The Irish slag cement producer Ecocem has been ‘bucking the trend’ of cement sector consolidation in Europe over the past few years as it has expanded both its production base and product range. The company endured a tough time during the recession in Ireland but has now positioned itself strongly for future challenges. Global Cement recently caught up with Ecocem Ireland’s Managing Director Micheál McKittrick to hear about the past, present and future of the company...
Ecocem - Introduction and development
Global Cement (GC): Please describe the origins of Ecocem and how it has developed over the years.
Micheál McKittrick (MM): Ecocem is an Irish-owned and headquartered company. It was established in 2000 by Donal O’Riain who is still the Managing Director of the Ecocem Group. He identified the opportunities to use ground granulated blast furnace slag (GGBS) for construction projects in Ireland, France and the Netherlands.
The first plant to come online was the Orcem plant in Moerdijk in the Netherlands. It began operating in 2002. The Dublin plant in Ireland came online in 2003. That plant was the first major supplier of GGBS to the Irish market as only a very small amount had been imported up until that point. The barriers to entry were not too severe, as the UK market had been using GGBS for a long time. The timing of the entry into Ireland was good in that the economy was growing strongly at the time. In 2007 the French construction materials group Saint-Gobain took a 30% stake in the overall company and in 2009 the third production facility opened in Fos-sur-Mer in the south of France.
It has been a very busy two years for Ecocem Ireland. April 2016 saw the opening of our first UK import terminal in Runcorn, Cheshire and April 2017 subsequently saw the opening of our second import facility in Sheerness, Kent. The capacity of the Runcorn facility was doubled in April 2017 due to the demands of the market. The Ecocem Group has also seen the opening of an import terminal in Gävle, Sweden and a manufacturing plant in Dunkirk, France is due to be operational at the end of 2017, further increasing the group’s capacity.
GC: Can you go into the Irish story in a bit more detail?
MM: The Irish market has been a rollercoaster to say the least. Almost as soon as the Dublin plant was commissioned in 2003 we entered the ‘Celtic Tiger’ period to around 2007, when growth was strong in the economy and infrastructure developments were numerous. The country was investing massively, particulary in highways and housing projects. Almost 95,000 homes were built in 2006 alone. In that four year period, Ecocem grew from just entering the market to running at full capacity, around 0.35Mt/yr.
Of course, subsequently the country had an oversupply of houses and a massive crash in 2008. This led to a Euro64bn bailout by the Troika (EU, IMF and ECB) and our sales fell by 60 - 65%. At this point the company had to diversify to survive. Previously it had been a case of ‘import, grind, sell,’ with a strong focus on the construction sector. We had to change and entered the bagged market, for example, as well as starting production of CEM III-A and CEM III C, which is for back-filling of mines. We developed a full-time Innovation Department with PhD students and post-doctoral fellows at universities in Ireland and France. They look at a range of potential applications: mortars, pre-cast, roof tiles, tile adhesives, soil stabilisation and others. We already sell into these areas but they are trying to identify ways to optimise our product for each, as well as maximising the use of slag across the board.
Since 2014 or so we have entered a third period in Ireland of gradual growth. There is a new infrastructure plan on the horizon and now we have a housing shortage, especially around Dublin. The public finances are largely in order too. There is also a sense that the EU is finding its feet again after a number of set-backs. For example, the election of Emmanuel Macron as the new French President adds some much welcomed stability.
That said, the economy faces threats from a number of angles. We have significant direct foreign investment from the United States, which is possibly something that could change due to the Trump Administration. And, of course, on the other side of Ireland is the UK, where Brexit is hanging over us. It’s a dynamic that I wish we did not have to deal with.
GC: How has the company grown so fast since 2013, given the shaky economic fundamentals?
MM: The growth has not been without its challenges but we have had a lot of support from our partners, particularly ArcelorMittal, with which we have a long-term GGBS supply contract at group level. We have also had help from the banks.
I think that something that also helps is that we are selling one major product and we constantly highlight its benefits. This is not a side-line for Ecocem and that is apparent to our clients and the wider public.
The advantages of the product are very appealing too, be they technical, architectural or environmental. These three areas ‘tick a lot of boxes’ for different types of people: engineers, architects, quantity surveyors, farmers. People see it as a premium product and assume that it has a premium price. When they hear that they can have all of these advantages and that it costs less than conventional concrete, we have a really strong selling position that convinces specifiers.
Technical
GC: What are Ecocem’s products?
MM: As well as GGBS we sell the two CEM III products that I mentioned, plus two admixtures. We make these to facilitate greater early strength development for our pre-cast clients. This enables them to produce using more GGBS and keeps the production schedules the same as that of conventional OPC-based cements.
GC: Where does the slag come from?
MM: We have a long-term partnership with ArcelorMittal, which supplies GGBS to us from France. The group is also supplied by TATA and Edersa from Spain.
GC: Do you anticipate GGBS supply problems going forward?
MM: Some producers have problems at the moment and others will have problems in the future. There are deficiencies in Germany already and I understand that independent concrete manufacturers will be unable to produce CEM III there in the second half of 2017.
Ecocem is in neither of the above two camps due to our supply agreement with ArcelorMittal, TATA and others. Indeed our French company is 30% owned by ArcelorMittal. It will continue to make GGBS available to all three facilities, as well as Dunkirk in the future.
GC: What are the environmental benefits of Ecocem’s GGBS compared to conventional materials?
MM: Ecocem Ireland’s GGBS has an Environmental Product Declaration (EPD) provided to us externally on an annual basis. The EPD states that the GGBS has an embodied CO2 output of 42kg/t. That compares to CEM I, at around 850kg/t or CEM II at 750kg/t. Regardless of what you are comparing it to, we are at a massive environmental advantage.
GC: Does Ecocem view GGBS as a ‘waste’ or a ‘byproduct?’
MM: Ecocem views it as a ‘byproduct’ and its production is carefully controlled. First, its characteristics are closely monitored at the iron plant. Secondly, the grinding at our sites ensures that it meets the required specification. GGBS is definitely not a ‘waste.’ The important thing is that we all reduce the need to manufacture traditional cement and therefore reduce global CO2 emissions.
GC: At our Global Slag Conference we recently heard that, the moment one labels GGBS as a ‘byproduct,’ some of the CO2 emissions that came from the iron production step should be taken into consideration in the slag. What is your view on that stance?
MM: I don’t buy into that to be honest. The reason is that it is going to be produced as part of iron prodution. We can either use it or send it to landfill. There is no call for us to take the CO2 emissions on the chin.
Markets and future
GC: How does Ecocem supply to customers?
MM: Bagged cement is sold to builders’ merchants and we advertise on that basis to the trade and the wider public. The bulk products are sold to concrete manufacturers. They come to us, receive dry bulk and take it to their own stockpiles. We have previously delivered to actual job sites but that is not how we normally operate.
GC: What are the company’s plans in the period to 2020?
MM: I already mentioned the progress with the Dunkirk project in France, which is an exciting site for us. It will be used to supply the Grand Paris Express rail project in France, which is building new rail lines, motorways and other infrastructure in the period to 2030.
We are also attempting our first project outside of Europe, in the US. We have applied to set up a GGBS mill in Vallejo, California but it is facing some local opposition. However, in the past month a council meeting was held and the result was fairly positive from our perspective. The council agreed to conduct the environmental report, which was previously not something it wanted to finalise. It has now seen sense and we should have more news to report on that front at the start of 2018. There are some other plans in discussion but those are internal at the moment.
GC: Micheál McKittrick, thank you for your time.
MM: You are most welcome!
Profile: Micheál McKittrick
Micheál McKittrick has been Managing Director of Ecocem Ireland, which also covers Ecocem Group’s UK activities, since October 2016. Before taking up this position, he worked for the Irish arm of UK-based engineering consultant Atkins. “I was there for 16 years, from my graduate days up until I moved to Ecocem,” he explains. “I worked in pretty much every area that Atkins covers in Ireland, from highway projects to civil works, the energy sector, asset management and management roles.”
When asked why he made the switch, Micheál replies, “Ecocem was a company that I had dealings with for around five years while working at Atkins. It struck me as a company that was strong in Ireland commercially and the culture that I had been exposed to while working with its staff was very attractive. I liked aspects of the engineering consulting game but it can be very frustrating when you work on a project that takes 10 years. Ecocem was a step change for me, a new and totally different challenge.”