South Africa: PPCs group revenue grew by 3% year-on-year to US$625m in its financial year to 31 March 2021 from US$607m in the same period in 2020. Group earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 16% to US112m from US$96.6m. Sales and earnings rose due to a recovery in cement sales, particularly outside of Zimbabwe, and general cost cutting.
Cement sales in South Africa benefited from retail demand in the inland region, while the coastal regions experienced a lagged recovery in demand. In Rwanda, the groups Cimerwa subsidiary reported strong cement sales due to the roll-out of government projects, retail demand and exports to the Democratic Republic of Congo. Operations in Zimbabwe were hampered by high inflation and a shortage of foreign currency.
Despite the difficult trading conditions in most of our markets, our businesses have benefited from a recovery in cement demand, resulting in improved financial performance, said chief executive officer Roland van Wijnen. He added that the group has worked on capital restructuring and refinancing projects. It has concluded an agreement with PPC Barnet's lenders, which terminates their right to recourse to PPC, signed agreements for the sale of PPC Lime and an aggregates business in Botswana and agreed with its lenders in South Africa to defer the equity capital raise in South Africa from March 2021 to September 2021.
South Africa: Pieter Fourie, the chief executive officer of Sephaku Cement, has died. He passed away on 19 May 2021 following suffering a stroke earlier in the month. He is survived by a wife, three children and five grandchildren.
Fourie became the head of the subsidiary of Nigeria-based Dangote Cement in 2007. He later became a board director of the company in 2009 after its stock market listing. His previous roles included being marketing director of Blue Circle, which was subsequently acquired by Lafarge South Africa, the managing director of the cement business unit of Lafarge South Arica and Strategic Development Director for Africa based at the Lafarge head office in France. Fouries role at Blue Circle included sales, distribution and marketing before being promoted to managing director of the cement business. He subsequently accepted the assignment at Lafarges head office in a strategic development role to integrate the newly acquired business in Africa into Lafarges portfolio.
South Africa: Duan Classen, the Operations Executive of Sephaku Cement, has been appointed as its acting chief executive officer (CEO) following the admission of Pieter Fourie to hospital. The cement producer said that Fourie, its current CEO, had been receiving medical care after suffering a stroke and was responding well to treatment.
Classen has been a member of the executive management in charge of operations since the construction of Sephaku Cements plants. He holds a bachelor degree in Metallurgical Engineering from the University of Pretoria, and has previously participated in the Young Managers Development Programme at INSEAD in France and a Management Development Programme at Duke University in the US. Classen completed his graduate engineer training at De Beers before joining Blue Circle Cement in 1997, where he was involved in Blue Circle Cement's integration into Lafarge in 1998. He subsequently worked for PPC before being appointed to DCSA in early 2008.
South Africa: PPC has agreed to sell its lime business to Kgatelopele Lime for US$36m. The cement producer previously identified PPC Lime as a non-core operation and the sale process started in December 2020. Kgatelopele Lime was formed to buy PPC Lime. Its shareholders are mineral resources trader IMR Resources, investment holding companies Kolobe Nala Investment Lime, HEX2M and JJJL Mining. The divestment is subject to consent by competition authorities and the government by the end of 2021.
PPC Lime originally started operations in 1954 in Lime Acres, Northern Cape. PPC Lime continues to mine out of two quarries, mining dolomite and limestone respectively, along with a rotary kiln plant to manufacture the burnt product. PPC Lime generated revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) for the financial year that ended 31 March 2020 of US$59m and US$7.6m respectively.
Kenya: Athi River Mining (ARM) Cement is preparing for liquidation and delisting from the Nairobi exchange following the failure of its administrators to revive operations. The East African newspaper has reported that PricewaterhouseCoopers advised liquidation in a letter of 19 April 2021. The joint administrators reached their conclusion based on the understanding the producer will not otherwise be able to settle in full with its creditors. The company plans to liquidate on 30 September 2021.
ARM Cement went into administration in August 2018 following a default on a loan. Its operations in Kenya were sold to National Cement in October 2019. China-based Huaxin Cement acquired its Tanzanian subsidiary Maweni Limestone in May 2020. In 2019 ARM Cements administrators fought an attempt by minority shareholders to buy out its majority stake in South Africa-based Mafeking Cement. In January 2021 the administrators received approval from the Rwanda Development Boards Registrar-General to commence the liquidation of Kigali Cement.
Several of South Africas cement and concrete producers joined up in early March 2021 to form an industry association called Cement & Concrete SA (CCSA). The Concrete Institute, Concrete Society of Southern Africa and the Association of Cementitious Material Producers established the organisation to, take the lead on all matters relating to cement and concrete in South Africa. Setting up an organisation like this takes time and it fits with the move in recent years of thinking about the whole building materials chain rather than just focusing on one part. The country is also in the first phase of its carbon tax and no doubt producers feel they need to make a renewed effort to fight their corner. Other aspects such as promoting the value creation story of the cement and concrete industry in South Africa, research and training also makes sense.
The timing here is compelling due to the ongoing review of anti-dumping measures that were levied by the International Trade Administration Commission of South Africa (ITAC) upon imports by Pakistan-based cement producers. Local media in South Africa reported that ITAC started reviewing the tariffs in December 2020 in a process expected to take up to 18 months in duration. As reported in January 2021 (GCW 489), imports to the country fell after ITAC introduced tariffs in 2015 but they have started to edge up since then, particularly from producers in other countries such as Vietnam and China. Separately, the CCSA may have scored an early victory with the news that its application that government-based infrastructure projects should only use locally-produced cement was working its way through the government.
Looking at the general market, PPC reported muted sales of cement in April and May 2020 due to the countrys first coronavirus-related lockdown from late March 2020. Similar to some other countries, construction projects halted and cement plants stopped producing. However, the market bounced back as the restrictions were relaxed with strong sales from June 2020 to September 2020 for the leading producer. It noted that the increase in volumes was mainly due to consumer retail although it noted that government infrastructure cement demand was also starting to be felt. PPCs cement sales volumes fell by 5 10% in South Africa and Botswana from April to June 2020 but then rose by 20 25% from July to September 2020. The continuation of this sales momentum was also noted in October and November 2020. Dangote Cements operations in the country reported a similar situation, with sales up by 7% year-on-year in the first nine months of 2020 due to a surge in home improvement related demand after the first lockdown ended. Similar to PPC, it reckoned that demand increased by 25 - 30% year-on-year in the third quarter of 2020 as limitations in travel and entertainment led to some people saving money instead.
After the summer sales bounce, producers were soon complaining about rising import levels in the autumn of 2020 with volumes catching up with the amounts recorded in 2019. Hence the ITAC review is a timely reminder of the perils facing local producers.
South Africas general coronavirus experience has been an outlier compared to the rest of Africa with higher cases and deaths reported. Yet, its still reported lower per capita rates than many comparable countries in Europe and the Americas. Like the UK and Brazil, the country also holds the dubious distinction of having a coronavirus variant named after it. Its cement market appeared to snap back with pent up demand following the lifting of restrictions in common with other countries that implemented tougher public health rules. At which point the importers caught up again a few months later. The effects of South Africas second wave of coronavirus led to a lockdown in late December 2020. The effects upon building materials sales are likely to be less drastic than previously because this lockdown has had lighter restrictions compared to March 2020. Surrounded by all of this, the CCSA has sure picked a busy time to start work.
South Africa: Several of South Africas cement and concrete producers have united to form a joint industry association called Cement & Concrete SA (CCSA). The association consolidates the former Association of Cementitious Materials Producers (ACMP), Concrete Society of Southern Africa (CSSA) and The Concrete Institute (TCI). It said that it aims to create long-term shared value and industry growth in South Africa through driving collaboration, skills development, innovation, and the highest standards in sustainable cement and concrete materials and products.
Chief executive officer Bryan Perrie said, At a time when many conflicting and ambiguous messages are shared readily on various platforms, and with the proliferation of substandard products and services, the need for authoritative engagement with all stakeholders is critical. He added, We are excited about the future of the cement and concrete industry in South Africa. The staff of CCSA are ready to discuss membership options and benefits. We are poised to add value and unlock opportunities for all members, and the industry at large.
Cement imports were one of the themes in this weeks news, with stories on the topic from South Africa and Ukraine. The former concerned the latest chapter in that industrys saga on slowing down imports. The International Trade Administration Commission (ITAC) has started a review on tariffs imposed on cement from Pakistan that were introduced in 2015.
Local producers in South Africa have experienced mixed fortunes since 2015, such as PPC and AfriSams failed merger attempt or the introduction of a local carbon tax, and were starting to complain again about imports even before the effects of coronavirus in 2020. This led the Concrete Institute to lobby ITAC in 2019 about rising imports from other nations, principally Vietnam and China.
Back in 2013 cement imports from Pakistan to South Africa were 1.1Mt. This represented the vast majority of all imports to the country. Tariffs of 14 77% were imposed on Pakistan-based exporters in mid-2015, initially for six months, but this was then extended. Roughly a year later in mid-to-late 2016, Sephaku Holdings said that imports of cement had significantly declined on a year-on-year basis, particularly from Pakistan. By the end of June 2016 approximately 0.16Mt had been imported compared to 0.5Mt in the previous period. However, it noted that 75% of the volume was from China. Since then imports started to creep up. Cement imports reportedly rose by 84% year-on-year in 2018 and then by 11% in 2019. Data from construction industry data company Industry Insight suggests that Vietnam accounted for 70% or 0.47Mt of the 0.68Mt of cement imported into South Africa in the first nine months of 2020. The remaining 30% or 0.20Mt came from Pakistan. In this kind of environment it seems unlikely that ITAC will do anything other than extend tariffs.
Meanwhile in the northern hemisphere, in Ukraine this week a court in Kiev dismissed a challenge by the Belarusian Cement Company to remove cement import tariffs from Russia, Belarus and Moldova that were introduced in mid-2019 for five years. Notably, a law firm representing Dyckerhoff Cement Ukraine, HeidelbergCement Ukraine, Ivano-Frankivsk Ukraine and CRH subsidiary Podilsky Cement commented favourably upon the courts decision to uphold tariffs. These producers form UKRCEMENT, the association of cement producers of Ukraine. However, the association doesnt include Russia-based Eurocement, which operates Ukraines largest cement plant at Balakleya. Relations have been poor between Russia and Ukraine since a war between the countries that started in 2014. So any trade tariffs implemented upon Russia and/or Commonwealth of Independent States (CIS) members will inevitably carry the whiff of geopolitics. Yet, in Ukraines defence, it also started an anti-dumping investigation into cement imports from Turkey in September 2020. Nationalism may be relevant but lets not discount hard-nosed economics just yet.
Turkeys involvement in Ukraine leads to last weeks presentation at Global Cement Live by Sylvie Doutres, DSG Consultants on cement and clinker trade in and out of the Mediterranean region. Readers can watch the presentation here but the headline story here was the trend of reducing exports away from southern European countries such as Spain, Italy and Greece, to greater exports from North African countries and Turkey over the last decade. Turkey particularly has pushed its share of exports even more in 2020 despite (or perhaps because of) a tough domestic market. The general trend here away from southern Europe has been blamed on European Union-based (EU) producers becoming less competitive often against newer plants in nearby countries.
Battles between producers and government tariff policies are a perennial feature of any market in commodities such as cement. The ebb and flow of import and export markets cover many factors including production costs, distribution networks, tariff structures and more. Distinctive features of cement trading, for example, are the high cost of transporting heavy building materials over land and the worlds chronic cement production overcapacity. In the EUs case one reason that often gets blamed is the emissions trading system (EU ETS) and the mounting cost it is imposing upon cement production. For example, todays story that Holcim Espaa wants to convert its integrated Jerez plant into a grinding unit has been blamed on falling exports and a reduction in ETS credits. It is noteworthy then that the EU ETS rate breached the Euro30/t level in December 2020. This may be good news for the sustainability lobby but the exodus of exports away from Southern Europe tells its own story. What form the EU ETS carbon border adjustment mechanism takes as part of the EU Green Deal will be watched closely by producers both inside and outside the EU.
Global Cement Live continues on 21 January 2021 with Kevin Rudd, Independent Cement Consultants, presenting 'Independent or third party factory acceptance testing of major cement plant equipment and critical spare parts and the challenges of Covid
South Africa: The International Trade Administration Commission (ITAC) started a sunset review in December 2020 of import tariffs imposed on cement from Pakistan. The investigation will last up to 18 months, according to Moneyweb. Existing anti-dumping duties, which were first implemented in 2015, will remain in place during proceedings.
The review by ITAC follows lobbying by the Concrete Institute (TCI) in 2019 to add additional protection against imports of cement from other countries like Vietnam. Construction industry data company Industry Insight reports that Vietnam accounted for 70% or 0.47Mt of the 0.68Mt of cement imported into South Africa in the first nine months of 2020. The remaining 30% or 0.20Mt came from Pakistan.
South Africa: PCC recorded sales of US$332m in the first half of its 2021 financial year, up by 1% from US$328m in the first half of its 2020 financial year. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 15% to US$66m from US$58m. Cement volumes fell in South Africa by 5% and in Botswana by 10% due to 35% slump in total volumes in the first quarter. The company said that this was due to muted cement sales in April 2020 and May 2020 as a result of Covid-19-related trading restrictions in South Africa. Cement sales have since recovered with strong year-on-year growth since June 2020. The increase in volumes is primarily retail led. PPC also said that it is beginning to experience the positive impact of increased infrastructure spending.
Chief executive officer (CEO) Roland van Wijnen said, I am pleased that we are once again able to serve our customers and play our part in keeping the economy going. My gratitude goes to my colleagues who have been working diligently to keep our operations running while observing stringent health and safety protocols. Our business has benefited from a strong recovery in cement sales in all our markets, post the easing of the lockdown restrictions, and this has resulted in improved financial performance for the group. Our efforts to improve cost competitiveness and reposition PPC on a sound financial footing are yielding encouraging results and we are making good progress on our capital restructuring project, which remains a key priority for the group.
Senegal: China-based Sinoma Group subsidiary CBMI Construction has awarded a contract to Denmark-based FLSmidth for the supply of three control systems for one new and two existing lines at the Kirne cement plant in This region. The lines will share a digital infrastructure built on the FLSmidth ECS/ControlCenter platform with ECS/PlantDataManagement software. Additionally, the supplier will equip the new Line 3 with its ECS/CemScanner and QCX/BlendExpert. It said that the setup will use 12,000 data points on Line 3 alone.
Group digital general manager Jens Adler said, With more than 1500 active product and process control installations in the cement industry, this order reaffirms our strong digital expertise. He added Digitalisation is transforming how many in the cement industry respond to increasing demands for emission reductions and efficiency. This is reflected in the emphasis on digital solutions as part of our MissionZero ambition to offer cement producers zero emission cement production by 2030.
France: Vicat recorded full-year consolidated sales of Euro2.81bn in 2020, up by 2% year-on-year from Euro2.74bn in 2019. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 6% to Euro557m from Euro526m. Consolidated net income rose by 8% to Euro172m from Euro160m.
The group said that organic sales were strong, rising in all regions except in France, by 6% in total. It attributed the decline to a near-total shutdown due to the coronavirus outbreak in mid-March 2020, which lifted incrementally throughout the first half of the year. Vicat Frances cement business recovered robustly in the second half of 2020, resulting in an operational sales increase of 3% for the year. Full stoppages of activity lasted for 33 days in India and for 30 days in Italy. Despite these challenges, business growth, cost-cutting and lower energy costs drove earnings growth, with very sharp improvements recorded in the Americas and in Asia. Additionally, the ramp-up of a new grinding plant in Mali and production performance improvements in Senegal supported a significant earnings increase in Africa.
Chair and chief executive officerGuy Sidos said, Thanks to our employees tremendous efforts and commitment, the Vicat group strengthened its position amid the unprecedented current pandemic situation. Our resilience and flexibility allowed us to make organisational changes in order to reconcile our competing imperatives of keeping everyone safe and healthy, unlocking savings and making rapid adjustments, such as relocating our Paris head office to LIsle dAbeau in the Auvergne-Rhne-Alpes region. Likewise, we made improvements to Vicats governance and stepped up our environmental and digital transformation programmes. Given the strength of our cash generation, we were able to resume key productivity investment programmes for the future. Despite the adversity we faced, our teams across all our various regions successfully delivered higher production efficiency levels and met market demand cost-effectively, paving the way for a solid increase in the Vicat groups results.
In 2021, the group plans to expand cement production and invest in new cement terminals in India and to continue with the upgrade of its Ragland cement plant in the US. It also says that it will ramp up projects aimed at meeting its carbon footprint reduction targets. The group expects its earnings to rise at constant scope and exchange rates over the full year.
Mali: A strike by two hauliers unions based in Senegal has caused cement shortages. The Union des Routiers du Sngal and the Intersyndicale du Secteur des Transports Routiers both started strike action in late December 2020, according to Bamako News. The country has three main cement plants - Ciments et Matriaux du Mali (CMM), Diamond Ciment (DCM-SA) and Ciments d'Afrique (CIMAF) but these companies only have a production capacity of 2Mt/yr. This is estimated to be 50% of Malis national requirement of 4Mt/yr. Commentators have called for a national cement supply policy in response to the situation and to reduce reliance on imports.
Senegal: Aumund Group says that it is supplying conveying equipment to a new production line that will be built at Ciments du Sahels Kirene plant. The order package includes 23 bucket elevators, seven pan conveyors, eleven drag chain conveyors, two Samson material feeders, four Centrex silo discharge machines and 19 silo discharge gates. The machines will operate in all stages of the production process, from raw materials discharge to conveying between the clinker silo and the cement mill, and in the packing plant. Supply will be made in several tranches between March and June 2021. Commissioning is planned for the first quarter of 2022.
China-based Sinoma International Engineering and its subsidiary CBMI Construction are the main contractors for the project. Aumund France and Aumund China, with support from Aumund Foerdertechnik, are the main divisions of Aumund working on the upgrade.
Senegal: Ciments du Sahel has begun work to increase the cement production capacity of its Kirene cement plant to 6Mt/yr. Agence de Presse Sngalaise has reported that the installation of a third line at the companys 3.0Mt/yr plant will double the units capacity when opened before the end of 2023.
Chief executive officer (CEO) Latfallah Layousse said, "We are now at a production capacity of 3Mt/yr of cement. Currently, we are starting our third line with a doubling of our production capacity in the next three years. The doubling of our production capacity will allow us, in the long term, to rise to a higher level and become one of the largest cement factories in the region."
Algeria: The Ain El Kebira (SCAEK) cement plant near Setif, part of the Industrial Cement Group of Algeria (GICA), has launched an operation to export 40,000t of clinker to the Dominican Republic. The company has already been marketed its products in Senegal, Ivory Coast, Guinea, Peru and Brazil, according to the Algeria Press Service. SCAEK has already exported 0.55Mt of clinker to countries in Africa and South America. The cement producer plans to export 0.75Mt of clinker in 2020.
Senegal: Sinoma subsidiaries Sinoma International Engineering and Sinoma Construction have signed a contract with Les Ciments Du Sahel for the upgrade of its 3.0Mt/yr Kirene cement plant in Dakar Region. The Euro245m contract stipulates that a new 6000t/day capacity cement production line will replace the plants old third line. Sinoma says that the new line will grind its first batch of cement from clinker in February 2022 and produce its own cement and clinker from October 2022. The group said, We believe that the contract ought to present no significant challenge for the company.
Senegal: The Chambre des Mines du Sngal (CMS) has reported a 5% year-on-year increase in domestic sales and a 0.6% year-on-year increase in cement production in the first half of 2020. The Le Journal de l'Economie Sngalaise newspaper has reported that exports fell by 13%.
France: Vicat says that group business activity increased month-on-month between April and May 2020. In a special update on business in the context of the coronavirus, the company said that the outbreaks impacts varied across the 12 countries in which it operates, all of which locked down due to the pandemic.
In France, the level of business is slightly lower than in May 2019 following a steady recovery from a strong slowdown in mid-March 2020. Macroeconomic and competition issues continue in Egypt and Turkey, not however due to the coronavirus outbreak, while volumes and prices have generally increased in Switzerland, the US, Brazil and Western Africa, except in Senegal, where the government has cancelled infrastructure projects. Following the pan-Indian lockdown between 24 March 2020 and 17 April 2020, business in India has resumed, albeit at a level significantly below that of the same period of 2019.
Algeria: Algerias estimated value of exported cement in 2019 is US$60m, up by 200% from US$20m in 2018. Algerian Trade Minister Sad Djellab noted increases to grinding capacity in Guinea Bissau, Senegal, Gabon and Mali as a potential source of revenue from clinker exports, according to LExpression. Algeria can meet the needs of these markets and become their leading supplier of clinker in 2020. The minister estimated that the total value of cement and clinker exports will reach US$400m by 2021.
Date Created: 2020-11-16T09:20:16+00:00 Reference Number: 093-1611LH Job Description: Our client is looking for a Deputy General Manager to oversee the production at their clinker and cement plant, ensuring efficient production and optimal revenue generation. Responsibilities: