Displaying items by tag: Plant

Central America: Denmark’s FLSmidth says it is moving ahead with two contracts for cement plants worth over Euro250m following the receipt of the agreed downpayment. One contract is for a new cement plant and the other is for an extension to an existing plant.

The cement plant engineering company has not released many details on the projects. However, both plans will be located in Central America and will supply cement mainly to their local markets. The expected commissioning is within 24 to 36 months and once operational, the cement plants will have a capacity of 2000t/day and 3500t/day respectively.

More positive news emerged from the UK cement industry this week with the news that Cemex is planning to restart the second kiln at its South Ferriby plant later in 2018. This marks the full recovery of the plant after a disastrous flood in late 2013 and it is an all round good news story. Around the same time the local government in Scotland approved the planning application for an upgrade to Tarmac’s Dunbar cement plant. That project involves installing a new cement grinding mill, a new cement storage silo and a rail loading facility.

Graph 1: Domestic cement, imported cement and other cementitious sales in the UK, 2001 - 2017. Source: Mineral Products Association.

The timing is interesting given the general uncertainty in the UK economy ahead of the UK exit from the European Union (EU). However, data from the Mineral Products Association (MPA) shows that total cementitious material sales (cement plus products made from fly ash and ground granulated blast furnace slag (GGBS)) reached 15.3Mt in 2017 from a low of 10.3Mt in 2009 following the financial crash. This isn’t as high as the 15.8Mt figures recorded in 2007 but it does mark a recovery. This masks to an extent the change in the market since 2007. Cement sales in 2017 at 10.2Mt were still below a high of 11.9Mt in 2008. The recovery has been driven by higher imports, 1.9Mt in 2017, and higher use of fly ash and GGBS products, which reached 3.2Mt in 2017.

Cemex and Tarmac are not alone in announcing projects. HeidelbergCement’s local subsidiary Hanson is upgrading its Padeswood plant with a new Euro22m mill. Irish slag cement grinding company Ecocem opened its import terminal at Sheerness in mid-2017 and French grinding firm, Cem'In'Eu, has also expressed interest in building a plant, in this case in London.

As discussed earlier in the year, new upgrade projects in the UK appear to carry an element of risk given the unknown status of its departure from the EU. Supply chains may be affected, companies are delaying investment and the value of Pound Sterling is falling. The collapse of construction services company Carillion also had a knock-on effect in the industry and, with major work on the Crossrail infrastructure project finishing, the industry has no major infrastructure projects in support. A quarterly graph of UK construction industry output volume by Arcadis shows almost uniform growth since mid-2012 although this started to flatten in 2017. A badly-handled Brexit (UK exit from the EU) could undo this growth.

All of this presents a picture of risk-adverse capital projects in the UK. The MPA figures help to explain the focus on grinding at Padeswood and Dunbar. The market has changed since 2007, with a growing focus on imports and secondary cementitious materials. Hence spending money on equipment to process these inputs makes sense. The decision to increase production at South Ferriby meanwhile depends on reviving existing equipment. Regional cement sales figures to 2016 from the MPA appear to indicate static demand in counties close to the plant (Yorkshire and Humberside) but sales have increased in the East Midlands and the East of England.

Just compare the current UK approach to the situation in Egypt. This week the head of the cement division of the Chamber of Building Materials described the decision to build the Beni Suef cement plant to local media as “not based on precise information” and that it had harmed local production. In case you had forgotten, that plant is one of the biggest in the world with six lines. The commentator may well have been representing smaller local producers but opening a 12Mt/yr plant in Egypt in these turbulent economic times marks a different approach to risk than the modest plant upgrades in the UK. Let’s wait and see who has the best approach.

Russia: Pervaya Stroitelnaya Kompaniya (PSK) plans to build a 1.2Mt/yr cement plant in the Petrovsky district of the Tambov region. The project has an investment of Euro126m, according to the Kommersant newspaper. The unit will use the Borisovsky deposit for its raw materials. PSK previously purchased the licence to develop the mine from Tambov-Cement company. The project is scheduled to be built from 2019 to 2025 in several stages.

UK: Cemex is planning to restart commercial production on the second kiln at its South Ferriby cement plant in November 2018. The company says that this investment highlights its confidence in the long-term potential of the UK building materials market.

The kiln has a capacity of 1000t/day and was originally installed in 1973. Since then the cement producer has conducted upgrade work on the production line to comply with environmental legislation and to install new electrical infrastructure, a control system and instrumentation. The second kiln was previously the first Cemex line in the world to achieve a 100% alternative fuel substitution rate in 2011. Once fully operational both kilns at the plant will give it a production capacity of 0.7Mt/yr.

UK: The planning department of East Lothian Council in Scotland has granted planning permission to an upgrade of Tarmac’s Dunbar cement plant. The work will include building a new cement grinding mill, a new cement storage silo and a rail loading facility. The work will also include a shed, belt conveyors pneumatic pipelines and associated works.

In its supporting statement the company said that the new cement mill was necessary to produce new grades of cement required for modern construction and the cement market. The proposed mill will replace two existing mills on the site and is intended to be more energy efficient and quieter than the existing mills. It added that the plant would benefits from rail sidings on both the south and north side of the East Coast Mainline railway line. At present trains are fed only on the south side using adjacent silos where train capacity is already fully used. Additional products are exported by road.

South Korea: Ssangyong Cement has launched what it says is the world’s largest waste heat recovery unit at its Donghae plant in Gangwon. The 43.5MWh unit had a budget of US$889m and was originally planned to 2016, according to the
Maeil Business Newspaper. 11 boilers plus turbines and cooling towers have been installed on six cement kilns at the site. The new system will also work in conjunction with an energy storage system (ESS) that was installed in April 2017.

Philippines: San Miguel Northern Cement has ordered two mills from Germany’s Loesche for a new 5000t/day production line at its Sison plant in Pangasinan. The scope of supply includes two complete grinding plants: a type LM 56.4 mill for cement raw material and a type LM 35.3 D for sub-bituminous coal.

Loesche will supply a majority of the electro-technical components for the line and the automation systems including its LM Master product. It will be responsible for the plant engineering and the supply of filters and blowers. The new line will use also A-Tec’s Hurriclon technology for de-dusting the raw mills.

Delivery of the order is scheduled for the start of 2019.

Kyrgyzstan: Member of parliament Karamat Orozova has proposed setting up a commission to examine building a new cement plant in the Batken region. She has proposed allocating land and loans for local businesses to build a new unit, according to the Central Asia News Service. The politician has criticised the decision to place the South-Kyrgyz Cement (SKC) plant in the Osh region of the country given the neighbouring problems in Batken. The 1Mt/yr SKC plant was built in 2010 with Italcementi.

Spain: FYM-HeidelbergCement has reached a record two years without an accident at its Malaga cement plant. The milestone also includes no accidents for subcontractors working at the site. The company has operated a ‘Zero Accident’ program since 2000 that has focused on improving the safety culture for all staff.

The Federación Interamericana del Cemento (FICEM) held its 2018 technical congress in Panama City last week and was attended by Global Cement. We’ll run a full write-up of the event in the October 2018 issue of Global Cement Magazine. The short version is that the conference was technically good but, from our perspective, it could have done with more regional analysis. Given that the event is for the local industry this is not a big issue as most of the delegates will know their own markets inside out and many were happy to discuss just this when asked. Likewise, FICEM’s in-house publication also included plenty of local data.

The nearest the presentations came to this was a global overview of the cement industry by Arnaud Pinatel of On Field Investment Research ahead of a market report the analysts are about to release. Although it covered the global cement industry the key local news was that the Latin American sector’s production capacity had grown by 3% from 2010 to 2018 but that prices had fallen in this time. The forecast suggested that cement sales volumes were expected to grow by 3% in 2019 - supported by Brazil, Peru and Bolivia - but that prices were also expected to fall by 1%, mainly due to issues in Argentina.

That last point is especially interesting over the last week because the Argentine cement body, the Asociación de Fabricantes de Cemento Portland (AFCP), released its figures last week to reveal that cement despatches rose by 4.2% year-on-year for the first eight months of 2018. However, at the same time the general news broke that the International Monetary Fund (IMF) was providing an emergency loan to support the country’s economy. The government was keen to shore up confidence in the economy and attributed the growth in the cement sector to the ‘most ambitious infrastructure plan in history.’

Only last year in 2017 the industry was riding a construction boom with cement shortages, new production capacity announced and the initial public offering of Loma Negra. Bailouts from the IMF don’t fit this picture of the poster boy for the South American construction industry. And, if a financial correction is pending, the new capacity that has been ordered may arrive at a bad time. This is a pretty worrying situation.

Meanwhile, across the Uruguay River into Brazil something long expected and hopefully more encouraging has occurred: the acquisition of cement plants. Italy’s Buzzi Unicem revealed that it had struck a deal to buy a 50% stake in the Brazilian company BCPAR from Grupo Ricardo Brennand for Euro150m. The arrangements cover two integrated plants: one 2.4Mt/yr unit at Sete Lagoas in Minas Gerais and a 1.7Mt/yr unit at Pitimbu in Paraíba. Buzzi has also added an option to buy the other half of the business until 2025.

It’s hard to place a value on the sale, but it looks as if Buzzi has picked up the capacity for just under US$100/t, subject to future variation on how well the company does. At that price though this a low figure and a bargain for Buzzi. Given the pain the Brazilian cement industry had been through in recent years some form of traction is welcome. Unfortunately, Grupo Ricardo Brennand has surely lost money on the deal given that the two plants were commissioned in 2011 and 2015 respectively. The complexity of the financial arrangements suggest that Ricardo Brennand is fighting to stay in the game if and when the recovery comes. If Buzzi has moved in then this suggests that it thinks it will make their money back and that it reckons that the bottom of the construction industry trough has been reached. A Brazilian take on this situation would be fascinating.

With these kinds of events happening the same week as the FICEM technical congress it really shows how vibrant and varied the region’s cement industry is. Next year’s conference will surely be even more interesting as market events in Brazil, Argentina and other countries develop.