India: Kanodia Cement has commissioned its new Amethi cement plant in Uttar Pradesh. The plant consists of four grinding units spread over an area of 18ha. Indo-Asian News Service has reported that the facility’s equipment includes two 12-spout rotary packers and six floor-mounted truck loading machines, supplied by Denmark-based FLSmidth. Kanodia Cement says that the new plant marks progress in line with its sustainable development plant. Its operations will directly and indirectly employ 1000 people.

France: CRH subsidiary Eqiom has successfully commissioned its Gennevilliers construction waste recycling pilot plant. Prior to the plant’s opening, Eqiom recycled 10,000t of construction waste in the first quarter of 2022. It is now aiming to recycle 50,000t in 2022.

The company says that its continual efforts are making the circular economy possible in the construction sector.

UK: UK construction recorded its highest ever quarterly total value at Euro27.5bn in the first quarter of 2022. Participants in the industry agreed Euro10.4bn-worth of construction contracts in March 2022. Analyst Barbour ABI has reported that residential construction contracts rose by 50% month-on-month to Euro4.22bn, their highest level since the Covid-19 outbreak arrived in the UK in March 2020. Chief economist Tom Hall noted a year-on-year and month-on-month increase in office construction activity as indicative of a reversal of the home-working trend of the past two years.

Hall said “While the current state of the industry is positive with lots of activity and record-breaking levels of contracts awards and planning approvals in some areas, the horizon is more concerning. Overall, the level of planning applications received in March was low and raises questions about the delivery of the government’s commitment to raise the standard of healthcare across the country and its flagship levelling up agenda.”

India: Switzerland-based Holcim is reportedly in the early stages of selling its subsidiaries Ambuja Cement and ACC. The company has held discussions with JSW, Adani Group and others, according to sources who have spoken to the Economic Times newspaper. Multinational building material producers have also been approached. Holcim has not commented on what it described as ‘rumours.’ Ambuja Cement and ACC have a combined cement production capacity of 66Mt/yr

Indonesia: Donny Arsal, the chief executive officer of Semen Indonesia, has told the government that the ongoing war in Ukraine has negatively affected supplies of coal and kraft paper to the cement industry.

The head of the state-owned company said that the international price of coal had driven local mines to export it rather than sell it locally at capped prices, according to the Jakarta Post newspaper. This had made it more difficult for cement producers to buy coal at the lower price. The Indonesian coal index (HBA) price rose to high of US$288/t in April 2022 following the introduction of international economic sanctions but the local domestic market obligation (DMO) price is US$70/t. Around 160Mt of coal is sold at the capped price. The majority of this goes to power generation and the remaining quarter of this is made available to cement and other industries.

Arsal lobbied the government to clarify its supply policy for DMO. He said that the cement sector needs 16Mt/yr of coal. Semen Indonesia needs about half of this. However, at present, it is only receiving about 63% of its coal requirements at the DMO price.

Arsal also mentioned that imports of kraft paper from Russia had stopped since the war started. Semen Indonesia uses the paper to make cement bags. Most of its kraft is sourced from Russia. The company spends around US$68m/yr on paper. It is now switching to using a woven material instead.

US: CalPortland has converted production at the 1.3Mt/yr Mojave cement plant in California to its Advancement HS, a Portland limestone cement (PLC) product. The plant will reduce its CO₂ emissions by 10% on a per ton basis. The company said the move supported the Portland Cement Association’s Roadmap to Carbon Neutrality and the industry’s overall efforts to address climate change.

US: A fire has been contained within the alternative fuels system at Holcim US’ integrated Whitehall cement plant in Pennsylvania. Suppression systems were activated and then fire fighters attended the scene, according to the Express-Times newspaper. The plant has notified the US Mine Safety and Health Administration about the incident. No injuries have been reported and an investigation is ongoing. A fact sheet about the plant says that it uses 2m tires/yr as part of its alternative fuels mix. It uses coal and petcoke for 50% of its mix.

Argentina: Data from the Asociación de Fabricantes de Cemento Portland (AFCP) shows that cement shipments grew by 7% year-on-year to 2.89Mt in the first quarter of 2022 from 2.71Mt in the same period in 2021. Local consumption of cement increased at a similar rate but exports rose by 18% to 31,040t from 26,276t.

Egypt: Mondi has acquired the paper bag converting lines from National Bag and Egypt Sack, two subsidiaries of Lafarge Cement Egypt, for an undisclosed sum. The production lines will increase Mondi’s capacity by around 150 – 180m bags/yr and strengthen its position in the Egyptian paper bag market. Local subsidiary Mondi Paper Bags already operates two plants in Egypt and with this acquisition will become a key supplier of paper bags to Lafarge Cement Egypt.

Claudio Fedalto, the chief operating officer of Mondi Paper Bags, said “We are excited to have signed a long-term supply agreement with Lafarge Cement Egypt and to servicing them locally in Egypt. The collaboration will offer Lafarge access to our latest innovations, industry expertise, strong plant network and customer service.”

Vicat’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.