18 January 2023
Portland Cement Association forecasts US cement consumption to decline later in 2023 18 January 2023
US: Ed Sullivan, the Chief Economist and Senior Vice President of Market Intelligence at the Portland Cement Association (PCA), expects that cement consumption will decline in the second half of 2023 due to a worsening general economic outlook. However, he noted that order books for the construction industry were ‘strong’ for at least the next six months and that this would cushion the sector. Sullivan made his comments at a presentation at the World of Concrete conference in Las Vegas.
Sullivan said, "When looking at the big picture of real construction spending and cement consumption this year, we should expect both volumes to soften throughout the year, with significant declines in the second half of 2023." He added, "The downturn is expected to be short-lived as interest rates ease slightly and stronger infrastructure volumes materialise in 2024 and beyond."
Sullivan predicts that the US economy is gradually weakening under the weight of high inflation, rising interest rates and geopolitical turmoil. However, he viewed the occurrence of a recession as unlikely. In the construction sector he forecasts that the private sector will continue decline in 2023 following a drop in 2022. Spending benefits from the Bipartisan Infrastructure Law are likely to be muted in 2023 before registering a stronger effect in 2024.
FLSmidth introduces new strategies for cement and mining sectors 18 January 2023
Denmark: Equipment manufacturer FLSmidth has launched new corporate strategies for its cement and mining sectors. The so-called ‘pure play’ plans are intended to further focus on technology, products and services and sustainability. The group says it is also simplifying its operating model to reduce risks, improve efficiencies, ensure stronger execution and improve profitability and quality of earnings. The announcement was made at the same time as the group’s latest investor event.
Mikko Keto, the chief executive officer at FLSmidth, said “We must prioritise our efforts on our core business, reduce risk and execute with excellence. We have already started to fundamentally transform our business to ensure stronger strategy execution and to achieve our long-term ambitions to the benefit of our stakeholders.”
In the cement sector the group’s ‘Green 26’ plan aims to make the company the preferred service supplier for the industry. It added that it has a “clear commitment to drive the green transition in the cement industry.” It has set a target of reaching an 8% earnings before interest, taxation, depreciation and amortisation (EBITDA) margin by 2026. For the mining sector the target is a 13 - 15% margin.
In provisional financial results for 2022, FLSmidth revealed that it had an EBITDA margin of 3.3% for cement and 7.6% for mining. Group revenue rose by 24% year-on-year to Euro2.93bn in 2022 from Euro2.37bn in the 2021. Revenue from the cement and mining sectors grew by 7% to Euro847m and 29% to Euro2.03bn respectively. The group said that the short-term outlook for the cement industry remained impacted by overcapacity and that a potential recession is expected to impact market demand negatively over the coming period. Its mining sector revenue was inflated by the acquisition of ThyssenKrupp Mining in 2022.
Sagar Cements wins auction to buy Andhra Cements 18 January 2023
India: Sagar Cements has won the auction to acquire Andhra Cements from Jaiprakash Associates (Jaypee Group), a company currently undergoing an insolvency process. The committee of creditors of Andhra Cements voted to approve the sale, although the amount of the bid has not been disclosed, according to the Press Trust of India. Dalmia Cement (Bharat) was also reportedly made a bid for the cement producer.
Andhra Cements operates an integrated plant at Durga and a grinding plant at Visakhapatnam in Andhra Pradesh. It was previously acquired by Jaypee Group in 2012 from Duncan Goenka Group.
Raysut Cement reports loss in 2022 18 January 2023
Oman: Raysut Cement’s loss after tax rose to US$243m in 2022 from US$33.6m in 2021. Its expenses more than doubled to US$361m from US$168m. Its sales revenue dropped by 12% year-on-year to US$118m from US$134m.
The release of financial data for 2022 follows the intervention by the Capital Market Authority (CMA) in late 2022. In November 2022 the regulator publicly called on the cement producer to urgently address 'material misrepresentations' in its financial results for the second quarter of 2022. It then replaced the company’s board of directors and appointed a temporary one in December 2022 following an audit. This is the second time the CMA’s history that it has taken such action, according to local press.
Paraguay: Ernesto Julián Benítez Petters, the president of Industria Nacional del Cemento (INC), has reassured the market that the company can continually to operate normally despite low water levels in the Paraguay River. He reported that, in the fourth quarter of 2022, boats were loading with 1.5m of draft, according to the Última Hora newspaper. This has meant that barges can only accommodate around half of their normal capacity. Benítez Petters added that it is uncertain when the river will recover its previously normal water levels.
The state-owned cement producer says it has enough raw materials to keep its plant operating at Villeta as it has used more barges to cope. It also conducted maintenance works at the docks of both its Viletta and Vallemí plants in 2021. Widening work at the Paso Queso on the river is a long term goal of the government.
Brazilian cement sales fall in 2022 18 January 2023
Brazil: Data from the Brazilian National Cement Industry Association (SNIC) shows that sales of cement fell by 3% year-on-year to 63.1Mt in 2022 from 64.4Mt in 2021. Sales fell in the Nordeste, Sudeste and Sui regions but grew elsewhere. Exports declined by 14% to 0.40Mt from 0.47Mt. SNIC has blamed the falling sales on a declining real estate sector, high inflation rates and a poor response from a new house-building campaign. It also attributed the Football World Cup in late 2022 as having a detrimental effect on national cement sales! SNIC forecasts sales growth of 1% in 2023 despite considerable market uncertainty.
Solusi Bangun Indonesia orders two silos from Claudius Peters 18 January 2023
Indonesia: Solusi Bangun Indonesia (SBI) has ordered two EC22 cement silos from Germany-based Claudius Peters. The silos have a volume of approx. 17,200m3 and will be installed by contractor PT Hutama Karaya (Persero). The scope of supply includes all process equipment for the silos from conveyors to filters.
SBI is a subsidiary of Semen Indonesia Group. It is expanding the export capacity of its integrated cement plant at Tuban by building a new terminal. The group has a cement production capacity of 65Mt/yr.
Turkish government investigating cement price and supply issues 18 January 2023
Türkiye: The Ministry of Trade says it is monitoring developments in the construction sector with regards to high cement prices and supply problems. It is looking at exports in particular, according to the Hürriyet Daily News newspaper. It has taken action following complaints it received in late 2022. Previously in 2021 the government added cement and clinker to the list of products which require a permission to be exported. Government bodies including the Ministry of Trade, the Ministry of Treasury and Finance and the Turkish Competition Authority (Rekabet Kurumu) have each been recently conducing inspections of cement companies looking in domestic and export prices.
US: Sublime Systems says it has secured US$40m in funding from its latest investment round. Venture capital company Lowercarbon Capital, The Engine, Energy Impact Partners and others took part in the Series A funding round. Siam Cement Group has also been announced as a strategic investor. The company will use the new capital to increase production at its pilot plant, build its team, conduct product testing and promote offtake commitments from new customers and partners.
Sublime Systems is commercialising an electrolysis cement production process that will manufacture cement at ambient temperature from a variety of abundant calcium sources. It says it is the first company to produce cement through this process.
Leah Ellis, co-founder and chief executive officer of Sublime said, "We have successfully demonstrated the viability and scalability of our approach and we are able to produce cement with the same or better strength, slump and durability than today's Portland cement. The support of our talented team and capital from our investors will enable us to operate our pilot facility, secure advance offtake agreements and work toward producing our low-carbon cement at scale."
The company was spun-out of the Massachusetts Institute of Technology (MIT) in 2020. It was co-founded by Yet-Ming Chiang, an MIT professor and co-founder of several climate-tech companies, including A123 Systems, 24M Technologies and Form Energy, and Leah Ellis, an Activate Fellow and one of MIT Technology Review's 35 Innovators under 35. To date, the company has concentrated its efforts on developing its first drop-in, low-carbon cement product, validating its manufacturing process at the pilot scale, validating buyer demand and building up its team.
Austria: Lafarge Austria and Perlmooser Beton will operate under the new name Holcim Austria from May 2023. Both companies have been part of Holcim Group since 2015. The rebranding exercise follows the renaming of LafargeHolcim as Holcim that took place in mid-2021.
Lafarge Austria operates two cement plants, at Mannersdorf and Retznei respectively, with a total production capacity of 1.6Mt/yr. Its headquarters is in Vienna. The company employs around 250 people.