Indonesian government tapers Cemex's plan Shortly after Cemex expressed to Indonesian authorities its interest in pursuing a 35% participation in the Indonesian market-leading cement producer PT Semen Gresik, the nation's government put a halt to the plan. The move was made, according to a report in The Wall Street Journal, after employees protested about losing control of the company to foreign interests.

Instead, Cemex pursued and received approval for a 14% minority interest in the company, leaving 51% of Semen Gresik under government control. The transaction is valued at $114.6 million, or $1.38 per share. Cemex plans to acquire as much as an additional 6% of Semen Gresik's outstanding shares through a tender offer.

According to The Wall Street Journal, the entire transaction has soured many traders who were considering similar offerings with the Indonesian government. The news of the deal with Cemex led to a 15% drop in Semen Gresik's shares.

The Semen Gresik transaction expands Cemex's presence in Southeast Asia and marks its second investment in the region in the last year. Cemex acquired a 30% stake in Rizal Cement, a Philippine Company in October 1997.

Holderbank in NZ, Thailand Holderbank announced it is looking to consolidate its present position in New Zealand by making an offer for all minority interests in its group company Milburn New Zealand Ltd.

Through its subsidiary, Zealhoff Holdings, Holderbank is offering NZ$1.90 (US$1) per ordinary share for the 27% of Milburn shares (about 37 million) it does notalready own.

Milburn's major activity is the production and distribution of cement from its plant at Westport. The company also is active in the aggregate, ready-mixed concrete, and lime segments.

Holderbank also has acquired a 24.99% interest in Siam City Cement Public Co. Ltd., Thailand's second-largest cement producer. Holderbank acquired about 37.5 million shares from Ratanarak family interests, currently the majority shareholder of Siam City Cement. The purchase price was about $153 million, and Holderbank will support Siam City Cement with another $55 million in its restructuring plans.

Vietnam halts investments The Vietnamese government has halted new investment in the cement industry until the year 2000 because of oversupply of cement on the Vietnamese market, according to the Vietnam News.

The Vietnamese Cement Corp. forecasts a fall in cement consumption over the next few years in the central and northern regions of the nation, but rising consumption in southern Vietnam. The Ministry of Planning and Investment has suggested that the industry should focus its attention on increasing the capacity utilization of existing cement plants, instead of constructing new ones.

This announcement comes on the heels of news that the Sao Mai Cement Plant, the largest plant of its type to be constructed in Vietnam, is now ready for operation, according to the Vietnam News. The $350 million plant has a capacity of 1.8 million mtpy, as well as a 30-MW power plant. The project, located in the Ha Tien province, is a joint venture with Holderbank and the Ha Tien Cement Plant.

In a related story, the Vietnam News reported that concrete producers in Ho Chi Minh City were forced to slash their prices as a result of a marked slowdown in activity in the city's construction industry. Some producers are even selling their concrete at the producer price. A number of concrete makers say they will have to make major cutbacks in production in order to survive.

Financial news Ciments Frangais had sales of FRF6.576 billion (US$1.2 billion) for the first six months of 1998, an increase of 7% from the previous year. The French markets seems to be sustaining its recovery while activity remains strong in markets such as the United States, Morocco, and Spain, according to the company.

The CBR Group saw an increase in sales for the first half of 1998 as well. Consolidated sales revenues increased 11% to BEF33.9 billion (US$982.5 million). Operating income before depreciation stands at BEF6.82 billion (US$197.3 million), a 12.7% increase compared to the previous half year.

Japan's production down Depressed by a decline in public works projects and housing starts, Japan's cement production for 1997 slipped 3.7% on the previous year to 95.84 million mt, according to the Japan Cement Association.

Total cement sales in the year, including exports fell 4.5% to 90.3 million mt, a sharp turnaround from the 1.6% growth recorded in 1996.

Domestic sales dropped 4.4% to just over 78 million mt due to fewer office building construction projects and other facility investment, the association added.

The association expects that, when the 1998 numbers are finalized, domestic demand will have stayed sluggish early part of the year mainly because of decreased public works spending.