24. Rapid rise in both cement production and consumption in Indonesia
2010
Cement Production
in million tons
2011
2012
2013
37.8
52.0
60.6
65.0
Cement
40.8
48.0
55.0
Consumption
in million tons
Per capita consumption one of the lowest in Asia – only 200 kg / year
61.0
Indonesian Islands and Domestic Cement Consumption in 2012
Cement consuption
share in Eastern
Indonesia now
growing fastest.
25. •
•
•
•
GDP grew over 6% annually since 2007
Growth is projected to remain >6 %.
World Bank - each year more 7 million middle class.
Increased Middle class Consumption give rise to new
housing and real estate development.
• Cuts in electricity and fuel subsidies: Indonesian
government intends to raise electricity tariffs gradually.
• Reduction in expensive fuel subsidies is placed high on
the government's agenda to relieve the annual budget
deficit.
26. Largest Indonesian Cement
Companies
Domestic Market
Share
Semen Gresik
40%
Indocement Tunggal Prakarsa
33%
Holcim Indonesia
16%
Bosowa Corporation
5%
• Only 1 private company
• Indocement orders seven Loesche
vertical roller mills for Citeureup
27. MALAYSIA
•
•
•
•
KILN CAPACITY : 20.5 MIL TONS
CEMENT MILL CAPACITY : 38.10 MIL TONS
CEMENT PRODUCTION : 21.95 MIL TONS
EXPORT : 2.80 MIL TONS
28. VIETNAM
•
•
•
•
•
1 of least developed in region
But biggest cement market in SEA
7th in World Production
Capacity of 66Mt/yr
Consumption in 2013 is forecast ~57Mt.
• Poorly planned – supply far outstripped demand
• The cement industry expects to export over 10Mt of
cement in 2013, or 15% of the nation's total output.
• higher coal, power and fuel prices that have pushed up
production costs and caused difficulties for domestic
producers.
29. INDIA
•
•
•
•
•
Global rank # 2
183 large plants
365 Mini Plants
260 Mil Tons consumption
Expected 550 MTPA by 2020
Global pact signed to support low-carbon cement investments
31. BANGLADESH
• Impressive track record on growth and
development
• Poverty reduction in both urban and rural areas
has been remarkable.
• Bangladesh is among the most densely
populated countries in the world.
• Bangladesh aspires to be a middle-income
country by 2021.
• Becoming a middle-income country
32. PAKISTAN
•
•
•
•
TOTAL PRODUCTION 45 Mil Tons
Export 8.3 Mil tons 2012-2013 FY
Domestic demand increase 7.89%
Population 184.31 Million in Sept 13
33. MYANMAR
TRADER’S PARADISE?
Siam Cement plans $388 m cement plant
Semen Indonesia to Build $200m plant
CONCH ?
Taiheiyo ?
Heidelberg Group ?
Predicted Per Capita consumption 200 KG
from 80 KG
34. SRILANKA
• Destination Srilanka?
• Tokyo Cement Profit increased 660% !
• Pakistan invasion ? D.G. Khan and Thatta set
to invest in Lanka.
• Nepali Billionaire Binod Chowdhary to invest
in Lanka ?
35. FINAL FRONTIER?
Coal and limestone : 100 Billion Tons claimed by
North Korean Government
Anthracite Coal : Over 4.5 billion tonnes in
reserve as per the local government
When we attend INTERCEM its all about trade. INTERCEM Bangkok gives an opportunity to expand our networks and knowledge in the most active trading region in the world –i.e. Asia.
Before moving to detail, lets have a look at this pie chart.Out of 3.6 Billions tons global production in 2012, Asia is producing about 80% and China alone about 60% i.e. over 2 Billion tons, so its needless to say where the prospect of trading lies.
Before moving to detail, lets have a look at this pie chart.Out of 3.6 Billions tons global production in 2012, Asia is producing about 80% and China alone about 60% i.e. over 2 Billion tons, so its needless to say where the prospect of trading lies.
Before moving to detail, lets have a look at this pie chart.Out of 3.6 Billions tons global production in 2012, Asia is producing about 80% and China alone about 60% i.e. over 2 Billion tons, so its needless to say where the prospect of trading lies.
Though as per Wikipedia Asia comprise of 48 countries, For my presentation I have excluded gulf countries and focused on the countries / territories as per this slide.Trading Patterns in Asia is mostly Seaborne and if you look at the slide, Star Marked countries are key export sources and rest are Importers.Just for clarification, the Export markets for Star marked countries are not only Asia the trade reach up to Americas, Africa and Gulf, we can say global.
Global Cement Majors came to Asia soon after Asian Economic crisis in 1997, since then except China they are having significant foothold in most of the Asian countries. Trading companies own by Cement majors plays a major role in Asian Cement Trade and in many cases poses a threat to survival of independent traders.
Lets looks at the individual country scenario, for those who are familiar with the numbers I am sure they will be able to find the trade prospect on their own.In 2012, the Japan’s production scale spanned 30 plants owned by 17 companies, with 3 majors Taiheiyo, Ube Mitsubishi and Sumitomo Osaka.
Japan production capacity is 54 Million Tons and they are exporting over 10 Mil tons per year.
Currently the South Korean economy demonstrates relatively quiet conditions and a moderate growth scenario. A continuing slight decline in domesticcement consumption highlights the impact of stagnating nationwide construction that will need jump-starting by government planners to avoid further more drastic slippage. Thus, they are gradually scaling down their production capacity.However their clinker and cement exports are healthy, significantly more than Japan.
China is producing more than half of the world’s cement (59.3% in 2012) and in 2013 estimated 2.4 Billion Cement will be produced.
China produced 1.1Bt in the first half of 2013, a year-on-year increase of 9.7%, according to the latest statistics released by the National Development and Reform Commission (NDRC). The cement inventory of the country's major cement producers increased by 0.3% year-on-year to 27.76Mt.Profit for the cement industry remained flat with a 1% increase year-on-year to US$2.49bn.Meanwhile the government is considering a detailed plan to eliminate outdated industrial production capacity, according to the China Securities Journal. The plan is expected to eliminate outdated capacity in the cement, steel, electrolytic aluminum, plate glass and shipbuilding sectors.Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology (MIIT), confirmed that MIIT and the NDRC are currently working on the plan. The plan will boost the sectors' utilization of existing capacity by setting industry access standards and eliminating outdated capacity. To ease overcapacity in affected industries, MIIT ordered in late July 2013 around 1400 companies in 19 sectors to eliminate outdated production capacity by September 2013 and eliminate excess capacity by the end of 2013.
Though GDP has slowed down, China Govt has taken various steps to keep the economy moving and we see that most beneficial is the Cement Industry due to various projects including nationwide fast rail network.The Chinese government, which owns and operates all domestic rail companies, launched the country's first high-speed service in 2007 and now boasts 9,300 kilometers of high-speed routes nationwide, turning a nonexistent network into the world's longest in a few short years.The Chinese government is reportedly spending some $300 billion to make that vision a reality, moving full steam ahead on its plan to build a 25,000-kilometer (15,534 mile) high-speed rail network by 2020.
Looking at these ambitious projects I am sure that the Cement demand in Asia specifically in China will remain firm for next 10 years.
Total production capacity 16.5 Mil tons and Export 5.5 Mil tons
Domestic cement consumption for Thailand's Siam Cement (SCC) is expected to be weaker over the next year, according to local paper The Nation. An SCC group meeting of local investors with Siam Cement's CEO, KanTrakulhoon, and CFO ChaovalitEkabut shed light on the company's current prospects and the cement market going forward. Trakulhoon explained that a softening of the property market and the slow movement of state infrastructure projects will see a slowdown in domestic cement consumption in 2H13. GDP growth is likely to be in the range of 2-3 per cent YoY in 2H13 and domestic cement demand is expected to rise less than five per cent YoY, decelerating from nine per cent YoY in 1H13. Demand for general building materials is also weakening, particularly at the low end of the market, but there is still some scope for sales growth of mid- to high-grade materials. SCC’s cement-building material growth will be mainly volume driven, led by new investments and robust demand expansion in Cambodia, Myanmar and Indonesia. SCC reaffirmed that new cement plants will be completed in Indonesia (1.8Mta) and Cambodia (0.9Mta) by mid-2015, while groundbreaking is planned next year for a 1.8Mta cement factory in Myanmar, which is expected to be completed in 2016.
Per capita cement consumption in Indonesia - which currently stands at around 200 kilogram per year - is one of the lowest in Asia, and in combination with a booming (macro)economy it therefore contains ample room for growth.Currently the island of Java accounts for more than half of Indonesia's total cement consumption. Java and Sumatra together account for around 75 percent of Indonesian cement consumption. These two islands (Java in particular) are home to the majority (almost 80 percent) ofIndonesians. But, although small in absolute numbers, the cement consumption share is increasing fastest in Eastern Indonesia.
(GDP) grew over six percent annually since 2007 (except for 2009 when international turmoil caused Indonesia's GDP growth to drop to (a still impressive) 4.6 percentfuture projections predict that this growth is most likely to remain above six percent in the coming years.Fueled by a quickly expanding Indonesian middle class.According to World Bank - each year 7million people join the ranks of Indonesia's middle class.Middle Class consumptive behavior and demands give rise to new housing and real estate development.BUT Although the Indonesian cement sector is booming, global economic uncertainty brought on by structural problems in the European Union and United States can influence Indonesia's national economic growth, thus affecting domestic cement demand. Also proposed cuts in electricity and fuel subsidies can negatively affect the cement industry: starting from January 2013, the Indonesian government intends to raise electricity tariffs gradually, while a reduction in expensive fuel subsidies is placed high on the government's agenda to relieve the annual budget deficit.
Indocement has ordered seven Loesche vertical roller mills for a new production line at the Citeureup cement plant, south of Jakarta. Citeureup currently comprises nine kiln lines with a total cement capacity of 11.9Mt/yr, making it one of the largest cement plants in the world.Two type LM 56.4 mills have been ordered to grind raw materials for cement. Each will have a capacity of 400t/hr at a product fineness of 10% R 90 µm. Two type LM 28.3 D mills are intended to grind coal and have a capacity of 40t/hr at a product fineness of 12 % R 90 µm. Indocement has ordered three type LM 56.3+3 mills to grind clinker. Each mill will be producing 240t/hr of PPC cement with a fineness of 19% R 32 µm.In addition to supplying vertical roller mills, Loesche will also be responsible for the cyclones, dedusting filters, fans and corresponding hot gas generators for the cement mills. Delivery for Citeureup plant will start at in August 2014.
Lafarge Malayan Cement, Malaysia's largest cement producer, is considering an expansion drive to help meet buoyant domestic demand. Lafarge Malaysia has a 40% share of the local market, in which the total industry production averages 20Mt/yr.In 2012 the company reported a 10% growth in net profit while revenue grew 7% to US$887m.Lafarge's rivals in the sector include YTL Cement Bhd, Tasek Corp Bhd and Cement Industries of Malaysia Bhd (CIMA). Both YTL Cement and CIMA have planned capacity expansions of around 1.5Mt/yr.
Despite being one of the least developed countries in the region, Vietnam has the biggest cement market in SEA and ranks seventh in the world in terms of production. Vietnam exported nearly 5.2Mt of cement in the first half of 2013, a rise of 63% year-on-year compared to 3.2Mt in the same period in 2012 said the Ministry of Construction. Bangladesh,Taiwan, Singapore, Indonesia and Cambodia were the major destinations. The ministry also stated that cement sales have grown by 27.9% year-on-year, reaching 27.9Mt so far in 2013.
The cement industry in India has been expanding significantly on back of increasing infrastructure activities and demand from housing sector.At present, the Indian cement industry is positioned on the second rank globally and comprise of 183 large and 365 mini cement plants.Indian cement majors, including ACC Ltd, Shree Cement Ltd and Ultratech, have signed a co-operation pact to support low-carbon investments in India. The pact was signed in Geneva with member companies of the World Business Council (WBC) for Sustainable Development’s Cement Sustainability Initiative and International Finance Corporation (IFC). The roadmap will pose as a possible transition path for the Indian cement industry to reduce its direct emissions by 18 per cent by 2050. This is the first roadmap to focus on one specific industrial sector in a single country, as per a WBC release.The market size of the industry is expected to grow from 223.4 MTPA during FY12 to 550 MTPA by FY20.
Being Asia’s No. 1 Clinker importer Bangladesh is the most important market for all the exporting countries/traders. However due to ongoing political unrest and multiple fatal incident in Garments Industry lucky charm seems slowing down for Bangladesh.The Cement demand has slowed down. Growth dropped from 12% in 2009 to 4.5% in 2012Local producer Lafarge has plan to double it capacity from 1.5 Mil to 3 Mil tons.
Bangladesh has maintained an impressive track record on growth and development. In the past decade, the economy has grown at nearly 6 percent per year, and human development went hand-in-hand with economic growth. Poverty dropped by nearly a third,coupled with increased life expectancy, literacy, and per capita food intake. More than 15 million Bangladeshis have moved out of poverty since 1992.While poverty reduction in both urban and rural areas has been remarkable, the absolute number of people living below the poverty line remains significant. Despite the strong track record, around 47 million people are still below the poverty line, and improving access to quality services for this vulnerable group is a priority. There are also many people who could fall back into poverty if they lose their jobs or are affected by natural disasters.With nearly 150 million inhabitants on a landmass of 147,570 square kilometers, Bangladesh is among the most densely populated countries in the world. Sustained growth in recent years has generated higher demand for electricity, transport, and telecommunication services, and contributed to widening infrastructure deficits. While the population growth rate has declined, the labor force is growing rapidly. This can be turned into a significant demographic dividend in the coming years, if more and better jobs can be created for the growing number of job-seekers. Moreover, improving labor force participation and productivity will help to release the potential of the economy. Exploiting the potential of regional cooperation and making trade policy more conducive to a deepening and diversification of exports will also play a vital role in the growth process.Bangladesh aspires to be a middle-income country by 2021. This will require increasing GDP growth to 7.5 to 8 percent per year based on accelerated export and remittance growth. Both public and private investment will need to increase as well. Growth will also need to be more inclusive through creation of productive employment opportunities in the domestic economy. To sustain accelerated and inclusive growth, Bangladesh will need to manage the urbanization process more effectively, as well as prepare for adaptation to climate change impacts.Becoming a middle-income country will require substantial efforts on many fronts. These include maintaining macroeconomic stability; strengthening revenue mobilization; tackling energy and infrastructure deficits; deepening financial-sector and external trade reforms; improving labor skills, economic governance, and urban management; and adapting to climate change. Bangladesh can become an export powerhouse, with its labor-intensive manufactured and service exports growing at double digits on a sustained basis, if it speeds up government decision-making. Without timely action, other countries (such as Vietnam and Myanmar) will take the markets being vacated by China.
Pakistan's cement industry contains over 20 producers, it is dominated by four major players - Lucky Cement, Bestway Cement, DG Khan and Maple Leaf – who hold nearly half of the country's cement production capacity of around 45Mt/yr. According to local media covering the spat, Lucky Cement uses 100% captive power generation, DG Khan Cement uses 40% and Maple Leaf Cement uses 45%.Overall the industry dispatched 33.4Mt of cement in the 2012 – 2013 year, with 8.3Mt exported.
On the back of strong GDP growth and an expanding population, Myanmar's construction industry has performed well in recent years. On average, Myanmar's gross domestic product expanded by 7.7% from 2001-10. An IMF study projected Myanmar's real GDP growth for 2011-12 as 5% and for 2012-13 as 6%. Myanmar is now becoming one of the world's most sought-after countries, ready to open up and woo foreign investors in its construction industry. This growth was supported by the country's improving political stability, increasing number of investment opportunities in energy and public infrastructure projects, and rapid inflow of foreign direct investment (FDI) from Vietnam, Thailand, China, Singapore, Korea, Japan and Malaysia. Last year the infrastructure and residential construction markets together generated 77.3% of the total Myanmar construction industry value. The Government has also accorded high priority to infrastructure development projects - such as roads, railways, bridges, ports facilities, airports, electric power, irrigation networks, communication systems, private schools construction, private hospitals, etc. There is an increasing trend of private sector participation in these projects which is expected to escalate as Private Public Partnership (PPP) is gaining momentum. Further, large-scale hydro-electric development and deep-sea port projects, road works, airports, hotels and other construction activities translate to high cement demand in Myanmar. Cement export to Myanmar is expected to increase before the new plants come into commercial production. There are 14 cement plants in Myanmar with a combined capacity of 3.5 million tonnes per year. The current cement demand in the country is 6 million tonnes. Myanmar imports 2 million tonnes of cement per year from Thailand, Indonesia, India and Vietnam. There is massive potential for cement growth in Myanmar. The growth trends for the industry will be similar to Thailand, with more direct investments leading to higher demand. The Myanmar government is in the process of allowing 10 new plants to be constructed over the next two years. The Myanmar Investment Commission has approved four new privately-owned cement plant projects with a combined capacity of 5,250 tonnes per day, or 1.9 million tonnes per year. The market price for cement in Myanmar varies between US$160 to $200 per tonne, which is high compared to other Asean countries. Over the next three to five years, cement consumption in Myanmar is expected to increase by 10-20% per year based on gross domestic product growth of 5.5% to 6%. Demand will be driven by large-scale infrastructure projects such as airports, inter-city roads and hydropower dams, as well as new hotels and resorts. Myanmar's per-capita cement use is 70-80 kilogrammes per year. MrWisoot said there is potential for per-capita demand to grow to 200 kg per year, equivalent to 10 million tonnes per year over the next five years.
It seems every one is rushing to Lanka!Question is who will be the real winner.The market is closed for independent players for trading unless local investment is made.However with small investment big gain can be made.Though Sri Lankan cement demand fell in the first half of 2013. Yet this doesn't seem to be stopping the cement industry's slow recovery following the civil war that ended in 2009.Local cement industry has seen volumes fall by 7% but this is expected to improve in the second half. Tokyo Cement, a grinding plant operator, has announced plans for a 1Mt/yr cement plant costing US$50m complete with its own captive biomass power plant. In addition, plans have emerged of a joint venture involving Pakistan's D.G. Khan Cement to build a grinding plant at Hambantota in the south of the island. Costing US$15m, The Hambantota project is also noteworthy because another Pakistan-based company, Thatta Cement, announced in April 2013 that it had signed an agreement with the Sri Lanka Ports Authority to a build a grinding and bagging plant at Hambantota. Also in 2013 the Nepali entrepreneur BinodChaudhary submitted a US$75m plan for a cement plant in the north of the island.
Trading opportunity out of North Korea is fast approaching. Lafarge has invested in North Korea not just for the sake of takeover deal of Orascom, the potential is hidden and to be explored as DPRK is sitting on massive reserve of both Coal and Limestone.
