Displaying items by tag: China
Ghana: Ghana has lost over US$13m due to imports of around 500,000t of bagged cement the Cement Manufacturers Association of Ghana (CMAG) has said to the Daily Guide newspaper. The association is fighting imports of bagged cement into the country, principally from China, because local production of cement exceeds demand. Local cement production capacity is 7.4Mt/yr, current consumption is 5Mt/yr and this leaves a surplus of 2.4Mt/yr.
"It's mind-boggling to see the ascendancy of imports of bagged cement from China despite persistent petitions that the manufacturers have installed capacities to meet local demand," said CMAG chairman George Dawson-Ahmoah in a recent statement. The association has been lobbying government bodies in Ghana since April 2015 on the issue if imported bagged cement from China. Local producers affected by the imports include GHACEM Limited, Diamond Cement Ghana, Savanna Diamond Cement and Western Diamond Cement.
2015 in cement
16 December 2015Here are the major stories from the cement industry in 2015 as the year draws to a close. Remember this is just one view of the year's events. If you think we've missed anything important let us know via LinkedIn, Twitter or This email address is being protected from spambots. You need JavaScript enabled to view it..
Will the year of the mega-mergers pay off?
2015 showed a global cement industry that was consolidating. Amongst the multinational producers Lafarge and Holcim finished their merger and HeidelbergCement announced that it was buying Italcementi. Yet alongside this international trend the large Chinese cement producers, who represent over a quarter of the world's production capacity, have continued their own-government-favoured consolidation. The on-going boardroom scuffles at Shanshui have been a lively example of this.
Where this will leave the cement industry as a whole in 2016 is uncertain but mergers and consolidation are no 'magic bullet' for difficult market conditions. After the fanfare subsided from the launch of LafargeHolcim the first quarterly report emerged in late November 2015 reporting falling net sales, net volumes and profit markers.
BRICing it – growth stalls in Brazil, Russia, India and China
The economies of the BRIC nations – Brazil, Russia, India and China – have all suffered in 2015. Brazil and Russia are enduring recessions. Growth in China and India is slowing down. All of this has a knock on in their respective construction sectors.
Over in China, we report today that production capacity utilisation is estimated to be 65% and that cement companies lost US$2.63bn in the first nine months of 2015. The same source says that at least 500Mt/yr of production capacity needs to be eliminated. That represents nearly a third of Chinese total production capacity or about an eighth of global cement production capacity.
Multinationals African plans accelerate
One consequence of all these international mergers is the transformation of the situation in Africa. Suddenly LafargeHolcim has become the biggest cement producer on the continent, followed by HeidelbergCement, Dangote and PPC. Africa becomes the big hope for the multinationals as established markets continues to flounder and growth in Asian and South American markets slackens. Perversely though, should African development growth slow it may cast a poor light on the mega-mergers of 2015 in the coming years.
Dangote Cement is growing fast and it may overtake HeidlebergCement soon as the second largest cement producer in Africa. Yet it may not be plain sailing for the Nigerian company. As we report today, sources in Gambia say that Dangote's plans to open a cement plant are on hold in part to protect its domestic suppliers.
The Gambian government has denied a licence to Dangote to open a cement plant. Dangote has built its empire in recent years by forcing out cement importers from Nigeria. As it expands in other countries in Africa it may now be facing a backlash to playing the nationalist card at home as other countries too desire 'self-sufficiency' in cement production.
Iran shakes off the sanctions
In July 2015 Iran and the P5+1 countries agreed to lift trade sanctions from Iran. The implications for the local cement industry are immense given that the country was the joint-fourth largest producer in 2014, based on United States Geological Survey data. Remove the sanctions and, in theory, the local economy should boom leading to plenty of construction activity. Notably, at the launch of LafargeHolcim the new CEO Eric Olsen was asked for the new group's position on Iran. It didn't have one but this will change.
China expands along the Silk Road
China's cement industry may be suffering at home but it has been steadily expanding in Central Asia. Notably Huaxin Cement has plants in Kazakhstan and Tajikistan and it has new projects in the pipeline. Business may be down at home but steady advancement abroad may offer the Chinese cement industry the lifeline it needs.
Cop out at COP21?
And finally... The 2015 Paris Climate Conference announced a diplomatic coup d'etat in December 2015. However, it apparently forgot to include any binding targets. The Cement Sustainability Initiative (CSI) pre-empted the decision by announced its aim to reduce CO2 emissions by clinker producers by 20 - 25% by 2030... Provided the entire cement industry follows its lead. Cement plants burning vast swathes of dirty fossil fuels may not have to worry quite yet.
For more a more detailed look at trends in the cement industry check out the Global Cement Top 100 Report in the December 2015 issue of Global Cement Magazine.
Global Cement Weekly will return on 6 January 2016. Enjoy the holidays if you have them.
Capacity utilisation of China's cement industry falls to 65%
16 December 2015China: China's cement industry has been trapped in sharp profit decline and its actual capacity utilisation has declined to 65%, according to an Economic Information Daily report.
Industry insiders believe that previous high speed development has overdrawn the demand for cement and that closing obsolete cement capacity and promoting mergers and restructures will be the new orientation for the industry. At least 500Mt/yr of low-grade cement capacity will be eliminated.
The number of loss-making cement companies has reached 1339 and accounted for 40% of the total, according to Kong Xiangzhong, Executive Vice President and Secretary General of the China Cement Association. Cement companies lost US$2.63bn in the first three quarters of 2015 and among the profit-making producers, many were suffering invisible losses.
China: The Vice minister of Industry and Information Technology, Xin Guobin, recently led a delegation to investigate excessive cement capacity in north-east China. Xin urged local governments, industry associations and key enterprises to work together, further reduce excessive capacity and try to reverse losses in the cement industry in the region.
Companies including Yatai Cement, Liaoning Daying Cement Group, Inner Mongolia Mengxi Cement Co., Ltd, Sunnsy Cement and China Tianrui Group Cement Company Ltd have all set up cement clinker production lines in north-east China.
Shanshui’s subsidiary said that Tianrui takeover was illegal
07 December 2015China: Shanshui Cement's major operating unit, Shandong Shanshui Cement Group, has said in a statement that the Shanshui Cement Board's removal of Management and Directors from Shandong Shanshui by Tianrui Group was illegal as it required government approval. Tianrui, the largest shareholder of Shanshui Cement, took control of the board at an extraordinary general meeting (EGM) on 1 December 2015, resulting in the removal of Shandong Shanshui management.
China's CITIC wins contract for US$262m cement plant in Cambodia
07 December 2015Cambodia/China: China's CITIC Heavy Industries Company has secured an engineering, procurement and construction (EPC) contract from a Cambodian conglomerate to build a US$262m, 5000t/day cement plant in Cambodia.
Under the contract, CITIC will carry out the detailed engineering design of the project, procure all the equipment and materials necessary and then construct a cement plant for Chip Mong Insee Cement Corporation, a subsidiary of Chip Mong Group. It will be "Cambodia's largest single cement line with the most modern and state-of-the-art equipment and technologies from Germany and China," said Aidan Lynam, CEO of Chip Mong Insee Cement Corporation. "It will be a world-class cement plant that produces top quality products for our company, with emission controls which protect the neighbouring environment with the lowest carbon footprint." The plant is a joint venture with Siam City Cement Public Company Limited of Thailand.
Mines and Energy Minister Suy Sem said that the contract between the two companies had clearly showed the confidence of investors in Cambodia's political stability and business opportunities. "Cement demand in Cambodia is very high due to the rapid progress of construction industry," he said. "Thus, I believe that this cement plant will be able to meet the demand of cement in Cambodia." It is estimated that domestic cement demand is about 4Mt/yr.
Shanshui Cement management ousted as Tianrui Cement seeks control
04 December 2015China: The management of China Shanshui Cement Group Ltd's operating unit was ousted two days after executives of its parent were dismissed, in a move analysts said underscores efforts by the company's biggest shareholder, Tianrui Group, to solidify control.
Shandong Shanshui Cement Group Ltd Founder Zhang Caikui, Chairman Zhang Bin and Chief Financial Officer Henry Li were among key managers whose positions were terminated on 3 December 2015. Tianrui's Vice Chairman Li Heping has succeeded Zhang Bin to become Chairman of the unit.
Anhui Conch to double West China Cement stake in consolidation
30 November 2015China: Anhui Conch has agreed to more than double its stake in smaller rival West China Cement for US$592m amid consolidation in an industry suffering from overcapacity.
Conch International Holdings (HK) Ltd, a wholly owned unit of Anhui Conch, plans to increase its holding in Shaanxi-based West China to 51.57% from the current 21.17%. If the transaction goes through, Anhui Conch will make a mandatory cash offer for all of the shares of West China that it doesn't already own.
West China agreed to buy four units of Anhui Conch and will issue shares in itself to pay for the purchase. West China will issue 3.403 billion shares at US$0.17 each for a total of US$592m. The issuance will raise Anhui Conch's stake in West China. Should Anhui Conch be required to make an offer for the rest of West China, it will pay US$0.22 in cash for each share.
Claudius Peters' ETA Cooler exceeds 13,000t/day in China
17 November 2015China: The ETA Cooler, the concept for cooling clinker in the cement making process announced by Claudius Peters Projects GmbH in 2004, has reached a new capacity milestone with a more than 13,000t/day model going into production earlier in 2015 in China.
The ETA Cooler principle was introduced in 2004 with a 2000t/day installation at a Holcim cement plant in Switzerland. Over the last decade, Claudius Peters Projects has progressively offered the market increasingly higher capacity models. It has now reached 13,000t/day, currently the world's highest capacity cement line production. The company has said that even higher capacity is feasible.
Due to its design, no dust removal system is required with ETA Cooler and the relatively long stroke action means a low grate speed, which in turn means less wear and maintenance. As there are no obstructions to the clinker flow in this moving floor technology, high transport efficiency is also achieved, with uniform cooling, thus improving the quality of the clinker and in turn the quality of cement produced, according to Claudius Peters Projects. The ETA Cooler has a very low construction profile and modular design, allowing it to be retrofit to existing cement plants.
China: China's Ministry of Industry and Information Technology (MIIT) has unveiled a document to ask cement companies in north China to carry out peak-shifting production on a trial basis in the winter. The peak-shifting production will not only ease the 'haze weather,' but also enhance the cement market and reduce producers' costs, according to industry insiders.
Due to fierce market competition, cement enterprises in north China produce cement at full capacity in the winter to seize the opportunity when the energy supplies end and building operations start. However, in the summer, many enterprises are forced to produce at half of their installed capacity due to the glut of cement on the market. As the cement industry is a high energy-consumption industry, the overlap of cement production and energy supply in winter increases coal consumption and leads to haze weather in north China. If peak production were carried out in winter for four months, about 4.36Mt of coal and 177bnm3 of flue gas emissions would be cut in the whole northern area, which could help improve the local environment. The peak-shifting production could also help ease overcapacity.
After the peak-shifting, cement enterprises in north and northeast China will suspend production for four to five months in winter and the overcapacity rate in the domestic cement industry will fall to 16 – 21% from the current 51%, which would help enhance the industrial climate.