Displaying items by tag: FLSmidth

Pakistan: Power Cement says it has started commercial operation of its new 7700t/day clinker production line at its Nooriabad plant. It completed the procurement and installation of machinery for the new line in mid-2019. It was supplied by Denmark’s FLSmdith.

Denmark: FLSmidth has said that, following the appointment of Mikko Tepponen as its chief digital officer (CDO), it is embarking on an acceleration of digitisation projects and an expansion to its portfolio based on ‘direct collaboration and co-creation’ with customers. FLSmidth said that this aims at ‘increasing productivity in the cement industry through optimisation and efficiency, including by reduction of fuel and raw material consumption and of process heat, time and emissions, security enhancement and many other areas’ that would benefit from a digitally integrated approach.

Tepponen said, “Digitisation and sustainability go hand in hand. When you succeed in digitising key processes in any large-scale industry, you tend to see clear benefits in areas such as energy consumption, waste reduction and resource use. Without a serious focus on digitisation, it will be impossible for us at FLSmidth to reach our MissionZero sustainability ambitions.”

Nigeria: Denmark-based FLSmidth has secured a contract with Dangote Cement for the supply of hot kiln alignment services for 16 kiln lines across Africa. 10 of the lines are installed across three plants in Nigeria, with the remaining six situated in Republic of the Congo, Ethiopia, South Africa, Tanzania and Zambia. The contract will endure until 2026.

Dangote Cement said that it chose FLSmidth to help it achieve ‘uninterrupted cement production and dispatch around the clock. Dangote Group deputy managing director Arvind Pathak said, “The equipment health audits, services, and support extended by FLSmidth have helped us maintain our pyro process equipment with good reliability. Hot kiln alignment is an excellent preventative maintenance strategy.”

FLSmidth says that it conducts 250 hot kiln alignments worldwide annually.

US: CalPortland has awarded a supply contract to FLSmidth for a new raw mill at its integrated Mojave plant in California. The scope of supply includes engineering, equipment and installation of a new OK 48-4 Raw Mill with a Condition Monitoring System and an ECS/ProcessExpert system. The mill is scheduled to be in operation in late 2021. No value for the current order has been disclosed.

“The new OK Raw Mill from FLSmidth will increase reliability and efficiency at our Mojave plant," said Bruce E Shafer, Senior Vice President for Cement Operations at CalPortland. It follows the purchase of a FLSmidth OK Cement Mill at the same plant in 2004. FLSmidth added that as both OK mills at the plant will share the same gearbox design, the unit will be able to streamline maintenance and manage inventory costs by sharing the one spare FLSmidth MAAG WPU-200 assembly.

The headline from the cement section of FLSmidth’s first quarter results summed up what may be the current situation for many companies supplying the sector: “service relatively stable – cautious on capex.” The general picture across both its mining and cement businesses was ‘significantly’ increased demand for local resources, remote support and digital products. On the mining side FLSmidth pointed out that it was impossible to assess the impact of coronavirus on its business because of the difference between government policies. Some places continue lockdowns or impose additional restrictions but others are starting to ease them. This point has ramifications for multinational cement producers and other suppliers too. It seems likely to continue during the coming months as lockdowns ease at different rates in different countries.

On cement specifically, FLSmidth provided a good global view of what the pandemic and government responses are actually doing to the industry. It reports that around 80% of the world's cement plants (excluding China) are currently in operation with some operating at reduced capacity. It described the market for services as ‘relatively stable’ in the first quarter but that cement consumption was being reduced by lower construction activity, plant shutdowns and restricted access to sites leading to reduced demand for technical services and commissioning. By region it identified the biggest impact to its business from coronavirus in India and the Middle East. Generally, it says that cement producers are suspending capital investments until the impact of coronavirus on economies is clearer. There has been some good news though, with the supplier noting that several of its customers have been looking for services that can reduce their operational costs.

The European Commission tackled this pervading sense of uncertainty in its roadmap towards lifting coronavirus containment measures that was published on 15 April 2020. The Committee for European Construction Equipment (CECE) was keen to share this with its members this week, pointing out how the European Union (EU) plans to lift border controls and re-start economic activity.

The plan is to ease travel restrictions between border regions for cross-border and seasonal workers, and then between European areas with low coronavirus infection rates. External borders can later be reopened with access by non-EU residents to the EU scheduled for a second stage. To re-start economic activity the EU recommends, again, a phased approach focusing on sectors that are ‘essential’ to facilitate economic activity such as transport. The commission says it will also create a rapid alert function to identify supply and value chain disruptions, relying on existing networks such as Enterprise Europe Network (EEN), clusters, chambers of commerce and trade associations, small and medium enterprise (SME) envoys and more. Whether the EU can actually coordinate a return to normality following its poor response in aiding Italy at the start of the European outbreak of coronavirus remains to be seen. Yet, its historical roots as an economic community dating back to the Treaty of Rome in 1957 suggests it may be more successful when coordinating technical aspects of trade.

Detailed above are the views and plans of just one supplier and one continental organisation, although they are both prominent. The takeaway from this is that uncertainty is a major problem so far for the cement industry in the wake of the coronavirus outbreak. Companies have faced a cash crunch in the short term as economies slowed down and they are reluctant to release cash until the future becomes clearer. Large parts of the cement industry and its suppliers are very international, which exposes it to even more uncertainty. Different countries enforcing different restrictions and different easing strategies at different times create a major headache for everyone and a block to investment. Making cement is undeniably an essential industry and this realisation by legislators can be seen in some countries that at first shut down their plants before understanding that they needed them open after all! Suppliers should benefit from this too, although at reduced activity levels. We don’t know what kind of recovery will come – hopefully one releasing plenty of pent up demand. Yet one thing is certain. The work of the regional cement associations and those representing suppliers is going to be crucial in the coming months.

Denmark: FLSmidth’s revenue in the first three months of 2020 was Euro607m, up by 2.5% year-on-year from Euro592m in the corresponding period of 2019. FLSmidth’s cement division’s sales were Euro240m (40% of total revenue), down by 2.6% from Euro246m. The company said that the coronavirus outbreak impacted results, especially in March 2020, when ‘customer hesitation on large investments intensified, particularly in cement,’ and customers increasingly deferred large investments. It added, “Demand for spare and wear parts is relatively stable, whereas technical services are challenged by restricted access to sites.”

FLSmidth says that it aims to ‘carry out business as usual’ throughout the coronavirus outbreak, with an increased reliance on ‘remote monitoring, maintenance and support.’

FLSmidth’s 2020 financial guidance remains suspended.

Saudi Arabia: Denmark-based FLSmidth has announced that it has secured an engineering, procurement and construction (EPC) contract with Yanbu Cement for a ‘massive’ efficiency-increasing upgrade to reduce the heat and power consumption of the 5.9Mt/yr integrated Yanbu cement plant in Al Madinah Province.

FLSmidth previously supplied the Yanbu cement plant with an automation upgrade and burner system retrofit in 2018. It concluded a service agreement with Yanbu Cement in 2019.

Russia: Denmark-based FLSmidth has held an equipment installation and maintenance workshop for Vostokcement employees at Vostokcement subsidiary Spasskcement’s 3.2Mt/yr integrated plant in Primorsky Krai. Employees of Spasskcement, Teploozerskcement and Yakutcement were in attendance, along with employees of Vostokcement partner company Betonych JSC. The workshop focussed on the use of FLSmidth equipment in material handling equipment monitoring and breakdown response, including kiln shell repair optimisation, vibration diagnostics and flaw detection and pneumatic conveying applications.

Cement producers and suppliers are now reacting to the coronavirus pandemic at scale. The biggest obvious development has been the lockdown in India that began on 24 March 2020. The implications for the cement industry are profound given the country’s population (1.3Bn) and massive cement consumption under normal conditions. It is the country with the world’s second largest cement production capacity.

UltraTech Cement, the biggest producer, said that it was suspending production at ‘various’ locations although it added that the situation was ‘dynamic’ and that it was monitoring it from time to time. Ambuja Cement and JK Lakshmi Cement have done likewise. The latter has suspended cement production at an integrated plant in Rajasthan and three grinding plants in Gujarat. Some Indian states have moved faster than others towards shutting down movement of people so JK Lakshmi’s decision may merely be based on legal necessity. However, a difference may arise in producer strategies between keeping integrated and grinding plants open. Building up inventory is one strategy seen in poor market conditions previously around the world. Alternatively, moving to more of a grinding model might make sense in some territories if, as is happening, countries implement lockdowns at different periods. However, some Indian states have moved faster than others towards shutting down movement of people and JK Lakshmi Cement’s closure pattern may simply reflect this.

At the international scale HeidelbergCement gave an idea to Reuters of the challenge facing the multinationals. Chief executive officer (CEO) Dominik von Achten described the start of 2020 as being strong but that construction projects were being delayed in the US and that activity in France and Spain was starting to weaken. Unsurprisingly, the company has shut down three of its plants in Lombardy at the centre of the Italian epidemic. He added that the group was holding a daily crisis call to assess the effect of the virus upon staff. He also said that the group was stockpiling cement amid the disruption. The clear warning sign was of an existential threat like that faced by the airlines whereby sales could simply stop for a three or four week period… or longer.

On the supplier side, Denmark’s FLSmidth has issued a robust plan on how it is aiming to maintain service and support for its customers. Past all the now-usual stuff such as remote working it included detail on how to support clients on site where absolutely necessary on a case-by-case basis. With regards to its supply chain it pointed out that it was confident, “that any local interruptions to our suppliers can be minimised, even when the agility of some suppliers is put to the test. We have redundancy built into the system.” To this end it emphasised the global nature of its business to ensure that it could deliver parts and equipment to its customers. It claimed that it coped with coronavirus in China due to its ‘very flexible’ supply chain but did admit to some supply chain impacts. Yet it says that production is back to approaching full capacity with workshops in Qingdao and Shanghai above 90% as they work their way through accumulated backlogs. Finally, it is also offering advice on how the company can support its customers on reducing or shutting down operations.

Other supplier comments on the situation have mainly been about protecting staff, working remotely and supporting customers through continued supply of equipment and services. Back in India, Sameer Nagpal, the CEO of refractory manufacturer Dalmia-OCL told Business Standard that the company was coping so far with the crisis with little major impact seen so far. Its raw material supply chain was dependent on China but after some minor disruption it was secure. Most of its customers are domestic, where it hadn’t reported problems so far, although this may change with the Indian lockdown. Exports were a different story as it sends around 10% of its production abroad and it has a plant in Germany. In Europe it was seeing a challenge due to supply chain disruption.

The experiences above are a snapshot of some of what is happening in parts of the industry as coronavirus disruption hits home. China’s restrictions are easing, most of Europe is in lockdown, India has started its quarantine and the US has restricted movement in about a third of its states. The current restrictions in the UK, for example, allow for construction work to continue but local media is debating the associated risks for workers. Other territories have different rules. All of this is affecting demand for cement and concrete. This in turn feeds through to producers and their suppliers. Global Cement continues to monitor the situation and wishes readers a safe passage through the pandemic.

Denmark: FLSmidth has reported ‘increasing disruptions to customers’ and its own operations’ and higher costs due to ‘more complex logistics and a weaker fixed cost absorption’ following the coronavirus outbreak. It says that around half of employees are working remotely.

FLSmidth continues its business improvement initiatives launched in 2019 and has implemented a capital expenditure (CAPEX) reduction, salary adjustment postponement and hiring freezes.