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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.

Egypt: Suez Cement has appointed Yasser Elnaggar as its chairman. He succeeds Hayrullah Hakan Gurdal in the role.

Elnaggar is the chief executive officer (CEO) of EN Investment, a management advisory and investment house. Previously he worked as CEO of the Chemical Industries Holding Company (CIHC), a conglomerate made up of 23 Egyptian companies. Alongside this he holds over 25 years experience as a diplomat for the Egyptian government with a notable posting in from 2010 to 2014 as the Deputy Chief of Mission of the Embassy of the Arab Republic of Egypt in Washington, DC. Domestic government roles he has held include working as the Principal Deputy Minister of Planning, Monitoring and Administrative Reform. In this position he helped oversee the implementation of Egypt's 2030 Vision strategy. He also held the post of Principal Deputy Minister of Investment until April 2016.

Thailand: Germany-based KHD Humboldt Wedag has reported the successful commissioning of a new Comflex grinding line at Siam City Cement’s Plant 1 in Saraburi. The line replaces two ball mill circuits, maintaining a production capacity of 350t/hr with a 40% lower energy consumption. The Comflex comprises a roller press, RPM18–200/180 static coarse material separator, VS620 static fine material separator, LS8600 system fan, HKSK 236/346 and four product separation cyclones. KHD says that Siam City Cement awarded it the engineering, procurement and construction (EPC) contract because of the system’s low specific power consumption of 13.36kWh/t, compared to over 21kWh/t in the previous system.

Peru: Total cement volumes in March 2020 were 0.42Mt, down by 51% year-on-year from 0.86Mt in March 2019 and down by 51% month-on-month from 0.85Mt in February 2020. Clinker volumes fell by 51% to 0.35Mt from 0.71Mt in March 2019 – down by 55% month-on-month from 0.78Mt in 2020.

Peru’s March cement exports were 6200t, down by 46% year-on-year from 11,400Mt in March 2019 and 55% month-on-month from 13,700Mt in February 2020. Imports in March 2020 were 102,000t, down by 3.6% year-on-year from 106,000t and up by 2150% month-on-month from 5000Mt.

Domestic demand fell by 47% year-on-year and 48% month-on-month to 0.49Mt, from 0.92Mt and 0.94Mt respectively.

Norway: Private accreditation body DNVGL has certified Aker Solutions’ 400,000t/yr carbon capture and storage (CCS) system installation at Germany-based HeidelbergCement subsidiary Norcem’s 1.2Mt/yr integrated Brevik plant in Telemark as safe. HeidelbergCement Northern Europe director of sustainability and alternative fuels Per Brevik said, “The promising results from pilot testing in Brevik give us confidence that realisation of the full-scale capture plant will be successful. We trust that the project risk related to novel technology elements is low.”

Following an 18-month test of the partial installation, the certification ensures that the full-scale project will receive government funding.

Australia: Germany-based Siemens subsidiary Flender has published plans for a drives production plant in the Tonkin Highway Industrial Estate, West Australia. The plant will serve the gear needs of the energy, minerals and cement industries. The unit is equipped with a 1.5MW test bench capable of testing drive systems of up to 6.6kV. Flender Australia chief executive officer (CEO) and managing director Kareem Emara said, “Western Australia has been an excellent market for us in the recent years. It’s only natural for us to reinvest in this key market and be where our customers are to offer them the combined brains trust of over 50 facilities worldwide through this new state-of-the-art centre.”

Germany: Lubricants specialist Fuchs has announced its collaboration with chemicals company BASF in performing a cradle-to-grave analysis of different mineral oil hydraulic fluids that takes into account all environmental and economic aspects of their lifecycle. The study concluded that high performance multigrade hydraulic oil (HVLP) has a lower environmental impact and lower overall cost than monograde hydraulic oil (HLP). Fuchs said, “This advantage is mainly based on an improved diesel fuel economy throughout the use phase - primarily due to improved volumetric fluid efficiency, lower friction and lower fluid mass circulation ratio.”

Fuchs and BASF both supply lubricants and chemical products to the cement industry.

China: Anhui Conch’s profit in the first quarter of 2020 was US$690m, down by 19% year-on-year from US$860m in the corresponding period of 2019. Sales fell by 24%, to US$3.28bn from US$4.31bn. The coronavirus outbreak in China impacted the results, notably through decreased sales volumes and a 190% increase in financial expenses due to devaluation of the local currency.

India: Ambuja Cements’ profit in the first three months of 2020 was US$52.4m, down by 6.5% year-on-year from US$56.2m in the corresponding period of 2019. Sales were US$3.72bn, down by 3.4% from US$3,86bn. The company said the shutdown of all plants in March 2020 due to the coronavirus pandemic ‘impacted operations.’ It added, “Taking into account directives from the government, operations at a few plants have commenced in a phased manner since 20 April 2020.’

Ambuja has said that together with ACC it has donated US$434,000 to non-governmental organisations (NGOs) to provide food and ration kits to vulnerable people affected by the coronavirus outbreak. LafargeHolcim CEO India and Ambuja Cements managing director and CEO Neeraj Akhouray said, “Collaborative models are more effective in both containment of the disease as well as support for those whose livelihood and even survival is at risk. We believe that our contributions to these NGOs that are delivering grass-roots relief measures, coupled with our own companies’ efforts on ground working with local communities, will greatly accelerate the scale and impact we will have.”

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.