Displaying items by tag: Project

Morocco: Denmark’s FLSmidth has won a contract to deliver a greenfield cement plant to a new customer in Morocco. The contract is worth US$45m.

The contract was signed by FLSmidth, together with Société Générale des Travaux du Maroc (SGTM) on 19 July 2019 signed a contract with TEKCIM S.A. to co-deliver a 3600t/day (1.2Mt/yr) cement plant. The plant will be built in Ouled Ghanem in Morocco’s El-Jadida Province and is scheduled to be fully operational during the third quarter of 2022.

This is the first business cooperation between FLSmidth and TEKCIM. The process leading to the agreement has involved the African Development Bank as well as local commercial banks, and the parties involved have set very high standards in terms of quality and sustainability.

“The project includes state-of-the-art equipment that will provide TEKCIM with a very efficient cement plant,” said Jan Kjaersgaard, FLSmidth’s President of Cement. It also demonstrates FLSmidth’s ability to support customers where financing is involved, which has been a key aspect to be awarded this project. The plant will fulfil strict international standards, which is a clear statement that we as a premium player in the industry are following suit on our agenda of delivering sustainable productivity.”

The contract scope includes engineering, supply of a full range of equipment from crushing to packing and load-out, supervision, commissioning and training of a local workforce. The order is effective immediately and has been recognised in the order intake for the second quarter of 2019.

India: UltraTech Cement has received approval from the environment ministry for a US$360m project in Andhra Pradesh, in which it will set up a 6Mt/yr integrated cement plant at Petnikote village in Kurnool district. The plant will have a 60MW captive power plant and a 15MW waste heat recovery-based power unit.

The company has already acquired 432 hectares of land for the project, which UltraTech says will generate employment for 900 people. The company still has to get 'consent to establish and operate' from the Andhra Pradesh Pollution Control Board.

Dominica: Argos, Grupo Argos’ subsidiary in Dominica, has opened a new packing plant to allow a more reliable and timely supply of cement. The plant's packer has three nozzles and a capacity of more than 1000bags/hr. The scope of the project includes structural and ergonomic improvements and the replacement of the system's dust collector, which will allow for cleaner and more environmentally-friendly processes.

Italy: Buzzi Unicem says its ready-mix concrete subsidiary Unical has completed the largest continuous concrete casting in Europe at the Galeazzi Orthopedic Institut project in Milan. It pumped 33,000m³ of concrete continuously for 94 hours including 3300 concrete mixer journeys with 106 Unical staff on duty. The new 16-storey building will have a height of 90m once completed.

Canada: Lafarge Canada plans to develop and demonstrate a full-cycle solution to capture and reuse CO₂ from a cement plant. Project CO₂MENT will demonstrate and evaluate Inventys' CO₂ capture system and a selection of CO₂ utilisation technologies at Lafarge's Richmond cement plant in British Colombia over the next four years. This project is being led by Inventys in partnership with Lafarge Canada and Total. It also received financial support from CCP (CO₂ Capture Project), the Province of British Colombia and Canada's federal government through the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP).

"At Inventys, we see a real opportunity to build a CO₂ marketplace where tonnes of CO₂ are traded between emitters and users," said Inventys president and chief executive officer (CEO) Claude Letourneau.

Phase I of Project CO₂MENT, the Contaminant Program, will attempt to reduce harmful organic and inorganic substances, such as sulphur dioxide, dust and soot, as well as nitrogen oxides, from cement flue gas. Phase II, the CO₂ Capture Program, will separate the CO₂ from flue gas using a customised-for-cement version of Inventys' carbon capture technology at pilot scale. Phase III, the CO₂ Reuse Program, will prepare post-combustion CO₂ for reuse and support the economical assessment and demonstration of CO₂ conversion technologies onsite, such as CO₂-injected concrete and fly ash.

Funding for the first two phases is complete and development of Phase I is underway. Phase I will begin operation in 2019 followed by Phase II and III in 2020.

Nigeria: Ashaka Cement, a subsidiary of Lafarge Africa, is set to inaugurate a 16MW power plant project in a bid to improve the reliablilty of its energy supply. Managing Director Rabiu Abdullah Umar said that the company would invest US$30.5m in the project. “We are helping to remove ourselves from the (national) demand for energy and providing our own solution,” he said. “This means a minimum of 16MW of electricity will now become available to the public grid for the people in the region to enjoy.”

There have been quite a few new cement plant project announcements in the past week, with expansions announced in Mexico, Nigeria, Bangladesh, Indonesia, India and Uzbekistan. 11.8Mt/yr of new capacity has been announced in just a week, mostly from a whopping 9.0Mt/yr project in Central Sulawesi, Indonesia, the first in that Province. Notable in this project, as well as two of the others, is the involvement, once again, of large Chinese-based cement plant manufacturers and / or finance and associated influence from Chinese parties.

Of course, this trend is nothing new. The rise of Chinese cement plant manufacturers, particularly into Africa and other developing cement markets, has been covered in previous Global Cement Weekly columns. However, it does appear to be stepping up a notch in 2018 compared to previous years. So far this year we have reported on 21 confirmed Chinese cement plants being built in 15 countries other than China, from the planning stage to ‘up-and-running.’ A total of 37.2Mt/yr, more than the capacity of Germany, is being built across Algeria, Cambodia, Cameroon, Indonesia, Kyrgyzstan, Namibia, Nepal, Nigeria, Pakistan, Russia, Tajikistan, Turkey, Ukraine, Uzbekistan and Zambia. That’s not including a similarly large number of news stories where the supplier is not explicitly stated. This is seen a lot in Indian projects, as well as in Vietnam, where the cement sector appears to still be expanding, despite the government’s pronouncements. In many of these cases, and elsewhere, these unidentified suppliers are likely to be Chinese.

The driver for this increase in Chinese-led cement sector investment is, of course, the severe overcapacity in China’s domestic cement sector. The government is currently undertaking its most drastic capacity reduction measures so far. The ongoing integration of Sinoma and CNBM is one example of the lengths it will go to to reduce the current inefficiencies in the sector. This week the Chinese government reiterated its strict prohibition on new greenfield cement plants. It also warned that any producer that wants to upgrade its plant with a new line must only install the same capacity as the line that will be replaced, amid concerns that some were flouting this rule. This comes as the profits of major producers have been rising. Presumably the government would like them to climb further still.

So where does this leave the more established (read ‘European’) cement plant manufacturers such as Fives, FLSmidth, KHD and thyssenkrupp Industrial Solutions, some of which are fully or partly-owned by Chinese companies? Well, with fewer full-line projects available in developing regions due to the rise of the Chinese, they have become increasingly specialised in specific areas. Those that want European equipment will increasingly specify a pyro-line from Supplier A, a mill or two from Supplier B, conveyors and storage from supplier C, and so on. Arranging this, as it turns out, is something that Chinese plant manufacturers are quite keen to do. Take, for example, FLSmidth working for Sinoma (China) alongside Atlas Copco (Sweden) and Kawasaki Heavy Industries (Japan) on a cement plant in Indonesia. Indeed, FLSmidth signed a framework with CNBM on future collaborations in July 2018. FLSmidth and CNBM already have an extensive ‘back catalogue’ of joint projects. FLSmidth has valuable expertise that Chinese firms need to complete these kinds of projects.

Of course, another European supplier, Germany’s KHD, is mostly owned by China’s AVIC. In a forthcoming interview in the September 2018 issue of Global Cement Magazine, KHD’s CEO Gerold Keune states that the Engineering, Procurement and Construction (EPC) scene is now ‘completely dominated’ by Chinese suppliers. KHD fits in by providing a wide range of equipment but, crucially, great expertise in pyroprocessing and crushing solutions. It itself relies on smaller firms to provide their knowledge to specific parts of a larger project, be it conveyors, feeding systems or silos. Everyone is getting better and better, but in a smaller and smaller area.

Also in the September 2018 issue of Global Cement Magazine will be a report from the VDMA’s Large Industrial Plant Manufacturer’s group (AGAB) in Germany, which highlights another advantage for the Europeans: Digitisation. According to a VDMA survey, the industry anticipates a positive influence from digitisation activities on sales and earnings and expects to see margins improve by up to 10% as a result of the efficiencies it offers over the next three years. In this regard they are ahead of the Chinese mega-suppliers.

The conclusion from this wide-ranging column? The integration of Chinese weight and European know-how is stepping up a notch and will only accelerate from here. Can everyone be ‘winners?’ The next few years may reveal some of the answers.

The small cement industry of Mozambique, in south west Africa must be an interesting place to make cement. On one side the country's producers, like their more vocal South African counterparts, have been fighting off cheap imports from Iran, Pakistan, China et al. On the other side of the coin though, Mozambique has growing domestic demand and is within striking distance of growing markets further into Africa, like Malawi and the Democratic Republic of Congo (DRC).

With the announcement this week that there will be not one but two new integrated cement plants in the country, bringing over 2Mt/yr of new capacity, everything should be set fair for the coming years then, shouldn't it? Domestic production will rise, the price of local cement will fall as a result, competition from imports will drop off and money will be made from new exports.

Except that might not happen. Before the announcement of these two plants, (one of which does not state a capacity), there was around 5.5Mt/yr of grinding and integrated capacity either currently active in Mozambique or due to come onstream in 2015. With the new projects this rises to over 7.5Mt/yr.

The desirable chain of events described above starts to break down due to the fact that domestic demand in Mozambique, while rising, is not currently anywhere near as high as domestic supply. The United States Geological Survey estimated that the country produced just 1.2Mt/yr in 2012. Data for 2013 and 2014, though unavailable, is highly unlikely to show a three-fold increase. Indeed Insitec, a minority shareholder in Cimentos de Moçambique, predicted in 2014 that demand for that year would rise to just 1.5Mt, before hitting the dizzying heights of 1.8Mt in 2018 – And that's still three years away!

So what are the options? Option 1: Some or all of the planned and mooted cement plants will fail to come to fruition. Option 2: Some or all of the plants will be built but will operate at reduced capacity and/or on a campaign basis. Option 3: The Mozambican cement industry becomes a regional powerhouse and starts to export to its neighbours.

Option 1 is certainly possible. Limak Group, one of the parties linked to the new projects, is a Turkish cement producer that is inexperienced outside of Turkey. There has also been a lack of information on the progress of projects by Austral Cimentos ('coming on stream in 2015'), Star Cement and Consolidated Building Materials, although a lack of progress reports does not necessarily imply 'no progress.'

Option 2 is more likely, as some producers already operate on a campaign basis. InterCement's plant at Nacala, formerly an integrated plant, currently operates only as a grinding station. Option 3 is also possible, with Malawi particularly lacking in cement production facilities.
In reality a combination of all three 'Options' is the most likely outcome. However, this will lead to Mozambique becoming yet another player in an increasingly busy African cement market. The desire for self-sufficiency in cement production, a common goal for the region's governments, can easily lead to over-estimates of local demand growth, with resultant over-capacity. Of course the expectation that all African countries can get rid of this extra cement capacity via exports will ultimately backfire.

In southern Africa we already have South Africa exporting. Angola declared 'cement self-sufficiency' in October 2014 and banned imports at the start of 2015. Zambia, Botswana, Zimbabwe and DRC all have large-scale Dangote and/or PCC projects near completion or in production that will greatly reduce their need for imports. Meanwhile, further north, Nigeria is already a gigantic producer and significant cement exporter. Cameroon has recently banned imports and Ghana is thinking of doing the same. Over in the east of Africa, Ethiopia's (and the rest of that region's) rapidly-developing situation was covered in this column just two weeks ago.

Finally, in the north of Africa, Algeria has declared its intention to be self-sufficient in cement by 2016. This news must have 'gone down like a lead balloon' in Italy, Spain and Greece, which have been reliant on north African markets after the bottoms fell out of their own economies. In the north east, Egypt has different problems at present, also described previously. It needs fuel not cement!

So where does this all lead for regional cement dynamics in Africa? Well perhaps the situation in India points the way. There, as in Africa, local and regional producers with the desire to expand grew from their local bases and eventually overlapped. Against a backdrop of lower-than-expected demand, the country now has overcapacity. This has resulted in smaller producers being acquired and leaving the market.

Could this eventually happen in Africa? Only time will tell. However one thing is certain: It's just not possible for every country to export to every other country!