production growth rates as it focuses its investment programs on infrastructure, roads, and highways. While demand for cement expanded YoY by 11.2 percent in April 2015, output of the building material grew by 10.3 percent. As the outlook for Thailandâ&#x20AC;&#x2122;s construction and infrastructure sectors in 2015 continues to improve due to favorable monetary conditions and greater political certainty, demand for cement improves, growing by 5.9 percent in April 2015,as compared to that in April 2014. However, the year-to-date rise in cement consumption remains marginal, standing at just 0.5 percent.

-20%

Morocco

Colombia

Pakistan

Ecuador

France

Cyprus

Germany

Japan

Poland

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Chile

Source: CW Research

-15%

Thailand

-5% -10%

77+60+56+30+23+22+17 Saudi Arabia

5% 0%

Spain

10%

Argwntina

15%

90+54+44+29+27+26+7+6

20%

Indonesia

April 2015, Year-on-Year Cement Demand Growth (%)

CW Research CEMENT MARKETS

In Chile, consumption of the building material continues to decline. For the fourth consecutive month, demand dropped with the year-to-date decline rate growing. Consumption of cement in Chile fell by 17.9 percent YoY, bringing the year-to-date decline to 10.9 percent. The surprising cement demand drop seen in Germany so far this year continued in April 2015, albeit at a slower rate. Consumption of the building material amounted to 2.2 million tons in the fourth month of the year, down 5.4 percent from sales volume seen in April 2014. As China continues its pledge to cut back pollution levels, its cement production volumes fell by 7.6 percent in April 2015 as compared to that in the same month in 2014. China seeks to cut coal consumption by 13 million tons per year through 2017.

The surprising cement demand drop seen in Germany this year continued in April 2015.

Vietnam has been boosting its cement production levels, reaching an 18.9 percent YoY growth rate in April 2015. The country has been exporting increasing volumes of cement, its main export markets being Bangladesh and Indonesia.

-20%

Colombia

Thailand

Belarus

China

Japan

Poland

Ukraine

Source: CW Research

-15%

Cyprus

-5% -10%

47+39+26+11+8+7 Saudi Arabia

5% 0%

Argentina

10%

Vietnam

15%

81+35+19+15+10+6

20%

India

Apr 2015, Year-on-Year Cement Production Growth Rate (%)

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MARKET DATA SNAPSHOT

CW Research

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

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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Source: CW Research 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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CEMENT ENERGY MARKETS

CW Research

CEMENT ENERGY MARKETS Coal Market Update Global coal trading volumes increased to 93.3 million tons in March 2015, gaining 3.7% in comparison to February 2015. Significant recovery in coal trading volumes was observed in Australia, Colombia, and the US, with declines recorded in Indonesia and China. Australian coal deliveries increased 9% in March from February to reach around 17.1 million tons, up 12% when compared to March 2014 index. According to Australian government forecasts, Australia will reclaim its title as the world’s biggest coal exporter from Indonesia by 2017. With China’s demand for thermal coal weakening, India has emerged as the pivotal consumer for coal. Indian coal imports are expected to increase at an annual average rate of 7% a year to reach 244 million tons by 2020, despite efforts to increase domestic production. While Australian thermal coal production is expected to decline slightly in 2015 due to falling coal prices, the long term outlook is for continued expansion. The Australian government’s Department of Industry and Science said production is expected to increase from 2016 as new mines would reach full capacity. The expected start-up of the new new 60 million tons per annum Adani (India) mine in Queensland’s Galilee Basin is likely to boost output to 278 million tons by 2020. Australia’s thermal coal exports are expected to reach 234 million tons by 2020, up from 201 million tons in 2014.

In March 2015, US coal exports reached 6.9 million tons, up 17% from the previous month but down 27% from the year before.

In March 2015, US coal exports reached 6.9 million tons, up 17% from the previous month but down 27% from the year before. The increase in the export volumes was mainly due to weather issues at Eastern ports during the month of February, and this pushed some loadings into March. However, the year-on-year decline reflected continued weakness in the seaborne market. Indonesia’s coal sector has not only been affected by declining coal demand, but also from the country’s attempt to shore up commodity prices by producing less coal. Indonesia exported 31.7 million tons in March, down 4% from 33 million tons the previous month. The Indonesian Coal Mining Association believes that coal production will reach 350-400 million tons in 2015, a decline of 58-108 million tons from 2014. The anticipated decline in coal output coincides with an expected drop in China’s coal demand due to slowing economic growth and its growing use of natural gas in its energy mix. Indian demand, on its own, will be insufficient to compensate for the decrease in China’s coal import volumes. Coal Global Trading (million tons) Indonesia

Australia

Russia

South Africa

Colombia

Rest

Feb-15

Mar-15

Jan-15

Dec-14

Oct-14

Nov-14

Sep-14

Jul-14

Aug-14

Jun-14

Apr-14

May-14

Feb-14

Mar-14

Dec-13

Jan-14

Nov-13

Oct-13

Sep-13

Jul-13

Aug-13

Jun-13

Apr-13

May-13

Feb-13

Mar-13

Jan-13

Dec-12

Oct-12

Nov-12

Sep-12

Aug-12

Jul-12

Jun-12

Apr-12

May-12

Mar-12

Source: customs data

120

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CEMENT ENERGY MARKETS

CW Research

Energy Prices Update COAL: The average price for April closed at $62.96 per ton, declining 3% as compared to March’s price of US$64.97 per ton and down 18% as compared to April 2014’s price $77.25 per ton. Oversupply, weak demand, lower natural gas prices, and energy efficiency are the major reasons for falling demand and prices for coal. Coal prices are falling as mining output is increasing in an already oversupplied market, while demand from major consumer countries is dropping. The low prices are a result of strong mining output in export countries such as Australia, Colombia, and South Africa combining with weakening demand, especially in China and other emerging markets. However, an uptick in Indian demand for coal is expected to offset the declining Chinese demand in the near future.

The average price for April closed at $62.96 per ton, declining 3% as compared to March’s price of US$64.97 per ton .

Despite a 1% increase in total electric power generation, US EIA expects a 6% decrease in coal consumption in the electric power sector in 2015. Lower natural gas prices are making it more economical to run natural gas-fired generating units at higher utilization rates even in regions that rely more heavily on coal-fired generation. Moreover, the retirements of coal-fired power plants due to various environmental regulations also reduces coal demand in the power sector. Australian coal prices have fallen to record levels, not seen since before the global financial crisis. This is mainly because of slower Chinese economic growth as well as new environmental rules leading to a decline in coal demand.

US exported

Colombia exported

Australia Newcastle

Indonesian HBA

South Africa Richards Bay

140 130 120 110 100 90 80 70

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Apr-15

Feb-15

Dec-14

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Oct-13

Aug-13

Jun-13

Apr-13

Feb-13

Dec-12

Oct-12

Aug-12

Jun-12

Apr-12

Feb-12

Dec-11

Oct-11

Aug-11

Jun-11

Apr-11

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

Steam Coal Fob Average Prices (US$/Ton)

CEMENT ENERGY MARKETS

CW Research

US Petcoke Export Price (US$/ton) Rolling 12-month average

80 60

PETCOKE: The appreciating dollar is hurting US petcokeâ&#x20AC;&#x2122;s competitiveness against coal. Since the majority of global petcoke production comes from the US while most global seaborne coal supply is in Asia-Pacific, Africa and Latin America, the real cost of petcoke in importing nations is rising at the same time that costs of competing coal production are declining. According to the current macroeconomic situation, US petcoke prices are expected to drop in order to remain competitive with the gradually declining coal market. Indian cement producers are showing increased buying interest for imported fuel-grade petcoke amid falling dry bulk freight rates, which had made landed cost economically viable. Although cement companies have been consuming imported petcoke or sometime, other industries like power producers are also now considering using it, as newer boilers are designed to burn fuel of various grades. According to sources, there is oversupply in the Indian market and prices are under pressure, adding that petcoke prices have to fall further because crude oil prices and seaborne coal market prices were falling. With the arrival of summer, petcoke production is expected to increase as refineries will produce more gasoline. Dry bulk freight rates are declining which could put further pressure on petcoke prices.

M-15

F-15

J-15

D-14

N-14

O-14

S-14

A-14

J-14

M-14

A-14

M-14

F-14

J-14

D-13

N-13

O-13

S-13

A-13

J-13

M-13

A-13

M-13

Source: customs data

Indian cement producers are showing increased buying interest for imported fuel-grade petcoke amid falling dry bulk freight rates.

Oman Oil Refineries & Petroleum Industries Company is planning major investments in storage and handling facilities for petcoke. The handling and storage system will allow for Sohar refineryâ&#x20AC;&#x2122;s output to be exported via Sohar Port. The new facility will have a pair of concrete silos with a combined capacity of 60,000 tons of pet coke. To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

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CEMENT ENERGY MARKETS

CW Research

NATURAL GAS: The US Henry Hub spot price traded at $2.61 per MMBtu in April, declining 7.8% month on month. Sustained low oil prices are putting downward pressure on both demand and supply in the US natural gas market. However, the decline in oil prices will have less impact on demand for natural gas from the power-generation and residential and industrial segments as the decline in coal demand are being substituted by increased natural gas usage by these segments.

Several countries, like China and Australia, are moving towards using natural gas as a result of the massive pollution that comes from burning coal.

Several countries, like China and Australia, are moving towards using natural gas as a result of the massive pollution that comes from burning coal. Russia recently signed an agreement to supply China with natural gas for the next 20 years. Exports are expected to begin in the next few years. Prices in Europe decreased 10.3% month on month, reaching $7.42 per MMBtu in April 2015. High storage levels and warm weather were the major drivers for falling demand and prices for natural gas. For European natural-gas contracts that remain indexed to oil prices, the decline in the price of oil has had a direct impact on contract prices. The head of natural gas, coal, and carbon at Energy Aspects said that natural gas prices would have fallen further but for the introduction of a new carbon price floor, a tax on fossil fuels that weighs more heavily on coal than gas. The UK floor price doubled to GBP 9.55 per ton of carbon dioxide at the start of April and is expected to double again in 2016.

Natural Gas Prices (US$/MMBtu)

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Source: EIA, World Bank

Apr-15

Aug-14

Dec-13

Apr-13

Aug-12

Dec-11

Apr-11

Aug-10

Dec-09

Apr-09

Aug-08

Japan LNG

Dec-07

Apr-07

Aug-06

Dec-05

Apr-05

Europe

Aug-04

Dec-03

Apr-03

Aug-02

Dec-01

Apr-01

Aug-00

Dec-99

Apr-99

20 18 16 14 12 10 8 6 4 2 0

MARKET DATA SNAPSHOT

CW Research

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

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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Source: CW Group analysis estimates LM: latest month Jan 2015 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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cement market and competition

arket and competition

Cement companies in India replace US petcoke with Saudi material Indian demand for high grade Saudi Arabian fuel grade petroleum coke (petcoke), with sulfur content above 8 percent, has strengthened, as such cargoes have become comparatively cheaper than US material. Some cement companies have already replaced US petcoke with Saudi material. However, higher landed costs were making some buyers wary of concluding deals. While offer prices for Supramax shipments of US Gulf petcoke having 6.5 percent sulfur were in the high-$70s/mt CFR, trades could only happen at around $76-$77/mt CFR. Tighter supply and higher dry bulk freight rates from US Gulf to India were pushing up landed costs for petcoke cargoes. An executive of a north India-based cement company said he was actively pursuing a June-loading US petcoke shipment. He said while offer prices were at around $76-$77/mt CFR, his target price was at around $72-$73/mt CFR. India’s JK Lakshmi Cement introduces Pro+ cement in the West Bengal With the opening of its Durg plant in Chhattisgarh, India’s JK Lakshmi Cement introduced Pro+ cement in the West Bengal markets. The Pro+ cement provides denser concrete with higher levels of impermeabilty, which provides several benefits, catering to the needs of newer types of construction projects. In the first phase, JK Lakshmi Pro+ Cement will enter Southern West Bengal regions like Kolkata, Howrah, 29 MAY - JUNE 2015

Bardhaman, Midnapore and Bankura. JK Lakshmi has an annual turnover of over Rs. 2500 crore. It currently has cement manufacturing facilities in Rajasthan, Gujarat, Haryana and UP. Pakistani producers seek to discourage import of Iranian cement The Pakistan Cement Manufacturers Association has proposed a 25 percent customs duty in a move to discourage the import of Iranian cement. The customs duty currently stands at 1 percent. According to the association, the merchants have been hiding the volume of imported cement to evade duties. “Inaction against these misdeclarations and smuggling were not only slashing government’s revenues but also hurting the local industry,” said APCMA. Around 34,000 tons of Iranian cement were imported in April and another 20,000 tons up to May 15. Pakistan seeks to challenge South African anti-dumping duties on Pakistan’s cement exports Pakistan is working with the South African government on two possible options to challenge South African anti-dumping duties on Pakistan’s exports of cement. “We are analyzing the detailed report of International Trade Administration Commission of South Africa (ITAC) to determine our course of action,” an official of the Pakistan National Tariff Commission (NTC) said. If no solution is found to the anti-dumping duties, the

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Pakistan’s government has the option to take the issue to the Geneva-based World Trade Organization. The ITAC has imposed a provisional duty for a period of six months at 14.29 percent for Lucky Cement, followed by Bestway with 77.15 percent, DG Khan with 68.87 percent, Attock Pakistan with 63.53 percent and other cement makers with 62.69 percent. The duty was imposed on the request of four South African manufacturers of cement: Afrisam, Lafarge Industries South Africa, NPC Cimpor and PPC. Pakistan’s cement exports to South Africa were of 1,091,235 tons in 2013, making that destination the second biggest market for cement exports after Afghanistan.

cement M&A AND FINANCE

&a and finance

Heidelberg India expects increased sales post monsoon Heidelberg Cement India’s net profit during the fourth quarter fell 82.95 percent to Rs 8.2 crore from Rs 47.85 in the same quarter for the previous year. Nevertheless, volumes grew by 6.5 percent when compared to the previous year. EBITDA per ton in March was of Rs 615 crore. Commenting on the company’s performance, Jamshed Naval Cooper, the company’s CEO, said that fuel costs highly influence how the company’s performance will look. Lower pricing has affected the company’s results for the quarter, yet Mr. Cooper expects prices to improve once the monsoon passes. India’s Prism Cements reports growing cement sales in Q1 2015 Mumbai-based Prism Cements reported a five-fold rise in standalone net profit at Rs 61.89 crore for the quarter ended March 31, 2015. The increase was helped by steps taken in the last fiscal for cost optimization. However, total standalone income grew marginally to Rs 1,529.53 crore in January-March from Rs 1,523.96 crore in the same quarter of 2013-14. Prism Cements sold 1.5 million tons of cement and clinker in the reporting period as against 1.47 million tons sold in the same period of the previous fiscal. “Cement Division has started using some quantities of imported coal in order to reduce cost. The full benefit of this initiative would reflect in the current financial year 2015-16 in a

phased manner,” said the company. The impact of improved operational efficiencies and increased volumes was negated by weak demand and sluggish prices during the fourth quarter as compared to the corresponding quarter of FY14. India’s Mangalam Cement posts income increase Mangalam Cement reported a standalone total income from operations of Rs 238.67 crore for the quarter ended March 31, 2015. Total income from operations rose from Rs 213.34 crore in the previous quarter. Furthermore, the cement manufacturer posted a net profit of Rs 2.72 crore for the quarter. The company’s consumption of raw materials increased as compared to the previous quarter. Power and fuel costs

have also increased in the quarter ended March 31. India’s Ambuja Cements reports net revenue lower than expected Ambuja Cements reported a mixed set of numbers for the March quarter, with a lower than expected net revenue, on account of lower cement sales caused by the weak demand in the first three months of the year. Net sales fell by 8.2 percent from a year ago to Rs.2,424.6 crore. The sales volume fell by 9 percent as compared to the same period of the previous year. Higher raw material and staff cost was partially negated by tight control in power and freight costs. The operating margin, at 19.4 percent, was lower by 245 basis points than a year ago. However, Ambuja Cements’ op-

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M&A AND FINANCE

Adani Cement Plant

India Cements reports profit for the fourth quarter Though overall financial results were lower than expected for India Cements, the company has reported a net profit of Rs. 36.6 crore against a loss of Rs. 151.7 crore in the year ago period. Nevertheless, the company was expecting profits to reach Rs 47 crore on revenue of Rs 1,168 crore for the quarter. Total income from operations fell 7.3 percent to Rs 1,043 crore during the quarter ended in March 31, compared to Rs 1125 crore in the corresponding quarter of the previous fiscal year. Total expenses declined 16 percent, out of which power and fuel expenses dropped 21 percent.

kistan. The company bid for 75.86 percent of Lafarge’s shares at an enterprise value of $329 million in July 2014 and then acquired another 12.07 percent through a public offer. Bestway Cement has a total production capacity of over 8 million tons per year, 18 percent of the overall cement industry’s capacity in the country. UltraTech is looking at multiple assets of Jaypee Group India’s UltraTech is eyeing Jaypee Group’s cement plant in Bhilai after its mega billion dollar buyout of Jaypee Group’s

Bestway Cement takes management control of Lafarge Pakistan Bestway Cement acquired additional Lafarge shares and has taken the management control of Lafarge Pakistan Cement by holding a 87.93 percent share package in the cement manufacturer. Following the transaction, Bestway Cement emerged as the largest cement manufacturer in Pa31

MAY - JUNE 2015

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

Madhya Pradesh plant. Both JP Group and UltraTech have been analyzing the valuation and the enterprise value that is being discussed is around Rs 2,1002,200 crore. The sale is just the beginning of Jaypee Group’s larger plan to sell its cement business bit by bit to ease its Rs 60,000 crore debt burden. The Bhilai plant has a debt of Rs 558 crore and the total enterprise value is inclusive of the debt amount, which has been consolidated and discussed. Meanwhile, UltraTech is looking at multiple assets worth up to Rs 4,000 crore of Jaypee Group.

Source: heidelbergcement.com

erating profit turned out to be more or less in line with estimates, despite the miss on the revenue front.

and cement projects expansions

India’s JSW Cement to boost capacity India’s JSW Cement plans to boost its cement production capacity over the next two to three years, aiming to reach 20 million tons per year of installed capacity. The company now has an annual capacity of 6 million tons. JSW Cement’s expansion is aimed at catering future demand. The aggregate investment for the expansion is estimated to reach Rs 8,000-9,000 crore. JSW Cement chief executive officer Anil Kumar Pillai said though the cement sector was witnessing muted growth, some major announcements made in the Union budget towards pushing infrastructure growth could result in a turnaround from the second half of this year, starting in October. JSW Cement’s utilization is likely to hit 70 percent in 2015/16, up from the current 60 to 65 percent. India to install latest machinery for JK Cements upgrade India’s Minister for Industries and Commerce Chander Prakash Ganga plans to install the latest machinery for the JK Cements upgrade so that the corporation earns a good profit during next year. The minister inspected the proposed site for establishment of income generating unit Pandrethan spread over 40 canals of land. Seven cement factories including JK Cements are functional in Khrew area. Managing Director JK Cements Rakesh Sharma said that the corporation has computerized all records and put it on its website to ensure transparency.

India’s Emami Group to set up cement unit in Chittor Emami Group plans a Rs 4,200-crore investment in Rajasthan for a cement plant, a solar power unit and a solar park. The Calcutta-based group plans to set up a 3 million ton per year cement unit in Chittor near Udaipur with backward integration into limestone mining. The project, which includes a clinker and grinding unit and a power plant, will come up in three years. Emami Group also proposed a Rs 1,200-crore investment in the solar sector. Emami intends to build a 100-mega-watt

solar power unit and a 500-mega-watt solar park at Jaisalmer. Indian state-run steelmaker to set up cement plant in Andhra Pradesh State-run steelmaker joint venture Rashtriya Ispat Nigam is considering a foray into the cement business as it draws up plans to set up a greenfield cement manufacturing plant. The new plant will have a production capacity of 6 million tons per year and will be located in Visakhapatnam in the state of Andhra Pradesh. The unit will be built through a joint venture route at an es-

Source: s

rojects and expansions

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

MAY - JUNE 2015

Source: s

projects and expansions

duction. It buys clinker from the market and uses slag produced from the steel plant to make ordinary Portland cement.

timated investment of Rs 3,000 crore. The plan to venture into the cement business is aimed at proper utilization of by-products such as fly ash and slag from its 2.9 million tons per year steel plant. Almost all the 1.2 million tons per year slag produced in the plant is now sold to the local cement manufactures; while fly ash is mostly used for earth-filling. “Our steel plant will produce sufficient fly ash and slag to feed a six mtpa cement plant. It generally requires a R500crore investment to create a one mtpa cement capacity”, said a RINL official.

Indian cement manufacturer begins trial operations at new plant Dalmia Cement commenced trial production at its new cement plant in Belgaum, Karnataka, India. The new 2.5 million tons per year cement plant commenced operations on March 23. With the commissioning of the new plant, Dalmia Cement’s installed capacity increased to 24 million tons.

India: Rashmi Group plans expansion at cement plant India’s Rashmi Group plans to invest Rs 450 crore to expand steel and cement capacity in Bengal. On cement expansion, the group will spend Rs 150 crore, aiming to boost output at its Jhargram unit. The expansion in steel products would also help the Rs 3,000-crore group to increase cement pro-

Kerneos will commission Vizag calcium aluminate cement plant in 2017 Kerneos India plans to complete the construction of its US$18.9m, greenfield 30,000t/yr calcium aluminate cement plant in Visakhapatnam within the next two years. The Vizag plant will be Kerneos’ 12th manufacturing plant globally. Three

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of its plants are located in France, three are in China, one is in the UK and one is in the US. Calcium aluminate cement is a special cement used mostly by manufacturers of refractories, and therefore demand for this variety of cement depends on the growth of the steel industry. Kerneos plans to increase the Vizag plant’s capacity as the market grows. India currently consumes 50,000t/yr of calcium aluminate cement as refractory binder. Kerneos supplies about 10,000t/yr to Indian refractory makers from its French and Chinese plants. The Indian government is aiming at a total steel production of 250Mt/yr by 2025, which means that the refractory industry would almost triple in size. Currently in India there are several small-scale merchant producers and several refractory producers manufacturing the binders for captive use. Kerneos, which has 30 customers in India, expects to double its market share in this segment in the next five years.

cement volume & pricing

olume and pricing

Cement demand in Pakistan is on the rise Domestic demand drives dispatches growth in Pakistan, where cement demand is on the rise. The increase amounts to 7.97 percent in the first 10 months of the current fiscal year (July 2014 – June 2015). Cement dispatches in July 2014 – April 2015 totaled 29.1 million tons, up from 28 million tons of cement dispatched in the similar period of the previous fiscal. “It was the domestic demand that kept the mills operating,” said a spokesman of All Pakistan Cement Manufacturers Association. Sales in the domestic market in April rose by 4.57 percent to 2.65 million tons, while exports in April stood at 640,000 tons. “We are still operating at a little over 76 percent capacity which translates into idle capacity of 8.94 million tons,” the spokesman said. Pakistan’s cement exports decline Pakistan registered a 25 percent fall in cement exports to Afghanistan as it is losing the market to its neighboring countries of Iran and India. In March, cement exports in Pakistan amounted to 443,000 tons, down 39 percent from 726,000 tons, in March last year. Iranian cement makers along with their Indian counterparts have made inroads into Afghanistan. Pakistan exported 2.06 million tons cement to Afghanistan in July-March FY15, as compared to 2.75 million tons in July-March FY14. Cement sales during the first nine months of the current fiscal year stood at 2.26 million

tons per month on average, up from 2.08 million tons per month in the corresponding period last fiscal, but average monthly exports dropped from 669,000 tons in July-March FY14 to 605,000 tons per month in July-March FY15. According to an APCMA spokesman, illegal cement import from Iran and tax evasion at import stage are affecting the cement industry. India’s Shree Cement commissions clinker manufacturing unit The northern cement company has commissioned a clinker unit capable of manufacturing 1.5 million tons of cement per year at Baloda Bazar, near Raipur in Chhattisgarh. The cement mill section of the same plant had already been commissioned in February 2014. Shree cement is the leading cement manufacturer in North India, having begun operations in 1978. The company has operations in Beawar, Ras, Khushkhera, Jobner, and Suratgarh.

rashtra is more than Rs 100. Builders and bulk buyers are dodging local vendors and preferring to import cement from Maharashtra. Any branded company cement is being sold at the cost of Rs 290 to Rs 300 for per bag in Maharashtra while the same cement is sold in Rs 400 to Rs 410 in Belagavi and across Karnataka. According to The Belagavi District Cement Dealers Association (BDCDA), Cement Industries Association (CEA) is creating artificial scarcity of cement in Karnataka to sell the material at the high cost, which is illegal. The cost of cement is sold in Karnataka is around 25 percent more compared to Maharashtra, Andhra Pradesh, Tamil Nadu, and Gujarat. Government is required to make an immediate intervention to this malpractice.

High cement prices in India’s Belagavi district compared to neighboring states Cement traders in the Belagavi district in the state of Karnataka, India teamed-up against the cement manufacturing industries by stopping the purchase of cement this week, condemning the huge difference in the cost of cement behind per bag in Karnataka, compared to neighboring states. The difference behind per 50kg bag cement between Karnataka and Maha-

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volume & pricing

INDIA

EXECUTIVE WORKSHOP

SEPTEMBER 4, 2015 MUMBAI, INDIA

A SUMMIT PRODUCED AND ORGANIZED BY

The Solid Fuels Summit India 2015 is a focused, executive-oriented meeting and networking opportunity for coal and petcoke industry professionals who are involved in the Indian coal and petcoke sectors. The Summit will bring a special dual focus on both business and industrial issues.

WORKSHOP THEMES ↘ ↘ ↘ ↘ ↘ ↘ ↘

Is there enough solid fuel to support India’s industrial growth? Outlook for shipping and impact on India solid fuel prices Logistics challenges: an unsolved bottleneck problem? India petcoke supply side and marketing Global regulations forcing re-thinking the supply options Thermal coal price outlook: world markets and India Coal ash: utilization in India and global markets; challenges and regulations

WHO SHOULD ATTEND? ↘ Professionals from the thermal coal and petcoke industries involved

in the production and marketing functions

↘ Procurement specialists from the cement manufacturing, power

generation and steel segments

↘ Raw materials managers from cement groups involved with coal

mining and / or fuel buying

↘ Bulk handling and logistics experts involved in the management and

movement of solid fuels

↘ Shipping and port professionals involved in the global supply chain

PAST REGISTERED COMPANIES INCLUDED: ABB • ACC Minerals (ACC Limited) • Bharathi Cement Corporation • Binani Cement • CW Group • Dron Energy • Essar Power • Greentech Engineering • Hira Power & Steel • i-maritime • Jenissi • JK Organization • Reliance Industries • Oceanbrave Shipping • OSPL Group • RNCOS • Salva Report • Tata Power • Ultratech • Yes Bank Organized by GMI Global LLC | www.gmiforum.com sales@gmiforum.com GLOBAL CONTACT: Beatrice Ene | be@gmiforum.com | 0040 722 764 802

cement people

eople

Ambuja Cement and NSDC to train over a 100,000 people, employ 75,000 In line with Prime Minister Narendra Modi’s vision of ‘Skill India’, Ambuja Cement, one of India’s major cement manufacturers, has signed a Memorandum of Understanding (MoU) with National Skill Development Corporation (NSDC) to train over 100,000 people across 14 locations in the country. According to the agreement, the training will be delivered by SEDI, an institute under Ambuja Cement Foundation, in 12 high growth sectors. At least 75% of the trained candidates will be guaranteed employment. SEDI will help in building identified skills, personality development, improvement on technological advances like computer skills, English speaking and on-the-job training etc., to reduce the skill gap in the target sector. The organization plans to upscale its training institutes manifold in the coming years by replicating the model at newer locations. Commenting on the partnership, Dilip Chenoy, Managing Director & CEO, National Skill Development Corporation (NSDC) said, “It’s a delight to see how major companies like Ambuja Cement are coming forward and contributing to the skills landscape. We need private companies to extend infrastructure and training support for skill development. The credibility of the group and the work that SEDI is doing will bring extensive support to our skills program.”

Sectors in which the training will be provided include Hospitality, Retail, Driving, Security, Electrical, Automobile, Construction, Carpentry, Beauty Culture, Garment Making, Fitter & Welder and Computer Training. The training will be conducted across 14 locations where Ambuja has its presence. Pearl Tiwari, CEO, Ambuja Cement Foundation said, “Committing ourselves to the skill development agenda of the country is a way of investing back into the nation’s resources.” Holcim Indonesia announces changes to Board of Commissioners and Board of Directors Holcim Indonesia’s shareholders approved the company’s annual report, changes to the Board of Commissioners and Board of Directors. Madan Lal Narula stepped down as Commissioner, having served since 2008. There were three newly appointed Commissioners approved by shareholders, namely Professor DR Kuntoro Mangkusubroto, former Minister and head of the special ministerial oversight unit of the previous Government as President Commissioner, Hendra Kartasasmita, with 30 years’ experience in consumer marketing in the region with a number of multinationals, as Commissioner, and Patrick McGlinchey, currently Regional General Counsel for Holcim East Asia Pacific and formerly Holcim Australia, also as Commissioner. Joining the Board of Directors was Francois Goulut, previously Manufacturing Director at Holcim Viet-

nam. Mr. Goulut contributes over 24 years of international experience with Holcim in cement plant management. “Current conditions have necessitated extensive cost cutting and efficiency measures to ensure we protect margins, at a time of contracting demand,” noted Mr. Schutz. “I am pleased we are making progress with our plans to strengthen our presence in Sumatra in addition to a very strong footprint to cover Java, the largest market with Tuban plant fully operational. Holcim offers a wide range of innovative solutions, customer value and expertise beyond the core business of cement supply. These skills are essential for Indonesia to build much needed infrastructure, not only for sustaining domestic growth but to compete in the new Asean Economic Community, capitalising on its comparative advantages of extensive resources and a large consumer sector,” he added.

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regional news

egional news

Pakistan

Source: thebusinessyear.com

Pakistan affected by illegal imports of Iranian cement Cement manufacturers in Pakistan are affected by unchecked ingress of Iranian cement, consistently eating up the local industry’s share while the government’s revenue collection efforts are also being affected. Cement manufacturers in the

country currently have 8.94 million tons of unutilized capacity. The All Pakistan Cement Manufacturers Association appealed the government functionaries to intervene and take effective steps to stop illegal import of Iranian cement and protect local cement industry. Measures that could help include adding cement in negative list of import items, so that the country’s surplus production capacity could be utilized to the maximum extent. Domestic uptake of

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cement continued to depict positive trends increasing by 7.97 percent during the first 10 months of this fiscal year (July 2014 – April 2015), while the exports declined by 9.09 percent. The cement industry dispatched 29.07 million tons of cement during July 2014 to April 2015 against total dispatches of 27.98 million tons during the same period in last fiscal year. Vietnam Vietnam’s cement exports to Bangladesh dropped in Q1 Bangladesh imported last year 8.4 million tons of cement and clinker from Vietnam for nearly $323 million, representing over a third of national exports. In 2014, Bangladesh was the largest market for Vietnamese cement and clinker. However, the first quarter 2015 saw a 33.6 percent decline in exports, with their value amounting to $70.1 million. This was the result of strong competition from Indonesia and China, as well as the development of Bangladesh cement industry that is expected to post an average annual growth of 5 to 10 percent in the coming years. Afghanistan Afghanistan imports less cement from Pakistan Afghanistan’s imports of cement from Pakistan were 24 percent lower in the first

Sri Lanka Lafarge Mahaweli Cement on schedule with housing program in Sri Lanka Sri Lanka’s Lafarge Mahaweli Cement is on schedule with its Savi Piyasa housing program. The company partnered with nine leading brands in the construction sector and two commercial banks to add value to its Technical assistance scheme for Individual Home builders. In Sri Lanka, the company provided architectural assistance to 220 families located in the Western and Northern Province. With the intention of providing even better options for their Savi Piyasa clients, Lafarge has now entered to partnerships with several leading brands, enabling them to receive special discounts on a large variety of building materials such as steel, paints, glass, PVC pipes, etc. Moreover, Lafarge has tied up with commercial banks and micro finance institutions to provide their customers with easy access to loan facilities. “We started this program a year ago, and we have been getting a lot of positive feedback. A package integrat-

ing architectural assistance, special discounts and financial facility has not been offered in Sri Lanka before, so I am confident that the individual home builders in the country will find interest in this turnkey solution,” said Anurag Kak - Managing Director of Lafarge Mahaweli Cement. New cement packaging to be launched Starlinger plans to present its new cement packaging this year in Guangzhou, China. The break-resistant AD*STAR cement sacks are made of polypropylene fabric. The new packaging features trouble free filling on the newest automatic cement filling lines and minimum breakage rates during transport and storage. AD*STAR sack conversion line on show in the Starlinger factory in China AD*STAR block bottom valve sacks are produced on Starlinger’s ad*starKON conversion lines, using a special welding technique. Due to the reduced raw material consumption during production they are an economic alternative to sewn sacks and paper sacks.

Source: cemap.org.ph

nine months of the current fiscal year due to exit of North Atlantic Treaty Organization (NATO) forces and smuggling. The withdrawal of NATO forces from Afghanistan is also affecting Pakistan’s economy, and it is losing one of the major cement export markets. “Since the announcement of the exit of NATO forces, Pakistan cement exports to the neighboring country is on decline as development work in Afghanistan has come to standstill after the exit of foreign forces, resulted in lower cement demand,” said industry sources. Pakistan’s cement exports to Afghanistan have been affected further by the set-up of new cement plant in Tajikistan. Pakistan exported 2.3 million tons cement to Afghanistan during July-April FY15 compared to 3.05 million tons in corresponding period of last fiscal year. “We are expecting further fall in cement exports to Afghanistan in coming years as NATO forces were major consumer of Pakistani cement. As per industry estimates end of this fiscal year, cement export to Afghanistan will be some 2.7 million ton,” sources added.

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highlights

orders & equipment

rders & equipment

Vietnam’s Xuan Than Group awards FLSmidth cement plant order FLSmidth received an order worth approximately EUR 100 million (DKK 750 million) from the Vietnamese cement producer Xuan Than Group for the supply of a complete cement plant with a capacity of 12,000 tons per day. The plant, to be located approximately 100 km South of Hanoi, Vietnam, will be the largest cement plant in South East Asia once completed and will feature energy efficient equipment, state-of-the-art emission control, and leading process control systems. “The Vietnamese cement market is expected to grow over the coming years, and it is a well-known market to FLSmidth as we have been present in the country for many years - also the construction of the largest cement plant in South East Asia proves our strong position in the area,” President of the Cement Division, Per Mejnert Kristensen said.

cepted by FLSmidth,” said Oman Cement. The company is installing an additional cement mill of 150 tons per hour capacity with supporting infrastructure of cement silos and bulk dispatches. The project is expected to be completed in the fourth quarter of this year. Cement mill installation in Turkey begins Loesche has begun the installation of a cement mill in Turkey. The LM 45.4 mill is being installed at the Bastas Baskent Ci-

Oman Cement’s project for additional capacity in progress Oman Cement awarded a contract for the upgrade of pollution control equipment at one of its production lines to Denmark-based FLSmidth. The $11.3 million contract is part of Oman Cement’s efforts towards environmental improvements. “In order to reduce emission levels, the company has awarded the work for upgrade of pollution control equipment for line-2 to FLSmidth. In this regard, the company has issued a letter of intent, which has been ac-

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mento plant in Elmadag, Turkey. The mill was ordered by Vicat Service Technique Ciment in May 2014, with Loesche supplying the mill within a 10 month delivery period. The mill has a grinding rate of 260 tons per hour to product fineness of 16 percent R 90 µm. The LM 45.4 mill has an installed drive power of 2100 kW. Loesche’s scope of supply also comprises weigh feeders, apron feeders, magnetic separators, metal detectors, shutoff and control flaps, vibrating conveyors, a bucket elevator, and expansion joints.

Infrastructure & projects

nfrastructure & projects

Concrete Use of bio asphalt pushed in France Researchers in France have made use of the microalgae waste to create asphalt and opined it could replace petroleum based substances. They have proved the viability of bio-asphalt by demonstrating its close similarity to the asphalt currently used to pave roads. According to the report, to make the bio-asphalt scientists, at the labs based in Nantes and OrlĂŠans, have used a hydrothermal liquefaction process (i.e., pressurized water) and have transformed the microalgae residue into a black and viscous substance that closely resembles petroleum-derived asphalt. The process has achieved a conversion efficiency of 55%.

now in ash ponds or giving them away for free to fly ash brick manufacturers. However, this is not being done properly. Another method for ash disposal, which was suggested recently, was dumping the ash in coal mines that have been shut down. However, the issue remains as ash gets washed out easily unlike sand, which is used to fill gaps in coal mines that are shut," a TSPCB (Telangana State Pollution Control Board) official said. According to the report, another major issue among coal-based power plants in both states is the lack of usage of modern electrostatic precipitators.

India: Fly ash bricks usage encouraged The Indian Government has been pushing for the mandatory use of fly ash bricks in governmental projects. Collector Deependra Singh Kushwah has asked all government agencies to comply with the notification issued by the environment and forests ministry about the use of fly ash bricks in construction activities. He also asked that they issue tenders for construction companies to use such bricks. "If the notification is about use of fly ash bricks only in areas around a thermal power station was

Aggregates

Source: news.steel-360.com

India: Worries arise over coal ash Telangana and Andhra Pradesh based coal-thermal stations are being supervised because those are apparently failing to efficiently dispose of coal ash. Pollution Control Board officials from both states have revealed that while notices were sent to almost all the thermal power plants regarding improper disposal of ash, most of these reports were sent to plants run by these state government franchises. â&#x20AC;&#x153;Coal-based power plants are disposing the ash as of

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infrastructure & projects in place, then that should be followed. All government agencies need to issue tenders making the use of fly ash bricks mandatorily,” he said. Construction & Projects Companies from Malaysia and Japan may build highways in India The Narendra Modi administration wants foreign companies to benefit from a policy that would allow them build highways in India. The road ministry has sought the finance ministry's permission for such a governmental approach. The road ministry would not have to go through the process of seeking tenders and bids for a highway project under this arrangement, allowing for faster implementation.

Korea to finance infrastructure construction projects in? The Korean and Indian governments agreed to start negotiations no later than June next year for improving their Comprehensive Economic Partnership Agreement. It is expected that the Korean government will provide financial support worth US$10 billion for infrastructure projects in India while Korean companies will be given opportunities to participate in the projects that include high-speed railway construction and alternative energy development. Ban in Nepal on construction of new projects Nepal has imposed a two-month ban on the construction of new building projects and limited ongoing construction to two floors following the deadly earthquakes that destroyed over 2,00,000 homes. The Ministry of Local Development has also put on hold the approval of new house designs for the same period. The ban would remain in effect until July 16, according

to a statement issued by the Ministry of Local Development. Those structures that were built by violating the existing building codes and those weakened by the recent earthquake and its aftershocks should be immediately demolished. The government would also review the existing building codes and make necessary changes to them. Until then, its decision taken would remain in force. The number of houses destroyed in last month's quake is over 2, 00, 000, more than twice the number of households wrecked in the 1934 temblor. India on its way to becoming infra market India is slated to become the world’s fourth largest market for infrastructure projects by 2025, as the real estate and construction sectors are continuously evolving in the country, according to a RICS (Royal Institution of Chartered Surveyors) report. “Recent reports commissioned by RICS found affordable housing was an acute problem in some BRICS (Brazil, Russia, India, China, and South Africa) nations exacerbated by growing urban populations,” RICS said in its report.

Source: neplindia.co.in

"Exim banks of foreign countries cannot fund their own developers for our highway projects. But we are hopeful this restriction will be removed to kick start infrastructure development in the country," a senior official said. The ministry has set itself an ambitious target of awarding projects to the tune of Rs 3.5 lakh crore in this finan-

cial year. The government is planning to launch 1,231 projects that will cover 37,000 km in the next two years.

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analyst recommendations UltraTech Cement HRBVClient Solutions recommend BUY for UltraTech Cement. TS Harihar, Chief Executive at HRBV Client Solutions, says that a lot of the cement companies like ACC and Ambuja Cements have corrected from higher levels, but cement becomes attractive as and when the pricing power comes back, and that is only possible when a real pick up occurs as far as construction space is concerned. So to that extent, cement demand and the power of cement pricing do not, as of now, rest on the manufacturers. According to the analyst, UltraTech Cement is one of the odd companies, which are looking good and look like a buy on dips candidate.

Ambuja Cements s2analytics.com recommends selling other cements stocks including Ambuja Cements, as the stock is on the verge of breaking a large trading range. Sudarshan Sukhani of s2analytics.com says cement is going through a bad patch, which started even when the Nifty was trying to move up. HSBC’s Herald van der Linde too names Ambuja Cements among the other listed companies, which fit sell-recommendations. The analyst says that the delay in the recovery in the investment cycle and poor monsoon expectations will continue to put pressure on earnings. According to him, earnings expectations are already too high because of the optimism about growth, while concerns about the monsoon could further dent rural demand. India is still the

acc

Prism Cement

Sameet Chavan of Angel Broking says that ACC is clearly trading in downtrend on the weekly chart. Previous important support level of Rs 1,530-1,540 is now acting as a strong resistance. Going forward looking at the stochastic momentum oscillator, the analyst expects the stock to give some immediate correction towards Rs 1,450-1,440. “We are maintaining a negative stance with a target of Rs 1,440 and stop loss can be kept at Rs 1,543,” Sameet Chavan added. On the other hand, Bhavin Desai of Motilal Oswal believes ACC still has a lot of room on the downside, and the stop loss should be put at around Rs 20.

Prism Cement may test Rs 135, says Shubham Agarwal of Motilal Oswal Securities. Some of the midcap cement names are showing signs of development, which is indicating that there could be an upward movement in the short term. So specifically talking about Prism Cement, there is an uptrend that we have seen in the stock. We have seen a breakout from the consolidation, which was there on the stock. Mr Agarwal is of the view that this breakout that has already taken place should extend to the level of Rs 135, with a probable stop loss of Rs 99.

most overweight market in the region in terms of the holdings of overseas investors. This is also reflected in high valuations – at a 12-month forward PE of 17.1x, the market is trading at a 17 percent premium to its five-year average. “We believe that valuations need to adjust downwards. As a result, we stay underweight on Indian equities,” Herald van der Linde explained.

of 11.7 MT. ICICIdirect analysts remain positive on the company from a longerterm perspective, but think moderation in domestic demand and slowdown in GCC remain near term concerns. Hence, they maintain HOLD rating with a revised target price of Rs 650/share. In turn, Kunj Bansal of Centrum Wealth Management is of the view that J.K. Cement provides a good investment opportunity. He relies on the fact that J.K. Cement drives part of its revenue from white cement, which relatively is not as prone to the industrial trend of decrease of gray cement as the white cement. J.K. Cement has a 0.6 million tonne white cement plant in India and also a white cement plant in Gulf. So to that extent, the white cement part of the business can be clubbed with home accessory companies like tiles, sanitary ware, which has been doing well.

J.K. Cement ICICIdirect.com has recommended to HOLD J. K. Cement with a target price of Rs 650, in its latest research report. At the CMP of Rs 602, the stock is trading at 10.6x its FY16E and 8.1x its FY17E EV/EBITDA, respectively. On an EV/ton basis, the stock is trading at $91 on FY17E capacity

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MOST POPULAR ON CEMWEEK.COM The most-read stories on CemWeek over the past two months reflect the industry’s mixed outlook. The India column shows the 20 most popular stories from CemWeek featuring India-related coverage, and the Global column shows the global events that gathered the most attention worldwide during the period. Visit CemWeek.com to access the full stories.

INDIA

GLOBAL

1 Indian cement manufacturers to bid on Lafarge’s cement units

1 Summit Materials to acquire Lafarge North America assets

2 Jaiprakash Associates to seek approval for proposed sale of cement units in India

2 Cement companies eye Indian assets of Holcim and Lafarge

3 Lafarge installs new mill at Rizal plant in the Philippines

3 Lafarge chief remains sanguine as merger approached completion

4 India’s Emami Group to set up cement unit in Chittor

4 Holcim chairman defends Lafarge merger at AGM

5 India’s UltraTech Cement posts financial results for the quarter ended March 31

5 Italcementi interested in Holcim and Lafarge assets in the U.S.

6 India’s UltraTech eyes Jaypee Group’s cement plant in Bhilai

6 HeidelbergCement shuts capacity in Tanzania

7 Chinese investors to build cement plants in Kazakhstan

7 Cameroon bans cement imports

8 India’s Mumbai Port Trust allots land for cement handling terminal

8 Kenya’s National Cement to invest in new plant in Uganda

9 Cement companies in India underperform

9 Lafarge invests in waste co-processing station in Romania

10 New cement plants to be built in East Java, Indonesia

10 General Manager of Caribbean Cement Company to be replaced

11 India’s cement demand to grow in line with economic recovery

11 Siwertell receives order for cement unloader in Kuwait

12 Indian state-run steelmaker to set up cement plant in Andhra Pradesh

12 Lafarge’s second-biggest shareholder expects Galchev to join board of merged Lafarge-Holcim

13 Prosperity Indonesia announces intention to build new cement plant 13 Russia’s ISC boosts cargo volumes with cement shipments 14 Net profit drops for HeidelbergCement India 14 Eurocement completes major upgrade at cement plant in Russia 15 Cemex announces new investment in the Philippines 15 Dangote Cement unveils a production target 16 Vietnamese cement plant adds production line 16 Lafarge reduces CO2 emissions per ton of cement 17 Merger of Lafarge and Holcim is not a threat for India’s UltraTech Cement 17 Holcim launches reorganization of Group function 18 India’s UltraTech Cement forecasts demand growth 18 Kenya’s National Cement to enter Uganda market 19 India’s Ambuja Cements reports net revenue lower than expected 19 Argos acquires stake in Colombian engineering company 20 Indonesian cement maker adds capacity 20 Lafarge and Holcim announce disposal plan for assets in the U.S.

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CW GROUP MEETING AGENDA The CW Group will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry.

Conferences where the CW Group will be presenting

Cement Business & Industry (CBI) Africa 2015

Cement Business & Industry India 2015

AshTrade India 2015

Solid Fuels Summit India 2015

June 25-26, 2015

September 3 – 4, 2015

September 4, 2015

Johannesburg, South Africa

Mumbai, India

webinars hosted by cw research

India Petcoke update: coal, petcoke

Global slag markets - a glance at next year’s trends

Global Cement Volume Forecast Report: 2H2015 update and outlook

CW Research Webinar Thursday, July 16, at 2:00 PM GMT

CW Research Webinar Thursday, October 15, at 2:00 PM GMT

CW Research Webinar Thursday, September 17, at 2:00 PM GMT

Mumbai, India

Recent released reports:

CW Research

Country report: Ivory Coast cement market (2015 update) Slag & AshTrade Americas

Sep 30 - Oct 1, 2015

Rio de Janeiro, Brazil

Country report: Poland Cement Market (2015 update) Country report: Zimbabwe cement market (2015 update)

CBI Brazil & LatAm 2016

February 24 - 25, 2016

Sao Paolo, Brazil

Country report: Madagascar cement market (2015 update) Country report: Argentina cement market (2015 update)

For questions or inquiries please contact Liviu Dinu, Market Services & Marketing Consultant at the CW Group at ld@cwgrp.com For more information please visit http://research.cwgrp.com/meetings

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EXHIBIT & SPONSOR OPTIONS

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SEPTEMBER 3-4, 2015 • VITS HOTEL • MUMBAI, INDIA

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ABHISHEK JAYAKUMAR Business Development Manager aj@gmiforum.com +91 900 446 9779

GLOBAL CONTACT BEATRICE ENE Client Development & Marketing Director be@gmiforum.com +40 722 764 802

PAST PARTICIPATING COMPANIES ABG Cement • ACC Limited • Aditya Birla Group • AIPMA • Alley-Cassetty Companies • Alliance Polysacks • Alternative Resource Partners • Ambit Capital • Ambuja Cement • Amrit Cement Industries • ASEC Trading • ATS Conveyors • Beroe Consulting • BEUMER Group • Bharathi Cement Corporation • Biltech Building Elements • Binani Industries • BQB InfraTechnorium • Browz • Burundi Cement (BUCECO) • Cachapuz • Cement Manufacturers Association (CMA) • Chettinad Cement • Chryso • Cimpor • Cimprogetti • Claudius Peters • Credit Suisse • CRH India • CTTL • CW Group • Dalmia Cement • DPTS Enterprises • Dron Energy • Emerald World Resources • Evonik Degussa India • Fly Ash Association of India (FAAI) • Fives FCB • FLSmidth • Golder Associates • Gujarat Siddhee Cement • Heidelberg Cement Group • HGH Systemes Infrarouges • Hi-Bond Cement India • Hirmi Cement Works • Holcim • International Finance Corporation (IFC) • Indian Institutes of Technology (IIT) • I-maritime • India Cements • Indian Concrete Institute • Indus Marketing Engineers • InGlobal Resources • Intelesco Solutions • IPIRTI • Italcementi Group • J.K.Cement • Jaypee Group • JK Sons • Jyotech • KHD • KJS Concrete • Lafarge • Lakshmi Cement • Larsen & Toubro • Loesche • Lytag • Madras Cement • Magnesita Refractories • Mapei • MASA India (MASA Group) • Maverick Consulting • McKinsey & Co • Merrill Lynch • Middle East Green Energies • Ministry of Mines Afghanistan • Ministry of Mines and Petroleum • Mitsui • Mjunction Services • Mondi Oman • Murli Cement • MyHome Industries • National Council for Cement and Building Materials • Neptune India • OM Consultants (AIPMA) • Orient Cement • Phillip Capital India • Plant Supervision • Prism Cement • Promac India • PricewaterhouseCooper • Quality Circle Forum Of India (QCFI) • Qualical • RAMCO - Enterprise Process Solution • Ready Mixed Concrete Manufactureres Association (RMCMA) • Refratechnik • Reliance Industries • Rexnord • RMC India • RNB Cements • RNCOS Business Consultancy • SABIA • Sagar Cements • SAIF • Sanghi Industries • Satna Cement Works • Saurashtra Cement • SB Engineers • Segezha Packing • SFK • Sharjah Cement • Shree Cement • Shri Digvijay Cement • Societa Impianti Calce (SIC) • SKF India • Somi Conveyor Beltings • Starlinger & Co • String Automation • Takraf • Tata Strategic Management Group • Tenova Mining & Minerals • The Crescent Group • The Energy and Resources Institute • Timken India Limited • Ultratech Cement • Union Cement • Vasavadatta Cement • Vicat • Vyankatesh Chemical Industries • W.R. Grace and Company • World Business Council for Sustainable Development (WBCSD) • Zawawi Minerals • Zuari Cement

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