CemNet - Cement Industry News Bulletin
09th February 2012

Dear Reader


This week’s news roundup leads with an overview of 2011 results from three European cement majors, highlighting recent challenges and prospects for the year ahead. Meanwhile, HeidelbergCement turnover advances helped by mild weather, Pakistan hopes for increased exports to India and Akçansa and Çimsa plan to acquire operations outside of Turkey.

Cemtech Middle East and Africa 2012 begins this Sunday at the Grand Hyatt Hotel, Dubai, UAE. For those who can make it, we look forward to meeting you there. Last-minute registrations can be made online – visit Cemtech.com/MEA2012


European cement majors – full year overview

This week saw the release of first-half results from three major European cement producers: Italcementi, Vicat and Dyckerhoff. While the former two companies experienced a challenging operational environment in Egypt, Dyckerhoff’s 2011 sales increased on higher volumes.

Italcementi
Italcementi’s 2011 group cement shipments were down by 1.9% YoY to 51.1Mt, a decrease largely attributed to the slowdown in Egypt due to political events
and stagnation in Italy. This was counterbalanced by the upward trend in France and North America and in the emerging markets of Morocco and India.

Western European cement and clinker volumes fell 2.3% to 18.8Mt. Italy was down by 0.5Mt to 8.9Mt and while there are no real signs of a pick-up in domestic volumes yet, prices showed a recovery. Commentary by Italcementi suggests that Italian demand has stagnated at low levels but analysts at JP Morgan have said that there are no near-term positive catalysts “as residential and non-residential orders continue to remain subdued and government austerity measures are likely to impact infrastructure spending.”

Turnover from the Mediterranean and Black Sea regions fell 17.2% to €1030.2m as Egypt, in particular, weakened in the face of increased supply and reduced demand. Given the political instability, visibility in the Egyptian market is poor. Cement and clinker shipments declined 5.4% to 16.1Mt, with an improvement in Morocco partially offsetting Egyptian reductions.

North American turnover showed a further recovery of 2.4% in local currency terms, but when converted into euros, there was a 2.5% reduction to €405.1m. Asian cement deliveries were just 0.3% higher at 11.1Mt but pricing did improve in both India and Thailand.

Vicat
Vicat reported generally favourable environments in 2011 except Egypt. Turnover rose 12.5% last year to €2265.5m of which cement accounted for 52.1%. Group cement deliveries advanced 11.5% to 18.04Mt, helped by a full year's consolidation of its Indian operations and an initial contribution from Kazakhstan.

The French turnover advanced by 12.9% to €939m, helped by milder winters boosting volumes in the first and in the last quarters. The final quarter was particularly strong, as shipments rose almost 8%, re-visiting the record levels of 2003. Vicat expects a 3% price increase in 2012 to hold, even if the market may slow a little.

Turnover in the US declined 1.5% to €165m but improved 3.3% on an underlying basis. Cement turnover fell by 8.4%, with Alabama being a very difficult market while volumes recovered by just over 3%.

A first full-year's contribution from Bharathi Cement in India produced a turnover of €126.4m, giving an organic growth rate of more than 90% and the company sold in excess of 2Mt of cement. Vicat Sagar Cement will come on-stream in 2012, but only produce limited volumes this year. In Kazakhstan, the 1.1Mta Jambul Cement works went into full production in April and in excess of 0.5Mt of cement was manufactured during the year.

In Egypt, turnover dropped 33.3% to some €139m and volumes contracted by around 15%, with a similar rate of decline being seen in prices. In the final quarter of last year, volumes fell around 28% and prices about 23%.

Dyckerhoff
Preliminary figures from Dyckerhoff show a 13.2% increase in turnover to €1600m in 2011. Of this, 38% was generated in Germany, 37% in Eastern Europe and Russia, 14% in the Benelux and 11% in the US.

With the exception of Dutch aggregates, volumes improved in all Dyckerhoff’s Western European markets and product ranges. Eastern European turnover advanced 21.3% to €598m on the back of higher volumes in Poland, Ukraine (which both saw double-digit rises in construction) and Russia. The United States associate's turnover, however, declined by a further 8.9% to €175m as cement volumes eased and prices remained under pressure.

The company noted that volume and sales were positively influenced by favourable weather conditions in 2011 and within this context it anticipates: “slightly declining sales in Germany/Western Europe in 2012. In Eastern Europe, we expect a continuation of economic recovery, particularly in Ukraine and Russia, this will also translate into higher sales.”

In Germany, the group anticipates construction spending to rise by 1-2% with residential and commercial construction increasing but public construction declining. Construction spending in Luxembourg and Czech Republic is expected to drop and building activity in The Netherlands will stagnate. In Poland and Russia, a 4% and 8% rise in construction spending is expected, respectively, while Ukraine will continue on its positive track with activity forecasted to grow 9%. The group expects 1% growth in the US construction sector this year, stating that a decline in public construction will be offset by growth in residential and commercial activity.

 

HeidelbergCement ahead in 2011

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Buzzi Unicem reduces debt and raises volumes

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Pakistan pin hopes on MFN status to India

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Morgan Stanley raises Japanese cement rating

Morgan Stanley MUFJ Securities has set the Japanese cement sector’s rating to “attractive” – the...
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Derba MIDROC Cement inaugurated, Ethiopia

Derba MIDROC Cement Plc, Ethiopia’s biggest cement factory, was inaugurated on Sunday in the...
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Akçansa and Çimsa seek acquisitions

Two of Turkey’s leading cement producers, Akçansa Cimento and Çimsa, plan two separate overseas...
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Siam City Cement 2012 growth forecast

Siam City Cement Co (SCCC), Thailand’s second largest cement producer, posted 4Q11 net profit of...
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News Bites

ICR Digital - February 2012 Issue

ICR February 2012 has a special overview of the UAE cement sector with exclusive reports from Fujairah Cement and Pioneer Cement. National Cement Co provide a summary of Yemen’s market.

Read the full issue online

ICR January 2012 Issue

Website features this week:

Our executive summary of key events taking place in the industry in January is available now in the Corporate Watch section of the website.

Online training:

The White Cement Manufacturing Technology Course starts on 27 February 2012. This six-week course course designed for employees of white cement manufacturing companies, those who are considering manufacturing white cement.

Forthcoming events:

Cemtech Middle East & Africa, Grand Hyatt Hotel, Dubai, UAE, 12-15 February 2012 - www.cemtech.com/MEA2012

Petrocem, Hotel Astoria, St Petersburg, Russia,
22-24 April 2012 - www.petrocem.ru

AFCM, Sunway Resort Hotel & Spa, Petaling Jaya, Malaysia, 23-26 April 2012 - www.cnca.org.my/AFCM/

Cemtech Asia 2012 , Jakarta, Indonesia
17-20 June 2012 - www.cemtech.com/ASIA2012

For more events, visit Diary Dates

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