Displaying items by tag: Export

Czech Republic: Domestic cement production was 4.57Mt in 2019, up by 3.2% year-on-year from 4.43Mt in 2018. CTK Business News has reported a corresponding increase in domestic sales, up by 1.5% to 3.84Mt from 3.78Mt, and exports, up by 1.9% to 761,000t from 747,000t. Slovakia received 380,000t (50%), Germany received 221,000t (29%), Austria received 114,000t (15%) and Poland received 68,500t (9%). Imports fell by 15% to 490,000t, of which Slovakia supplied 245,000t (50%), Poland supplied 122,000t (25%), Germany supplied 98,000t (20%) and Austria supplied 39,200t (8%).

India: JK Cement says that it will sell its white cement, formerly JK White Cement, under the new name ‘WhitemaxX.’ The Economic Times newspaper has reported that the new name “strengthens JK Cement’s core commitment to delivering the maximum to its consumers and partners with a focus on consistent and premium product quality,” according to the company.

JK Cement is the world’s third largest white cement producer and it exports WhiteMaxX to 43 countries.

Back on 11 March 2020, this column drew attention to the seemingly intractable overcapacity situation in Vietnam. On that day, incidentally the day that the World Health Organisation (WHO) declared the Covid-19 outbreak to be a full-blown pandemic, Vietnam held firm on its previous estimate that it would produce 103Mt of cement in 2020. 70Mt would be consumed domestically, with 33Mt exported. At the time much of the world was heading down the coronavirus rabbit hole and we were incredulous. South East Asia was worst affected by lockdowns at that point and demand was poor. It was clear that the country would struggle to find buyers, even with its famously reasonable prices.

Fast forward five months and figures from last week show that Vietnam’s cement producers actually exported an incredible 19.5Mt in the first seven months of 2020. The volume was 11% higher than the 17.6Mt exported in the corresponding period of 2019. However, prices suffered, with the value of exports falling by 5.4% to US$732m. That works out at US$37.54/t in 2020 against US$43.98/t in 2019 - a drop of US$6.44/t. Now, just as in March, the Ministry of Construction has maintained again that Vietnam will export 32-33Mt of cement and clinker in 2020. The volumes seem impressive, but it’s ‘sales for show, profit for dough.’ How much longer can the country continue to pour such vast amounts of cement into the global market at these low prices?

Well it seems the answer is ‘not any more.’ Following an announcement in May 2020 that no new cement plant projects would go ahead in 2020 after all, there is now a new cement industry development strategy to help move the sector forward. Under the plans, all plants with a capacity under 0.9Mt/yr will be forced to improve their productivity, product quality, energy efficiency and, crucially, environmental performance, by 2025. While the government says it will help to facilitate the changes, we can be reasonably sure that it wants to reduce its domestic capacity to a fairly meaningful extent. The Global Cement Directory shows that Vietnam has at least 28 plants of less than 0.9Mt/yr capacity, jointly contributing around 16.6Mt/yr. While we should be clear that the government is not calling for the wholesale elimination of capacity, removing these plants would leave the country with around 86Mt/yr of cement production and halve exports to around 16.4Mt/yr, assuming 70Mt/yr of domestic consumption. On the surface the government says it will help plants ‘facilitate’ the changes, but it remains to be seen whether its many older, less efficient plants will actually be able to jump through the hoops the authorities put in their way. Of course, one need look no further than neighbouring China to see how effective such directives from the top of government can be.

For its part the Vietnamese government is clear: Plants that don’t pick up the pace will be closed. It says that the strategy aims to “Develop the cement industry to an advanced and modern level, to produce cement of international standard quality with economical and efficient use of energy, giving high competitiveness in the international market, while meeting the needs of the domestic market, completely eliminating out-dated, natural resource-consuming and polluting technology.” The government stops just short of mentioning profitability, but it is clear that this would be another nice effect of reduced capacity in an economy where the state is effectively selling the cement by itself. China again shows what should happen next. Following major profitability improvements in 2017, 2018 and 2019, China’s producers continue to go from strength-to-strength in 2020, even taking coronavirus closures into account. This week Anhui Conch reported a 5.3% increase in its first half net profit (to a tidy US$2.33bn), with China Resources Cement chiming in with an 11% rise to US$541m. While it is unclear from outside of China just how much capacity has been terminated, the changes are having the desired effect.

So, after looking for perhaps slightly too long at dwindling returns, Vietnam’s government appears to be serious about overcapacity. Its (larger) cement producers look set to gain from supply-side reforms in the same way that many in China have. The industry will shrink over the next few years and, while closures and job losses will be unpopular, the country, its economy and its environment will benefit from this policy in the long run.

Tunisia: The Ministry of Industry and Small and Medium-Sized Enterprises has issued a decree authorising the use of polypropylene cement bags, with the aim of increasing the competitiveness of Tunisian cement against rival Turkish products on the Libyan market. The Economiste Maghrebin newspaper has reported that the loss of a valuable exporter market following Algeria’s attainment of a cement surplus led the ministry to enact the cost-cutting policy. In January 2020, Algeria enacted a progressive prohibition on this type of packaging with a view to a blanket ban from 1 January 2021.

Minister of Industry and Small and Medium-Sized Enterprises Salah Ben Youssef says that his department “submitted a report on the impacts of the use of polypropylene packaging for cement to the Ministry of the Environment in May 2020 and received no reply,” but implemented the initiative because it was the only viable alternative to kraft bags, which he says are “overpriced due to monopolies in raw materials and assembly.” Ben Youssef said that polypropylene bags, which are permitted for use in food, lime, animal feed and fertilisers packaging, are “both recyclable and reusable,” and would enable the Tunisian cement industry to become self-sufficient in serving its bagging needs. As a further cost-cutting measure, Ben Youssef proposed that the government establish a solar power plant in order to reduce cement companies’ total energy bills by US$5.13m/yr.

The 16Mt/yr-capacity Tunisian cement sector, which includes international companies such as Carthage Cement and Brazil-based Votorantim Cimentos subsidiary La Cimenterie de Jbel Oust, produced 11Mt of cement in 2019 against a domestic demand of 7.0Mt.

Vietnam: Producers have reported a 5.4% fall in value of cement and clinker exports to US$732m in the first seven months of 2020 from US$774m in the corresponding period of 2019. Volumes increased by 11% to 19.5Mt from 17.6Mt. Dautu Online News has reported that Bangladesh, China and the Philippines were among import markets for Vietnamese cement.

The Ministry of Construction maintains its 2019 projection of 32Mt – 33Mt of cement and clinker exports in 2020.

Turkey: Germany-based Körfez Engineering’s Körfez foundry in Dilovasi, Kocaeli Province, has announced that it is now exporting its cast steel products, including cement kilns, preheaters, clinker coolers and mills, to 70 countries spanning five continents. Exports account for 85% of sales. Foundry general manager Çağdaş Alan said, “We are proud to export to different geographies and to increase the number of countries we export to during this difficult period the world is going through. We hope to overcome this difficult period with the least loss for our business and the country.” He added, “We continue to invest in information technologies, develop our facilities in line with industry 4.0, and create a dynamic business environment with innovative trainings for continuous development of our expert staff.”

Russia: Eurocement Group’s exports rose by 67% year-on-year to 0.33Mt in the first seven months of 2020 from 0.20Mt in the same period in 2019. Deliveries to the Belarus, Finland, Latvia, Estonia and Kazakhstan have grown significantly. The group says it managed this despite coronavirus-related lockdowns with construction project suspensions in many markets.

Pakistan: Cement producers dispatched 47.8Mt of cement in the 2020 fiscal year, which ended on 30 June 2020, up by 2% year-on-year from 46.9Mt in the 2019 fiscal year. Data from the All Pakistan Cement Manufacturers Association shows that the largest area of growth was in cement exports from southern Pakistan, up by 46% to 5.88Mt from 4.01Mt, while northern exports fell by 22% to 1.97Mt from 2.53Mt. Conversely, domestic dispatches fell by 29% in the south to 5.64Mt from 7.98Mt, and rose by 6% in the north to 34.3Mt from 32.4Mt, thus constituting 72% of total dispatches.

Iran: Sistan and Baluchestan Province has reported total exports of 54,000t of cement to Afghanistan in the first quarter of the Iranian fiscal year (21 March - 21 June 2020). Fars News Agency has reported that a total of 2060 trucks made the deliveries with an average load of 26t. Iran exports 11Mt/yr of cement, primarily to North Africa and the Gulf states, against a domestic consumption of 61Mt/yr.

Pakistan: DG Khan Cement has secured a contract for the supply of cement to a customer in the Philippines. The cement producer exported 0.27Mt of cement and 0.71Mt of clinker in its financial year to 30 June 2019. Government Advisor for Commerce, Textile, Industry and Production Abdul Razak Dawood called the addition of a Philippine client to the company’s order list a “breakthrough” saying, “Once market reach extends then market share will increase. Increasing geographical diversification is an important part of our strategic trade policy.”