CASABLANCA, April 15 Moroccan cement producer
Ciments du Maroc (SCM.CS) expects its net profit to grow in 2008
as dividends from an Egyptian affiliate and lower taxes offset
higher energy and raw material costs, its chairman said.
Morocco's cement market has grown at 8 percent a year since
the start of the decade and Ciments du Maroc, a unit a of
Italcementi (ITAI.MI), has struggled to keep output growing as
fast as demand.
The company has been forced to buy in clinker from
competitors to assure supply, denting profitability. Margins
have shrunk further as the cost of energy grew.
External purchases of clinker, as well as rising costs of
solid fuel, cut profits by 218 million dirhams last year,
Chairman Mohamed Chaibi told reporters and analysts in
Casablanca on Tuesday.
"That 218 million risks worsening in 2008 but should stay
stable in 2009 ... and largely disappear in 2010," he said.
"We can have a strong increase in sales, a worsening in
variable costs and stagnation of fixed costs but we will still
have an improvement in terms of net profit nonetheless."
Ciments du Maroc and its main competitors Lafarge Ciments
LAC.CS and Holcim HOL.CS are investing heavily to meet
surging demand for cement in Morocco due to ambitious transport
infrastructure and housing projects and a boom in tourism
The company has increased capacity at existing plants but
part of the expansion was delayed after authorities blocked a
planned extension of its Agadir factory.
Now it is building a new 3.1 billion dirham cement factory
at Ait Baha in the south which can to produce 1.6 million tonnes
of clinker and 2.2 million tonnes of cement. The plant's first
cement crushing unit will come on line in March 2009.
At its Marrakesh installation, an increase in crushing
capacity and clinker production will become effective by the end
of the first half of this year, the company said.
Ciments du Maroc's net profit grew 17 percent last year to
612.5 million dirhams but operating profit climbed just 4.3
percent to 900 million.
The net figure was boosted by 50 million dirhams in
dividends from Egyptian affiliate Suez Cement Co.
Chaibi said he expected double-digit percentage growth in
the Moroccan cement market again this year after a 12.6 percent
increase in 2007.
The market could eventually reach over 20 million tonnes, up
from 12.8 million last year, before growth flattens out, as
consumption of cement per inhabitant in Morocco is still below
countries such as Turkey or Tunisia, company executives said.
(Reporting by Tom Pfeiffer; Editing by Paul Bolding)