Displaying items by tag: Arabian Cement Company
Arabian Cement Company's profits rise in 2023
06 March 2024Egypt: The Arabian Cement Company has reported a 36% year-on-year rise in its sales, reaching US$124m in 2023. Profits also saw a substantial jump, up by 94% to US$14.3m in 2023 from US$7.37m in 2022.
Egypt: Arabian Cement Company is replacing electrostatic precipitators at its Ain Sokhna cement plant with bag filters. Arab Finance News has reported that the project will commence in two phases. Arabian Cement Company will first install the filters in Line 1 of the plant, before subsequently installing them in Line 2. Italy-based air pollution control specialist Redecam Group will execute the upgrades.
Arabian Cement Company to establish decarbonisation roadmap for Sokhna cement plant
21 November 2023Egypt: Arabian Cement Company has hired consultancy A³&Co. to help develop a decarbonisation roadmap for its 5Mt/yr Sokhna cement plant. The roadmap will include the implementation of an integrated environmental, social and governance (ESG) business model, Science-Based Targets Initiative (SBTi)-verified targets, carbon market trading and EU carbon border adjustment mechanism (CBAM) registration. Arabian Cement Company will execute projects to achieve its goals via a strategic partnership with A³&Co and the European Bank for Reconstruction and Development (EBRD).
Arabian Cement Company CEO Sergio Alcantarilla said “We are excited about this partnership with EBRD and A³&Co., which showcases our commitment to environmental stewardship and sustainable development. By embracing cutting-edge solutions and adopting greener processes, we are not only reducing our carbon footprint but also setting new benchmarks for the industry.”
A³&Co. CEO Amr Nader said “Through our collective expertise, we are confident that we can drive meaningful progress towards decarbonisation and the production of green cement, setting a precedent for responsible business practices in the region. The renewed cooperation between Arabian cement and A³&Co. is an additional milestone in our successful collaboration over the past two years. A³&Co. will also develop a Climate Corporate Governance (CCG) framework for Arabian Cement Company, which is the cornerstone for a fully-functioning ESG system in line with international norms.”
Tarek Talaat becomes new Raysut Cement CEO
20 September 2023Oman: Tarek Talaat has moved from Egypt-based Misr Cement Group to Raysut Cement, where he takes over the role of CEO. He was previously managing director and CEO of Misr Cement Group. Before that, he held leadership positions across Europe, Egypt and the Middle East at Holcim, Arabian Cement Company and Ras Al Khaimah White Cement. Raysut Cement called Talaat the ‘standout’ choice for the CEO position, due to his vision, strategic mindset and proven turn-around experience. Tarek holds a bachelor’s degree in civil engineering from Cairo University and studied financial management at INSEAD University in France. He has a Master of Business Administration (MBA) degree from the Swiss Business School, Zurich, in Switzerland.
Raysut Cement said “With Mr Tarek at the helm, we are confident that Raysut Cement will continue to thrive and reach new heights. His leadership will be instrumental in guiding the company through the ever-evolving landscape of the cement industry.”
Reuters has reported that Talaat’s resignation as managing director of Misr Cement Group will take effect on 12 October 2023.
ACC to start additional solar project
07 November 2022Egypt: Arabian Cement Company (ACC) has signed an amendment to its 2019 contract with Amarenco SolarizEgypt (ASE) to establish a solar photovoltaic (PV) unit at its Suez plant. The amendment to the agreement aligns with updated regulations recently issued by the Egyptian Electric Utility and Consumer Protection Regulatory Agency (EgyptERA) to encourage and support self-built solar energy projects as Egypt hosts the United Nations Climate Change Conference (COP27) in Sharm El Sheikh.
ACC already generates 20.6MW of power from a solar PV plant, representing 3% of its total power needs and saving 5500t/yr of CO2. Construction of a second site, capable of saving 13,000t/yr of CO2, will now begin in early 2023. The actual commissioning and start-up of operations is expected in September 2023.
“As part of our sustainable development strategy, we are continually assessing opportunities to develop Egypt’s cement industry with projects that integrate sustainable and environment-friendly solutions and renewable energy resources given their significant environmental, social impact and on the economy at large,” said Sergio Alcantarilla, the chief executive officer of ACC.
Update on Egypt: September 2020
30 September 2020The one thing that the Egyptian cement industry really didn’t need this year was any more jolts. Since the gargantuan 13Mt/yr government/army-run El-Arish Cement plant at Beni Suef opened in 2018, the sector has been stuck in production overcapacity and struggling to catch up. Yet, like the rest of us, they got one nasty surprise in the shape of the coronavirus pandemic. This has added stress to the whole situation and we can see some of this in various news stories that Global Cement has covered recently.
HeidelbergCement’s local subsidiary Suez Cement has been busy in recent days making changes to its corporate structure in the form of a tender offer to buy a 100% stake in Egyptian Tourah Portland Cement. Production stopped at Tourah Cement in June 2019 due to market conditions. This follows yet more lacklustre financial results earlier in September 2020 that show the pain that it and other cement producers have been enduring. Suez Cement’s loss nearly doubled year-on-year to Euro38m for the first half of 2020 and its sales fell by 18% to Euro145m. This was blamed on production overcapacity and a coronavirus-related lockdown. Other producers, both multinational and local, have experienced a similar situation.
Suez Cement also announced in mid-September 2020 that its Ready Mix Beton subsidiary had secured a contract for the supply of concrete for the construction of two new monorail lines connecting the country’s new city projects. Unfortunately, as Suez Cement’s chief executive officer (CEO) Jose Maria Magrina explained in an interview to Daily Egypt News in July 2020, “the New Administrative Capital (NAC) is a very big project, but in the end it has not offset the decrease in informal buildings that have been stopped.” Despite Suez Cement being a major supplier and the proximity of its plants to the site, overall sales have gone down.
Graph 1: Cement consumption in Egypt. Source: Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries.
Magrina’s gloom is shared by other industry figures with a general assumption that perhaps up to a quarter of the country’s 20-something cement plants may have to close in the next year or so. Coronavirus has only deepened this view as the government’s response was to cease issuing construction licences for private buildings in Greater Cairo, governorate capitals and major cities from late May 2020 for six months. Solomon Baumgartner Aviles, the CEO of Lafarge Egypt, said in July 2020 that local cement demand fell by 6.5% year-on-year in the first half of 2020. He added that coronavirus had ‘strongly’ impacted the building materials sector with a big effect on the individual market, and with the licence halting exacerbating the situation further. As data from the Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries shows above in Graph 1 demand peaked at 56.5Mt in 2016 and has since declined to a low of 48Mt in 2019. By month the sector recovered in January and February 2020 respectively with growing cement sales on a year-on-year basis but this has since declined with losses in most months subsequently. This is set against a production capacity of 81.2Mt/yr in 2018, giving an excess of 30Mt/yr and a utilisation rate of 59%.
One story that was mentioned in the local press this week is that Arabian Cement Company (ACC) had started negotiations with the European Bank for Reconstruction and Development and the Commercial International Bank – Egypt to secure new loans worth over US$20m. The ACC has denied this publicly in a statement to the Egyptian Exchange but it’s a sign of the trouble that is expected in the sector given the current circumstances.
All of this leaves cement producers scrabbling to hold on until the market picks up again, takes action in other ways or the government intervenes. Some analysts expect the market to stabilise in the medium to longer term as work on large infrastructure projects like the NAC mounts. Suez Cement’s Jose Maria Magrina has said that, “the government must, within the law, dictate norms that will rationalise the market, while making sure that companies survive since current prices do not cover the costs of production.” Local press has since reported that the Ministry of Trade and Industry has started trying to help cement companies, including measures such as limiting production to balance supply and demand, and decrease the surplus in the market. Another option is a coordinated export subsidy programme in coordination with the government but nothing appears to have happened yet after several years of discussion. Unhelpfully for any export aspirations, Egypt finds itself in a very cement export-heavy part of the world, wedged as it is between North Africa, Turkey and Southern Europe.
Hope springs eternal though as, almost unbelievably, Egyptian Cement Group’s CEO Ahmed Abou Hashima surfaced last week to remind everyone that his company still plans to inaugurate its new integrated cement plant in 2021. The project to build a new 2Mt/yr unit in Sohag has been brewing since 2017 when it was announced with China-based Sinoma on board as the engineering partner. It was originally scheduled to open in the first half of 2020 but it was delayed by coronavirus. Let’s hope the picture looks better when it finally opens.
Egypt: Khaled Fahmy, the Minister of Environment, has opened a new production line at Arabian Cement Company’s Ain Sokhna plant in Suez. The line uses FLSmidth’s Hotdisc combustion device to allow it to use high levels of alternative fuels, according to the Watani newspaper. The opening was attended by Muhammad Shehab Abdel-Wahab, chief executive of the Egyptian Environmental Affairs Agency, Nahed Youssef, head of waste management organisation, as well as a number of representatives of the financiers, and director of the European Investment Bank.
In 2015 Arabian Cement Company commissioned another Hotdisc installation. At the time is said it had a designed fuel mix of 70% coal and 30% alternative fuels, using a mixture of agricultural wastes, municipal sludge, and refuse-derived fuel (RDF).
Arabian Cement Company reschedules US$30.9m loan to 2021
11 January 2018Egypt: The Arabian Cement Company (ACC) has successfully rescheduled a US$30.9m loan from the National Bank of Egypt. The loan will now be paid in quarterly instalments to mid-2021, according to the Daily News Egypt newspaper. The borrowing was originally taken out to expand its production faculties.
Update on Saudi Arabia
25 October 2017Arabian Cement Company had some choice words for a contractor this week when it blamed it in a bourse statement for a delay for a new mill at its Rabigh plant. The project has been pushed back to the third quarter of 2018 from the fourth quarter of 2017. The second phase of the plan, to build a new clinker production line, has also been placed under review.
The contractor may have given Arabian Cement an excuse to put a question mark over its new line, but the market reality has been stark. Also this week, Saudi Cement Company reported that its net profit had fallen by 51.5% year-on-year, to US$92.3m in the first nine months of 2017 compared to US$190.4m in the previous period. It blamed falling sales.
Graph 1: Cement sales (Mt) by quarter in Saudi Arabia, 2015 to September 2017. Source: Yamama Cement.
As Graph 1 shows, cement sales volumes in Saudi Arabia have been dropping since 2015. Sales fell by 5.3% year-on-year to 10.5Mt in the third quarter of 2017 from 10.9Mt in the same period in 2016. Year to date figures show a worse trend with a drop of 17.4% to 35.2Mt in the first nine months of 2017 compared to 42.7Mt in the same period in 2016. This decline has accelerated compared to a decrease of 5.4% from 45.1Mt in 2015 for the first three quarters.
Analyst Al Rajhi Capital provided some context to this situation in its September 2017 report on the August 2017 sales figures. It reported particularly steep declines in cement sales volumes of over 35% for Northern Cement, Najran cement and Hail Cement for the first eight months of the year. However, some producers - including City, Qassim, Yanbu and Al Safwa - did manage modest gains. Overall though the financial services company did not expect any pickup for the second half of 2017.
Last time this column covered the kingdom’s cement industry in early 2016 it asked when the government was going to relieve the export ban. Cement production was high, inventory was pilling up and infrastructure spending was falling. The ban was subsequently lifted but commentators worried that it would be too restrictive to have much effect due to tariffs and volume restrictions. A steady stream of cement producers has applied for export licences since then, but exports have not alleviated the situation. With inventory remaining high for the producers, current export policy failing to help and the local construction market subdued, it is unlikely that anything is going to change soon for the local cement industry. In fact it may even get worse if the government decides to revise its energy price policy later in 2017 or in early 2018, adding to the input cost burden of the producers.
Talk of market consolidation in this kind of market environment seems inevitable. This is exactly what happened earlier in the month when Jihad Al Rashid, the head of the Saudi National Committee for Cement Companies, said to local press that the local market only needed four large cement producers rather than the 17 companies it has at present. The question at this stage seems to be when, rather than if, will this process start.
Delays announced to new mills at Arabian Cement Company
23 October 2017Saudi Arabia: The Arabian Cement Company (ACC) says that the construction of new cement mills at its Rabigh plant has been delayed to the third quarter of 2018 from the fourth quarter of 2017. The delay has been blamed on, “…the contractor's failure to comply with the timetable.” The second-phase of the project, to build a new clinker production line, is under review. The cement mill order was placed with China National Building Material (CNBM) in 2015.