Displaying items by tag: grinding plant
Update on Türkiye, January 2023
18 January 2023The Ministry of Trade in Türkiye said this week that it was monitoring developments in the construction industry. Specifically, the ministry is reacting to complaints it has received about the high price of cement and supply issues. It has been looking at exports of clinker and cement. The statement noted that prices had risen particularly in the last one to two months and that the government was prepared to take unspecified action to alleviate the situation.
The comments hark back to the autumn of 2021 when members of the Construction Contractors Confederation (IMKON) stopped working for two weeks in response to high prices including cement. At the time the ministry tightened its rules on exporting cement and clinker. This followed the start of an investigation into alleged anti-competitive behaviour by the regulator Rekabat Kurumu into nine cement producers in the first half of that year. Around the same time Türk Çimento, the Turkish Cement Manufacturers' Association, had also been warning about growing raw material and energy costs. It noted that declining domestic sales between 2017 and 2019 had encouraged its members to focus on export markets more. All of this was overshadowed in February 2022 when Russia invaded Ukraine and global energy prices spiked. Türk Çimento then warned of the trouble that high coal prices were causing the sector.
Graph 1: Domestic and export cement sales in Türkiye, January – September, 2017 – 2022. Source: Türk Çimento.
Graph 1 above shows that the trend towards exports that Türk Çimento pointed out in mid-2021 has continued. Domestic sales fell to a low of 33.2Mt in 2019, recovered to 2021 and dropped somewhat so far in 2022. As an aside, that decline in domestic sales from 2017 to 2019 was the first the local cement industry had experienced a fall in sales since at least 2002. Exports fell year-on-year in 2018 but have increased steadily since then to 14.6Mt in the first nine months of 2022. Exports represented 10% of total sales in 2017. So far in 2022 they have accounted for 27% of total sales. Türk Çimento’s take on the picture so far in 2022 is that it expects the domestic market to decline by 10% in 2022 in all regions of the country principally due to high commodity prices. Cement exports are expected to increase but clinker exports to decrease.
Commercially, Türkiye-based cement producers have reacted to high energy prices by upping their own product prices in turn. OYAK Çimento, for example, reported significant rises year-on-year in sales revenue and earnings in the first nine months of 2022. Net sales grew by 160% year-on-year to Euro403m and earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 202% to Euro106m. Akçansa and Çimsa reported a similar situation.
Despite the high energy costs, both investment and merger and acquisition activity has continued in the cement sector in 2022. In August 2022 Fernas Group completed its purchase of two integrated cement plants, a grinding plant and associated ready-mix concrete assets from Çimsa Çimento for US$110m. Later in the year, in November 2022, Safi Çimento acquired Sancim Bilecik Çimento’s integrated plant from Aşkale Çimento. Various upgrade projects to cement plants were also reported including projects at KÇS Kipaş Çimento’s Kahramanmaraş plant, Nuh Çimento’s Hereke cement plant, MEDCEM’s Silifke plant and OYAK Çimento’s Ünye plant.
Recent reporting by the Economist newspaper suggests that the government is targeting the domestic housing sector in response to higher than inflation price rises even compared to Türkiye’s high consumer price inflation rate. The next general election in June 2023 may also be encouraging legislators to look at the accommodation needs of their constituents. Whether this is connected to the Ministry of Trade’s recent decision is unknown. Cement producers have followed the money to lucrative export markets in recent years. How far the government is willing to intervene in this strategy could mark a change in direction for the sector.
Sagar Cements wins auction to buy Andhra Cements
18 January 2023India: Sagar Cements has won the auction to acquire Andhra Cements from Jaiprakash Associates (Jaypee Group), a company currently undergoing an insolvency process. The committee of creditors of Andhra Cements voted to approve the sale, although the amount of the bid has not been disclosed, according to the Press Trust of India. Dalmia Cement (Bharat) was also reportedly made a bid for the cement producer.
Andhra Cements operates an integrated plant at Durga and a grinding plant at Visakhapatnam in Andhra Pradesh. It was previously acquired by Jaypee Group in 2012 from Duncan Goenka Group.
UkrainInvest helps to establish grinding plants in Ukraine
17 January 2023Ukraine: Ukrainian foreign investors’ fund UkrainInvest contributed US$20m towards the establishment of new grinding plants in Ukraine in 2022. Ukraine Business News has reported that the fund received 126,000 investments in 2022, up by a factor of six year-on-year. It added 11 projects worth US$2bn to its portfolio throughout the year, during which Russia launched its on-going invasion of Ukraine.
Adani Cement takes on the unions in Himachal Pradesh
11 January 2023Adani Cement’s dispute with truck driver unions in Himachal Pradesh is about to enter its fifth week. The standoff began on 15 December 2022 when the company closed its integrated plants at Darlaghat and Barmana in response to union freight rates. A third unit, a grinding plant at Nalagarh, reportedly continued to operate for a few days longer with raw materials supplied from neighbouring Punjab and Rajasthan, until the transport companies shut down its supply.
Adani Group took over the plants from Ambuja Cement and ACC following its acquisition of Holcim’s India-based businesses in September 2022. The new business seemed to be running smoothly as new officials were appointed and an alternative fuels subsidiary, Geoclean, was created. Then Adani Cement closed its two plants in Himachal Pradesh. In a statement the group said, “Our plants at Gagal (Barmana) and Darlaghat have been incurring losses for quite some time now with no signs of improvement due to stiff resistance from transportation unions ignoring the larger cause of employment generation and contribution to the state’s revenue.” The group added that it had requested the truckers reduce the freight rate to around US$0.07/t/km from US$0.14/t/km, with the lower rate previously recommended by a committee from the state’s transport department.
Himachal Pradesh held state elections in mid-November 2022 with the Indian National Congress (INC) party taking control of the state government from the Bharatiya Janata Party (BJP). The results of the poll were revealed about a week before the cement plants closed and the new administration has suffered a bumpy start to its tenure. At first the state government issued a show cause notice to the cement producer requesting that it explain the closures or else risk ‘appropriate administrative action.' Several rounds of talks followed to no avail. Most recently, a government subcommittee has been set up that will bring together representatives of Adani Cement and the truck unions to try and agree on new freight rates.
In production terms the closure of the Darlaghat and Barmana cement plants is a big deal in the state, given that they have a combined cement production capacity of 6Mt/yr from the region’s total integrated capacity of 10.5Mt/yr. Data is limited on the direct effects of the standoff on the cement and construction market so far. However, competitor UltraTech Cement may be benefiting as it was swiftly awarded the supply contract for government projects. Local press reports have also noted that some of the unions have been stopping cement trucks from entering the state.
What is clearer is the human side to the dispute. Around 1000 staff are employed both directly and indirectly at the Barmana plant and others have jobs at Darlaghat and Nalagarh. Adani Group has relocated at least 140 staff from both sites during the closures. In addition over 7000 drivers were supporting both plants. Even more people have jobs connected to the plants, their supply chains and markets.
The argument between Adani Cement and the truck driver unions in Himachal Pradesh needs to be resolved soon for the good of everybody. Rising fuel costs are the driver of this situation, although it would be interesting to know why the other cement producers in the state haven’t similarly reacted against high freight rates in the same way. India isn’t the only country where the cement sector has been affected by driver union activity. South Korea endured a series of driver strikes in the autumn of 2022 that disrupted the cement sector. Eventually the government enacted laws to restrict strikes that might cause disruption to key areas such as cement production. The International Monetary Fund (IMF) forecasts that global inflation rates will stabilise in 2023 after a sharp rise in 2022. Growth rates are also predicted to slow. As societies and companies adjust to this it seems likely that there will be more clashes between companies, unions and other organisations as everybody tries to absorb higher costs.
SONACIM orders generator part from Chinese supplier
05 January 2023Chad: Société National de Cimenterie (SONACIM) has placed an order with a China-based machine parts supplier for a part for its Baoré grinding plant’s generator. Alwihda News has reported that previously ordered the part from a supplier based in Egypt, which since failed to make the delivery. Cement production has been suspended at the plant since early July 2022, pending delivery of the missing part.
SONACIM’s deputy director general Koye Ndaye Benoît said “As soon as the part arrives, production will be restarted.”
430 people are employed in SONACIM’s operations in Chad.
Adani Group reportedly in talks to acquire Orient Cement stake
04 January 2023India: Dow Jones Institutional News has reported that Adani Group is in talks with a ‘major shareholder’ of Orient Cement over a possible acquisition of the latter’s stake in the CK Birla Group company.
Orient Cement first began producing cement in Telangana in 1982, and has since spread to Karnataka and Maharashtra, with a cement production capacity of 8Mt/yr.
Orient Cement previously leased land in Maharashtra for a new grinding plant from coal-fired power plant Adani Power Maharashtra, an Adani Group subsidiary, in late 2021. Adani Group entered the cement sector following its acquisition of ACC and Ambuja Cements from Switzerland-based Holcim on 16 September 2022.
India: Three cement producers plan to establish new plants in Shankragarh, south of the River Yamuna in Uttar Pradesh’s Prayagraj District. The Uttar Pradesh State Industrial Development Authority said that JK Cement has signed a memorandum of understanding for the construction of a 2.5Mt/yr grinding plant, according to the Hindustan Times newspaper. Eco Cement plans to build a 4Mt/yr grinding plant, and KJS Cement a 2Mt/yr cement plant. All three companies have applied for no-objection certificates from the Uttar Pradesh Pollution Control Board.
Bruks Siwertell to supply ship unloader to project in Adelaide
29 December 2022Australia: Bruks Siwertell has received an order from Hallet Capital for an enclosed ship unloader for Port Adelaide. A gantry-mounted Siwertell 490 F-type unit has been ordered along with a jetty screw-conveyor system feeding a dome silo and individual screw conveyors for installation inside the dome. The unloader will be suitable for discharging bulkers up to 40,000dwt at a rated cement handling capacity of 500t/hr. It is planned for delivery in August 2023 and will be assembled on site.
Hallett Group announced plans in mid-2022 to build a slag cement grinding plant in Port Augusta, South Australia. The project will also include a new distribution facility at Port Adelaide.
Purvanchal Cement to increase production capacity to 1Mt/yr by 2026
21 December 2022India: Purvanchal Cement plans to invest US$24m in cement acquisitions and new grinding capacity construction projects before 2026. Under the plans, the producer will double its cement production capacity to 1Mt/yr. The Economic Times newspaper has reported that the plans include the establishment of a grinding plant in West Bengal and a second new plant with an associated quarry in northern Assam.
Purvanchal Cement operates the 0.5Mt/yr Kamrup grinding plant in Assam.
Cementos Portland Valderrivas acquires KKR's Andalusian business
20 December 2022Spain: FCC subsidiary Cementos Portland Valderrivas has completed its acquisition of global investment company KKR's Andalusian business, including its subsidiary Surgyps. Surgyps operates an 800,000t/yr grinding plant in Jerez de la Frontera, Cádiz. The business filed for bankruptcy in 2010, but continued to operate the plant under a government concession, lasting until 2031.
The El Economista newspaper has reported that Cementos Portland Valderrivas said "With this operation, the group complements its position in Andalusia by taking a decisive step in our commitment to reduce the carbon footprint of cement."
The group controls six integrated cement plants across Spain, with a total capacity of 9.9Mt/yr.