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LATEST CEMENT INDUSTRY NEWS
Oman:Oman Cement sees 40% net profit drop in H1
Oman Cement has recorded a 40% drop in its net profit in the January to June 2015 period from OMR 9.09million (€21.23million US$23.62million) in the same period in 2014, to OMR 5.44million.

The cement producer has registered a 7.7% decline in its total revenue in the six months under review to OMR 27.33million. It has posted a marginal decrease in its sales revenue in the period under review from OMR 25.68million in the same period in 2014, to OMR 25.53million.

Investment and other income dropped by 54.1% in the January to June 2015 period from OMR 3.94million previously, to OMR 1.80million. Its total expenses increased by 8.2% in the six months under review from OMR 19.70million in the same period in 2014, to OMR 21.30million.

UAECEMENT.COM - Jul ,26,2015

Iran: 350,000 tons cement exported abroad
Head of Fars Province Organization of Industry, Mines and Trade said on Wednesday that in Iranian year of 1393 more than 4.700 million tons cement were produced from the province and 350,000 tons were exported abroad.

Ali Hemmati said that export of this amount earned more than 19 million dollars.

He said that cement was exported to Egypt, Iraq, Kuwait and Somali.

Hemmati said that Fars Province has eight cement factories by capacity of 5.700 million tons output annually.

He said that three other cement plants are to be commissioned soon and authorization for construction of eight other factories has been issued.

Currently, total production capacity of cement in the country is around 80 million tons annually, which is to increase to 95 million tons soon.

UAECEMENT.COM - Jul ,26,2015

India:Emami Cement to build cement plant in West Bengal
Emami Cement plans to build a 1.5 – Mt/yr capacity cement plant in Panagarh, Bardhaman, West Bengal, according to the Palestine News Agency.

The plan also includes a 10MW captive coal-fired power plant. Land has been allotted by the West Bengal Industrial Development Corporation (WBIDC). The estimated cost of the project is US$65.7m.

UAECEMENT.COM - Jul ,26,2015

Philippines Aboitiz to invest $531 mln in cement venture
Aboitiz Equity Ventures Inc said it will invest 24 billion pesos ($531 million) in the cement business after formalising a deal with Irish cement maker CRH Plc to buy the Philippine assets of Lafarge SA .

The announcement on Wednesday came about two months after cement companies Holcim and Lafarge, which have agreed to merge, said CRH would buy some of their assets for 6.5 billion euros ($7.12 billion).

In May, Aboitiz said it was looking to partner with CRH to buy Lafarge s assets in the Philippines as the local power-to-banking conglomerate sought to diversify into infrastructure.

"The agreement (with CRH) will be by way of an agreed investment in holding companies for the purpose of the acquisition of the various Philippine assets and businesses of Lafarge SA, including the cement production and other cement-related businesses and services," Aboitiz told Manila s stock exchange on Wednesday.

The transaction is expected to be completed within the second half of 2015, subject to conditions under the merger of Holcim and Lafarge and approval of the global sale of Lafarge assets, it said.
UAECEMENT.COM - Jul ,22,2015

South African cement sales increase
According to market analysts, South Africa s first quarter cement sales have increased by more than 15% as a result of demand from smaller players countering the slump in the building sector led by bigger companies.

The report released by PPC confirmed that sales rose to 2.87 million t in the first quarter of 2015.

According to Imara SP Reid analyst Sibonginkosi Nyanga, the increase in cement sales could be the result of smaller companies such as Afrimat attracting more business.

Despite this jump, listed construction firms have mostly struggled to increase profit since the end of the building boom that took place during the 2010 World Cup.

UAECEMENT.COM - Jul ,19,2015

Saudi: Saudi cement companies report profit declines in 2Q
Saudi Cement reportedly dropped 11.8% in net profit for 2Q15, attributed to lower local sales. The figure for the three months to end of June was SAR254 million, down from SAR288 million in 2Q14. This was below analyst forecasts of SAR261.4 million.

Fellow Saudi producer Hail Cement also reported a fall in profit, with earnings at SAR28.6 million in 2Q15 down from SAR46 million in 2Q14. Earnings were down 18.44% for the first half. The decline was put down to increased costs due to a maintenance shutdown and a decrease in production volumes.

In April, Emirates 247 reported that some companies could reduce production due to the failure to lift the export ban that was imposed in 2012. Cement demand is very healthy in Saudi Arabia, yet there is reported to be a surplus of 22 million t in the domestic market.

UAECEMENT.COM - Jul ,19,2015

Iranian: Iranian cement output exceeds 15 million t
The Iranian Ministry of Industry, Mines and Trade has announced that in Q1 2015 cement production reached 15.774 million t and clinker output passed 19.264 million t.

The Ministry also announced that in the same period around 4.34 million t cement was exported abroad.

Iranian Current output capacity in cement is 80 million t a year, which is expected to reach 120 million t in the next 10 years.

UAECEMENT.COM - Jul ,19,2015

Holcim and Lafarge complete merger to create LafargeHolcim
Europe: Holcim Ltd and Lafarge SA have completed their global merger and have launched LafargeHolcim. The merger completion was dated 10 July 2015. All conditions for the completion of the merger were fulfilled following the successful completion of the public exchange offer and the issuance of new Holcim shares to Lafarge shareholders. Holcim s shareholders had previously approved the merger-related resolutions at an Extraordinary General Meeting on 8 May 2015.

With the completion of the merger, the mandate of the new board of directors and of the new executive committee with Eric Olsen as CEO has become effective. LafargeHolcim will also unveil its new logo and corporate identity. It has been designed to demonstrate that Holcim and Lafarge have united to form one company, expressing the leadership and strength of the new group.

"Today s closing is a historic event, not only for our two founding companies, but also for the industry as a whole. LafargeHolcim has a unique business portfolio, is the industry benchmark in research and devlopment and offers its customers the widest range of innovative and value-adding products, services and solutions, from smallholders to large enterprises and most complex projects," said Wolfgang Reitzle, co-chairman (statutory chairman) of the board of directors of LafargeHolcim.

"This new company is built on the rich history and culture of Lafarge and Holcim and its teams. The merger has not only resulted in a larger and more global company but brings about a unique set of complementary capabilities to capitalize on. Under the leadership of Eric Olsen, the new Group will foster a new operating model and create more value for all our stakeholders," said Bruno Lafont, co-chairman of the board of directors of LafargeHolcim.

The new LafargeHolcim shares will be traded on the SIX Swiss Exchange as well as the Euronext in Paris as of 14 July 2015. As announced, LafargeHolcim will re-open the public exchange offer to give the remaining Lafarge shareholders the opportunity to also tender their shares. The new offer period will start on 15 July 2015 for a duration of ten trading days until 28 July 2015.

GlobalCement - Jul ,13,2015

Expanding Japan s construction industry
According to Timetric s Construction Intelligence Center (CIC) Japan s construction industry reduced by 1.6% in 2014. Yet the Japanese construction industry is anticipated to increase over 2015 – 2019. Overall it is expected to reach a potential CAGR of 1.2%, increasing from US$600.2 billion in 2014 to US$637.4 billion in 2019.

Factors supporting this growth include investments in residential and infrastructure markets, low unemployment rates, improvements in consumer and investor confidence, positive developments in regional economic conditions and investment in public transport infrastructure such as the construction of the JPY5.5 trillion (US$57.3 billion) ultra-high speed magnetic levitation (maglev) trainline and the JPY10.0 billion (US$97.6 million) Kansai international airport expansion project.

Additionally the country s urban population is projected to increase to 94.1% by 2020 – rising from 115.3 million in 2010 to 119.4 million in 2020 – according to the United Nation s Department of Economic and Social Affairs (UNDESA).

Sina Zavertha, Economist at Timetric, commented: “The country s growing urbanisation will create fresh demand for the residential construction market over the forecast period. Consequently, we can expect market output to record a CAGR of 2.25%, in nominal terms over the forecast period, to value JPY20.7 trillion (US$223.3 billion) in 2019.”

Yet there are risks to this outlook on construction industry growth in Japan associated with rising labour and construction materials costs.

UAECEMENT.COM - Jul ,13,2015

San Miguel to build two cement plants in the Philippines
In the Philippines, San Miguel Corp. has confirmed it is looking into investing US$800 million in two new cement plants, as demand in the country is expected to increase. Each plant would have a capacity of 2 million t and both are scheduled for completion in 2017. One of the cement plants will go up at Northern Cement Corp. s existing facility and the second one will be built in Quezon province.

The plants will be funded 50/50 by loan and equity, the company has confirmed. San Miguel Corp. holds a 35% stake in Northern Cement Corp. The new plants will bring the company s total cement production capacity to 10 million t.

Cemex recently announced that it is building a 1.5 million t cement production line at its Luzon plant in anticipation of greater demand for cement in the Philippines.

UAECEMENT.COM - Jul ,13,2015

​The Pakistan Cement sales improve up to 3.5 percent
Boom in the construction and housing sector in the country has helped cement sales grew by 3.5 percent in the fiscal year ended June 30 and the upward trend in the sales would be maintained in the current fiscal year.

The fiscal year 2015 recorded total sales at 35.4 million tonnes and this was due to increase in the private sector expenditure on construction and housing.

Besides, higher government infrastructure spending and improved security situation also helped increase cement sales during the year.

Local sales posted stellar growth of eight percent on yearly basis in the year to reach 28.3 million tonnes, which were better than the average growth rate of five percent seen in the last five years.

On month-on-month basis, total sales grew by nine percent to 3.3 million tonnes in June 2015.

Export dispatches were down 12 percent on yearly basis to clock in at 7.2 million tonnes.

And going forward, the demand from Afghanistan is likely to improve due to ease in political situation.

Additionally, higher disposable income, due to lower inflation (4.6 percent in FY15), will also boost the private sector expenditure on construction and housing, as evident from mega housing schemes launched by Bahria, Fazaia, DHA and the UAE s Emaar.

Based on the above reasons, the forecast is that Pakistan cement sales to rise by 9% in FY16 to reach 38.6 million tonnes, while the export sales to remain flat at 7.2 million tonnes.
UAECEMENT.COM - Jul ,11,2015

Expanding Japan s construction industry
According to Timetric s Construction Intelligence Center (CIC) Japan s construction industry reduced by 1.6% in 2014. Yet the Japanese construction industry is anticipated to increase over 2015 – 2019. Overall it is expected to reach a potential CAGR of 1.2%, increasing from US$600.2 billion in 2014 to US$637.4 billion in 2019.

Factors supporting this growth include investments in residential and infrastructure markets, low unemployment rates, improvements in consumer and investor confidence, positive developments in regional economic conditions and investment in public transport infrastructure such as the construction of the JPY5.5 trillion (US$57.3 billion) ultra-high speed magnetic levitation (maglev) trainline and the JPY10.0 billion (US$97.6 million) Kansai international airport expansion project.

Additionally the country s urban population is projected to increase to 94.1% by 2020 – rising from 115.3 million in 2010 to 119.4 million in 2020 – according to the United Nation s Department of Economic and Social Affairs (UNDESA).

Sina Zavertha, Economist at Timetric, commented: “The country s growing urbanisation will create fresh demand for the residential construction market over the forecast period. Consequently, we can expect market output to record a CAGR of 2.25%, in nominal terms over the forecast period, to value JPY20.7 trillion (US$223.3 billion) in 2019.”

Yet there are risks to this outlook on construction industry growth in Japan associated with rising labour and construction materials costs.

UAECEMENT.COM - Jul ,11,2015

Holcim - Lafarge s Public Exchange Offer Completed Successfully


The Autorité des marchés financiers (the “AMF”) has published the interim results of the public exchange offer initiated by Holcim Ltd for the shares of Lafarge S.A. (the “Offer”).

As of July 7, 2015, a total of 252,230,673 shares, representing 87.46 percent of the share capital and at least 81.47 percent of the voting rights1 of Lafarge S.A. have been tendered to the Offer. The success of the Offer was subject to the condition that a minimum acceptance threshold of 2/3 of Lafarge s share capital or voting rights be reached by Holcim Ltd. Final results shall be published by the AMF on July 9, 2015.

The result reflects the confidence of shareholders in the future company. Both companies are very pleased with this positive outcome as it paves the way towards completion of the merger.

UAECEMENT.COM - Jul ,09,2015

​Brazil s cement demand expected to fall by 10 - 15% in 2015
Brazil: According to Valor Economico, estimates from the cement industry association Sindicato Nacional da Indústria do Cimento (SNIC) point to a retraction in domestic cement demand in 2015, the first market dip in the last 10 years.

Some estimates point to a 10 - 12% decrease, eventually 15% if there is no pick up in demand. There was a 1% increase in cement demand in 2014, as the sector was pushed by construction activities and abundant credit offers at favourable rates. Cement sales in 2014 grew by 1.4% to 70.9Mt and imports fell by 20.4% to 817,000t. Apparent cement consumption in 2014 grew by 1% to 71.7Mt.

The SNIC has said that consumption could fall to around 60Mt in 2016. Installed capacity is 90Mt/yr and 10Mt/yr of extra cement production capacity is expected in 2015.
UAECEMENT.COM - Jul ,09,2015

Cement signals – import row in Kenya
Kenyan cement producers kicked off this week about Chinese cement imports for the Standard Gauge Railway Project in Kenya. Local producers, including ARM Cement and Lafarge, have asked the Kenya Railways Corporation to explain why the Chinese-backed project is importing cement. Project builders the China Rail & Bridge Corporation (CRBC) has imported 7000t of cement so far in 2015 according to Kenya Ports Authority data.

Project completion is planned for 2017 with a requirement of 1Mt of cement. If CRBC carried on this rate then, roughly, the project might only use 42,000t of imported cement if the import rate holds. This is less than 5% of the estimated requirement. However, cement imports increases into Kenya have stayed steady since 2012. Imports rose by 2000t from 2013 to 2014. CRBC s imports will stick out significantly in 2015.

Kenya National Bureau of Statistics (KNBS) data places Kenyan cement production at 5.8Mt in 2014, an increase of 16.3% from 5.1Mt in 2013. Production growth has been steadily building since the late 1990s with, more recently, a dip in the rate of growth in 2011 that has been corrected as the growth has returned. Consumption has risen by 21.8% year-on-year to 5.2Mt in 2014 with imports also rising and exports dropping.

Imports for the railway project are duty free as ARM Cement Chief Executive Officer Pradeep Paunrana helpfully explained to Bloomberg. Producers have also recently upgraded their plants to specifically supply 52.5 grade cement to the project. Given this, it is unsurprising that local Kenyan producers, including ARM Cement and Lafarge, are complaining about this situation, especially given the increasingly pugnacious African response to foreign imports led by Dangote and companies in South Africa. Both ARM and Lafarge hold integrated plants and grinding plants in Nairobi and Mombasa. This is the route of the new railway line.

The backdrop to this is that the Chinese cement industry is struggling at home as it adjusts to lower construction rates and reduced cement production growth. Profits made by the Chinese cement industry fell by 67.6% year-on-year to US$521m for the first quarter of 2015, according to National Development and Reform Commission (NDRC) statistics. At the same time the Shanghai Composite, China s principal stock market, has seen the value of its shares fall by 30% since June.

Although it is unclear where the cement imports in this particular row are coming from, informal or formal business links between large state controlled corporations such as a China s major cement producers will always be questioned by competitors outside of China for both genuine issues of competitiveness and simple attempts to claw more profit. If the Chinese cement producers are sufficiently spooked or they really start to lose money then what is to stop it asking a sister company building a large infrastructure project abroad to offer it some help? Or it might consider asking the Chinese bank providing 90% of the financing towards the US$3.8bn infrastructure project to force the Kenyan government to offer more concessions to foreign firms. Meanwhile one counter argument goes that Kenya has a growing construction market with a giant infrastructure project that may unlock the region s long-simmering low cement consumption per capita boom. The Kenyan government may face some difficult decisions ahead.
UAECEMENT.COM - Jul ,09,2015


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