Displaying items by tag: HeidelbergCement
Germany: The Ministry for Economy and Climate Protection has presented HeidelbergCement with its German Climate and Environment Innovation Prize (IKU) for its ReConcrete-360° concrete recycling process. The process retrieves hardened cement paste from waste demolition concrete for use in place of limestone in clinker and cement production. The recycled material can also bind CO2 to act as a carbon sink.
Global research and development Wolfgang Dienemann said “With ReConcrete-360°, we have succeeded in developing a limestone substitute from demolished concrete that also allows us to use the carbon-containing exhaust gases from cement production. A small revolution with a big impact: In Germany alone, the CO2 savings potential of this process is 10Mt/yr. The IKU award underlines that we can be proud of our pioneering innovation.”
Germany: HeidelbergCement’s first-quarter sales were Euro4.43bn in the first quarter of 2022, up by 12% year-on-year from Euro3.96bn in the first quarter of 2021. Its cement and clinker sales volumes remained level year-on-year at 28.4Mt. Sales grew in all regions except North America, where they fell by 6% to Euro798m from Euro849m. Cement and clinker sales volumes fell there by 17%, but rose in every other region.
Chair Dominik von Achten said “The first quarter of 2022 was not an easy one for HeidelbergCement. Despite the continuing uncertainties regarding the supply of energy and raw materials and the associated rise in energy prices, we were able to increase our revenue significantly.” Looking to the rest of 2022, von Achten said ”Although there is still a lot of uncertainty concerning energy and raw material availability and costs, we continue to see strong demand for our products in all regions. In particular, demand for sustainable, low-carbon products is growing rapidly.”
Twiga Cement boosts sales in 2021
20 April 2022Tanzania: Twiga Cement’s sales were US$194m in 2021, up by 14% year-on-year from US$170m in 2020. The subsidiary of HeidelbergCement recorded a profit for the year of US$38.1m, up by 18% from US$32.2m. During the year, the company recorded its highest ever cement and clinker production and sales volumes.
Update on Egypt, April 2022
13 April 2022Vicat’s plans to buy another 42% stake in Sinai Cement became public this week. Once completed, the France-based company should own 98% of the Egyptian company, based on previously published ownership figures. The announcement heralds a rapprochement in the relationship between the cement producer and the Egyptian government.
Last year Vicat raised a case against the government with the International Centre for Settlement of Investment Disputes (ICSID) over an argument about how it could invest in Sinai Cement as a foreign company. All seems forgiven and forgotten now with a settlement agreement signed in March 2022 between Rania el Mashat, the Minister of International Cooperation on behalf of the Egyptian government, and Guy Sidos, the chairman and chief executive officer of Vicat Group. Local press reported that the government is trying to attract more direct foreign investment. Sinai Cement reported a loss attributable to its parent company of around US$19.1m in 2021, down from a loss of US$30.3m in 2020. However, its sales rose by 63% year-on-year to US$78m.
Sinai Cement has some specific operating issues related to its geographic position in the Sinai Peninsula and ongoing security concerns. Yet its mixed fortunes also sum up some of the continuing challenges the Egyptian cement industry is facing. After years of overcapacity, the government introduced reduced cement production quotas in July 2021 and this is mostly perceived to have improved prices in the second half of the year. Vicat described the arrangement as having capped the local market at 65% of its production capacity and it said that prices recovered ‘significantly’ as a result in the second half of 2021. Cemex’s regional chief Carlos Gonzalez told local press that the move had given plants “A glimmer of hope for the return of balance to the cement market.” The company has also announced a US$20m local investment backing up this view. Not all the foreign multinational companies entirely agreed, with HeidelbergCement reporting a ‘sharp’ decline in sales volumes although chief executive officer Dominik von Achten did describe the country as ‘coming back’ in an earnings call about his company’s financial results in 2021. Solomon Baumgartner Aviles, the chief executive officer of Lafarge Egypt, was also cooler about the production cap in a press interview in October 2021, describing it as too early to assess how well the cap was working and noting that the gap between supply and demand was still large.
Vicat said in its annual report for 2021 that, “Provided no further adverse geopolitical, health or security developments occur, the current climate is unlikely to jeopardise the prospects of an improvement in the subsidiary’s profitability, which should begin to gradually occur.” The geopolitical bit was timely given that Russia’s war in Ukraine started on 24 February 2022. It also targets the latest problem hitting Egyptian cement producers: energy costs. The head of Arabian Cement told Enterprise Press that initially some producers had opted to temporarily stop production and use stocks instead to attempt to try and wait until the energy price volatility ended. However, it stayed high so the cost of cement has gone up generally. Producers are now trying to switch to using a high ratio of natural gas, such as 10%, but this is dependent on the government letting them.
The Egyptian government, for its part, is facing a decision whether to supply subsidised gas for domestic industry or to export to Europe. The backstory here is that Egyptian cement producers are facing yet another step change in fuel supply. In the mid-2010s lots of plants switched from heavy fuel oil and gas to coal. High international coal prices could be heralding another change.
Alongside this the value of Egypt’s cement exports rose by 151% year-on-year to US$456m in 2021 from US$182m in 2020. The Cement Division of the Federation of Egyptian Industries has attributed this to growth mainly on the African market. This trend continued in January and February 2022 with cement exports up by 141% year-on-year to US$104m from US$43m. The main destinations were Ghana, Cameroon, Ivory Coast and Libya.
HeidelbergCement summed up the current state of the Egyptian cement market in its 2021 annual report as follows “The development of the Egyptian cement market continues to be determined by government intervention.” What happens next is very much in the hands of the state as it decides whether to extend the production cap, which fuels to subsidise, whether to allow exports and where to invest in infrastructure projects. One variation on this theme may be local decarbonisation targets. At the end of March 2022 the Global Cement and Concrete Association (GCCA) launched a series of Net Zero Accelerator initiatives, including one in Egypt. How a country that produces more cement than it needs reduces its CO2 emissions presents another challenge for manufacturers and the government to grapple with.
HeidelbergCement India commissions 5.5MW solar plant
13 April 2022India: HeidelbergCement India has commissioned a 5.5MW solar power plant in its mining area located in Damoh, Madhya Pradesh. The mining operations and clinker plant at Damoh have started receiving electricity from the plant. The solar plant is expected to generate 10GWh/yr, replacing electricity purchased from the grid.
CBR completes Antoing cement plant upgrade
08 April 2022Belgium: CBR has successfully completed an upgrade of systems connected to the kiln of its 0.8Mt/yr Antoing cement plant. The company says that it has modernised the kiln gas cycle, reducing the plant’s power consumption by 2.5%.
The Antoing cement plant previously underwent a capacity expansion and alternative fuels (AF) substitution-increasing upgrade to its kiln line in late 2020.
HeidelbergCement, Felleskjøpet AGRI and Egil Ulvan Rederi to build the world's first zero-emission bulk carrier
06 April 2022Norway: HeidelbergCement, agricultural cooperative Felleskjøpet AGRI and shipping company Egil Ulvan Rederi plan to build what they say will be the world's first zero-emission bulk carrier. The project has also received support of around Euro12m from the Norwegian government-owned sustainability company Enova. The vessel is scheduled for completion and commissioning in 2024. Once operational the ship will be used to transport aggregates products for HeidelbergCement and grain for Felleskjøpet between west Norway and east Norway using hydrogen powered transport.
Egil Ulvan Rederi was selected following a tendering process in 2021. The ship is intended to be highly energy efficient, using rotor sails and has a streamlined design to reduce energy consumption. It will be powered by hydrogen from Norwegian energy supplier Statkraft but will also have small auxiliary batteries and a fuel cell on board to maximize flexibility.
Giv Brantenberg, general manager HeidelbergCement Northern Europe, said “The project addresses emissions from the transport part of our value chain. It is unique, ambitious and future-orientated. It is fully in line with HeidelbergCement Group's target to be the leading actor in our industry on the path to carbon neutrality." HeidelbergCement estimates that the carbon footprint of the aggregates products can be reduced by 50 - 60% by using the zero emission vessel, as transport accounts for a significant part of the total carbon footprint of these products.
How much does Holcim value Russia?
30 March 2022The economic fallout from the war in Ukraine continued this week with the news that Holcim plans to leave the Russian market. It said that it took the decision based on its “values to operate in the most responsible manner.” The company’s Russian subsidiary added that all of its plants would continue to operate as normal while it considered its divestment options.
Holcim’s road to withdrawal has been staggered. In February 2022 at the start of the war it pronounced its sympathy for any affected colleagues and their families and made a Euro1m donation to the Red Cross. Later it said that it would continue operating its business in Russia by following all regulations and supplying the local market. However, at this time it said it would suspend further capital investments in Russia and that it would “not benefit from our presence in this market.”
It’s unknown what prompted Holcim to take the plunge with Russia one month after the war started. At the very least, making decisions over assets valued this highly takes time. CM Pro has reported that the Russian government has considered introducing reference prices for building materials for infrastructure projects and that the Federal Antimonopoly Service (FAS) has been monitoring prices for ‘unreasonable’ growth over the last month. This follows grumbling by the Ministry of Industry and Trade in late 2021 about an apparent low capacity utilisation rate in the country despite shortages in the Central Federal District.
CRH said that it was leaving its Russian concrete business in early March 2022. Yet the decision by Holcim makes it the first of the three western multinational cement producers with large-scale operations in Russia to publicly say it’s pulling out. Holcim, HeidelbergCement and Buzzi Unicem each operate at least two integrated cement plants in the region.
Lafarge entered the Russian market in 1996. Its successor Holcim runs plants at Voskresensk and Kolomna in the Moscow region, at Ferzikovo in the Kaluga region and Volsk in the Saratov region. Together the plants have a production capacity of around 9Mt/yr. Over the last decade Holcim and its predecessor has invested at least a reported Euro1.3bn in three of the plants. The dry-production line Ferzikovo plant was built in 2015. The Shchurovsky plant in Kolomna was originally founded in 1870 and claims to be the oldest in the country. In 2011 it started commissioned a new dry production line. The Volsk plant started a modernisation project in 2017. The fourth, the Voskresensk plant, was mothballed in 2016. However, in early February 2022 LafargeHolcim Russia said it was aiming to spend Euro23m towards restarting production at the site. This was likely due to a boom in construction in 2021. The subsidiary also owns three aggregate quarries in the Republic of Karelia region of the country, near the border with Finland.
Selling up in Russia looks set to be difficult for Holcim. This is principally due to the European and American economic sanctions and the Russian government’s stated intention to nationalise the assets of any company trying to leave. This is clearly why Holcim has worded its plans so vaguely. If or when a peace deal is reached between Russia and Ukraine, the business environment could change significantly, depending on the terms, complicating any existing sale process. Determining how much Holcim might want to get from such a sale in these conditions is complex. Smikom bought Eurocement from Sberbank for Euro2.1bn in 2021 giving it 10 plants. Could Holcim realistically expect to sell its plants for around Euro200m each in the current environment? As for the hit Holcim might take, in its annual report for 2021 it said that the group’s Russian operations represented around 1% of the 2021 consolidated net sales. This would have been around Euro260m. Its Russian cement production capacity was reported as being 9Mt/yr in 2021 or 3% of the group’s global figure of 293Mt/yr.
Finally, it is worth noting though that Lafarge’s charges of ‘complicity in crimes against humanity’ also continued to be tested in the French courts this week. The legal case relates to the conduct of Lafarge in Syria between 2011 and 2014. This is totally separate from the situation in Russia but it does highlight the issue of corporate ethics for the group once again. Following proceedings in December 2021, Beat Hess, chair of the board of Holcim said, “The described events concerning Lafarge SA were concealed from the Holcim board at the time of the merger in 2015 and go completely against the values of our company.” Consider that use of ‘values’ again. Holcim may be about to find out how much it is prepared to pay for its values as it departs Russia.
Mohamed Hegazy appointed as head of Suez Cement
30 March 2022Egypt: Suez Cement has appointed Mohamed Hegazy as its chief executive officer (CEO). He succeeds Jose Maria Magrina, who has held the post for six years. Magrina will start a new position as the CEO of HeidelbergCement Trading.
Hegazy is currently the commercial director of Suez Cement. He started his career with HeidelbergCement Group in 2007 as a sales representative for Suez Cement. He took over managerial roles in the sales and marketing departments, before being nominated as commercial director in 2017.
Germany: Australia-based Calix says that its LEILAC-2 carbon capture retrofit of HeidelbergCement's Hanover cement plant has passed its financial investment decision. The company is accordingly proceeding with detailed design and long-lead item purchasing. It will launch construction in 2023. Calix added that, due to a number of project risk flag points given the 'market situation,' it will not buy major components until closer to that time.
When commissioned, the installation will capture 0.1Mt/yr of CO2 and cost an estimated Euro20 - 25/t of CO2 captured.