India: Adani Group has reportedly relocated 'significant roles' in ACC and Ambuja Cements to Ahmedabad, Gujarat. ACC and Ambuja Cements' headquarters are situated in Mumbai, Maharashtra, and employ 6000 and 4700 people respectively. The Business Standard newspaper has reported that many people in leadership positions now based in Ahmedabad continue to run teams in Mumbai.

Pakistan: Bestway Cement has ignited the kiln of Line 1 of its Mianwali cement plant in Punjab. The line has a capacity of 2.3Mt/yr. The Pakistan Observer newspaper has reported that it increases the producer's cement capacity by 18% to 15.3Mt/yr and brings its total number of production lines to eight. The Mianwali cement plant is equipped with a 20MW solar power plant and will run on 50% renewable energy. It also has a 9MW waste heat recovery (WHR) plant, an air cooled condenser (ACC) system and a rainwater harvesting system.

Bestway Cement CEO Lord Zameer Choudrey said "It's a great day for the company. Our new greenfield production line at Mianwali has been set up in a record time, despite various hurdles and supply chain disruptions caused by Covid-19."

Indonesia: Semen Indonesia subsidiary Semen Baturaja has obtained four loans worth a total US$59.9m. Bank Negara Indonesia, Bank Mandiri, Bank CIMB Niaga and HSBC Indonesia advanced the funds. The loans' syndicated credit agreement aligns with Semen Baturaja's sustainability strategy, which is based on Semen Indonesia's Sustainability Framework.

Semen Baturaja's managing director Daconi Khotob said "This syndicated sustainability-linked loan will provide many benefits for Semen Baturaja, including lower interest rates than conventional loans, more attractive term sheets and the flexibility to make accelerated repayments." Khotob added that the sustainability provisions will also 'broaden the scope of investors.'

Canada: The Cement Association of Canada (CAC) said that it is 'confident that Canada will lead in building clean technologies for a sustainable future' following the publication of the government's Budget 2023 on 29 March 2023. The budget includes US$26bn-worth of green tax credits. US$19.2bn-worth of this is allotted to renewable energy. It also includes a final design for Canada's Investment Tax Credit for Carbon Capture, Utilisation and Storage (CCUS). CAC president and CEO Adam Auer said that, when finalised, the budget will help to 'close the gap' between existing Canadian legislation and incentives offered under the US Inflation Reduction Act and EU Green Deal Industrial Plan.

Auer said “With close to 60% of our emissions resulting from the immutable chemistry of making cement, deep investment in innovative and expensive technologies, like CCUS, are both vital and unavoidable. With Budget 2023, the government clearly affirmed its understanding of the final role this technology plays in our industry’s efforts to reach net-zero." He continued “We were also pleased to see references to carbon contracts for difference (CCfD). Canada’s cement companies, like many industries in Canada, are part of large multinationals, and divisions must compete within their companies for projects. Investing in net-zero projects requires predictability. The certainty that CCfDs can provide is the difference between attracting investment, building projects and creating clean jobs - or conceding the opportunity to our competitors."

Vietnam: The General Statistics Office recorded domestic cement production volumes of 27.4Mt throughout the first quarter of 2023. The figure corresponds to a drop of 9.9% year-on-year from first-quarter 2022 levels. Việt Nam News has reported that the country produced 116Mt of cement in 2022, up by 5.8% year-on-year.

Mexico: Holcim Mexico has commenced production of its Fuerte Más reduced-CO₂ cement at its cement plants in Macuspana and Tabasco at a combined rate of 60,000t/yr. The cement offers 50% reduced CO₂ emissions and 10% higher physical performance than ordinary Portland cement (OPC). The El Economista newspaper has reported that Holcim Mexico replaces some of the clinker in the cement with locally-sourced minerals from Southeast Mexico. Chemical compounds in the material colour the cement red.

The Centre for Technological Innovation for Construction (CITEC) Toluca verified the product as suitable for all applications. Holcim Mexico's industrial director Adrián Belli said that comparable green cements are currently only available in France and Italy.

The Chinese cement sector had a tough time in 2022. This was confirmed this week as the large domestic cement producers released their financial results. Revenue was down, profits fell and cement sales volumes tumbled. The key causes included the continuation of the country’s zero-coronavirus policy, the declining real estate market and rising input costs for raw materials such as coal. Demand for cement withered and so did the fortunes of the cement companies.

Graph 1: Cement output in China, 2018 to 2022. Source: National Bureau of Statistics of China.

Data from the National Bureau of Statistics of China shows that cement output fell by 9.8% year-on-year to 2.13Bnt in 2022 from 2.36Bnt in 2021. The greater decrease was in the first half of the year rather than the second. The China Cement Association (CCA) said that this was nearly the lowest output in the last decade and the largest decline since 1969 ! The National Bureau of Statistics of China also pointed out in a release that, despite investment in fixed assets increasing by around 5% in 2022 and national infrastructure spending growing by 9%, real estate development investment dropped by 10% to US$1.46Tn.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports.

Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.

The cement producers warned in their forecasts that the results for 2022 were going to be rough and so it came to pass. China National Building Material (CNBM)’s revenue fell by 16% year-on-year to US$33.4bn in 2022 and Anhui Conch’s sales fell by 21% to US$19.2bn in 2022. Although, Tangshang Jidong Cement and Huaxin Cement reported declines of income or revenue in single digits. Profits halved for all of the companies covered here. Various combinations of the reasons covered above were cited for the situation.

What is more interesting are the responses some of the producers are making and what has gone well. CNBM, for example, is pinning its hopes on better staggered peak production and infrastructure projects. Anhui Conch, meanwhile, appears to have been diversifying its business by increasing both its concrete and solar power production capacity significantly in 2022. It was also announced that it plans to spend US$2.81bn on capital expenditure projects in 2023. China Resources Cement (CRC) said it had optimised its presence in South China through selected acquisition and divestments. Huaxin Cement has continued its focus on overseas markets with its share of operating revenue originating from outside China rising to 13% of the group’s total in 2022 compared to 8% in 2021. It also mentioned a number of unnamed projects around the world steadily drawing nearer to action. Sure enough, the group announced earlier in March 2023 that it was buying a majority stake in Oman Cement.

As for 2023, the CCA forecast in January 2023 that cement demand would be flat or slightly down. However, at the same time, provincial changes to the real estate market are expected to improve market conditions and infrastructure development will further drive demand for cement. The CCA identified that the cement sector’s production overcapacity could become an issue with lower demand. In 2022 the national clinker production utilisation rate was 65%, a fall of 10% from that in 2021. It also pointed out that peak-staggered production had actually helped cement producers generally to cope with smaller declines in profits compared to less well regulated industries.

Problems such as the zero-coronavirus policy, the real estate market and rising raw material costs have made the country’s production overcapacity issue worse. Changes are being made such as the national abandonment of the coronavirus lockdowns in late 2022, and, as mentioned above, the real estate market is being modified. In addition to this, various environmental changes are on the way, as the government works towards its sustainability goals. The country remains the largest cement producer in the world. Yet the message here is that we should expect more of the same for the cement sector in China in 2023.

Kenya: Bamburi Cement has appointed Mohit Kapoor as its Group Chief Executive Officer (CEO), with effect from 1 April 2023. He succeeds Seddiq Hassani, who has held the position since 2018.

Kapoor is an electrical engineer who has also worked in marketing and supply chain management. He previously held the post of the CEO of Holcim Qatar. Prior to this he worked as the Head of Growth and Innovation at Holcim India, the Managing Director of Readymix Projects, the Vice President of Logistics and Supply Chain at Lafarge India and the Senior Project Manager for Lafarge Group Audit.

China: China National Building Material's (CNBM) revenue fell by 16% year-on-year to US$33.4bn in 2022 from US$40.0bn in 2021. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 31% to US$5.18bn from US$7.50bn. Sales from its cement and concrete business segments fell by 18% to US$16.0bn and 29% to US$5.25bn respectively. Adjusted EBITDA fell by 42% to US$2.89bn and 7% to US$470m. Its sales volumes of cement and clinker decreased by 15% to 316Mt from 373Mt. Sales volumes of concrete decreased by 24% to 84.7Mm³ from 112Mm³.

The group said that, “In 2022, the triple pressure from shrinking demand, supply shock and weakening expectations persisted, and the complexity, severity and uncertainty of the development environment increased.” With regards to the building materials segment it blamed a declining real estate market, a poor economy and general poor demand in both the peak and off seasons. It added, “The downturn in demand has further aggravated the contradiction of overcapacity in the industry, with prices running low, coupled with a sharp rise in the cost of coal and other elements leading to escalating production costs, the production and operation situation was extremely critical.” In response the company is continuing to push for supply-side reform, promote precise staggered peak production, working on stablising the market and seeking out opportunities to supply large-scale infrastructure projects.

China: Anhui Conch’s sales fell by 21% year-on-year to US$19.2bn in 2022 from US$24.4bn in 2021. Its net profit dropped by 52% to US$2.31bn from US$4.84bn. Sales volumes of cement and clinker decreased by 24% to 310Mt. It blamed the situation on weakening market demand and high energy costs.

New projects that started operation in 2022 included a capacity replacement scheme at its Anhui Chizhou Conch Cement subsidiary and two new clinker production lines at the Qarshi project in Uzbekistan. The group also completed its acquisition of Chongqing Duoji Renewable Resources, Naimanqi Hongji Cement and Chifeng Hahe Cement. By the end of 2022 its cement and concrete production capacities rose by 1% to 269Mt and 73% to 25.5Mm³. Its solar power capacity also more than doubled to 475MW.