Displaying items by tag: Fives

Two supplier news stories this week presented a snapshot of the global cement industry. The first was FLSmidth’s annual results for 2018. The second was the announcement by France’s Fives that it had signed a collaboration agreement with China’s CNBM.

Overall FLSmidth reported its highest order intake in six years with revenue growth driven by its minerals division. On the cement side though the equipment manufacturer was blunt, describing the market for new cement capacity as, “subdued with low plant utilisation globally.” In its assessment a slow increase in global consumption outside of China was not enough to absorb overall production overcapacity. It said it saw a ‘healthy’ level of small to mid-sized orders for grinding plants, upgrades, retrofits and single equipment orders. The market for replacements and upgrades was identified as a strategic focus. It also noted environmental upgrades for plants in China and India as environmental regulations tighten.

Fives’ news touched on the rivalry that western-based manufacturers have faced from Chinese competitors. Fives and CNBM have agreed to explore projects together in new plants, expansions and upgrades. Although the press release was brief, this seems to involve CNBM using Fives technology such as grinding mills, pyro-lines and burners. Like the rest of the industry Fives has had a tough time of it in recent years in the cement sector although 2018 seemed to have improved considerably at the nine-month stage in September 2018. So signing an agreement with a competitor at this stage is interesting. FLSmidth did a similar deal with CNBM in mid-2018 when it signed a framework agreement for future collaboration.

The context here is that the new plants that are being built are often part of China’s One Belt, One Road Initiative, typically in Central Asia or Africa. Mostly these plants are being financed by Chinese joint ventures and built by Chinese suppliers. This week Reuters published a map of new cement plants being built in 2018 with Chinese involvement along the silk road using Global Cement data. Rightly, FLSmidth and Fives are taking steps to be a part of this growth.

Figure 1: New Chinese cement plant projects outside of China in 2018. Source: Reuters using Global Cement data.

There is a tendency in the western press to play up Chinese imperial ambitions exemplified by US Vice President Mike Pence’s comments at the Asia-Pacific Economic Cooperation summit in Papua New Guinea in November 2018. Yet, Sinoma International Engineering, one of CNBM’s engineering subsidiaries, reported that its new order intake fell by 14% year-on-year to US$4.56bn in 2018. No reason for the decrease was given but most of this fall seemed to come from its construction division. In turn most of this came from a fall in foreign orders. The implication is that China’s attempts to move its cement industry out of the country may not be happening fast enough to preserve the size of these companies.

Returning to European equipment suppliers, FLSmidth summed up its response to this situation in its annual report. The cement market is split between premium and mid-market projects, with the latter dominated by Asian suppliers. FLSmidth says it is targeting the mid-market by becoming the preferred original equipment manufacturer (OEM) of choice. They are not alone in their ambition as the Fives deal shows.

China/France: China’s CNBM and France’s Fives have signed a cooperation frame agreement for future collaboration. The cement plant equipment manufacturers will explore projects together, in plant upgrade, plant expansion and new plants to implement Fives technologies, such as the FCB Horomill grinding system, the FCB Pyro-line and Pillard burners on an international basis. The signing ceremony of the agreement took place in late January 2019 bringing together Song Zhi Ping, the chairman of CNBM and Frédéric Sanchez, the president of Fives.

US: France’s Fives Group has released detail about a project to upgrade the cement mill workshop at Giant Cement’s Harleyville plant in South Carolina. The contracts included the complete engineering, supply, fabrication, transport, installation and commissioning services for material handling, cement grinding and cement loading. New equipment included a clinker and additives transport circuit with a dedusting system, a classifying circuit with a FCB TSV Classifier, a new Fives TGT Filter, all gas and material connections as well as the ball mill internals revamping, a cement truck bulk loading area and a weighing station.

Engineering, offshore supplies and project management were handled by Fives FCB. Onshore supplies and all site works including civil and structural works, mechanical and electrical installations were covered by Fives Solios. Major milestones of the project included starting civil works in November 2017. Mechanical and electrical erection work ran from February to July 2018. First cement production was on 29 June 2018.

UAE: Fives Group’s Mineral Business Line has set up a new subsidiary in the Middle East to support customers with services and technical assistance. Based in Dubai and referring to the Services Department, the new division aims to support Fives' customers through a local presence and by offering its services including upgrade and revamping projects, technical assistance, supply of spare parts, on-site machining and so on.

Bahrain: France’s Fives Group has launched a joint educational initiative with the ‘Tamkeen’ Labour Fund and Bahrain Polytechnic. The project is aimed at increasing the number of Bahraini workforce in the industrial sector, by reinforcing the employability of Bahrainis and by bridging existing skill gaps, in-line with the Kingdom’s Vision 2030 requirements. Fives plans to contribute in a non-profit initiative as part of its Corporate Citizenship Program. It will provide internship opportunities within the worldwide network of its companies and will partner with Bahrain Polytechnic.

“Fives has a longstanding commitment to Bahrain where we have been established since 2003. As a corporate citizen, we are proud to contribute to the communities in which we operate. This initiative is one of the ways in which the group supports the sustainability of the industry in Bahrain. The partnership between public and private entities that we have created with this initiative is really a model for the future,” said Frédéric Sanchez, Fives’ chairman of the executive board.

The training programs will be implemented and delivered by Bahrain Polytechnic, which was established by Bahraini Government to deliver applied learning, technical education, skills-based and occupational trainings.

US: France’s Fives has opened a new sales office for its cement and minerals businesses. The new location is intended to better address the US market to promote FCB technologies and services for the cement and minerals industries, in the fields of equipment, systems, revamping and complete line projects.

Oman: Four French investors and technology suppliers, including Fives and Suez, have created a syndicate to develop business opportunities in the Special Economic Zone Authority of Duqm. The other partners are CMA CGM and EDF Renewables. The companies intend to assess various investment options in the area and develop them. In particular, the syndicate has an interest in a ‘global approach to cement factory ecosystems’ and related facilities including transport facilities, a solar power generation plant and the production of alternative fuels.

Mexico: Cruz Azul has launched the construction of a fifth production line at its Oaxaca cement plant in Lagunas. State governor Alejandro Murat Hinojosa presided over the ceremony. The new line has an investment of over US$130m and is scheduled for completion by the end of 2020. It will also be able to co-process alternative fuels up to a rate of 40%. Previously, Germany’s Loesche and France’s Fives sold grinding mills for the upgrade.

France: Fives has appointed Denis Mercier in the newly created role of Deputy General Manager. He will start working for Fives on 15 October 2018. Directly reporting to Frédéric Sanchez, chairman of the executive board, he will join the Group’s Executive Committee.

Mercier’s main duties will be supervising all Fives functional departments involved in group transformation: operational performance, human resources, communication, innovation, strategy and marketing, international development and information technology.

Between 2012 and 2015, Mercier was Chief of Staff of the French Air Force. Since 2015, he has been North Atlantic Treaty Organization (NATO) Supreme Allied Commander Transformation, a role that ended in September 2018. Born in 1959, Denis Mercier has received the awards of Grand Officier de la Légion d’honneur and Officier de l’Ordre national du Mérite.

Poland: Fives FCB has released more information about an upgrade to a limestone grinding workshop for Lhoist Bukowa. In late May 2018 it signed an acceptance certificate with the lime producer for a FCB TSV Classifier 1400 HF. The classifier was selected to close a circuit consisting in a ball mill in open circuit. This FCB TSV Classifier 1400 HF is the third one ordered to Fives by Lhoist Bukowa.