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More movement in Italy this week with Buzzi Unicem’s purchase of three cement plants from HeidelbergCement. Buzzi acquired the Testi integrated cement plant at Greve and the Borgo San Dalmazzo and Arquata Scrivia grinding plants in Piedmont. No value for the transaction was disclosed but HeidelbergCement trumpeted that it was ‘well on our way’ to reach its target of Euro1.5bn of disposals by the end of 2020. This follows last week’s purchase of Cemitaly's Spoleto cement plant in Perugia by Colacem. Cemitaly, in case readers don’t know, is another of HeidelbergCement’s Italian subsidiaries.

Upon completion of these deals, Buzzi Unicem will own 10 integrated plants and five grinding plants in Italy. It continues the company’s consolidation drive in Italy from mid-2017 when it bought Cementizillo and two of its integrated plants for the knock down price of up to Euro125m.

The two other leading cement producers are now Germany’s HeidelbergCement with its local subsidiaries (led by Italcementi) and Colacem. HeidelbergCement has 10 integrated plants and 10 grinding plant. Colacem has seven integrated plants and one grinding plant. All three companies have integrated production capacities of around 9 – 14Mt/yr. Since 2012 the market has shifted from six major producers to three. Sacci, Cementir and Cemenzillo have left the field following acquisitions by their competitors. Italcementi was taken over by HeidelbergCement in 2016.

Graph 1: Cement production in Italy, 2006 – 2017. Source: Italian Cement Association (AITEC).

Data from the Italian Cement Association (AITEC) shows that the impetus for this consolidation trend was the reduction in Italian cement production to 19.3Mt in 2017 from a high of 47.9Mt in 2006. Despite this though the country still has a total production capacity of 37.7Mt/yr, according to Global Cement Directory 2019 data, giving it an utilisation rate of just over 50%. Production picked up again in the north and central regions of Italy in 2017 but this was insufficient to counter declines in the south and Italy’s islands. Exports have held steady in this time at around 2 – 3Mt/yr but this represents a doubling share of production from 5% in 2006 to 10% in 2017. Production has been steadily dwindling year-on-year since 2006 but domestic consumption rallied a little to 18.7Mt in 2017.

The Italian government instituted its ‘Industry 4.0’ policy in early 2017 to boost competitiveness. This included modest growth forecasts of 1%. International Monetary Fund (IMF) data shows that the country managed gross domestic product (GDP) growth of 0.9% in 2018. Yet, Buzzi Unicem reported like-for-like net sales contraction of 0.9% in 2018. HeidelbergCement was more circumspect in its reporting on Italy for 2018 but it did describe a ‘moderate’ increase in sales volumes of cement excluding its acquisitions.

With the IMF diagnosing the Italian economy as ‘weak’ and cutting its growth forecast to 0.1% in 2019 the prospects aren’t looking encouraging for the cement sector. AITEC data placed cement consumption at 309t/capita in 2017. This is on the low side for Western European standards suggesting that, although more consolidation could be coming, the market may also be down too. Its not great news for cement producers but the Italian market is edging ever closer to recovery.

Germany: Ali Emir Adıgüzel has resigned as the chief executive officer (CEO) of HeidelbergCement trading subsidiary HC Trading. He will be succeeded by Hakan Gurdal, a member of HeidelbergCement’s management board.

In a statement on LinkedIn Adıgüzelthanked HeidelbergCement’s chairman Bernd Scheifele for his support over the last 15 years. He added that it was, normal to have differences of opinion regarding the performance evaluation, strategy and future steps in companies.

Born in Turkey, the 58-year old Adıgüzel graduated from Harvard Business School in the US and the Boğaziçi University Business Administration Department in Turkey. He started his career working in Saudi Arabia and has been the general manager of HC Trading since 1996. He became Trade Chairman for the Mediterranean, Middle East and International regions, which include Turkey in 2004 and was appointed CEO in 2016.

Russia: Eurocement has appointed Andrey Solovyov as the director general of its 2.6Mt/yr Peterburgtsement plant. Soloviev, a graduate of the Moscow Mining Institute, holds experience working for other cement companies. He previously ran Eurocement’s Sengileevskiy cement plant in Ulyanovsk. He has been suceeded at this site by Ildus Sagitov, a graduate of the Belgorod State Technological University.

UK: EvoQuip has appointed Barry O’Hare as its International Sales Director. He holds experience in the crushing and screening industry, having worked in a number of positions for Powerscreen and Terex MPS over the past 11 years, most recently as a Powerscreen Regional Sales Manager. In the new role O’Hare will be responsible for leading the strategic and operational sales activities for EvoQuip in all markets excluding North America, as well as a range of sales supporting responsibilities, including the development and management of territory sales.

Kenya/South Africa: Kenya’s ARM Cement is fighting moves by minority investors in South Africa’s Mafeking Cement to buy it out for a nominal sum. ARM Cement is attempting to sell its 70% stake in the company for around US$3m as part of its administration process, according to the Business Daily newspaper. Mafeking Cement owns limestone reserves in north-west South Africa and ARM Cement originally took a stake in the company to raise investment and eventually build a cement plant.

However, the minority investors have invoked parts of the shareholders’ agreement and filed a court application in South Africa that, if successful, would allow them buy out ARM Cement’s stake for a nominal price less than US$1. ARM Cement’s administrators PricewaterhouseCoopers have taken steps to counter the move.

Benin: Aliko Dangote, the chairman of Nigeria’s Dangote Cement, raised the issue his company has with exporting cement to Benin. He said this company could not export cement to Benin despite its Ibese plant in Nigeria being under 30km from the border, according to the Vanguard newspaper. He alleged that the country was importing ‘more expensive’ cement from China instead.

Dangote made the comments in an interview with Mo Ibrahim at the 2019 Ibrahim Governance Weekend in Abidjan, Ivory Coast. He also said that he looked forward to the Continental Free Trade Area (CFTA) making trade easier in the region.

Bolivia: SEDEM, the government’s business development agency, has refuted accusations that a new cement plant being built in Caracollo, Oruro does not have enough water or raw materials. Patricia Ballivián, the general manager of SEDEM, presented reports from PricewaterhouseCoopers and C & C Ingeniería y Procesos defending the supplies to the unit. The reports were released in response to accusations by a local politician that the project had been poorly planned.

The reports revealed that the Empresa Publica Productiva Cementos de Bolivia’s (ECEBOL) plant will recycle the industrial portion of its water supply. It will have a supply of 4l/s and a 3.5Ml reservoir. It also has limestone, gypsum and clay reserves sufficient for the production of 100Mt of cement. These are expected to last the plant 60 years.

Indonesia: Indocement is aiming for 4% growth in sales year-on-year to around US$1.12bn in 2019 due to sluggish cement consumption. This compares to 5% growth in revenue in 2018. The subsidiary of Germany’s HeidelbergCement expects demand to increase in the second half of 2019 following elections, according to the Jakarta Post newspaper. It predicts that cement consumption will be driven by government infrastructure projects and the construction of residential projects and buildings. It plans to spend up to US$70m towards setting up a quarry in West Java and completing new cement terminals.

The cement producer is also preparing to increase its thermal substitution rate with alternative fuels like refuse-derived fuel (RDF). This follows a 50% rise in production costs due to coal in 2018. In September 2018 to agreed to buy 500t of RDF from the West Java government.

US: The Portland Cement Association (PCA) has announced the winners of the 2019 Energy and Environment (E&E) Awards. The awards recognised environmental and community relations projects that were completed in 2018 and were presented at the 3rd Annual Cement and Concrete Fly-In.

The CalPortland Mojave cement plant in California won the Energy Efficiency award for the installation of a new classifier system for its vertical roller mill that increased energy efficiency by reducing fan power requirements. The plant also installed a control system for the finish mill that will maximise performance and help reduce wear on equipment. The classifier installation reduced the finish mill energy intensity by 1.5 to 2.0kWh/t, and the control system reduced energy intensity by 13%. In 2018 22% of the electricity consumed by the plant came from on-site renewable wind energy generation. CalPortland has implemented significant energy efficiency measures and its energy management program has been recognised by the Environmental Protection Agency Energy Star program as the Energy Star Partner of the Year for 15 years in a row.

Roanoke Cement Company and Titan America’s Troutville plant in Virginia won the Environmental Performance award for being the first cement manufacturing plant in the US to receive ISO 50001 certification for energy management of all aspects of energy procurement, design and use. The plant reduced its total electrical consumption by 10% and fossil fuels use by more than 12%. The plant has also implemented an alternative fuels program as part of its certification for the True Zero Waste Program, administered by Green Business Certification and has received silver status achieving a 96% rate of waste divergence from landfills.

Lehigh Hanson’s Permanente cement plant at Cupertino in California won the Innovation award for the installation of a water treatment system reducing concentrations of metals, including selenium, to meet permit limits. Lehigh Hanson developed a treatment system that combined ultrafiltration and reverse osmosis (UF/RO) technology in conjunction with biological treatment technology to remove metals, including selenium and dissolved solids. This ensured applicable effluent limits were met while optimising treatment capacity and efficiency. This treatment system is the first of its kind in the cement industry ensuring that effluent limits are met while, at the same time, limiting the quantity of waste needed to be managed.

Buzzi Unicem USA’s Greencastle cement plant in Indiana won the Land Stewardship award for opening a 4km smooth packed stone trail in conjunction with the not-for-profit People Pathways organisation as Phase 2 of the Putnam Nature Trail. Buzzi Unicem USA staff and People Pathways used heavy equipment for rough clearing and grading of the overgrown former railroad bed and improved and expanded the physical trail. These areas were then landscaped with trees, native prairie vegetation plugs, interpretive signage, benches, birdhouses and other features. Additional nature trail enhancements include placement of wildlife monitoring cameras along the trail, installation of nesting boxes and interpretive signage, and maintenance of the recently completed restoration of native flora installed in 2017 and 2018.

Cemex’s Lyons cement plant in Colorado won the Outreach award for volunteering work by its staff at the Rocky Mountain National Park in Boulder, Colorado, performing campground improvement activities at Glacier Basin Campground by moving rocks and fallen timber and clearing existing fire pits of ash deposits. The plant then introduced a new community outreach initiative by hosting a Manufacturing Day event, providing local students tours of the quarry and plant to increase youth interest in pursuing a vocation in skilled trades. Additionally, the plant teamed up with the Celestial Seasonings B Strong Ride for cancer care and research for an event aimed at increasing safety awareness while fundraising for two local organizations and their efforts to fight cancer.

Mexico: Holcim Mexico has won an award from the National Chamber of Cement (CANACEM) for reporting no accidents at its cement plants in 2018. The award was presented at CANACEM‘s XXXVI National Congress of Occupational Health and Safety in Chihuahua.