Cement firms crack a smile at '97
15 Jan 2000
Reporting positive sets of annual results, two major UK cement manufacturers say they are emerging from an industry-wide slump and that the market is recovering.
Blue Circle, for which cement is the major activity, reported pre-tax profits of £297.6m for 1996, up 9 per cent on 1995. Activities in the Americas and Asia were strongest, Africa was unmoving, while its European operators winced. In the UK, although turnover slipped 0.3 per cent to £688.9m, profits rose 6.5 per cent to £87.8m.
Profits at the British division of Blue Circle Cement (BCC) fell 9 per cent to £59.4m. The company said market demand in the UK had dropped by 4 per cent on 1995.
The company commented: `Cement prices have increased only modestly, well below the rate of inflation. The profit decline was prevented from being more severe as we continued to cut costs.'
BCCplans to build a new plant next year, at Holborough, Kent, assuming it gets planning permission. This would mean the closure of its Northfleet site and possibly others at Ipswich and Plymouth, unless these plants develop strong markets for specialist products.
`UK cement demand is expected to show a modest increase in 1997 with prices firming,' the company ventured.
Rugby Group's domestic cement sales grew by 7 per cent in the first three months of 1997, a development heralded by the Financial Times as `evidence of the UK recovery'. Rugby promptly put up its prices by 9 per cent.
Nevertheless, the company reported a 14 per cent drop in pre-tax profits to £62.5m, for 1996.
Rugby cut domestic production of cement and lime by 5 per cent and profits slumped 12 per cent to £16.6m. On the positive side, the company is constructing a new plant at its Rugby headquarters.
* Castle Cement, the second biggest UK producer, is part of Scancem, which reports in April.
