Displaying items by tag: Export
Nigeria: Authorities in Seme Customs Area say that Nigeria's exports of cement to Togo fell 75,000t below its target for 2022. The Sun newspaper reported that Nigeria-based Dangote Cement faced intense competition in the Togo market, leading to the shortfall for the year.
Pakistan: Local cement producers delivered 30.6Mt of cement to customers in Pakistan during the first nine months of the 2023 financial year, down by 15% year-on-year from 36.1Mt in the corresponding period of the 2022 financial year. The Dawn newspaper has reported that producers exported 3.04Mt of cement, 9% of total sales of 33.6Mt. Exports fell by 35% from 4.64Mt, while total sales fell by 18% from 40.8Mt.
The All Pakistan Cement Manufacturers Association (APCMA) said “Continued political instability, currency devaluation and poor economic conditions are badly affecting all the industrial sectors, including the cement industry.” It continued “Construction activities in both the northern and southern regions of the country have been declining significantly over past months. Employment opportunities for skilled and unskilled labour attached to the construction sector are also in decline.”
Hungary: The government has enacted an 'architecture law' which will increase its role in decision making within the Hungarian cement industry. When it enters force in July 2023, the law will let the government set producers' cement volumes and prices. It will also require the companies to sell their products to the market-leading retail network, and will give the government a right of first refusal over future divestments.
Der Spiegel News has reported that the government previously enacted decrees that further regulated limestone production, imposed 90% 'additional mining levies' and required producers to obtain special permits to export their cement abroad. Duna-Dráva Cement, a subsidiary of Heidelberg Materials and Schwenk Zement, reportedly began making losses on its bagged cement sales due to the new rules. Both Germany-based owners separately received letters inviting them to sell a stake in Duna-Dráva Cement, and thanking them for their cooperation, in 2022. The sender identified themself as the owner of an 'intensively expanding group of companies' with a 'dominant position in the Hungarian building materials industry.' Anti-corruption organisation Transparency International identified the correspondent as a friend of Hungarian President Viktor Orbán.
Regarding the incoming change to the law, a representative of Heidelberg Materials said "These regulations are a total violation of all the rules of the European internal market. It is obvious that the government wants to pressure foreign cement manufacturers to sell.”
Kasanga port to expand capacity
29 March 2023Tanzania: Tanzania Ports Authority (TPA) plans to expand the capacity of the 54,000t/yr port of Kasanga on Lake Tanganyika in Rukwa Region. Mbeya Cement Company exports 42,000t/yr of cement via its terminal at the port to the Democratic Republic of Congo and Zambia. The port has been undergoing a US$1.92m upgrade to raise its berths due to rising water levels in Lake Tanganyika since April 2019.
The port of Kasanga generates revenues of US$34,200/yr for the TPA, primarily from Mbeya Cement Company’s export operations.
Thang Thang Cement despatches cement to Central America
23 March 2023Vietnam: Thang Thang Cement has despatched a shipment of 55,000t of cement produced at its Ha Nam cement plant to a customer in Central America. Vietnam Investment Review News has reported that Lotus Cement and Commodities Trading Corporation shipped the order from Ho Chi Minh City.
Vietnamese cement producers are reportedly seeking new trade partners due to 'lingering headwinds' in the domestic and global markets.
Titan Cement Group’s sales rise in 2022
22 March 2023Greece: Titan Cement Group’s sales rose by 33% year-on-year to Euro2.28bn in 2022, while its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 20% to Euro331m. The producer sold 17.2Mt of cement, up by 2% year-on-year from 16.8Mt. Its USA sales rose by 34% to Euro1.31bn, its Southeastern Europe sales rose by 33% to Euro386m, its Greece and Western Europe sales rose by 22% to Euro326m, its Eastern Mediterranean sales rose by 48% to Euro256m and its Brazil-based joint venture Apodi’s sales rose by 38% to Euro115.9m. During the year, the group commenced exports of Type IL Portland limestone cement (PLC) from its Samsun, Türkiye, cement terminal to the US.
Group chair Marcel Cobuz said “The great performance results highlight the group's ability to adapt to market conditions and to activate effective growth strategies, driving positive financial performance mainly in US and Europe, where we serve the majority of our customers and have close to 90% of our sales. They also underscore the group’s resilience, adaptability and commitment of all our great teams to transform the group commercially and technologically while digitising our customer journey and decarbonising aggressively, delivering long-term value to all our stakeholders.”
Egypt: The General Authority for the Economic Zone of the Suez Canal has awarded UAE-based Abu Dhabi Ports Group (ADPG) a contract to operate two cement terminals, at Arish and Port Said. ADPG plans to establish 60,000t-worth of additional cement storage capacity at the Arish cement terminal, and 30,000t-worth of new cement capacity at the Port Said cement terminal. This will give the two Mediterranean ports a combined cement despatch capacity of over 2Mt/yr. The company expects this to double Egypt's cement capacity upon the completion of both projects in late 2023.
Under the contract, ADPG has also gained a 30-year concession over the Safaga Port multi-purpose terminal on the Red Sea coast. It plans to invest US$200m in an expansion to increase the terminal's dry bulk goods capacity to 5Mt/yr. It expects to commission the expanded facility in mid-2025.
Algeria: Groupe des Ciments d'Algéries (GICA) says that it exported 350,000t of clinker produced at its Chlef cement plant over the period between 1 January and 14 March 2023. Local press has reported that the producer aims to export a total of 2Mt of clinker throughout 2023. It is currently on track to reach 1.75Mt, 13% short of its target, but 17% greater than its 1.5Mt exported in 2022. The company despatched the clinker from the ports of Oran and Tenès, to customers in Africa, Europe and South and Central America. It would now like to begin delivering its clinker to Syria and Türkiye in order to help facilitate rebuilding efforts there in the wake of the catastrophic February 2023 earthquake.
After the initial shocking coverage of the Russian invasion of Ukraine, which began in February 2022, came announcements of the most extensive sanctions in history by the EU, G7 nations and others against Russia. In the EU, this effectively deconsolidated companies' Russian subsidiaries, leaving decision makers with the choice whether to sell up or hold out for better times.1 Four Russian-facing EU cement producers - Buzzi Unicem, CRH, Heidelberg Materials and Holcim - finalised their strategic responses in March 2022.
One year on, on 15 March 2023, 666 (21%) of 3110 eligible multinationals have withdrawn from Russia, according to the KSE Institute.2 Ireland-based CRH led the cement sector exit. It abandoned its Finland-based subsidiary Rudus' ready-mix concrete joint venture, LujaBetomix, on 2 March 2022. Switzerland-based Holcim took longer, but affected its exit on 14 December 2022, agreeing to sell Holcim Russia to local management. One condition of the sale was a rebrand (to Cementum, in February 2023) to withdraw the Holcim name from Russia. Unlike CRH, Holcim's Russian business included multiple cement plants - though the producer stated that it contributed less than 1% of group sales during 2021.
The KSE Institute uses the equivocal label of 'waiting' for companies which have paused investments, or scaled back operations, in Russia, while retaining their subsidiaries. This applies to 500 companies globally (16% of the pre-war total). Germany-based Heidelberg Materials acted swiftly to freeze further investments in HeidelbergCement Russia on 10 March 2022. At that time, its three cement plants were in winter shutdown. In terms of capacity, the 4.7Mt/yr-capacity Heidelberg Materials Russia constitutes 2.8% of Heidelberg Materials. In 2022, Heidelberg Materials suffered a Euro102m impairment on account of its Russian business. CEO Dominik von Achten, announcing the freeze, had described the subsidiary as a 'pure local business with no imports or exports.' Its website has since come offline, but the corporate structure presumably maintains in its frozen isolation.
1220 global multinationals - 39% of all those previously operating in Russia - are still 'continuing operations.' Among these is Buzzi Unicem. Having decided that 12 months was long enough, the Ukrainian National Agency for the Prevention of Corruption (NAPC) placed Italy-based Buzzi Unicem on its list of Russian war sponsors on 8 March 2023 for the actions of its subsidiary SLK Cement. A scathing denouncement accompanied the listing, in which the NAPC set out its main charges. It accused Buzzi Unicem of:
1. Expanding its business in Russia since the invasion;
2. Supplying its products to Russian state-owned businesses, including energy suppliers Rosatom and Rosneft;
3. Voicing support for the invasion via its social media presence.
The NAPC concluded “Buzzi Unicem's continued business in Russia means direct support and sponsorship of terrorism by Russia.”
Buzzi Unicem responded in no uncertain terms that these allegations are untrue: it has no business in Russia, and the entity bearing its logo on its (SLK Cement's) website is entirely independent in its decision-making and commercial actions.
This goes to the root of what it means to be a subsidiary of a corporation. Buzzi Unicem seeks to define the relationship as beginning and ending in operational involvement. Yet Buzzi Unicem and other corporations have invested large sums in businesses like SLK Cement. According to the NAPC, Buzzi Unicem paid Euro62m in taxes alone in Russia between 2016 and 2021. Whether they have elected to 'continue operations,' 'wait' or write in favourable buy-back options into sales contracts, as has happened in other industries, companies can be expected to seek to return to their investment.
As such, it is not entirely surprising that Buzzi Unicem should have followed up its rebuttal with a defence of SLK Cement. It stated "SLK Cement is a Russian domiciled entity operating exclusively in that country and therefore subject to domestic legislation. Payment of taxes and having employees being mobilised to the army are not discretionary decisions, rather legal obligations within the Russian jurisdiction."
In the decision to sell or hold, multinationals face the usual considerations: can they afford to yield their market share to other - less conscientious - competitors? Or, in this instance, those from Türkiye, India and China, whose potential investments are unrestrained by sanctions? Even as Holcim thrashed out its exit deal in October 2022, China-based West China Cement announced plans for a new US$260m, 1.2Mt/yr cement plant in Tatarstan, Volga Federal District. Meanwhile, Cemros (formerly Eurocement) is carrying out a Euro3m mill upgrade at its Lipetsk integrated cement plant in Central Federal District, which will increase the plant's capacity by 20% upon commissioning in early 2023. Between them, Central Federal District and Volga Federal District host four former Holcim cement plants.
12 months into the Russian invasion of Ukraine, an onslaught of withdrawals has shrunk, but not collapsed, the Russian economy.3 The Russian government insists that cement demand remains high (up by 2.1% year-on-year to 58.3Mt during the first 11 months of 2022, according to the Russian cement association Soyuzcement).4 The country has substituted new sources of imports for those lost since the beginning of the invasion, the government claims. It is even preparing for a cement shortage from 2024 onward by 'further developing domestic production capacities.'
Far from shrinking, Russian cement production rose by approximately 2.5% year-on-year to 60.7Mt in 2022.4, 5 The two aforementioned districts - Central Federal District and Volga Federal District - contributed a healthy 15.3Mt (25%) and 13.4Mt (22%) respectively. If the statistics are to be believed, the EU's recalled producers are missing out on a bonanza.
At the same time, all four EU-based producers face the parallel burden of increased costs in their key markets, as sanctions keep energy prices at an all-time high, and nowhere more so than in Europe. These sanctions purport to target Russian businesses and individuals, but their bite is far less discriminating. Companies may well wonder why they are being penalised by governments whose policies failed to prevent a Russian invasion of Ukraine in the first place.
We have no idea what will happen in Ukraine and Russia in the rest of 2023, but we can be sure it will be uncertain territory for the two countries’ cement producers. Those with (former) assets in the Russian market will have to continue their delicate balancing act.
1. European Commission, 'Frequently Asked Questions,' 16 March 2022, https://trade.ec.europa.eu/doclib/docs/2022/march/tradoc_160079.pdf
2. KSE Institute, 'Stop Doing Business with Russia,' 15 March 2023, https://leave-russia.org/leaving-companies?flt%5B147%5D%5Beq%5D%5B%5D=9062
3. European Council, 'Infographic - Impact of sanctions on the Russian economy ,' 9 March 2023, https://www.consilium.europa.eu/en/infographics/impact-sanctions-russian-economy/
4. Soyuzcement, 'Cement Review,' December 2022, https://soyuzcem.ru/documents/%D0%A6%D0%B5%D0%BC%D0%B5%D0%BD%D1%82%D0%BD%D0%BE%D0%B5_%D0%BE%D0%B1%D0%BE%D0%B7%D1%80%D0%B5%D0%BD%D0%B8%D0%B5_%D0%B4%D0%B5%D0%BA%D0%B0%D0%B1%D1%80%D1%8C%202022.pdf
5. BusinessStat, 'In 2022, 60.7 million tons of cement were produced in Russia,' 21 February 2023, https://marketing.rbc.ru/articles/14025/
Pakistani cement consumption drops in February 2023
06 March 2023Pakistan: Cement consumption fell by 7.1% year-on-year in February 2023 with total dispatches reaching 4.04Mt against 4.35Mt dispatched in February 2022. According to the All Pakistan Cement Manufacturers Association (APCMA), local cement dispatches by the industry during February 2023 were 3.59Mt compared to 3.94Mt in February 2022, a decline of 9%. Exports increased by 11%, as volumes rose from 405,489t in February 2022 to 449,940t in February 2023.
In February 2023, cement plants in the north of Pakistan dispatched a total of 3.01Mt of cement, down by 7.4% against 3.26Mt in February 2022. Cement plants in the south of Pakistan dispatched 1.03Mt during February 2023, 6.1% less than 1.09Mt during February 2022.
Northern cement plants supplied 2.95Mt to the domestic market, an 8.3% fall, while southern plants sold 640,645t, a 12.0% fall. Exports from the north rose by 58.2% as quantities increased to 64,717t. Exports from the south increased by 5.7% to 385,223t.
An APCMA spokesperson said that the economic situation in the country was becoming more complicated with each passing day. “We are facing serious operational problems. We need timely supply of spare parts and consumable items to ensure stable operation of our plants and we urge the government to come-up with practically applicable and industry friendly policies to enable the industry to come out of this difficult situation.”