Displaying items by tag: Government
Sheerness grinding plant secures planning permission
15 December 2022UK: The planning applications committee of Kent County Council has approved Hercules Enterprises' Euro46.5m plan for a new 500,000t/yr grinding plant at Sheerness Docks on the Isle of Sheppey. The Sheerness Times Guardian newspaper has reported that the council assented subject to the producer's adherence to its particulate and dust management plan and continual noise monitoring. When commissioned, the new plant will create 52 new jobs, generate up to 144 truck movements per day and increase traffic on the A249 by 1%.
Hercules Enterprises' director Stuart Mason Elliot said that the new facility will help to move cement production away from its reliance on road transport. He said “This is not an open, dated, dusty old operation, but a fully-enclosed, clean, modern, environmentally responsible and sustainable plant designed to be a good neighbour to residents and other occupants of the port.”
Bangladesh Cement Manufactures Association demands withdrawal of increase to limestone import duty
14 December 2022Bangladesh: The Bangladesh Cement Manufactures Association (BCMA) has demanded that an additional 30% increase to import duties on limestone be removed. A supplementary duty was introduced in November 2022 when the National Board of Revenue (NBR) changed the way limestone was coded in response to a significant increase in imports since 2020, according to the New Nation newspaper. Previously limestone importers were paying a duty US$7.80/t. Now they are reportedly paying US$14.60/t.
The BCM wrote to the NBR about the issue in mid-November 2022. BCMA president Alamgir Kabir renewed his association’s lobbying to remove the additional duty at a press conference held in mid-December 2022.
Cemex opens Tunjuelo Circularity Centre
13 December 2022Colombia: Cemex has announced the launch of the Tunjuelo Circularity Centre at its former Tunjuelo quarry near Bogotá. Having rebuilt parts of the 50m-deep quarry with demolition waste, Cemex will now work on its ecological restoration, while continuing to receive excavation waste for reconstruction of the ground. It will meanwhile divert demolition waste deliveries for recycling in aggregate production. In Bogotá, Cemex has launched an initiative for urban construction partnerships in collaboration with local authorities. It will also collect municipal solid waste (MSW) there for use in its cement production and collect its used plastic cement bags for recycling in building materials production.
Cemex’s Colombia and Peru president Alejandro Ramírez said "This is a pioneering model for Cemex in the construction materials industry globally, which we aim to position as a benchmark for circularity within the sustainable development of large cities in Colombia and the world. A piece of land that supplied materials for Bogotá's development for decades has received construction and demolition waste for its redevelopment and was transformed into a green area to the south of the city, an epicenter of the circular economy and an opportunity for urban development for the capital city of Colombia."
Chongqing Sifang New Materials' cement facilities resume operations
12 December 2022China: Chongqing Sifang New Materials says that it has resumed cement production at all sites following the end of the latest round of Covid-19 lockdown restrictions. The producer says that it brought capacity back online in a progressive manner.
Update on Ethiopia, December 2022
07 December 2022Derba MIDROC Cement signed a contract with Sinoma International Engineering in recent weeks to build a US$282m upgrade at its integrated Derba cement plant in Oromia. The move is the latest in a steady stream of projects that have been announced in Ethiopia over the last few years. Other recent developments include a deal in July 2022 by businessman Getu Gelete to buy PPC’s stake in Habesha Cement and plans in August 2022 by investor Worku Ayetenew to build a US$1bn cement plant with a production capacity of 12,000t/day. Alongside these capital intensive projects, the government has been trying to regulate the price of cement through measures such as setting fixed prices, limiting the volumes that individuals can buy and asking producers to cut distributors out of the supply chain.
To summarise some of the plant projects over the last couple of years, the Derba MIDROC Cement upgrade project intends to double the production capacity of the integrated Derba cement plant in Oromia to 15,000t/day. The other big ongoing project was announced in early 2021 when East African Holding and China-based West China Cement agreed to build a 10,000t/day plant at Lemi in Amhara Region. East African Holding is the parent company of National Cement, one of the larger producers in the country. Then in July 2021 Sinoma International Engineering’s subsidiary Suzhou Sinoma signed an initial deal with Western International Holdings, West China Cement’s international arm, to build the plant. Prime Minister Abiy Ahmed visited the construction site in March 2022 to lay the foundation stone but no commissioning date has been disclosed so far. Based on Sinoma’s assessment when it signed the contract, construction would take around 20 months, so a commissioning date by late 2023 seems reasonable. There are also a number of other projects that have been announced in the local press such as Abay Industrial Development Share Company plant at Dejen. FLSmdith said that the contract to build the 5000t/yr plant became effective in late 2020. However, not much more has been released publicly. Another project at Berenta in Amhara is also reportedly under construction.
The Global Cement Directory 2022 places the country’s production capacity at around 12Mt/yr. This compares to 15Mt/yr from 13 companies as reported by a local news source although this figure is likely to also include grinding plants. Yet the same source also placed the actual working capacity at 6Mt/yr due to old machinery and poor maintenance. As for the market in Ethiopia, Dangote Cement said that the sales from its Mugher plant rose by 1.8% year-on-year to 1.7Mt in the first nine months of 2022 and that the unit was running at full capacity in the third quarter. It reckoned that it held a 42% market share during this period, out of a total market of around 4.2Mt. Previously it said that the total market for the whole year was 7Mt in 2021.
Unfortunately it also mentioned issues with security in the region. This became a live issue this week with news that at least 30 employees of Dangote Cement were reportedly kidnapped in early December 2022 by an armed group that calls itself the Oromo Liberation Army. This is particularly sad for the company given that its country manager was shot dead in 2018. Two employees of the Mugher Cement plant were also taken hostage by the same group in October 2022 although thankfully they were later freed.
A number of projects have been announced in Ethiopia over the last few years but they appear to be taking a while to materialise. This time though a couple of the projects do seem to be on the way and the change in ownership of Habesha Cement seems to suggest a renewed vigour to the local construction market since the government opened up investment. Unfortunately, security concerns are pressing as demonstrated by what happened to some of Dangote Cement’s staff this week.
Ethiopia: Derba MIDROC Cement has signed a US$282m contract agreement with China-based Sinoma International Engineering to upgrade its integrated Derba cement plant in Oromia. The project is intended to double the plant’s cement production output to around 15,000t/day, according to Fana Broadcasting Corporate. Takele Uma, the Minister of Mines, attended the signing ceremony.
Mali: Mahamoud Ould Mohamed, the Minister of Industry and Trade, has laid the foundation stone of the Mali Sahel cement plant in Bema, Bamako District. Sacko Holding is financing the project and it was previously reported as costing around US$300m, according to Mali Actu. The plant is expected to create around 600 direct jobs. It is scheduled to become operational in 2025. Sacko Holding and Energie du Mali (EDM), the state-owned electricity company, are also planning to provide an electricity supply to Bema as part of the initiative.
Energy for the European cement sector, November 2022
30 November 2022This week’s Virtual Global CemPower Seminar included an assessment on how interventions in European power markets might affect efforts to decarbonise industry. The presentation by Thekla von Bülow of Aurora Energy Research outlined how different countries in the European Union (EU) were implementing the forthcoming electricity price cap on ‘inframarginal’ producers to 180Euro/MWh. Each of these different proposals will entail differing levels of structural change to the wholesale energy market. For example, the Agency for the Cooperation of Energy Regulators (ACER) has recommended establishing a series of frameworks including a stronger focus on Contracts for Difference (CfD) schemes to promote renewable energy sources.
These changes are a consequence of the EU’s response to the Russian invasion of Ukraine. Gas prices surged and then pushed up other energy prices in turn to record levels. As this column covered in September 2022, the price of electricity shot up in the summer of 2022 whilst at the same time Russian gas imports ceased. Cembureau, the European Cement Association, called for urgent action to be taken to support cement production due to large increases in the cost of electricity. For example, in its latest overview of the German cement industry, the German Cement Works Association (VDZ) said that the sector has an electrical consumption of 30TWh/yr. Clearly energy policy is of great interest to the industry.
Since then, in late September 2022, Heidelberg Materials’ chief executive officer Dominik von Achten told Reuters that his company was preparing to shift production at its Germany-based plants to times and days when power prices are lower including at the weekend. However, this was dependent on negotiations with the unions. Von Achten also warned of plant closures being a possibility. Then, in November 2022, it emerged that Zementwerk Lübeck’s grinding plant in northern Germany had reportedly been only operating its grinding plant at night and at the weekend due to high electricity prices. Also in November 2022 European energy news provider Energate Messenger reported that Heidelberg Materials was preparing its cement plants in Germany with emergency backup power to keep critical services running in the case of electricity power cuts. One view from the outside came from equipment supplier FLSmidth’s third quarter results where it noted it had, “...started to see the first cases of budget constraints imposed by customers to counter the increasing energy cost. A high utilisation is still driving service activity in Europe, but some customers have put large capital investments on stand-by and we have experienced a slowdown in decision-making processes.” On the other hand it also pointed out that this trend is driving sales of products that helped reduce energy usage and/or switch to alternative fuels.
On the financial side, Holcim reiterated in its half-year report that, on the country, level the group uses a mixture of fixed price contracts, long-term power purchase agreements, on-site power generation projects and increased consumption of renewable energy at competitive prices to reduce the volatility from its energy bills. Both Cemex and Heidelberg Materials said similar things in their third quarter results conference calls. Cemex said that nearly 70% of its electricity requirements in Europe were fixed in 2022 with nearly 30% fixed for 2023. It went on to reveal that around 20% of its total costs for cement production in Europe derived from its electricity bill. Interestingly, it added that a higher proportion of its electricity costs in Germany were fixed than elsewhere in Europe, due to the use of a waste-to-electricity system owned by a third party that is fed with refuse-derived fuel (RDF), but that it was more exposed to floating fuel rates in Spain. Heidelberg Materials added that it supported energy price caps in both Germany and the EU whether they affected it directly or not.
So far it has been a mild start to winter in Europe. This may be about to change with colder weather forecast for December 2022. This will stress test the EU’s energy saving preparations and in turn it could force the plans of industrial users, such as the cement sector, to change. Some of the cement producers have commented on the financial implications of rising fuel costs but they have been quieter publicly about how they might react if domestic consumers are prioritised. Plant shutdowns throughout cold snaps are the obvious concern but it is unclear how likely this is yet. The variety of energy policies between fellow member states, their own supply situations and the differences between cement plants even in the same country suggest considerable variation in what might happen. If large numbers of cement plants do end shutting throughout any colder periods, then one observation is that it will look similar to winter peak shifting (i.e. closure) of plants in China. The more immediate worry in this scenario though is whether these plants actually reopen again.
The proceedings pack from the Virtual Global CemPower Seminar is available to buy now
South Korea: The government ordered 2500 cement truck drivers to return to work on 29 November 2022. The Korea Herald newspaper has reported that drivers in the sector who continue their strike will be subject to criminal sanctions of up to three years in prison or a US$22,600 fine, and will have their truck driving licences suspended. The government explained that the order is justified due to cement truck drivers' failure to present 'good cause' for the industrial action.
President Yoon Suk-Yeol said "Taking the livelihoods of ordinary people and the national economy hostage to look out for their own needs is not justifiable."
Cement truck drivers make up 35% of a total 7080 truck drivers from 200 companies across the South Korean economy participating in the strike, which began on 24 November 2022.
China: Chinese regulatory authorities have instructed the country's financial institutions to begin lending more to property developers to help them complete residential construction projects. The International New York Times newspaper has reported that the Ministry of Finance has implemented tax breaks for non-first-time homebuyers. Meanwhile, People's Bank of China reduced the minimum total emergency funds to be held by commercial Chinese banks by US$70bn in order to free up cash. Industrial and Commercial Bank of China lent US$91bn to 12 different developers, while Bank of Communications lent US$14bn to leading property developer Vanke.
Governor of the People's Bank of China Yi Gang said “China’s housing sector is linked to a lot of upstream and downstream industries, so its healthy development is of great significance to the overall economy."