September 2025

It's been a cold and rainy 'summer' so far in 2013 in the UK. So much so that crowds at the Glastonbury Music Festival watching the Rolling Stones this weekend were lucky they didn't get drenched during 'Jumpin' Jack Flash.' However, cement producers around the world are increasingly tackling the opposite problem as they concentrate on water conservation measures.

As we see this week, the Cement Manufacturers' Association of the Philippines (CeMAP) has started advocating the use of rainwater for cement production. According to figures put out by CeMAP, an average dry-process cement plant uses 100-200L of water per tonne of clinker produced. The Philippines uses around 3.2BnL/yr of water for its cement production capacity of 21Mt/yr, which operated at an 85% capacity utilisation rate in 2012. A simple calculation reveals a water usage rate of 179L/t of cement produced in the Philippines. Though close to the top of CeMAP's dry-process water use range, it is actually less than some of the multinational cement producers (see below).

Water conservation among multinational cement producers has become increasingly high-profile in recent years. In January 2013 Cemex announced that it had developed a methodology to standardise water measurement and management across all of the company's operations. This followed a three year partnership between Cemex and the International Union for Conservation of Nature (IUCN). In its 2012 Sustainability Report Cemex reported that 12% of its cement operations were in water-scarce or water-stressed locations. Its water consumption for cement was 305L/t. This compares to Holcim's water consumption for cement of 260L/t in 2012.

Other multinational cement producers have put into place similar measures. Lafarge started to assess its 'water risk' in 2011. It found that 25% of its cement production sites were located in areas of water scarcity or high water scarcity, based on 2025 projections of annual renewable water supplies per person. A follow-up with the WWF Water Risk Filter (WRF) continued the assessment, identifying 15 Lafarge cement sites as being located in 'high-risk' basins, with 10 particular sites identified in Pakistan, India, Algeria, Mexico, Jordan, China, South Africa, Iraq and Uganda.

It is worth noting here that most of these countries are currently growth areas for cement demand and so producers with plans to expand in these regions need to tread a careful line. Cement makers that use vast amounts of water in water-scarce regions will be less desirable neighbours for local populations than those that use less water. This, like consumer and regulatory pressures in developed markets, could turn into a major driving factor for improved environmental performance in developing regions. Investing in water conservation measures therefore appears to make sense socially, environmentally and (ultimately) economically.

Switzerland: Xavier Dedullen has been appointed Head of the newly-created Legal and Compliance function at international cement producer Holcim, as well as Group General Counsel. As Corporate Functional Manager, he became a member of Holcim Senior Management, effective 28 June 2013. He reports directly to the Group CEO. As Chief Legal and Compliance Officer and Group General Counsel, Xavier Dedullen assumes responsibility for all legal and compliance matters.

Chile: Cementos Bío Bío has appointed Iñaki Otegui as its new CEO, effective 1 August 2013. Otegui replaces Jorge Matus, who has resigned after 39 years with the company.

A recent BBC television documentary explained the rise of low-cost airlines in the UK in the early 1990s. With news of an independent cement grinding plant in western France doing the rounds this week, we ask could the same revolution happen in the cement industry?

Back in the early 1990s following deregulation in the European aviation industry, smaller airlines took the opportunity to try a different model to the larger national carriers. Taking cost-cutting ideas from the US-based Southwest Airlines (deregulation had occurred earlier in the US) new companies like Ryanair and EasyJet burst into the short haul market, seizing market share and changing people's attitudes to air travel. For example, low to medium income males going on a 'British Gentlemen' stag (bachelor) party to a European destination such as Ayia Napa or Riga would have been unthinkable before the mid-1990s.

Flying passengers around Europe and producing cement are clearly radically different businesses. However, Kercim Cements' objective to produce 600,000t of cement and take a 10% share of the local market near Saint-Nazaire in Loire-Atlantique department of France stands out. With the European cement industry in decline and endless stories about cement exporting nations flooding developing markets, taking a grinding-led business model suddenly sounds considerably more competitive.

In addition, an independent company importing clinker from non-EU countries might also benefit from not being subject to quota allocations of CO₂. This issue was raised from a different angle earlier in 2013, when Irish company Ecocem complained about large cement producers making profits from the EU Emissions Trading Scheme (ETS) despite reduced production.

Thinking around grinding as the model for an industry step-change, one of the presenters at the Global CemTrader conference in May 2013 was Moisés Nunez of Cemengal. He spoke about 'Plug&Grind', his company's low-cost modular grinding plant technology. Essentially, the Spanish company can fit a grinding station into 15 shipping containers and assemble the grinding unit wherever the client can transport it to. Once again, this sounds perfect for a global cement industry that is making too much clinker.

As this column has reported previously, Africa is the ideal target for a low-cost grinding-led business model given its overall high level of demand for cement. Any cement business near the coast has been under intense competition from imports. So much so, that former PPC (Portland Pretoria Cement) head Paul Stuiver stated that any African facility built within 200km of a port was at risk. Could French and other EU-based coastal cement plants also be at risk? With the cost of production and transport on the rise, the low-cost grinding model may even work in Europe. The beauty of the Cemengal system is that it is mobile so that it can follow market opportunity.

As the Economist recently pointed out in a review of the global cement industry, it is an industry dominated by a small number of companies. High cost of entry, high transport costs by road and other factors mean that this is unlikely to change anytime soon. Yet, exports by sea provide some level of increased competition. Both of the grinding projects mentioned above rely on this fact. Let's wait and see what happens.

Ireland: Donald A McGovern, Jr will join the board of CRH as a non-executive director effective from 1 July 2013.

McGovern, a US national aged 62 years, is currently Vice Chairman for Global Assurance at PricewaterhouseCoopers (PwC), a position he has held since July 2008. McGovern will retire from PwC on 30 June 2013, following a 39 year career with the firm, during which time he directed the US firm's services for a number of large public company clients. He is a member of the American Institute of Certified Public Accountants and holds a Master's Degree in Business.

Germany: Minister Eveline Lemke has presented a medal for outstanding commitment to the economy in Rhineland-Palatinate to Irene Scheidweiler, one of the joint founders of Vecoplan. Lemke described Scheidweiler as a model for younger generations.

Scheidweiler founded the recycling technology firm based in Bad Merienberg in 1969, when she was aged 22. In 1995 Vecoplan AG became a subsidiary of MAX Automation AG of Dusseldorf. Today the company employs more than 400 staff at locations in Germany, the US, UK, Austria and Spain.

Dominican Republic: The Dominican Association of Cement Producers (Adocem) swore in Carlos Gonzalez as its president for 2013 – 2014. Gonzalez, who is also president of Cemex in the country, joins Gabriel Ballestas of Cementos Argos as treasurer and Jose Caceres of Cementos Cibao as secretary.

US: Texas Industries (TXI) has announced that its board of directors has named Tom Ransdell as its chairman of the board effective from 18 June 2013. Ransdell has been an independent director of TXI since 2005 and has many years of experience in the construction materials industry. Ransdell now fills the position of chairman created by the untimely death of Bob Rogers on 11 June 2013.

Rogers was the son of the founder of TXI, Ralph Rogers, and was CEO of the company from 1970 until 2004 when he retired. From 2004 until 11 June 2013 he served as chairman of the board of TXI.

TXI is the largest producer of cement in Texas and a major cement producer in California. TXI is also a major supplier of construction aggregate, ready-mix concrete and concrete products.

Lafarge's decision to expand in Zimbabwe adds to the mix in sub-Saharan Africa.

As we discussed in Global Cement Weekly #104, Dangote and PPC (formerly Pretoria Portland Cement) may be facing off as the biggest local cement producers in the region but the influence of the European-based producers should not be dismissed too readily. Investing US$200m over the next 10 years matches PPC's similarly sized investment announced in November 2012. According to Lafarge, the spend will help maintain the cement producer's market share in the country.

The other point of note from Lafarge's Zimbabwe announcement is the emphasis on the multinational's 'Building Better Cities' campaign in the story. This is unsurprising given that that Lafarge Zimbabwe Managing Director Jonathan Shoniwa made the comments about Lafarge Zimbabwe at a branding event for the campaign. Similar events are happening around the world. However, looked at overall, the decision to place cities at the heart of its marketing makes an increasingly compelling case for a variety of markets.

Some commenters on the Global Cement LinkedIn Group discussed this very issue recently in response to a news story on Lafarge's next set of expansion plans for China. Specifically, someone asked why would Lafarge want to expand in a market suffering from overcapacity!

The Building Better Cities campaign offers one answer. As China prepares to shut down excess capacity, Lafarge's strategy to be in place once the dust settles (perhaps literally in some places) starts to make sense. As a marketing tagline 'building better cities' works well because who doesn't – from Zimbabwe to China to even France – want better cities with better transport links through price, planning, technical and aesthetic innovations.

To give a sense of the environmental zeitgeist happening in China right now, this week we carry a news story on the Chinese Institute of Public and Environmental Affairs reporting 17 Chinese cement companies for environmental misdemeanours. Elsewhere, we can see evidence of continued foreign enthusiasm for investment in the Chinese cement market from Japan's Sumitomo Osaka Cement, despite fears of overcapacity. Lafarge is saying the right things at the right time but it may not be alone in its strategy.

In the global cement news this week, we see that PPC (the former Pretoria Portland Cement), a large-scale domestic player in the South African cement industry, has taken it upon itself to provide association-like services to cement and concrete consumers in the country. PPC says that it felt obliged to supply information on things like quantity analysis, setting advice and product testing in the place of the now-defunct Cement and Concrete Institute (CCI).

The CCI, lambasted by PPC and other cement producers for years, was accused in April 2013 by PPC of not providing the kind of advice and services that cement producers should expect from an association. PPC, Lafarge and AfriSam all pulled funding and the CCI collapsed.

If the CCI had simply ceased to exist, PPC's new stance, putting its own cash into industry-wide assistance, might be seen as laudable. However, the CCI has been re-born as the Concrete Institute (CI), an organisation that is, by its own admission, no longer on the lookout for the interests of the whole industry. The CI is largely backed by Sephaku Cement, itself majority owned by the Nigerian cement juggernaut Dangote Cement, making PPC's stance suddenly look like one of self-preservation. Dangote is making rapid progress in the sub-Saharan cement industry and firms like PPC cannot afford to let it sweep aside the status-quo in South Africa.

The speed and scale of Dangote's rise, covered previously in this column, is huge. Nigeria's largest company now has interests in Senegal, Zambia, Tanzania, Congo, Ethiopia, Cameroon, Ghana, Sierra Leone, Ivory Coast and Liberia as well as Nigeria and South Africa. Not a month goes by without the announcement of another upgrade, plant or project. Dangote has a fantastic position in its domestic market that has enabled these new projects to be funded.

By contrast PPC is battling a stale construction market in South Africa. South African cement sales fell by 3.8% year-on-year in the fourth quarter of 2012. To counteract this, PPC has committed to expand outside of South Africa to the tune of 40% of total production by the start of 2016. It announced in early 2013 that production is on track to come online in Rwanda, Ethiopia and the Democratic Republic of Congo by the fourth quarter of 2015. Zimbabwe is expected to follow suit by the middle of 2016. It already has interests in Botswana and Mozambique.

With two of its largest home-grown cement producers both expanding rapidly outside of their domestic markets, and a relative lack of interest from the big four multinationals, the sub-Saharan cement market is set for big changes in the medium to long term. PPC and Dangote are expanding towards each other and already share many markets. Dangote has expanded more rapidly and is moving towards exports from Nigeria. PPC is catching up by taking shares in strategically-placed plants. Is sub-Sahara headed for a showdown...? Whatever happens, the future of this rapidly-growing market will certainly be interesting.