Displaying items by tag: Cemex
The race to digitise the cement industry
10 July 2019The big announcement from LafargeHolcim this week was the launch of its Industry 4.0 plan known as ‘Plants of Tomorrow.’ The scheme hopes to use automation technologies and robotics, artificial intelligence, predictive maintenance and digital twin technologies across the company’s entire production process. Operational efficiency gains of 15 - 20% are promised.
There wasn’t much detail beyond the use of the Siggenthal integrated cement plant in Switzerland as the ‘lighthouse’ of the scheme, where around 30 proof-of-concept technology ideas will be tested. One technology it did flesh out a little was its long-running Technical Information System (TIS). This follows the work between Holcim and the power and automation product supplier ABB. LafargeHolcim says that over 80% of its plants around the world use the TIS to provide data transparency at plant, country, regional and global level. It added that some country operations have more than a decade of historic technical data available. This last point is pertinent as the data could potentially be used to support the training of any machine learning algorithms the company might want to invest in. The building materials company also mentioned its LH Maqer subsidiary. This startup incubator was launched at the end of 2018.
LafargeHolcim appears to be playing catch up here with Cemex, which has steadily been promoting its own Industry 4.0 developments in recent years. Emphasis on ‘promotion’ here as only yesterday, the day LafargeHolcim made its big reveal, Cemex happened to release information about a recent roundtable in France that it participated in on digitisation and productivity in the construction sector.
Notably in March 2019, the Mexican multinational struck a deal with Petuum to implement its Industrial AI Autopilot software products for autonomous cement plant operations at its plants around the world in March 2019. Readers can find out more about Petuum’s work with Cemex in the June 2019 issue of Global Cement Magazine. In late 2017 Cemex too set up a division, Cemex Ventures, to engage with startups, universities and other organisations. Cemex has also been building its digital customer integration platform Cemex Go since around the same time.
One interpretation of Industry 4.0 is as a German-industrial approach to the so-called fourth or digital revolution pushed by Anglophone software companies. The idea of taking as much data from a production process, such as making cement, is enticing but the prospect of actually doing something useful with this tsunami of information is daunting. Typically algorithm techniques or predictive maintenance seem so far to focus on discrete parts of a process such as a finish grinding mill or final product logistics networks. Companies like Germany’s Inform focus on the latter for example and, incidentally, it celebrated its 50th anniversary this week.
If automated systems start making apparently nonsensical yet useful decisions across the whole raw materials, production and supply chains, then Industry 4.0 will reach its full potential. This moment, if it comes, will be analogous to the time IBM’s computer Deep Blue managed to beat chess grandmaster Garry Kasparov in the late 1990s. What’s more likely are automated systems that can perform consistently outside the human operator comfort zone edging up against hard physical process constraints.
Meanwhile, what will be interesting to watch here is whether LafargeHolcim will be able to leverage any advantage over Cemex by having more cement plants to pull data from. Before LafargeHolcim started selling off its south-east Asian subsidiaries it had more than three times as many cement plants as Cemex. If data really is more valuable than oil these days then starting late in the industrial digital arms race may not be as deleterious as one might first think.
Cemex querying provincial tax in Costa Rica
05 July 2019Costa Rica: Cemex has taken legal action to query a local 5% tax on the sale of cement in the provinces of Cartago, San José and Guanacaste. The issue is commercially relevant because its competitor Cementos Fortaleza operates a grinding plant at Salinas Esparza in Puntarenas where the tax is not liable, according to Diario Extra magazine. Cementos Fortaleza opened its unit in 2018. Cemex operates an integrated and a grinding plant in the country.
France: HeidelbergCement France has finalised the acquisition of Cemex’s Centre region aggregates and ready-mixed concrete businesses. The acquisition includes seven aggregate quarries and 28 ready-mixed concrete plants. The acquired aggregates reserves and resources amount to about 25Mt. HeidelbergCement France will fully integrate the operations into its own network.
“With this acquisition, we strengthen our vertically integrated market position in central France,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement. “The operations fit very well into our existing network of aggregates and ready-mixed concrete plants in the Paris region, and we expect significant synergies.”
US: Cemex has announced that it is supplying concrete, including a specialised self-consolidating mix, along with thousands of tonnes of aggregates for the replacement of the Sixth Street Viaduct Bridge in Los Angeles, California. The original 915m-long bridge, which has served as a backdrop in numerous films, was built in 1932 and is in need of replacement.
Cemex will supply 34,400m3 of ready-mix concrete. This will include 4800m3 of Evolution, Cemex’s range of self-consolidating concrete product that, in this instance, was tailored to fit the bridge’s design and the requirements of the client, CalTrans. Cemex will also supply a fibre-reinforced concrete solution for the bridge deck and structure itself. The US$482m structure, funded by a mixture of state and Federal funds, is expected to open in late 2020.
Mexican sales slide in first quarter
11 June 2019Mexico: According to figures from INEGI, Mexico’s national institute of statistics, sales of cement were worth US$1.21bn during the first quarter of 2019. This figure was 7% lower than during the first quarter of 2018. In volume terms sales fell from 11.89Mt to 10.91Mt, a fall of 8.1% year-on-year.
Market leader Cemex reported a sales fall of 15% in the analysed period despite a price increase of 4%. Cementos Fortaleza, owned by Elementia, posted a sales growth of 1% in terms of value, thanks to rising prices.
Swiss firm LafargeHolcim, through its subsidiary Holcim Apasco, saw total sales shrink by 7.4% in Latin America, with sales of cement falling by 2.6% as a consequence of the demand drop in Mexico and Argentina. Only Cementos Chihuahua registered significant growth, with sales increasing by 8% in during the quarter due to the construction of new industrial buildings and mining projects in the north of the country.
France: Cemex has supplied over 0.3Mm3 of ready-mixed concrete and more than 0.55Mt of aggregates for the Grand Paris Express project over the past three years. It has used mobile on-site concrete plants and a local network of 21 plants in Île-de-France to support the large-scale railway infrastructure scheme.
"The Grand Paris worksites present a daily challenge to deliver ready-mix concrete on time, supply aggregates to our production sites, and move earthworks from the stations and tunnels out of Paris,” said Benjamin Lecendrier, Major Projects Director at Cemex France.
The Grand Paris Express worksites on metro lines 11, 14 and several sections of line 15 South have involved most of Cemex’s staff in the Île-de-France region, with four full-time operatives working in a dedicated unit. Given the scale of operations, logistical organisation is a challenge, with the twin demands of delivering construction materials and removing 40Mt of earthwork by 2030.
Talk of US tariffs on imports from Mexico was not troubling the National Chamber of Cement (CANACEM) this week. Director general Yanina Navarro pointed out to local media that Mexico only exports 1.42Mt or 3.4% of its total production of 44Mt/yr to its northern neighbour. This is a little higher than the 1.04Mt reported by the United States Geological Survey (USGS) in 2018, although that figure is believed to have underestimated imports to El Paso district in Texas. Mexico was the fifth largest exporter of hydraulic cement and clinker to the US behind Canada, Turkey, China and Greece.
Commentators pointed out that Grupo Cementos de Chihuahua (GCC) might be affected more that other Mexican producers as two of its plants are close to the border at Samalayuca and Juárez in Chihuahua. However, GCC operates five plants in the US. Cemex also has a plant near the US border at Ensenada in Baja California. Yet it’s the fourth largest producer in the US by integrated production capacity. If either company had its export markets seriously disrupted by any border duties they could likely focus on production in the US to compensate.
Once again this is similar to the situation with the proposed border wall where, although President Donald Trump wanted Mexico to pay, it would have been Mexican companies benefiting the most from any construction boom. This was also the case with the US-Mexico-Canada Agreement (USMCA), the successor to the North American Free Trade Agreement (NAFTA). The international structure of many of the larger Mexican cement producers insulates them from these kinds of political and trade disputes.
Mexican producers shouldn’t be too complacent though. Tariffs are likely to play havoc with integrated supply chains as in the car industry. Building materials will probably be affected less so but that 1.42Mt export figure is more than the production capacity of many individual Mexican cement plants. Taking away this export market will drag on the industry’s utilisation rate and alternate destinations may be hard to find. Note the trouble Mexico has had distributing its products in Peru. The Supreme Court there upheld a fine this week on UNACEM for trying to block the distribution of Cemex’s brand of cement in 2014. Also, although Trump’s tariffs on Chinese products may not have much of an impact on building materials, USGS data shows that Chinese imports of cement to the US fell by 27% year-on-year to 0.76Mt in the six months to the end of February 2019. Similar reductions could await Mexico’s exporters.
The general consensus from the free market press is that tariffs will ultimately hurt both economies. In agreement the Portland Cement Association (PCA) published a market report in April 2018 on the effects of tariffs on US cement consumption in the wake of tariffs on steel and aluminium imports from the European Union (EU), Canada and Mexico. The summary was that all forms of tariff – from minor to a global trade war – would likely result in reduced US cement consumption to varying degrees due to slower economic growth. A full-scale set of tariffs on Mexican imports is likely to induce similar consequences.
Cemex completes global roll out of digital platform
03 June 2019Mexico: Cemex says it has completed the global deployment of its digital platform Cemex Go. The product is available in 21 countries with 96% of the company’s total recurring customers using it. 45% of Cemex’s total global sales are processed through the platform, over half a million payments are completed through it per year and 1.5 million deliveries use the system annually.
“We are incredibly proud that our vision of providing a superior customer experience enabled by digital technology has been deployed to our customers around the world. Cemex Go has proven itself as a game changer, an established and essential tool for our customers, accessible anywhere, any time to help them run their businesses with increased efficiency,” said Fernando A Gonzalez, chief executive officer (CEO) of Cemex. He added that platform was only part of the ‘initial’ stages of the company’s digital transformation plans.
Peru: The Supreme Court has upheld a fine of nearly US$2m by the National Institute for the Defense of Free Competition and the Protection of Intellectual Property (INDECOPI) on UNACEM. The penalty was levied due to UNACEM and its distribution network refusing to allow retailers to sell cement made by its competitor, according to the Gestión newspaper. INDECOPI said that in 2014 UNACEM and its collaborators refused to allow retailers to stock its Sol brand of cement if they were selling the rival Quisqueya brand produced by Mexico’s Cemex.
Cement producers in the Philippines warn that unchecked imports may affect investment plans
28 May 2019Philippines: Cement producers say that if the government does not implement a permanent safeguard duty on cement imports they may reconsider investment plans to upgrade their plants. Representatives of Taiheyo Cement, Republic Cement, Holcim and Cemex made the comments at public hearings by the Tariff Commission, according to the Philippine Star newspaper. The commission is conducting an investigation to determine whether the provisional safeguard duty imposed by the Department of Trade and Industry (DTI) on cement imports should be kept.
During the hearings, Cirilo Pestaño II the executive director of the Cement Manufacturers Association of the Philippines (CEMAP), lobbied the government to impose a higher ‘definitive’ safeguard duty. He said that imports of cement rose by 64% year-on-year to 1.74Mt in the first quarter of 2019 from 1.06Mt in the same period in 2018 despite the provisional safeguard measure being in place.