Displaying items by tag: GCW493

One news story to note recently has been Cemex’s decision to recommission a kiln in Mexico to address cement shortages in the southwest US. In early February 2021 the Mexico-based producer said it was spending US$15m to restart a 1Mt/yr kiln at its CPN cement plant in Hermosillo, Sonora. The unit is over 250km from the US border but Cemex said it was making the investment to cope with cement shortages and project delays in California, Arizona and Nevada. At present it supplies over 3Mt/yr to California, Arizona, and Nevada from its integrated plant in Victorville, California and via sea-borne imports. Efficiency improvements at Victorville and other unspecified supply chain changes are also planned.

Cemex isn’t the only company with an eye on the south-west US. Around the same time Japan-based Taiheiyo Cement concluded its deal with Semen Indonesia to buy a 15% stake in its subsidiary Solusi Bangun Indonesia (SBI) for around US$220m. It’s a long way from Arizona but the related statement mentioned plans to make SBI’s integrated Tuban plant in East Java more export focused, with the construction of a new jetty and silos. It intends to export 0.5Mt/yr of cement to Taiheiyo Cement’s business in the US. Its local subsidiary, CalPortland, runs two integrated plants in California and one in Arizona.

Chart 1: Annual change in US cement consumption by state, December 2019 – November 2020. Source: PCA & USGS.

In its recent winter forecasts the Portland Cement Association (PCA) reported that the Mountain region of the US recorded the highest growth in cement consumption in 2020, at 10%, due to underlying economic fundamentals and favourable demographic trends. Data from the United States Geological Survey (USGS) supports Cemex’s view too. Ordinary Portland Cement and blended cement shipments rose by 21% year-on-year to 2.74Mt in Arizona and New Mexico in the first 11 months of 2020 from 2.28Mt in the same period in 2019. This doesn’t quite tally in California where shipments fell slightly, by 0.8%, to 9.42Mt. However, it reported 12% growth to 2.38Mt in the first quarter of 2020, suggesting that the market could return sharply once the coronavirus epidemic is better under control. Overall, shipments in the US grew by 1.03% to 82.3Mt in the first 11 months of 2020, driven by growth in central regions. The PCA expects national cement consumption to grow by about 1% in 2021 with a ‘robust’ recovery driven by residential housing but slowed by uncertain coronavirus vaccination supplies and general market volatility.

In a world with too much clinker production capacity, it stands out to see two established producers so visibly chasing market share in a mature market. Rather than building new plants, both Cemex and Taiheiyo Cement are using or reviving existing production lines in other countries, and building import strategies as well as optimising their existing facilities in the regions. With the western building material multinationals now often looking to focus on ‘safe’ markets in Europe or North America the fight to grow market share in these regions is likely to become more intense. It also complicates decisions about when or if an existing plant should be mothballed or shut. After all, Cemex’s old production line in Hermosillo is about to become very useful indeed.

Honduras/Panama: Cementos Argos has appointed Gustavo Adolfo Uribe as its manager in Panama and Central America. He has been succeeded by Luis Eduardo Tovar as the manager in Honduras.

Uribe studied civil engineering at the School of Engineering of Antioquia (EIA) and followed this with graduate training in economics at the University of Los Andes in Colombia and business at the École Supérieure des Sciences Economiques et Commerciales (ESSEC). He has worked for Argos for over 15 years in a variety of management roles, including being the general director for the business in Honduras.

Tovar studied business at the University of Lincoln in the UK. He has also worked for Argos for over 15 years in various managerial and strategic roles.

Kenya: East African Portland Cement (EAPCC) has appointed Daniel Kiprono as its acting managing director. He succeeds Stephen Nthei, who was appointed to the temporary post in mid-2019. No reason for his departure has been disclosed. Nthei replaced Simon Peter Ole Nkeri, who was reportedly relieved of the role, in mid-2019. Kiprono has worked at EAPCC for over 20 years in a variety of roles.

Kazakhstan: Kazakhstan’s cement production increased to 10.8Mt in 2020. Kazakhstan Newsline has reported that 2020 is the first year in which domestic cement production has exceeded 10Mt. Capacity utilisation across the nation’s 16.5Mt/yr of installed cement capacity was 66%.

HeidelbergCement’s 0.8Mt/yr Caspi Cement plant exceeded its rated capacity by 10%. Kazakhcement’s 1.0Mt/yr Shar cement plant and ACIG’s 0.5Mt/yr Khantau cement plant both produced no cement in 2020. Gezhouba-Shiyeli Cement’s Shiyeli cement plant stood idle for several months in early 2020 when management and engineering staff became stranded in China due to the coronavirus outbreak.

Kazakhstan Association of Cement and Concrete Producers executive director Erbol Akymbaev said, “The production capacities of Kazakhstani factories exceed the needs of the domestic market by 41%: domestic consumption in 2020 amounted to just over 9Mt. Access to neighbouring markets is complicated by the fact that states protect their own producers. For example, in Russia, according to GOST, additional certification of imported products is required." He added that the cement industries of the two main cement exporters to Kazakhstan – Iran and Russia – are unregulated in terms of CO₂ emissions. Kazakhstan’s commitment to a reduction in its emissions of 15% by 2030 gives it a competitiveness disadvantage.

Colombia: The Regional Autonomous Corporation of Antioquia (CorAntioquia) approved the modification of the environmental license of Cemex Colombia’s upcoming 1.0Mt/yr Cementera del Magdelena Medio integrated cement plant in Maceo, Antioquia. The modification will allow for the production of up to 1.5Mt/yr of cement annually. It will additionally enable the company to extract up to 990,000t/yr of limestone and clay. The producer called the authorisation an ‘important step’ towards the plant’s completion.

Cemex Colombia and Peru president Alejandro Ramírez said, "The modification of the environmental licence is a milestone that allows us to resume work to make this project a reality, through which it is expected that we will offer our materials for infrastructure and housing works in the country more efficiently."

Cameroon: Atlantic Group is planning to build a 1Mt/yr integrated cement plant in the Port of Kribi. Business in Cameroon has reported that the company has received all necessary permissions for the project. The group’s only asset in Cameroon is the 48,000t/yr Atlantic Cocoa plant in the Port of Kribi, commissioned in 2020. Parent company Ivory Coast-based Atlantic Group recently inaugurated the 1.5Mt/yr Société Ciment Côte d'Ivoire (SCCI) near Abidjan in Ivory Coast.

Kribi’s five existing cement plants have a total production capacity of 5.8Mt/yr.

Egypt: Misr Beni Suef Cement has ended a contract with Arab Swiss Engineering Company (ASEC). In April 2019 the companies signed a contract for ASEC to provide technical management at the producer’s plant. Reuters News has reported that the cement company will now undertake the operation of its production lines.

China: The Anti-Monopoly Bureau of the State Administration for Market Regulation has fined eight cement companies US$35m for price fixing. Caixin reports that seven companies in Shandong province formed Zibo United Cement Enterprise Management in 2017 to manage their arrangement through invoicing, sales, setting prices and coordinating operating regions. The extent of the anti-competitive behaviour between the companies extended to organising a price management committee to manage the arrangement by monitoring sales and even fining members in breach of its self-declared rules. As well as Zibo United, the other companies in the cartel were Shandong Baoshan Technology, Shandong Donghua Cement, Shandong Shanlü Environmental New Material, Zibo Luzhong Cement, Shandong Chongzheng Special Cement, Zibo Shanshui Cement and Linqu Shanshui Cement.

US: Martin Marietta’s total revenue remained stable at US$4.73bn in 2020. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 11% year-on-year to US$1.39bn from US$1.25bn in 2019. Cement shipments rose by 11.7% year-on-year to 1.1Mt in fourth-quarter of 2020 due to strong demand in Texas.

“As we move forward, we believe underlying demand fundamentals will reset, establishing 2021 as the year during which the nation regains its economic footing,” said Ward Nye, the chairman and chief executive officer (CEO) of Martin Marietta. He added, “We anticipate single-family housing growth, expanded infrastructure investment and notable heavy industrial projects of scale will support the company’s near-term shipment levels. We expect these demand drivers, combined with the ancillary construction necessary for housing community buildouts and the potential increased infrastructure investment from a comprehensive Federal surface transportation package, should provide for multi-year growth in product demand,”

Cameroon: Cimenteries du Cameroun (CIMENCAM) has signed an agreement with YUP Cameroon to accept online payments via YUP’s mobile phone-based banking system. Orders can be made via on CIMENCAM’s online portal. YUP allows its customers to access financial services without a bank account. The system started in Ivory Coast and Senegal in 2017 and is now present in Burkina Faso, Cameroon, Guinea, Ghana and Madagascar.