Displaying items by tag: Export

Dominican Republic: Cemex has signed an agreement to sell its operations in the Dominican Republic to Cementos Progreso Holdings and partners for US$950m. The sale includes a cement plant with a capacity of 2.4Mt/yr, 12 concrete plants, a quarry and two distribution centres, as well as export businesses to Haiti.The divestment is expected to finalise in the fourth quarter of 2024, pending closing conditions.

Fernando Gonzalez, CEO of Cemex, said "This transaction advances us significantly in our portfolio rebalancing strategy which is focused on reducing our exposure in emerging markets and redeploying capital into growth investments in priority markets, primarily the US."

Vietnam: Export prices for clinker and cement in Vietnam have dropped significantly in May 2024, impacting the construction industry and raising concerns among exporters. This decline is due to decreased international demand, intense competition, and evolving trade policies, according to the Vietnam News Brief Service. The Ministry of Construction noted that after a decade of growth, export volumes have fallen sharply since 2022, with exports dropping to 10.9Mt in 2023 from 15.2Mt the previous year. Only 5.4Mt is expected to be exported in the first half of 2024.

The Vietnam Cement Association (VNCA) has highlighted ongoing challenges, particularly influenced by the downturn in China’s real estate market and competitive pressures from Chinese cement surpluses. The VNCA has urged Vietnamese exporters to explore new markets, improve product quality and increase production efficiency. Additionally, the VNCA recommends that the government consider eliminating export taxes on clinker to mitigate these challenges.

Russia: Belarusian Cement has concluded a deal with the Moscow regional government to build a logistics facility in the region at Naro-Fominsk. Prime Press News has reported that the facility will cost US$22.5m. It will be equipped with ready-mix concrete, precast concrete and dry mix plants, as well as a rail terminal, storage areas and loading zones for despatches by road.

Director General Alexander Dovgalo said "This investment will not only bolster our logistics capabilities but also enhance our service quality for Russian partners and extend our market reach within Russia and the CIS member states."

Algeria: Algeria has initiated the export of 46,000t of cement to the US, overseen by Trade Minister Tayeb Zitouni at the port of Annaba.

Minister Tayeb Zitouni said “This operation is part of our ongoing efforts to develop and diversify Algerian exports to foreign markets. This demonstrates the government's commitment to increasing and diversifying our exports. We are also committed to supporting export businesses and streamlining administrative procedures to promote sector growth.”

Cemex announced last week that it will stop producing clinker at its Lloseta plant in Mallorca. Grinding activity at the site will continue, along with the shipment of bagged and bulk cement products. The company has framed the closure as part of its decarbonisation plans. The dismantling of the two preheater towers at the plant is scheduled to take place by the end of 2030. Cemex said that it will take this long to allow the cement plant to continue operating, as well as a neighbouring hydrogen unit and other nearby industrial units. The status of the Lloseta plant has been in question before. It was closed in early 2019 due to reduced cement demand and mounting European CO₂ emissions regulations. However, it reopened in 2021.

Readers may recall that Cemex España participated in the Power to Green Hydrogen Mallorca project. Land by the Lloseta cement plant was used to hold solar panels and a solar-powered hydrogen unit. Other partners in the project included energy suppliers Enagás and Redexis and renewable power and infrastructure company Acciona, among others. When the unit was commissioned in early 2022, it said it was the first solar power-to-green hydrogen plant in Spain. The link between Cemex and hydrogen is noteworthy given the cement company’s adoption of hydrogen injection as part of its alternative fuels strategy. Interestingly, Acciona planned to use a blockchain method to certify that hydrogen produced at the site was made using renewable energy sources. Heidelberg Materials also plans to use the same process to verify its evoZero brand of net-zero cement products in 2025. Another recent sustainability sector news story in Spain is the commissioning by Çimsa of a 7.2MW solar plant supporting its Buñol white cement plant in Valencia. The new installation is expected to supply about 18% of the plant’s energy needs.

On the corporate side of things, FCC revealed in mid-May 2024 that it was preparing to spin-off its cement and real estate subsidiaries into a new company called Inmocemento. The cement part of this is Spain-based Cementos Portland Valderrivas. The move is intended to bolster the values of the different parts of the business. The proposal will be put to FCC’s shareholders in late June 2024, with any resulting action taking place by the end of the year. The decision to separate FCC’s cement assets is reminiscent of the financial engineering Holcim has proposed with its US business. However, in this case the driver does not appear to be the disparity between the European and US stock markets.

Graph 1: Domestic consumption and exports of cement in Spain, 2013 - 2023. Source: Oficemen.

Market data was also out this week from Oficemen, the Spanish cement association. Domestic cement consumption grew year-on-year in April 2024 but the year so far is looking weaker with consumption from January to April 2024 down by 4.5% year-on-year to 4.65Mt. This is below Oficemen’s forecast for 2024 where it expected a stagnant situation. However, there are eight more months to go. In 2023 cement consumption fell by 3% to 14.5Mt and exports declined by 7.5% to 5.2Mt. The association blamed continued underinvestment in both the public and private sectors due to economic instability since the Covid-19 pandemic. Graph 1 above shows the wider situation in the Spanish cement market over the last decade. The share of exports has declined and local consumption rebounded after 2020 but has declined since then.

These news stories provide a snapshot of what’s been happening in Spain recently in the cement sector. Oficemen’s prediction for 2024 is gloomy but local consumption has risen over the past 10 years. Exports have fallen but the cement association has started to spin the country’s decarbonsiation drive as a potential positive for the industry’s competitiveness generally. It’s hard to discern right now but there might be an advantage for an export-focused country that conforms to European standards in the future if it can hold onto its capacity. Admittedly, that’s a big if. This thinking along sustainability lines could be seen earlier in May 2024 when Cementos Molins Group rebranded itself as Molins. It described the rebranding as a bid to represent the wider range of construction products it manufactures and sells beyond cement. Oficemen has also pointed out that the local market has room for development given the relatively low cement consumption per capita in Spain compared to its peers. So, whatever happens next, there is likely to be room for improvement in the cement market.

Belarus: Belarus Cement Group (BCG) will export 67,000t of cement to Russia by rail in May 2024, using its own train, which will complete 18 runs. So far, the BCG train has completed 9 runs to the Central Federal District of Russia, delivering 37,000t of cement.

The Ministry of Architecture and Construction of Belarus said "This month, the BCG has launched a fixed-route train of its own hopper wagons to deliver cement to Russia. The first train was dispatched from the Belarusian cement plant (Kostyukovichi, Mogilev Oblast) to Moscow Oblast.”

Changes are underway in South Asia’s second largest cement sector, with two legal developments that affect the industry set in motion in the past week. At a national level, the Competition Commission of Pakistan recommended that the government require cement producers to include production and expiry dates on the labels of bagged cement. Meanwhile, in Pakistan’s largest province, Punjab, a new law tightened procedures around the establishment and expansion of cement plants. At the same time, the country’s cement producers began to publish their financial results for the first nine months of the 2024 financial year (FY2024).

During the nine-month period up to 31 March 2024, the Pakistani cement industry sold 34.5Mt of cement, up by 3% year-on-year. Producers have responded to the growth with capacity expansions, including the launch of the new 1.3Mt/yr Line 3 of Attock Cement’s Hub cement plant in Balochistan on 17 April 2023. China-based contractor Hefei Cement Research & Design executed the project, including installation of a Loesche LM 56.3+3 CS vertical roller mill, giving the Hub plant a new, expanded capacity of 3Mt/yr.

Pressure has eased on the operating costs of Pakistani cement production, as inflation slowed and the country received a new government in March 2024, following political unrest in 2022 and 2023. Coal prices also settled back to 2019 levels, after prolonged agitation. Pakistan Today News reported the value of future coal supply contracts as US$93/t for June 2024, down by 2% over six months from US$95/t for January 2024.

Nonetheless, cost optimisation remained a ‘strong focus’ in the growth strategy of Fauji Cement, which switched to using local and Afghan coal at its plants during the past nine months. Its reliance on captive power rose to 60% of consumption, thanks to its commissioning of new waste heat recovery and solar power capacity. During the first nine months of FY2024, the company’s year-on-year sales growth of 14% narrowly offset cost growth of 13%, leaving it with net profit growth of 1%.

Looking more closely, the latest sales data from the All Pakistan Cement Manufacturers Association (APCMA) shows a stark divergence within cement producers’ markets. While exports recorded 68% year-on-year growth to 5.1Mt, domestic sales fell, by 4% to 29.4Mt. The association further breaks down Pakistani cement sales data into South Pakistan (Balochistan and Sindh) and North Pakistan (all other regions). Domestic sales dropped most sharply in South Pakistan, by 6% to 5.16Mt. In the North, they dropped by 3% to 24.2Mt. Part of the reason was a high base of comparison, following flooding-related reconstruction work nationally during the 2023 financial year. Meanwhile, the government finished rolling out track-and-trace on all cement despatches during the opening months of the current financial year, and commenced the implementation of axle load requirements for cement trucks. APCMA flagged both policies as potentially disruptive to its members’ domestic deliveries, amid a strong infrastructure project pipeline.

Pakistani producers suffer from overcapacity, but have established themselves as an important force in the global export market. They continue to locate new markets, including the UK in January 2024. Lucky Cement was among leading exporters overall, with a large share of its orders originating from Africa.

On 17 April 2024, the government of Punjab province set up a committee to assess new proposed cement projects, with the ultimate goal of conserving water. Falling water tables are considered a significant economic threat in agricultural Punjab. Besides completing an inspection by the new committee, proposed projects must also secure clearance from six different provincial government departments and the local government. While acknowledging the necessity of the cement industry, the government insisted that it will take legal action against any cement plant that exceeds water allowances.

Pakistan’s cement plants have grown in anticipation of a local market boom. Without this strong core of sales, underutilisation will remain troublesome, especially in North Pakistan where exposure is highest. At the same time, APCMA has given expression to the perceived lack of support affecting production and distribution. For an industry with expansionist aims, new restrictions on its growth and operations can feel like an existential menace.

Kenya: President William Ruto has commissioned a Cemtech clinker plant in Sebit, West Pokot, valued at US$345m. Construction of the plant began in 2010 and it will produce 6000t/day of clinker with a cement capacity of 2Mt/yr. After production, the clinker will be transported to a grinding plant in Eldoret.

Mining Principal Secretary Elijah Mwangi said "The production is enough feed for all cement plants in the country. The demand for this critical material will now be met with the excess available for export." The opening of this plant is a ‘major relief’ for cement companies in Kenya, which have historically had to import 60% of their clinker. Currently, National Cement and Mombasa Cement manufacture clinker, while Bamburi Cement, Savannah Cement, Rai Cement, and Ndovu Cement import it.

Located at the Sebit limestone mines in Kipkomo subcounty, the plant has generated over 2000 job opportunities.

Jamaica: Caribbean Cement Company's first phase of its expansion project is set for completion in 2025. The expansion will increase cement production by 30%.

Managing director Jorge Martinez said "When completed, this project will further reduce our CO₂ emissions and deliver increased output from 2600 to 2850t/day of clinker to meet the increased local demand for cement. We will also have the capacity to explore options for exporting to other countries within the Caribbean community. These exports will benefit Jamaica’s economy through foreign currency income."

The US$40m plant expansion in Rockfort, Kingston is financed by the company, with 150 workers already on the project. The expansion was announced in 2022 and aims to strengthen Jamaica's cement industry, reduce import reliance and support the regional construction sector. It will also support parent company Cemex's sustainability targets, including CO₂ emission reduction and optimisation of heat consumption in cement production, as part of its Future in Action programme.

Mali: Morocco-based Ciments de l'Afrique (CIMAF) has held a ceremony marking the laying of the first stone of a new 1Mt/yr cement plant it is building at Natien in Sikasso region. The project has a budget of around US$50m and is intended to be expandable to 2Mt/yr should the market need arise, according to La Nouvelle Tribune newspaper. Cement produced at the plant will be sold domestically and exported. Commissioning is scheduled for early 2026. Moussa Alassane Diallo, Minister of Industry and Commerce, attended the event in addition to members of the National Transition Council, the governor of Sikasso region and, Malick Sefrioui, the Vice President of CIMAF.