August 2025

The Global CemPower conference took place last week in London, attracting 103 delegates from 25 countries. The conference looked at waste heat recovery options in the global cement industry. 'Back-of-the-envelope' calculations suggest that the value of the waste heat recovery units that could be installed in the global cement industry in the next ten years might total US$50bn - well worth thinking about.

Robert McCaffrey, the conference convenor, gave a listing at the event of the seven megatrends that will shape the future of the global cement industry, including demographic trends (aging of both developing and developed nations), urbanisation (with 70-75% of humanity due to live in cities by 2050), the growth of new country superpowers, the possibility of further climate change, paradigm shifts in the cement industry business model, ever-increasing energy costs and the influence of Rumsfeldian known-unknowns and unknown-unknowns.

Whatever else happens in the next 50 years, increased energy costs and energy efficiency will be the order of the day. In the global cement industry, waste heat recovery is here to stay.

Presentations, videos and a full review of the Global CemPower conference are available here, www.globalcement.com/conferences/global-cempower/introduction.

UK: ANH Refractories Europe has hired Stefan Frank, a senior engineer with more than 20 years' experience, to drive export sales across Europe.

The senior refractory engineer has joined the Wirral based firm to bolster expertise in the cement sector. He has been charged with kickstarting a new campaign to increase ANH's profile and drive sales in emerging cement markets in countries including Turkey, Ukraine and Italy.

Frank holds more than 20 years' experience in the refractory industry. This has included roles at HeidelbergCement Group's Technology Center in Leimen, Baden-Württemberg, in Germany, and extensive work in the rotary kiln field.

ANH Refractories Europe managing director Peter Rooney said, " The European cement market has been a solid area for sales in the last 12 months and we believe Stefan has the knowledge and skills to build on this."

The American owned firm, which has a US turnover of US$550m, manufactures materials used in linings for furnaces, kilns and incinerators operating at high temperatures. It delivers refractory solutions, services and products to many industries including aluminium, petrochemical, power, incineration, mineral and glass.

Lafarge announced swingeing cuts this week in a new bid to squash its debt. The headline figures were that it intends to generate at least Euro1.75bn earnings before interest, taxes, depreciation and amortisation (EBITDA) in the four years from 2012 to the end of 2015 and that it aims to reduce net debt below Euro10bn in 2013.

Given that Lafarge's EBITDA has dropped from Euro4.62bn in 2008 to Euro Euro3.22bn in 2011 this seems like a tough job. In addition to finding the savings, Lafarge may also have to battle the decline of the Euro a clear and present danger for a multinational with deep Eurozone foundations. The group has detailed planned cost savings of at least Euro400m in 2012 and of at least Euro300m in 2013. Both of these figures are below the yearly average of Euro435m required to meet the EBITDA target of Euro1750m by 2015.

First came the regional restructuring from January 2012 with the job losses but how Lafarge will really save cash still remains unclear. Higher energy savings through alternative fuels, increased savings from new programmes to manage electricity and productivity improvements were all mentioned in the press release. No specific information was provided for how these changes will affect the bottom line. Practically, analysts expect that Lafarge will raise its cement prices in response to rising energy input costs, making profits along the way with raised margins.

Lafarge chief executive Bruno Lafont stated that the group will raise Euro1bn in asset sales in 2012. On the cement side, progress on the Lafarge-Tarmac UK joint venture will start by the end of June 2012. The combined assets are valued at around Euro500m. News on an Indian acquisition in Lafarge South Africa has gone quiet since Aditya Birla Group and Shree Cement were reported as showing interest in January 2012. The holding was valued at around Euro650m.

Crudely assuming that half of the proceeds of the sale of the Lafarge-Tarmac assets will go to Lafarge, selling Lafarge South Africa would probably allow Lafarge to hit Lafont's target for 2012. That just leaves similar savings for 2013, 2014 and 2015 to be found! What does Lafarge intend sell next?

Sweden: Åke Erikssson is the newly appointed manager of the Höganäs Bjuf Asia Pacific operation, shown here (left) together with the managing director Erik Olsen.

Höganäs Bjuf Asia Pacific provide services to the cement producers in the Asia Pacific region and will in the future also start with installation services.

Spend, spend, spend has been the advice for CRH this week. The suggestion by an industry analyst this week that Irish building material conglomerate CRH should go on a shopping spree seems almost perverse! Or at least like stockbrokers trying to drum up excitement.

Just as all of the big multinational cement producers are selling assets and tightening management structures to cope with the ongoing financial turmoil, CRH is the only player that hasn't ruled out acquisitions in 2012. The analyst from Dublin stockbroking firm Davy predicted that CRH could spend up to Euro3.5bn on acquisitions while remaining within its banking agreements; a more level-headed figure was given as Euro1.5bn.

CRH broke down its revenue in 2011 to 55% to the European divisions and 45% to the American ones, with European Distribution, Americas Materials and European Materials being its top three sections. European Materials, the worldwide division containing cement assets generated Euro2.99bn, 16.5% of total group revenue.

With 85% of CRH's European Materials division concentrated on Switzerland, Finland, Benelux, Eastern Europe, Turkey and Asia its exposure to the Eurozone economic slowdown has been reduced compared to the competition. Yet what to buy next is fraught with risk. If Greece exits the Euro for example, then there may be some bargains going, but how long it would take these assets to become profitable is a big unknown.

Similarly, the over-indebted Mediterranean countries present opportunities and challenges. CRH's decision to transfer its 49% holding in Portuguese cement joint venture Secil to Semapa in May 2012 may indicate CRH's intention to stay well away from the Eurozone until the dust settles. Given the amount of cash that CRH could potentially throw around however, it seems odd that the company didn't try to disrupt the ongoing Cimpor takeover by two Brazilian firms. If anything happened to the bid by Camargo Corrêa and Votorantim then CRH would be in a prime position to benefit should it wish.

Whatever CRH decides to do with its money, it's a good problem to have! Lafarge, Cemex, HeidelbergCement and Holcim must all wish they had the same dilemma.

Qatar: The Qatari Investors Group has appointed Faisal Abdulla al-Mana as the managing director of its subsidiary, Al Khalij Cement Company. Al-Mana was elected as member of the board of directors of the group in 2011. He has also been the vice chairman of Redco Construction Company since 2004.

It is hoped that his appointment will bring about further progress and prosperity, enhancing confidence and further development within the cement company. He brings a wealth of experience in the sector, which plays an important role Qatar's economic development, according to an Al Khalij spokesman.

Qatari Investors Group chairman Abdulla bin Nasser al-Misnad expressed optimism and confidence in al-Mana's abilities and visions, as his performance as one of the members of the board of directors of the Qatari Investors Group had been 'outstanding'.

Two trends have put the squeeze on the Indian cement industry this week. Firstly it emerged that producers were slashing prices ahead of the coming monsoon season. Then the Centre for Monitoring Indian Economy (CMIE) proclaimed that it expected cement prices to rise by 5.9% in the 2013 financial year.

Producers cutting prices in May, before the monsoon, is important because it suggests that overall cement demand is already down. Once the rains come demand will go down even more. A slowdown in construction, particularly in infrastructure projects, a labour shortage and a sand shortage have all been blamed. Looking ahead however, as the CMIE has done, suggests that prices have to go up due to the increase in railway freight charges announced in March 2012 and the excise duty hike announced in the Union Budget 2012-13. All that remains in the middle are the profit margins that the cement industry has become accustomed to.

Back in January 2012 Fitch Ratings predicted a 'negative outlook' for the Indian cement industry in 2012, based on overcapacity and higher interest rates. Now it seems that total capacity utilisation is down in 2012 compared to 2011, from 76.2% to 71.3%. Throw in the railway and duty increases and one might be tempted to feel that Fitch went easy on the subcontinent.

Yet, the cement producers have already found one silver lining in the monsoon season. Industry sources were soon reported as using price increases in the country's south zone and price decreases in the north zone as evidence that cartel-like behaviour couldn't possibly be happening. In a country as large as India perhaps they should have added the words 'nationally coordinated.' Despite the price drops, prices in the cities have been reported at an all-time high due to supply shortages - a situation that may be familiar to some consumers in Saudi Arabia.

Colombia: Cementos Argos has announced the appointment of four new vice-presidents following of internal reorganisation. Following the promotions Jorge Mario Velasquez, president of Argos, commented that the moves had met the right balance of youth and experience.

Juan Luis Munera, a commercial law attorney with seven years service with Argos, has been appointed to vice president for legal and sustainability. Carlos Horacio Yusty, an engineer specialising in industrial management systems with 16 years service with Argos, has been appointed to vice president of finance. Mauricio Ossa, a business manager with 15 years service with Argos, has been appointed regional vice president of the company's Caribbean operation. Tomas Restrepo, currently vice president of innovation with five years service with Argos, will serve as regional vice president of Argos' Colombian units.

Two stories this week on alternative fuels illustrate their current place in the cement industry succinctly. Sumitomo Osaka Cement in Japan plans to increase the sales of power generated in-house at its Tochigi Prefecture plant using wood biomass fuel. Meanwhile on the other side of the Pacific Cemex US is planning to cut costs and carbon emissions by installing wind turbines at its Victorville site in California.

At the recent Global CemTrader conference on supplementary cementitious materials (SCMs), coal and petcoke and logistics for the global cement industry, Patrick Peenaert of Lafarge delivered a presentation entitled the 'Global Overview of Worldwide Coal & Petcoke.'

In his talk Peenaert revealed, unsurprisingly, that fossil fuels dominate the global cement industry for the energy consumption of the top four international producers, with coal and petcoke making up over 70% of usage. However, alternative fuel usage has grown from 13% in 2008 to 18% in 2011. As price pressures on fossil fuels grow from other industries so too will investment into alternative fuel options.

The Japanese story demonstrates this well, especially given that the economic fallout of the 2011 earthquake on the Japanese power industry has made an alternative fuel process considerably more valuable for a plant with a temporary closed kiln. By contrast the US story is more nonchalant: operations will proceed at the Californian plant regardless of whether the turbines are built or not.

Yet hedging one's bets with power sources is increasingly seen to be a prudent long term strategy in an uncertain world. A familiar refrain in the recent batch of cement producer financial reports has been mounting energy costs. This week's half-year results for the Pretoria Portland Cement in the bullish African market is no exception.

Watch the video of Patrick Peenaert's presentation at the Global CemTrader 2012 conference, and all the other presentations

India: Martin Kriegner has been appointed CEO of Lafarge India as part of the current group-wide reorganisation drive. He will hold responsibility for all of Lafarge's cement, aggregates and concrete activities in the country.

"I am happy to return to India as Country CEO, at a time when the construction sector is evolving quickly in the country. By combining all of our activities together we will be able to support this evolution by offering integrated and innovative solutions at an earlier stage of construction in close proximity with our customers, allowing the full benefits of our innovative products and services to be realised," said Kriegner.

Martin Kriegner, an Austrian citizen, joined Lafarge in 1990 and became the CEO of Lafarge Perlmooser AG, Austria in 1998 before he moved to India as head of the cement activity in 2002. Prior to this assignment he served as regional president, based in Kuala Lumpur, Malaysia. Lafarge has four cement plants in India: two plants in the state of Chattisgarh and a grinding plant each in Jharkhand and West Bengal.