Displaying items by tag: Government
Update on Russia, February 2022
02 February 2022Russia made imports easier last week. At the end of January 2022 an order from Rosstandart, the national standisation agency, relaxed inspection controls allowing for simpler imports from countries outside the Eurasian Economic Union (EAEU). Previously each such batch required a 28 day inspection period. This has now been dropped to encourage more imports of cement. Deputy Industry and Trade Minister Viktor Yevtukhov explained the reasoning behind the measure to InterFax, “In order to avoid problems in the domestic Russian cement market in the future, it is necessary to spur competition. It will balance the prices for this basic building material and will restrain their growth in case of such risks.”
Some idea of the situation facing the Russian cement market at the moment can be gleaned from market data supplied by CM Pro. Production rose by 7% year-on-year to 56.4Mt in the 11 months to November 2021. Imports rose by 26% to 1.6Mt at the same time. The Ministry of Industry and Trade has attributed this to a construction boom created by growth in both government-funded infrastructure projects and domestic housing. It also noted a local shortage and price increases in the Central Federal District in the autumn of 2021, although it said it redistributed cement from other regions to remedy the situation. This imbalance in the country’s main cement producing and consuming region, including Moscow, can also be seen in the figures. Production was about 2Mt below consumption in this area in 2019 and 2020. Yet so far, to November 2021, this gap grew to 2.7Mt. At the same time the price of cement reportedly jumped by 20% from November 2020 to December 2021.
Graph 1: Cement production in Russia, 2015 – 2021. Source: CM Pro and estimate from Global Cement.
It has been reported that the Ministry of Industry and Trade has also been wondering publicly why a study conducted in 2021 found that the national cement sector had an apparent operating capacity of 65Mt/yr compared to a total production capacity of 105Mt/yr, including mothballed and inactive plants and production lines. In other words the sector has been operating at a 62% production utilisation rate and the government is trying to coax it higher by opening up imports. And just to make sure that there was no confusion on the matter, Yevtukhov added, “I am sure that if the domestic producers will cope with the task of increasing the real volume of cement production and will not allow prices for their products to increase above the rate of inflation, the market will self-regulate, and additional imports of cement to Russia (which are traditionally small) will not be needed."
Given the country’s large size, imports seem to be mainly a threat to producers in the big population centres around Moscow and the Volga with good international transport links. Producers appear to have received and understood the message from the government as they have pledged to increase real operating capacity by 3 – 5Mt. The bear in the room for both Russian and European cement producers though is what happens in Ukraine in 2022. With North Atlantic Treaty Organization (NATO) members threatening economic sanctions and Russia supplying a significant share of Europe’s gas supply, any progression from the current rhetoric could cause discomfort to markets in both Russia and Europe. Turkish cement exporters, manufacturing in a NATO member country and hoping to take advantage of increased exports to Russia, could be in a particular bind if events heat up. All of this indicates that Smikom picked an interesting time to buy Russia’s largest cement producer, Eurocement, back in mid-2021. There’s an ongoing construction boom but also risks aplenty.
With apposite timing, LafargeHolcim Russia announced this week that it was going to reopen its integrated Voskresensk cement plant near Moscow. The unit was originally stopped in 2016. Now it plans to spend Euro23m on restarting the plant and building a dry construction mix unit at the site. Who says big government doesn’t work?
Russian government relaxes cement import rules
02 February 2022Russia: The Federal Technical Regulation and Metrology Agency (Rosstandart) has relaxed import rules for cement originating from outside the Eurasian Economic Union (EAEU). Under the new regulations the 28 day inspection period has been cut, according to InterFax. The Industry and Trade Ministry has taken the action to cope with a rise in cement consumption created by both government-backed infrastructure projects and domestic housing. It added that the Central Federal District experienced a shortage in the autumn of 2021 with associated price rises.
"We expect that the reduction of the procedure's duration may encourage importers of cement to increase the volume of its import into the country. And this, in turn, should in fact increase competition in the market and stabilise prices. This, I repeat, is the most important thing that needs to be achieved in the domestic building materials market for its balanced operation," said Deputy Industry and Trade Minister Viktor Yevtukhov.
South African cement imports rise by 18.7% to November 2021
02 February 2022South Africa: Data from Industry Insight shows that cement imports grew by 18.7% year-on-year to 1.1Mt in the first 11 months of 2021. Imports hit a monthly high of 162,000t in November 2021, according to Moneyweb. The majority of the imports came from Vietnam followed by Pakistan. The increase in imports in November 2021 appears to have occurred despite a ban on the use of imported cement on all government-funded projects that started in the same month. Bryan Perrie, the head of Cement & Concrete SA, said that it was likely that imports in November 2021 remained high is because the cement was “probably already on the water before the designation came in."
Cemex UK launches ReadyBlock Zero zero carbon concrete block
01 February 2022UK: Cemex UK has launched ReadyBlock Zero, a zero carbon concrete block, on the UK market. The product joins the company’s Vertua reduced-CO2 product range. Cemex UK achieved zero carbon production by means of offsetting. It said that ReadyBlock Zero will help builders to meet the UK’s government’s Future Homes Standard, which requires a 75 – 80% CO2 emissions reduction in all newly built homes.
Cemex’s Europe regional urbanisation solutions director of asphalt, paving and building products Carl Platt said “We have developed the UK’s first carbon neutral concrete block to help housebuilders get ahead of the game when it comes to building low carbon homes that meet and exceed government guidelines and changes to building regulations. We want to make life easier for housebuilders to make simple sustainable choices that make large scale impacts on the often complex road to net zero. Concrete blocks are the most common structural component in the construction of UK homes, so by switching to zero carbon blocks, ReadyBlock Zero presents a huge opportunity for housebuilders to make significant carbon reductions.”
Master Builders Solutions launches new admixtures range
31 January 2022Germany: Master Builders Solutions has announced the addition of a new range of admixtures consisting of MasterEase and Master X-Seed to its admixtures portfolio. The company developed MasterEase and Master X-Seed to best enable European cement companies to produce cement of the EU’s new CEM II/C-M and CEM VI Portland-composite cements. Master Builders Solutions hopes that the new products will drive the construction industry’s transition to low-clinker cements and CO2-optimised concrete.
Parent company MBCC Group’s European president Christian Geierhaas said “Providing sustainable solutions is a key factor of Master Builders Solutions’ portfolio and overall strategy. Strong partnerships are essential and support and accelerate the development of significant innovations. We work with major players to continuously develop efficient admixtures to add value to our customers and achieve a long-term sustainable positive effect on the construction industry.” He added “In addition to the usual performance criteria, such as fluidity and compressive strength, our new solutions for our ready-mix customers are characterised by their outstanding robustness. Our admixtures provide an important differentiator by guaranteeing consistently high quality concrete, even upon variation of the cement type and fluctuation of the raw materials used to produce these new, more sustainable cements.”
Nigerian President inaugurates Line 4 at BUA Sokoto
28 January 2022Nigeria: President Muhammadu Buhari inaugurated BUA Group’s new 3.0Mt/yr Line 4 at its Sokoto plant in northern Nigeria on 27 January 2022. The plant is the largest private sector employer of labour in the north-western part of Nigeria.
At the inauguration, the President expressed delight that the Federal Government policies on economic diversification, job creation and creating an enabling environment for businesses to thrive were working. He pledged to continue his administration’s support for ‘serious investors’ to set up businesses that will take advantage of huge reserves of resources in different parts of the country.
The President thanked the Founder of BUA Cement, Abdul Samad Rabiu and the BUA team for the ‘great work they are doing’ in supporting the government's economic diversification and job creation agenda.
Speaking personally, President Buhari added that, as the head of Sokoto State in 1985, he had also inaugurated Line 2 at the same plant, saying, "Today, almost 37 years later, to commission the fourth line is a very special day for me personally. As you all know, one of the key economic pillars of our administration has been to create an enabling environment for businesses to thrive. This is necessary for job creation and indeed, for our economy and national security.”
Canada: Lehigh Cement and Enbridge have announced a memorandum of understanding to collaborate on carbon storage for the integrated Edmonton cement plant in Alberta. Captured emissions will be transported via pipeline and sequestered by Enbridge. Lehigh Cement says it is developing North America’s first full-scale carbon capture, utilisation and storage (CCUS) unit for the cement industry at its Edmonton plant, with the goal of capturing approximately 0.78Mt/yr of CO2.
Pipeline company Enbridge intends to apply to develop an open access carbon hub in the Wabamun area, west of Edmonton in conjunction with Lehigh Cement and Capital Power, as part of the Government of Alberta's Request for Full Project Proposals process. Once complete the Open Access Wabamun Carbon Hub would be among the largest integrated CCUS projects in the world. Subject to the award of carbon sequestration rights and regulatory approvals, the project could be in service as early as 2025.
Update on Uzbekistan, January 2022
26 January 2022An acquisition in Uzbekistan by Russia-based Akkerman Cement this week highlights resurgence in the local market.
The subsidiary of USM has just purchased a majority stake in Akhangarancement with the help of financing from Gazprombank. No value for the acquisition has been disclosed. However, the move follows the sale of Russia-based Eurocement to Smikom in early 2021. Then in June 2021 Eurocement sold off its majority stake in Akhangarancement to Cyprus-based Lamanka Enterprises for US$53m. Now, as part of the sale to Akkerman Cement, the start of a new 2.5Mt/yr dry process production line at Akhangarancement in 2021 has also been highlighted. As for Akkerman Cement’s interest in become a multinational cement producer, it said that, “The investment in Akhangarancement, like all USM investments in Uzbekistan, is primarily aimed at the development of this country, the small homeland of Alisher Usmanov, the main shareholder of USM.”
Aside from any potential sentimental yearnings from a billionaire, the Akhangarancement deal follows a few developments in the Uzbek market in recent months. At the start of January 2022 the state assets management agency UzAssets agreed to sell the government’s majority stake in Qizilqumcement for US$174m to United Cement Group (UCG). This was a significant move locally given the size of UCG in the Central Asian states. UCG operates two integrated plants and one grinding unit in Uzbekistan. The acquisition of Qizilqumcement’s 3.4Mt/yr plant now makes UCG the largest cement company by production capacity in the country. It has also been building a new production line, like Akhangarancement, with commissioning last reported as scheduled as sometime in 2022.
Finally, the other recent development in Uzbekistan occurred in December 2021 when China-based Anhui Conch announced that it had started building a new 2.5Mt/yr cement plant in the Akhangaran district in Tashkent. The project has a price tag of US$200m.
Graph 1: Cement production in Uzbekistan, 2016 – 2020. Source: State Committee of the Republic of Uzbekistan on Statistics.
In early 2021 the government suspended tariffs on cement imports and this was then later extended into late 2022. President Shavkat Mirziyoyev says he signed the decree to keep house prices low. Subsequently, imports grew by 26% year-on-year to 2.2Mt in the first nine months of 2021. The main importers were Kazakhstan (44%), Tajikistan (25%) and Kyrgyzstan (25%). Graph 1 above shows recent annual production trends over the last five years. So far in 2021, to September 2021, overall domestic cement production rose by 17% to 9.08Mt. In 2020 annual production was about the same as the country’s production capacity of 10.3Mt/yr.
The mixture of Russian and Chinese companies involved with the recent plant acquisitions and new projects chimes with the general position of the Uzbek economy and its geographical position between the larger economies of Russia and China. For example, January 2022 data from the Uzbek State Statistics Committee showed that bilateral trade with Russia overtook that with China in 2021 for the first time since 2014. The two countries have had similar trade turnover with Uzbekistan over this period. Since the mid-2010s the national economy has liberalised and investment by foreign companies into industries like cement reflects this. The sale of Qizilqumcement also shows the further movement of state assets into private ownership. With apparent production utilisation closing to 100% and the government encouraging imports, it’s a good time to be a cement producer in Uzbekistan. Accordingly, foreign cement companies are investing.
Congo: The Société Nouvelle de Ciment du Congo (SONOCC) plans to resume production at its integrated Louteté plant in Bouenza from 31 January 2022. Plant manager II Xingtao made the announcement during a meeting with Antoine Thomas Nicéphore Fylla Saint Eudes, the Minister of Industrial Development and Promotion of the Private Sector, according to the Central African News Agency.
The minister called for the meeting because reportedly only one of the country’s integrated cement plants, FORSPAK Cement, is currently operational. SONOCC blamed the situation on a mechanical breakdown, the coronavirus pandemic and the slow arrival of an order from France. II Xingtao said that SONOCC was hoping to use limestone from Dangote Cement’s plant at Mfila to help alleviate the situation.
Dangote Cement estimated in October 2021 that the total market for cement in Congo was around 667,000t in the first nine months of the year. Its 1.5Mt/yr integrated plant in Mfila sold 357,000t of cement during the period, a rise of 33% year-on-year.
Portland Cement Association reports 3.6% rise in cement consumption to November 2021
24 January 2022US: The Portland Cement Association (PCA) reports that cement consumption rose by 3.6% year-on-year in the first 11 months of 2021. Ed Sullivan, Senior Vice President and Chief Economist at the PCA, made the announcement at the World of Concrete trade fair in Las Vegas, Nevada. He also forecast that cement consumption would be driven by non-residential and public works in 2023 and 2024 as mortgage rates increased. The country is also set to spend US$1tn on new and rehabilitated infrastructure projects and this would consume 46Mt of cement over a five-year program. Over a quarter of this amount would be used on roads, bridges and resiliency structures.
The PCA’s president and chief executive officer Mike Ireland and Senior Vice President of Sustainability Rick Bohan also spoke at the event to further promote the association’s Roadmap to Carbon Neutrality.