Germany: Cemex Zement’s Rüdersdorf, Brandenburg, cement plant is to host a new 100t/day carbon capture installation. Cemex Zement will collaborate with UK-based Carbon Clean on a front-end engineering and design (FEED) study for the project. The system will combine captured CO₂ with sustainably sourced hydrogen in order to produce green synthetic hydrocarbons. The partners aim to increase the system’s CO₂ capture capacity to 300t/day by 2026, before finally scaling it up to 2000t/day.

Europe, Middle East, Africa and Asia regional president Sergio Menendez said “This project with Carbon Clean is the latest development in Cemex’s plan to achieve carbon neutrality at the Rüdersdorf cement plant by 2030, through our pioneering carbon neutral alliance with expert industrial consortiums. Carbon capture will play a fundamental role in the efforts to succeed at this goal and ensure our operations are more sustainable.”

US: Eagle Materials’ consolidated sales were US$985m in the first half of the 2022 financial year, up by 13% year-on-year from US$875m in the first half of the 2021 financial year. Its gross profit rose by 25% to US$282m from US$225m. The group recorded cement sales of US$496m, up by 4.4% from US$475m in 2020.

Switzerland: The Science-Based Targets Initiative (SBTi) has validated Holcim’s 2050 net zero CO2 emissions pathway. The pathway consists of targets covering Holcim’s entire value chain, across Scopes 1 – 3.

CEO Jan Jenisch said “The building sector has an essential role to play to accelerate our world’s transition to net zero. I am proud to be joining the SBTi today to announce Holcim’s net zero pathway to 2050. By setting the first Net-Zero Standard for our industry, we are walking the talk on our commitment to take science-driven action to win the Race to net Zero.”

India: Dalmia Bharat’s consolidated cement sales in the first half of the 2022 financial year were 5.1Mt, up by 6.2% year-on-year from 4.8Mt in the first half of the 2021 financial year. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 1.6% to US$178m from US$176m. The company recorded a net profit of US$67.1m during the period, up by 19% from US$56.3m. During the second quarter of the year, which ended on 30 September 2021, Dalmia Bharat commissioned a second line at its Cuttack, Odisha, cement plant and began trial production at its newly acquired Murli cement plant in Maharashtra.

The Orissa Diary newspaper has reported that managing director Puneet Dalmia said "We are pleased with our performance during the quarter. In spite of unprecedented costs related headwinds across all regions, our razor sharp focus on operational efficiencies and execution has helped us contain our costs and deliver an industry-leading performance. We have made considerable progress on our immediate priorities, including expanding our capacity, driving organisational transformation, reinforcing our brand and redefining our corporate governance framework. Looking ahead, we remain focused on further strengthening our momentum to drive sustainable and profitable growth and generate top-tier returns for our stakeholders.” He continued “As India's economy continues to rebound from the lows of last year, we expect the demand and pricing environment for the sector to improve for the rest of the 2022 financial year."

UK: The Clean Growth Fund has led a Euro1.19m investment in cement industry decarbonisation software developer Carbon Re. Other investors are Blue Impact Ventures, Cambridge Enterprise Fund and UCL Technology Fund. The supplier says that its deep reinforcement learning AI product can reduce cement plants’ operating costs by Euro1.97 – 5.09/yr and eliminate 20% of Scope 1 emissions. Five pilot installations of its Delta Zero platform are installed at cement plants in the EU, India, Thailand, Turkey and Vietnam.

CEO Sherif Elsayed-Ali said “Our mission is to reduce global emissions at the gigatonne scale, starting with the cement industry, and to become the leading global AI company to deliver industrial decarbonisation. Carbon Re’s AI technology provides heavy industry with an effective solution to address their critical challenges of energy costs and emissions reduction.” He added “The road to a zero-carbon world will be long, but with the support of the Clean Growth Fund and our other investors, our AI-products and solutions will evolve to accelerate the transition of energy intensive industries.”

World: A Systems Change Lab report on the state of climate change action has warned that the global cement industry is making insufficient progress towards its 2030 climate change targets and that a step-change in action is required. It recorded the carbon intensity of global cement production at 635kgCO₂/t in 2018 with the 2030 target of no more than 370kgCO₂/t. The rate of change over the previous five years was reported as being 2.9% but an annual rate of change of 22.5% would now be required to meet the 2030 target.

It also noted that emissions intensity from the cement industry had actually increased slightly in recent years. It reached this conclusion by using a different methodology from the Getting the Numbers Right (GNR) project. Instead it estimated the global emissions intensity by using global data on process emissions and energy data from the International Energy Agency and the GNR.

The report said that the cement sector would need to go beyond traditional mitigation options such as improving energy efficiency and switching fuels to meet its climate commitments. However, carbon capture utilisation and/or storage (CCUS) and novel cements were described as costly and immature. In its view, “Decarbonisation in the long term thus will depend on significant investments in research, development, and demonstration, alongside efforts to create a demand for low-carbon cements and policies to support investment in decarbonisation technologies.” It described both strategies as, “not yet fully mature in terms of technology development, costs and scaling.” The ‘critical enablers’ it identified to help the cement sector meet its target included stricter regulations, increased demand for low-carbon cement and investment in pilot and industrial scale projects looking at novel cements.

Overall, the report said that change towards averting climate change across 40 key areas in power generation, buildings, industry, transport, land use, coastal zone management and agriculture was not happening fast enough and that none were on track to meet their respective 2030 targets. Change was happening but not at the required pace. Systems Change Lab is a collaboration between the High-Level Climate Champions, Climate Action Tracker, ClimateWorks Foundation, the Bezos Earth Fund and World Resources Institute.

Philippines: Siam Cement Group has established a subsidiary to provide logistics services for its business in the Philippines. Reuters News has reported that the group has injected US$205,000-worth of investment into the company.

UK: Cemex has joined its subsidiary Cemex Ventures and Taronga Ventures in investing in construction logistics digital platform developer Voyage Control. The group said that the supplier’s product can reduce delays, waste and cost overruns through optimised delivery scheduling, and provide an overview of all transactions in real time. It currently helps to coordinate 6 million deliveries annually at 200 sites across North America, Europe and Asia.

Cemex Ventures director Gonzalo Galindo said “Cemex Ventures seeks to integrate Voyage Control with Cemex's digital assets, which will allow us to provide a better and more complete service to our clients. Now, we can collect more information, continue to promote operational efficiency and sustainable reporting and improve our health and safety criteria to reduce risks.”

Bangladesh: LafargeHolcim Bangladesh has launched a new early strength rapid set cement known as Holcim Shokti. The company said that the product is the first on the Bangladeshi market to use rapid set technology to enhance its early strength by 50% within 48 hours, reduce its setting time by 15 – 25% and optimise water requirements. The producer estimates that project costs will fall by US$16.4/t of Holcim Shokti cement used compared to those of projects using ordinary Portland cement (OPC).

Holcim Shokti cement is available across Bangladesh in bagged form.

Interesting move from HeidelbergCement this week with the news that it has agreed to buy a cement plant in Tanzania. The Germany-based multinational producer has signed a deal to buy a 68% stake in Tanga Cement from South Africa-based AfriSam. There has been no indication of the price but the arrangement will give HeidelbergCement a 1.3Mt/yr integrated plant in the north of the country along with a limestone quarry with reserves to last 30 years. The transaction is expected to close in the second quarter of 2022. HeidelbergCement says it then hopes to buy the remaining shares in the company.

HeidelbergCement already operates one integrated plant in Tanzania, Tanzania Portland Cement’s (TPC) Wazo Hill Plant in the capital Dar es Salaam. It took control of the plant in the early 2000s when its subsidiary Scancem International purchased over half of the company’s shares. The plant commissioned a new cement mill in 2014 to increase its production capacity to 2Mt/yr. Local press reported in April 2021 that the subsidiary planned to invest US$15m towards modernising the unit in 2021. It sells cement under the Twiga brand.

Tanga Cement runs a plant near Tanga that was originally commissioned in 1980. Holcim took it over in the mid-1990s before South-Africa based AfriSam assumed control in the early 2010s. The plant commissioned a second production line in 2016 and it has a production capacity of 1.3Mt/yr. It sells cement under the Simba brand.

HeidelbergCement’s decision to buy a plant in Tanzania is noteworthy because it goes against the general trend in acquisitions by western-based multinational cement companies in recent years. Instead of shrinking away from markets in developing economies and doubling-down on ‘safe havens’ in mature markets it has bought a plant in a developing country. Although one might argue that it does fit the definition of a well-chosen bolt-on acquisition.

Graph 1: Cement production in Tanzania, 2011 – 2020. Source: Tanzania National Bureau of Statistics.

As Graph 1 above shows, cement production in Tanzania has more than doubled over the last decade, from 2.4Mt in 2011 to 6.5Mt in 2020. Tanzania Portland Cement estimated local demand at 5.9Mt, including exports, in 2020. This was against a total cement production capacity, from both integrated and grinding plants, of 11Mt/yr. As well as the TPC and Tanga Cement plants mentioned above, Holcim runs an integrated plant in Mbeya and Huaxin Cement operates one near Tanga. Alongside this, new integrated plants have opened including Lake Cement’s 0.5Mt/yr Kimbiji plant in 2014 and Dangote Cement’s 3Mt/yr Mtwara plant in 2015. The big project on the horizon is a proposed 7Mt/yr integrated plant from China-based CNBM/Sinoma, although not much has been heard publicly about it since mid-2020. At that time local press was reporting that compensation was being finalised for residents of the proposed site near Tanga. Needless to say, given the size of the plant compared to the Tanzanian cement market, much of the plant’s output is intended for export.

With the CNBM plant in mind, it is noteworthy that HeidelbergCement committed to buying an extra plant in the country. Production has been going up over the last decade to presumably meet demand but the new Chinese project could potentially blot out the entire existing production. Tanzania faced a cement shortage at the end of 2020 despite coronavirus. TPC has repeatedly warned of production overcapacity in Tanzania and the challenges of competition. Yet it reported a new sales record in 2020 and growth of 7% in the national cement market. Despite a 5Mt overcapacity, TPC says it managed to adapt to the new market conditions. It also managed to grow its operating profit by 20% year-on-year to around US$46m in 2020 compared to HeidelbergCement Group’s 8% rise in results from current operations in 2020. This kind of return no doubt helped HeidelbergCement to make up its mind.