Displaying items by tag: Export
UAE: Emirates Steel Arkan (ESA) has appointed consultancy A³&Co. to help plan and implement decarbonisation initiatives at its 5.7Mt/yr Al Ain cement plant in Abu Dhabi. The collaboration will focus on reducing CO2 emissions and costs, in line with the Science-Based Targets Initiative (SBTi)’s 1.5° Pathway for Net Zero and in conformity to the EU’s Carbon Border Adjustment Mechanism (CBAM).
ESA is committed to reducing its CO2 emissions by 40% between 2018 and 2030, and to achieving carbon neutrality by 2050.
Vietnam raises 10-month exports to Australia
28 November 2023Vietnam/Australia: Vietnam exported 412,000t of cement to Australia during the first 10 months of 2023. Việt Nam News has reported that this is more than double the 10-month 2022 figure of 157,000t. The total value of the shipments also more than doubled year-on-year, to US$20.5m from US$8.37m.
Norway: Heidelberg Materials Northern Europe inaugurated its Slemmestad cement terminal in Asker on 17 November 2023. The terminal’s equipment includes 12,000t-capacity cement silos. It cost US$13.3m to build and has a loading rate of 390t/hr.
JSW Infrastructure to build US$495m port of Keni
17 November 2023India: JSW Group subsidiary JSW Infrastructure has won a contract to build a new deep-water port at Keni in Karnataka on a public-private partnership (PPP) basis. India Blooms News Service has reported that the port will support export terminals for local cement plants and limestone mines, alongside other industries.
Vietnam’s 10-month cement and clinker exports rise in 2023
31 October 2023Vietnam: The government recorded growth of 0.3% year-on-year in exports of cement and clinker from Vietnam during the first 10 months of 2023. They ended the period at a cumulative 26.2Mt, compared to 25.9Mt a year earlier. Việt Nam News has reported that the value of exports fell by 2.4%, to US$1.13bn.
Heidelberg Materials grows its business in Indonesia
18 October 2023Heidelberg Materials reversed the prevailing wisdom for western multinational cement companies this week when it said it was preparing to buy a cement plant in Indonesia. It announced on 17 October 2023 that its Indonesia-based subsidiary Indocement had signed a deal to acquire all the shares of Semen Grobogan’s integrated cement plant in Central Java for an undisclosed sum. This challenges the trend since the mid 2010s of the likes of Holcim and CRH selling up in the developing world and concentrating instead in markets in North America and Europe.
The decision to buy a cement plant in Indonesia raises eyebrows because the country can produce far more cement than it needs at present. Its cement capacity utilisation rate has been below 60% since 2020 and Central Java has the most plants out of all the nation’s regions. Indocement’s own investor relations presentation for the first half of 2023 laid out data from the Ministry of Industry and internal sources forecasting that the utilisation rate would only reach 57% in 2025. National production capacity meanwhile is around 117Mt/yr at present and expected to reach just below 120Mt/yr in 2025.
Before this latest agreement, Indocement operated four integrated plants in the country and it was the country’s second largest cement producer after Semen Indonesia. Heidelberg Materials bought the company in 2001 and currently owns a 55% share in it. Three of these plants it owns directly, with a capacity of around 25Mt/yr across 14 production lines. One of these is the 18Mt/yr Citeureup plant, one of the world’s largest cement plants. However, in 2022 the company leased the Maros integrated cement plant in South Sulawesi, the Banyuwangi grinding plant in East Java and several cement terminals owned by Bosowa Group, including terminals in Makassar, Barru and Garongkong, via production facility lease agreements. It said this was part of a plan to reduce logistics costs and target the east of the country better. The integrated plant has been leased for three years from March 2022 and the grinding plant and terminals for five years from September 2022.
Semen Grobogan’s plant started commercial production in 2022, has a cement production capacity of 2.5Mt/yr and limestone reserves of over 50 years. Germany-based Heidelberg Materials was keen to point out that the acquisition would reward it with “significant synergies with Indocement’s existing plants in Indonesia” such as in logistics, alternative fuels, and transfer of technical and sustainability knowledge.
It is worth noting financially that Indocement suffered a couple of bad years during the Covid-19 pandemic with revenue and profit down. However, the situation improved in 2022 with both net revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA) for the year up by 11% year-on-year to US$1.04bn and 4% to US$220m respectively. Despite the company’s sales volumes falling by 2% to 17.6% and energy prices increasing it was able to raise its prices. The first half of 2023 has seen the improvements accelerate with more price rises, higher domestic sales volumes from the new leased operations and increased clinker exports to Bangladesh and Brunei.
The improving financial outlook for Indocement and the new condition of many of its clinker production lines may help to explain what is going on here. The Citeureup plant started up in late 2016 and, combined with the Semen Grobogan plant that started up in 2022, both plants cover three-quarters of the company’s production capacity. In a highly competitive market such as Java this may make a significant difference. Consider also the leased plant at Maros, in the less well-served Sulawesi region, and that focus on terminals elsewhere. Here one might be able to view another approach to coping with overcapacity, by targeting different markets either directly or via exports.
It won’t be clear how well Heidelberg Material’s strategy in Indonesia is working until like-for-like financial figures start to be released. The company itself has warned of various risks such as the country’s impending ban on overloaded trucks and the potential effects of a proposed carbon tax on electricity prices. Another thing to consider are last week’s rumours in the press about Heidelberg Materials selling up in India. If this did happen then the proceeds might well help advance the company’s plans in Indonesia. All of this goes to show that one doesn’t always have to copy one’s corporate peers. The retreat by the western multinationals to safer havens has slowed… for now at least.
Algeria: Amouda Cement plans to start exporting cement to the European Union (EU) by end of 2023. It obtained a certificate of conformity to EU standards in March 2023, according to the Algeria Press Service. Djarmoun Fatimé, the cement producer’s Marketing and Communications Director, made the announcement at the Batiwest 2023 trade show taking place in Oran. The company has exported nearly 200,000t of cement and clinker to Mali and Niger since 2021. It is also hoping to target countries in West Africa such as Mauritania and Senegal.
The company operates a 2.5Mt/yr integrated cement plant with two production lines at El Beïda in Laghouat province.
Ukraine suspends anti-dumping duty on Moldovan cement
09 October 2023Moldova: The Ministry of Economic Development and Digitalisation has announced that Ukraine will cancel an existing anti-dumping duty on imports of Moldovan cement until 31 December 2023. Ukraine announced the move following constructive discussions held during a meeting of the co-chairs of the Moldovan-Ukrainian intergovernmental commission on trade and economic cooperation held in Odesa, according to Interfax-Ukraine.
Moldovan Minister of Economic Development and Digitalisation Vadim Humene insisted that Ukraine cancel the anti-dumping duty so that Moldova did not have to ‘initiate trade defence processes’ regarding products that Moldova imports from Ukraine.
In addition to the temporary removal of the anti-dumping duty, the two countries expressed their readiness to help remove barriers to trade and simplify border controls to optimise the flow of goods, review environmental duties and ensure transparent, uniform application of legislation by both countries.
CBAM: the Godzilla of carbon tariffs goes live
04 October 2023The European Union (EU) carbon border adjustment mechanism (CBAM) started its transitional phase this week ahead of the full adoption of the scheme in 2026. Importers of goods with a high carbon cost, including cement, will have to report the direct and indirect CO2 emissions associated with production. No financial penalty will be incurred during the transition period, but from 2026 onwards importers will have to start buying certificates at the EU emissions trading scheme (ETS) price. However, even the full version of the CBAM will be phased in with the cost of embedded emissions increased gradually from 2026 to 2034. Readers can catch up on the CBAM guidance for importers here.
Graph 1: Sources of cement and clinker imports to the EU in H1 2023. Source: Eurostat/Cembureau.
Global Cement Weekly has covered the EU CBAM frequently, but it is worth remembering which countries are most likely to be affected. According to data from Eurostat and Cembureau, the EU imported just over 10Mt of cement and clinker in 2022. This compares to around 2.5Mt in 2016. Graph 1 (above) is even more instructive, as it shows where the cement and clinker came from in the first half of 2023. Most of it was manufactured in countries on the periphery of the EU with, roughly, a third from Türkiye and a third from North Africa. These are the countries with the most to lose from the CBAM.
Graph 2: CO2 emissions intensity for cement exports. Green signifies cleaner than the EU average, Red signifies more carbon intensive than the EU average. Source: World Bank.
Türkiye is the most exposed. Data from Türkçimento shows that it exported 3.4Mt of cement and clinker into the EU in 2022 or 13% of its total exports. Bulgaria, Italy and Romania were the main destinations for cement. Belgium, Spain and France were the main targets for clinker. Notably, more clinker than cement was exported to the EU. For context, in total Türkiye exported 18.5Mt and 8.5Mt of cement and clinker respectively in 2022. The US was the leading destination for Turkish cement at 9.7Mt and Ivory Coast for clinker at 1.3Mt. Türkiye seems set to tackle the problem that CBAM poses for its iron and cement sectors by introducing its own emissions trading scheme. One view expressed has been that if the country has to pay for its carbon emissions it would much rather pocket the money domestically than see it go to a foreign entity. A relative CBAM Exposure Index put together by the World Bank by June 2023 suggested that Türkiye would actually benefit slightly in comparison to some of its cement exporting rivals as the CO2 emissions intensity of its cement exports was 4.85kg CO2eq/US$. This study’s pivot point was 4.97kg CO2eq/US$, putting Türkiye just across the line for increased competitiveness.
Cement export data for Algeria is harder to find but state-owned Groupe des Ciments d'Algérie (GICA) has been regularly issuing bulletins since 2018 detailing its cement exports. It previously had an export target of 2Mt for 2023 with destinations in Africa, Europe and South and Central America. Looking more widely, research by the African Climate Foundation (ACF) and the Firoz Lalji Institute for Africa at the London School of Economics and Political Science estimated that 12% of Africa’s cement exports ended up in the EU. It reckoned that the introduction of the CBAM and an EU ETS price of Euro87/t would reduce total African exports of cement to the EU by 3 - 5% if the EU ended its ETS free allowance. The World Bank CBAM Exposure study found that Egypt and Morocco were likely to become more competitive for cement exports but Tunisia less so. Unfortunately this analysis did not cover Algeria.
The third largest individual source of imports into the EU in the first half of 2023 was Ukraine. Research from the Kiev School of Economics estimated that the start of the CBAM would reduce the export volume of cement to the EU by 2 - 5%/yr. The World Bank study found that Ukraine would become less competitive as the emissions intensity of its cement exports was 7.62kg CO2eq/US$. This would be compounded by the fact that more than 90% of the country’s cement exports ended up in the EU. However, since the EU backed the country when Russia invaded in early 2022, imposing the CBAM on exports has acquired geopolitical consequences. There has been lobbying on this issue from various sources, so this situation might be one to watch to gain a sense of how the EU might react when its sustainability aims clash with its political imperatives.
One major risk for the cement exporting countries soon to be affected by the CBAM is if other countries start to do the same in a domino effect before the exporters introduce their own carbon pricing schemes. Türkiye is clearly alert to this. Other countries are thinking the same way. The US, for example, has had senators discuss the merits of setting up its own version. It is also wise to using sustainability legislation to further its own economic ends as the Inflation Reduction Act in 2022 showed. At the moment the US needs lots of cement imports but were this to change then the case to enact a US CBAM might grow.
Finally, one should never discount the sheer amount of bureaucracy involved when dealing with the EU. The UK discovered this when it voted to leave the EU and now the rest of the world gets to enjoy it too! Christian Alexander Müller of Evonik told the Die Welt newspaper this week that Brussels had created a bureaucratic ‘Godzilla.' Another commentator noted that the European Commission only published its guidance document for importers on CBAM in mid-August 2023 and that helping export partners would be like teaching them Latin in just a few weeks. Bona fortuna!
Vietnam: Exports of cement and clinker from Vietnam totalled 23.9Mt during the first nine months of 2023, down by 0.4% from nine-month 2022 levels. Việt Nam News has reported that the value of the country’s cement exports dropped by 2.6% year-on-year to US$1.03bn.
Throughout 2022, Vietnam exported 31.1Mt of cement, for US$1.36bn.