Displaying items by tag: China

China: Dongwu Cement turnover has been boosted by rising cement prices in the first half of 2018. Its sales revenue rose by 60% year-on-year to US$31.9m in the first half of 2018 from US$19.9m in the same period in 2017. Its profit more than doubled to US$4.18m from US$1.47m. Its sales volumes of cement grew by 11% to 0.67Mt from 0.6Mt.

China: Sinoma International Engineering’s sales revenue rose by 14% year-on-year to US$1.47bn in the first half of 2018 from US$1.29bn in the same period in 2017. Its net profit increased by 45% to US$94.6m from US$65.1m. The subsidiary of China National Building Material (CNBM) said that signed new contracts in the cement sector with a value of US$1.26bn in the reporting period, including seven cement production lines and two grinding units.

China: Tianrui Cement’s sales revenue rose in the first half of 2018 due to an average price rise year-on-year of 22%. Its revenue grew by 13.8% to US$629m from US$553m in the same period in 2017. Profit increased by 17% to US$82.6m from US$71.6m.

Cement sales volumes fell by 4.7% to 13.3Mt from 12.6Mt due to government imposed production limits in Henan province and a decrease in infrastructure and property investment. In Henan and Anhui the company’s cement sales fell by 7.1% to 10.3Mt but it Liaoning and Tianjin it rose by 4.5% to 3Mt. the cement producer also reported that its cost of sales rose by 12.3% to US$721m due to rising coal prices and other input costs.

UK: Refractory producer RHI Magnesita says that its cement and lime segment was ‘flat’ in the first half of 2018. It blamed this on on-going low capacity utilisation in China and Brazil and ‘some’ market share losses due to its prices. The adjusted sales revenue of its Industrial Division, including cement and lime, rose by 14.3% year-on-year to Euro413m in the first half of 2018 from Euro362m in the same period of 2017. Overall, the company reported a 24.6% increase in revenue to Euro1.51bn from Euro1.21bn.

In a separate release RHI Magnesita subsidiary Magnesita said that the company’s revenue rose by 81.6% to US$133m. This was attributed to sales to the cement business in North America and higher deliveries in Europe in 2018. However, Magnesita’s services business suffered from a poor cement market in Brazil.

There have been quite a few new cement plant project announcements in the past week, with expansions announced in Mexico, Nigeria, Bangladesh, Indonesia, India and Uzbekistan. 11.8Mt/yr of new capacity has been announced in just a week, mostly from a whopping 9.0Mt/yr project in Central Sulawesi, Indonesia, the first in that Province. Notable in this project, as well as two of the others, is the involvement, once again, of large Chinese-based cement plant manufacturers and / or finance and associated influence from Chinese parties.

Of course, this trend is nothing new. The rise of Chinese cement plant manufacturers, particularly into Africa and other developing cement markets, has been covered in previous Global Cement Weekly columns. However, it does appear to be stepping up a notch in 2018 compared to previous years. So far this year we have reported on 21 confirmed Chinese cement plants being built in 15 countries other than China, from the planning stage to ‘up-and-running.’ A total of 37.2Mt/yr, more than the capacity of Germany, is being built across Algeria, Cambodia, Cameroon, Indonesia, Kyrgyzstan, Namibia, Nepal, Nigeria, Pakistan, Russia, Tajikistan, Turkey, Ukraine, Uzbekistan and Zambia. That’s not including a similarly large number of news stories where the supplier is not explicitly stated. This is seen a lot in Indian projects, as well as in Vietnam, where the cement sector appears to still be expanding, despite the government’s pronouncements. In many of these cases, and elsewhere, these unidentified suppliers are likely to be Chinese.

The driver for this increase in Chinese-led cement sector investment is, of course, the severe overcapacity in China’s domestic cement sector. The government is currently undertaking its most drastic capacity reduction measures so far. The ongoing integration of Sinoma and CNBM is one example of the lengths it will go to to reduce the current inefficiencies in the sector. This week the Chinese government reiterated its strict prohibition on new greenfield cement plants. It also warned that any producer that wants to upgrade its plant with a new line must only install the same capacity as the line that will be replaced, amid concerns that some were flouting this rule. This comes as the profits of major producers have been rising. Presumably the government would like them to climb further still.

So where does this leave the more established (read ‘European’) cement plant manufacturers such as Fives, FLSmidth, KHD and thyssenkrupp Industrial Solutions, some of which are fully or partly-owned by Chinese companies? Well, with fewer full-line projects available in developing regions due to the rise of the Chinese, they have become increasingly specialised in specific areas. Those that want European equipment will increasingly specify a pyro-line from Supplier A, a mill or two from Supplier B, conveyors and storage from supplier C, and so on. Arranging this, as it turns out, is something that Chinese plant manufacturers are quite keen to do. Take, for example, FLSmidth working for Sinoma (China) alongside Atlas Copco (Sweden) and Kawasaki Heavy Industries (Japan) on a cement plant in Indonesia. Indeed, FLSmidth signed a framework with CNBM on future collaborations in July 2018. FLSmidth and CNBM already have an extensive ‘back catalogue’ of joint projects. FLSmidth has valuable expertise that Chinese firms need to complete these kinds of projects.

Of course, another European supplier, Germany’s KHD, is mostly owned by China’s AVIC. In a forthcoming interview in the September 2018 issue of Global Cement Magazine, KHD’s CEO Gerold Keune states that the Engineering, Procurement and Construction (EPC) scene is now ‘completely dominated’ by Chinese suppliers. KHD fits in by providing a wide range of equipment but, crucially, great expertise in pyroprocessing and crushing solutions. It itself relies on smaller firms to provide their knowledge to specific parts of a larger project, be it conveyors, feeding systems or silos. Everyone is getting better and better, but in a smaller and smaller area.

Also in the September 2018 issue of Global Cement Magazine will be a report from the VDMA’s Large Industrial Plant Manufacturer’s group (AGAB) in Germany, which highlights another advantage for the Europeans: Digitisation. According to a VDMA survey, the industry anticipates a positive influence from digitisation activities on sales and earnings and expects to see margins improve by up to 10% as a result of the efficiencies it offers over the next three years. In this regard they are ahead of the Chinese mega-suppliers.

The conclusion from this wide-ranging column? The integration of Chinese weight and European know-how is stepping up a notch and will only accelerate from here. Can everyone be ‘winners?’ The next few years may reveal some of the answers.

China: Asia Cement (China) said that its profit attributable to owners for the six months that ended on 30 June 2018 surged by a factor of 10.7 to reach US$139.3m compared to the same period of 2017. Revenue amounted to US$718.8m, an increase of 47% from a year earlier.

Meanwhile, China Resources Cement (CRC) announced that its net profit for the first six months of 2018 was US$2.0bn, a rise of 145.5% year-on-year. CRC’s turnover amounted to US$2.36bn, an increase of 40.4% from a year earlier.

The Chinese government has once again reiterated that it will continue to strictly prohibit cement companies from adding new capacity, despite improving profits. Years of efforts to cut excess capacity in the sector have helped to improve the industry's profits, but signs are emerging that some factories are increasing new capacity, according to Ministry of Industry and Information Technology, which released a joint statement with the state economic planning agency. It said that expansion projects to produce more cement, won't be approved. In addition, factories' plans to replace out-dated capacity with new capacity must comply with government rules.

China/US: China’s Ministry of Commerce has proposed placing retaliatory tariffs on products from the US, including cement. The list covers 5207 items and proposes adding import taxes of up to 25% on them. It includes clinker, white cement, limestone, quicklime, slaked lime, gypsum, refractory products and cement packaging machinery. The ministry said that the new tariffs will take effect at a date to be announced later on.

Tajikistan: The government has supported a new cement plant project to be built in the Surxondaryo Region. The unit will be financed by private investors, according to Uzbekistan Newsline. Several new cement plants are planned locally including a 2.4Mt/yr integrated project from Russia’s Eurocement Group with an investment of US$220m and two Chinese-backed projects. Xin Lei is planning to build a 1Mt/yr plant for US$108m in the Akhangaran region. Akhangaranshifer also wants to build a 1Mt/yr plant for US$100m.

China: Anhui Conch says it has resumed production at three production lines at the cement plant run by its Tongling Conch subsidiary at Gusheng in Anhui province. In late July 2018, Tongling Conch received a written notification from the Tongling Environmental Protection Bureau requesting the ‘immediate’ resumption of operation of Tongling Conch’s waste incineration and ancillary systems for treatment of domestic waste of Tongling City. The suspension of production at the cement plant followed the temporary closure of a pier used by the plant in late May 2018 in accordance with new government regulations on drinking water supply and pollution.

Namibia: Whale Rock Cement plans to commission its new plant near Otjiwarongo at the end of October 2018. The 1.2Mt/yr unit had an investment of US$350m, according to the Xinhua News Agency. Cement from the plant will be sold under the Cheetah brand. The project is a joint venture between China's Asia-Africa Business Management and local partners.