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The Construction Products Association (CPA) has just forecast a 25% drop in construction output for 2020 in the UK due to Covid-19. And this is the optimistic prediction! It blamed the decline, which is said to be the sharpest ever recorded, on the country’s coronavirus-related lockdown. 60% of planned construction output was lost in April 2020 due to social distancing measures. This compares to a 6.5% decline in gross domestic product (GDP) forecast for 2020 by the International Monetary Fund (IMF) in April 2020 for the UK. OneStone Consulting’s Joe Harder in his Covid-19 Impact Analysis CIC 2025 report has forecast a 12.7% decrease in European cement production. Readers should keep in mind that construction output, GDP and cement production are all connected but not necessarily directly related.

Further details of note from the CPA include a direct link between the strength of lockdown measures and work lost, as well as differences between types of activity. So, for example, more construction output (in percentage terms) was reported lost in Scotland, where tighter lockdown measures were implemented. On the latter point, more output was lost in residential construction compared to non-residential with a similar trend reported in the repair, maintenance and improvement sector, again worsened in the residential part of this market. The sector that suffered the least was non-residential repair and maintenance as work on, currently, mostly deserted buildings and infrastructure was prioritised. One example of this may have been Aggregate Industries, the UK subsidiary of LafargeHolcim, which said this week that it had completed major works on the A14, a major regional trunk road, ahead of schedule. It didn’t directly make the link in its press release but quiet roads would have helped.

The CPA is touting the now-familiar range of letter-shaped economic recession shapes in the report, including ‘V’, ‘W’ and the dreaded ‘U’. However, the CPA’s Economics Director Noble Francis was more confident that infrastructure projects would bounce back fastest due to favourable investment cycles in utilities, government support for its high-speed railway scheme HS2 and, “greater ability to implement safe distancing for workers on larger sites.”

That last point ties in nicely with the operational guidance that the Mineral Product Association (MPA), the UK’s trade association for the heavy building material sector in the UK, released last week. This is all crucial information on a comprehensive and detailed scale along the lines released in other countries.

Much of this will be becoming second nature to cement industry workers and/or will be familiar to anyone who has watched US consultant John Kline discuss these issues on Global Cement Live. Yet there are some points worth discussing here such as ‘Avoid Distraction.’ This one’s all about remembering to keep in mind existing health and safety practices alongside all the coronavirus-related ones. All the usual health and safety regulations and advice remain in place and in some ways become even more important as there may be fewer staff working on socially-distanced sites, or first responders may be otherwise busy elsewhere. Another point from the MPA’s guidance is to ‘Provide More Time,’ which acknowledges that working with coronavirus measures will require more time. Other implications from a business changed by coronavirus are things like notifying the police when sites are closed and considering further security for such sites to minimise risk of theft. A lot of this stuff seems obvious but it’s easy to miss things.

For a recent review of the UK cement industry readers should refer to Edwin Trout’s feature in the June 2020 issue of Global Cement Magazine. One change since it was published has been Cemex’s proposal to mothball its 0.8Mt/yr South Ferriby integrated plant in Lincolnshire. The cement producer says it is not related to coronavirus but if the CPA’s predictions are accurate then it will make it that much harder to keep the plant open.

Everyone’s hoping for a ‘V’ shaped recovery from the coronavirus downturn in the UK and everywhere else around the world. Boots on the ground operating advice like that issued by the MPA and others is part of how the construction materials industries can work towards achieving this.

Mexico: Cemex has made changes to its management team with immediate effect.

Jose Antonio Gonzalez, the Executive Vice President of Finance and Administration, has been appointed as Executive Vice President of Strategic Planning and Business Development.

Maher Al-Haffar, the Executive Vice President of Investor Relations, Corporate Communications and Public Affairs, has been appointed Executive Vice President of Finance and Administration. The group added that Investor Relations will now be integrated to its Finance department.

Mauricio Doehner, the Executive Vice President of Corporate Affairs and Enterprise Risk Management, has been appointed Executive Vice President of Corporate Communications, Public Affairs and Enterprise Risk Management.

Juan Romero, the Executive Vice President of Sustainability, Commercial and Operations Development, will oversee Digital Marketing, in addition to his current responsibilities.

Luis Hernandez, current Executive Vice President of Digital and Organizational Development, will oversee Cemex Ventures, in addition to his current responsibilities.

Juan Pablo San Agustin, the Executive Vice President of Strategic Planning and Business Development, will leave Cemex. No date for his departure has been released.

Japan: Taiheiyo Cement has nominated Shinhachiro Emori as a new director. He is currently the president of Taiyo Vinyl Corporation, a subsidiary of Tosoh Group. The proposed appointment will be decided upon at Taiheiyo Cement’s shareholders meeting in late June 2020. At the same time the cement producer announced that Yuzo Arima is retiring as a director.

Canada: Progressive Planet, a company developing pozzolan-based cementitious products, has appointed Doug Brown as a Scientific Advisor with immediate effect. Brown is a materials scientist who holds a PhD in chemistry from the University of Calgary. He has worked with the team that founded Carbon Engineering, a Canadian company that is developing industrial-scale technology to remove CO₂ directly from the atmosphere. He has also worked in the private sector in the field of green building technologies and he is a board member of the Alberta Chapter of the Canadian Green Building Council.

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.

Turkey: HeidelbergCement and Sabancı Holding subsidiary Akçansa has used the coronavirus lockdown period to install a new burner at its Büyükçekmece cement plant in Istanbul, where production has been suspended due to the outbreak. FCT Combustion supplied the burner, which it said will improve ‘combustion, emissions control and clinker quality.’

Akçansa will undertake a burner upgrade on its second kiln during a scheduled stoppage in mid-2020.

US: The Texas Commission on Environmental Quality (CEQ) has granted permission to Lhoist North America for the installation of a new vertical kiln at its New Braunfels, Texas plant. The company says that the kiln will form the basis for a plant expansion to meet the growing lime demand of the construction and steel sectors.

Lhoist North America chief executive officer (CEO) and president Ron Thompson said, "We are proud that this investment at New Braunfels aligns with our company's commitment to environmentally sustainable growth."

UK: The Construction Products Association (CPA) has predicted a 25% year-on-year decline in total national construction output in 2020. It said that the coronavirus lockdown resulted in the loss of 60% of planned construction output in April 2020, included 85% of homebuilding.

CPA economics director Noble Francis said, “Even under this most optimistic of scenarios, the country’s construction activity would suffer its sharpest fall ever recorded. Returns to site in May 2020 will focus on partially completed developments rather than new starts as house builders are expected to be cautious given uncertainty regarding demand. This uncertainty will also keep the recovery muted in commercial offices, industrial factories and the most severely-affected sub-sector, commercial retail.” He added, “A more positive outlook is expected for infrastructure activity thanks to a greater ability to implement safe distancing for workers on larger sites but also, vitally, thanks to HS2 being given the go ahead to proceed. An increase in activity from the five-year investment programmes within regulated sectors such as water and sewerage, roads and rail also adds to this more positive story.”

Mexico: Cemex has announced the amendment of its facilities agreement with several financial institutions to alter its consolidated leverage and coverage covenants. Under the new terms, the leverage covenant will increase to 6.75x for June 2020 and to 7.00x for September 2020 through to March 2021 and decrease thereafter.

Cemex chief financial officer (CFO) Maher Al-Haffar said, “We are very pleased with the completion of this process and with the support of our lenders. We are proud of our track record in working together with our bank group in both good and challenging time.”

Cemex said that as part of the amendment it has agreed to ‘temporarily limit certain flexibilities related to capital expenditure.’

Nigeria: Dangote Cement has recorded earnings before interest, taxation, depreciation and amortisation of US$293m in the first quarter of 2020, up by 2.2% year-on-year from US$287m in the first quarter of 2019. Sales rose by 3.8% to US$639m from US$616m. Cement sales volumes fell by 0.6% amid a total suspension of South African operations from late March 2020 due to the coronavirus lockdown.

Dangote Cement chief executive officer (CEO) Michael Puchercos said, “2020 started strongly, with growth across the board despite the early effects of the COVID-19 pandemic. We are closely monitoring all markets according to the guidance provided by the authorities in each country. We continue to provide superior services and deliver high quality products to our customers.”