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Heidelberg Materials announced this week that it is preparing to close its integrated cement plants at Beffes and Villiers-au-Bouin in France by October 2025. It framed the restructuring as a response to ‘a significant decline in cement sales in France’ and a plan to focus on low-carbon products. Unfortunately, local media reported that around 170 jobs will be lost at the two sites. The company says it is looking at ‘socially acceptable solutions’ including redeployment to other locations in the country.

Investment has been forthcoming from Heidelberg Materials France in recent years. It reminded everyone that it initiated a Euro400m scheme at its France-based subsidiary Ciments Calcia in late 2020. Most of this was earmarked towards a new production line at the Airvault plant, which is currently being built. Other schemes at the Beaucaire, Bussac-Forêt and Couvrot integrated plants followed. More recently, Heidelberg Materials launched a carbon capture, utilisation and storage (CCUS) project at Airvault, part of the GOCO2 initiative, with the aim of starting initial capture in 2030 with full 1Mt/yr capture planned later. What the company didn’t mention though was at the time of that 2020 investment it was also preparing to convert the integrated Gargenville plant into a grinding unit, stop white cement production at its Cruas plant with the intention of turning the site into a terminal and it wanted to reduce its workforce by around 140. To be fair to Heidelberg Materials though, it did have the same goal of reducing its specific net CO₂ emissions. The added detail this week was that the group aims to generate half of its revenue from sustainable products that are either low-carbon or circular by 2030.

Heidelberg Materials France is not alone with its ambitions for low-carbon products. Holcim notably opened in early 2023 what it said was the first calcined clay unit in Europe at its Saint-Pierre-la-Cour cement plant. Heidelberg Materials then followed in May 2023 with the announcement of a calcined clay project at its Bussac-Forêt cement plant. Other clay projects from Vicat, NeoCem and Neo-Eco have been reported since then. The other prominent France-based blended cement producer that has steadily been building its business in recent years is Hoffmann Green Cement. More general plant upgrade projects that are also worth mentioning include Eqiom’s (CRH) upgrade to its Lumbres plant in February 2024 and the ignition of a new kiln at Lafarge France’s Martres-Tolosane plant in October 2023. Both of these projects have been framed as driving sustainability.

Graph 1: Cement production in France, 2014 - 2022. Source: France Ciment.

Heidelberg Materials’ assessment about the poor state of the cement market has been confirmed by local media. Sales reportedly started falling in 2022, were down by 6% year-on-year in 2023 and further downward pressure is expected in 2024. Production data shown in Graph 1 above released by France Ciment, the national cement association, doesn’t really show what has been happening with sales. Over the last 20 years production hit a high of around 22Mt in the mid-2000s before settling around 16 - 17Mt/yr from 2015 onwards. The more telling trend, perhaps, has been the increase in CEM II blended cements from 50% in 2012 to 64% in 2022. Cement production may have stayed roughly the same over the last decade but it is using less clinker than it used to. Hence the pressure on companies like Ciments Calcia to reduce clinker capacity.

A further cost pressure facing cement producers in France is the impending end to the price cap on electricity scheduled by the end of 2025. The government enacted the scheme in late 2021 at the end of the Covid-19 pandemic, but then carried on as energy prices spiked following the Russian invasion of Ukraine. France Ciment lobbied in August 2023 for further protection for the sector using the argument that decarbonisation was not possible without electricity available for a reasonable price. It added that decarbonising the cement sector in France with carbon capture would cost around Euro3.5bn. Electricity prices started rising in February 2024 as part of the government’s phase out of the scheme.

Finally, 17 people were arrested on 5 April 2024 in connection with a demonstration at Lafarge France’s Val-de-Reuil ready-mixed concrete plant in Eure. Environmental activists reportedly trespassed on the site, according to local press, causing an estimated Euro450,000 in damages with acts such as spraying foam into machinery, ripping up bags of cement, breaking windows and more. The activists presented their actions as a response to both the environmental impact of cement and concrete production and the ongoing legal allegations about Lafarge’s actions in Syria in the early 2010s. Lafarge France’s La Malle integrated plant was also similarly targeted in December 2022 when around 200 activists stormed the site and caused damage to machinery and property. Lafarge’s response at the time was to remark that there was a feeling of misunderstanding given that the La Malle plant was piloting various decarbonisation methods.
All of this presents a febrile picture of the cement sector in France. Sales are down, electricity costs are set to go up and producers are switching to low-carbon cement products. Alongside this they are also closing clinker production plants but are also investing in new decarbonisation projects. At the same time environmental protestors have also been targeting cement and concrete plants and Lafarge’s association with its former actions in Syria appear to have made it more of a target than the other manufacturers. It is unsurprising then that Holcim, the parent company of Lafarge France, has raised the risk of damage to the group’s reputation, with both the general public and investors, should it fail to meet its targets. Reaching net zero was never going to be easy but setting unrealistic targets is increasingly not an option.

Pakistan: Fecto Cement has appointed Hanif Idress as its chief financial officer. He succeeds Abdul Samad in the post. The cement producer operates the integrated Taxila plant near Islamabad.

Pakistan: Fauji Cement has appointed Anwar Ali Hyder as its chair. He succeeds Waqar Ahmed Malik in the post. The company operates four integrated cement plants in the country. It inaugurated its Shadan Lund cement plant in Dera Ghazi Khan in November 2023 bringing its total cement production capacity to 10.6Mt/yr.

US: Eagle Materials and Heidelberg Materials North America, through their joint venture Texas Lehigh Cement Company, will start up a new slag cement facility. The facility will be located in Houston, Texas and will start production in the summer of 2024. When completed, it will have a production capacity of 500,000t/yr. This is in addition to Texas Lehigh’s cement plant in Buda, Texas.

US/Austria: RHI Magnesita (RHIM) plans to acquire Resco Group for US$430m. The acquisition of Resco will add fireclay and pyrophyllite-andalusite mining operations in the US to its existing magnesite and dolomite operations across Europe, the US, Brazil and China. Furthermore, RHIM aims to transfer ‘significant’ production volumes from non-US plants to Resco's US facilities. The completion of the acquisition is anticipated in the second half of 2024.

Philippines: Cemex Philippines has launched a new 1500m² warehouse in Barangay Pangao West, Batangas, to improve its supply chain capabilities and meet the growing demand for construction materials in the region. This opening coincides with the Philippine national government's allocation of US$17.7bn for infrastructure development in 2024. The facility will support major development projects in Batangas, Quezon, and provide nearby provinces with cement. The Ibaan Warehouse operates 24 hours a day, providing staging areas for the loading and dispatch for cement products.

Luis Franco, president and CEO of Cemex Philippines, said "This warehouse is a great complement to our Luzon distribution network as it gives us a better position to address increasing cement demand in the market."

Global: The World Cement Association (WCA) has recently welcomed Refratechnik Asia as an Associate Corporate Member. Refratechnik Asia supplies refractory materials to the cement and lime industries in China, Southeast Asia, and Oceania. The firm produces 120,000t/yr of refractory materials.

Ian Riley, CEO of the World Cement Association, said "We are keen to see Refratechnik Asia promote its value-orientated culture within our organisation and its commitment to driving greener practices in the cement and wider construction industry.”

Kenya: President William Ruto has commissioned a Cemtech clinker plant in Sebit, West Pokot, valued at US$345m. Construction of the plant began in 2010 and it will produce 6000t/day of clinker with a cement capacity of 2Mt/yr. After production, the clinker will be transported to a grinding plant in Eldoret.

Mining Principal Secretary Elijah Mwangi said "The production is enough feed for all cement plants in the country. The demand for this critical material will now be met with the excess available for export." The opening of this plant is a ‘major relief’ for cement companies in Kenya, which have historically had to import 60% of their clinker. Currently, National Cement and Mombasa Cement manufacture clinker, while Bamburi Cement, Savannah Cement, Rai Cement, and Ndovu Cement import it.

Located at the Sebit limestone mines in Kipkomo subcounty, the plant has generated over 2000 job opportunities.

Vietnam: In the first quarter of 2024, Vietnam's cement and clinker exports maintained a volume of 7.9Mt but represented a 11.7% year-on-year decrease in value to US$298m, according to the General Statistics Office.

The value decrease is reportedly attributed to China's sluggish real estate market and anti-dumping duties imposed by the Philippines. Export prices also declined slightly, with the average price in 2023 dropping by 3% year-on-year. The Vietnam Cement Association anticipates further challenges for these exports in 2024, facing increased competition from the Philippines, Central America and South Africa. Domestic production is expected to exceed demand, with consumption estimated at 60-62Mt, prompting intensified export efforts to manage an excess production of around 30Mt.

India: Jahangirabad police have raided a cement warehouse, seizing 437 bags of counterfeit cement. The owner has been arrested under the Copyright Act of the Indian Penal Code.

The raid followed a complaint from Delhi resident Raunak Joshi, head of a company identifying fake and adulterated products. Joshi reported unauthorised sales of cement under the UltraTech brand in Jinsi Square, Jahangirabad. The police's operation at Mohammad Siddiqui's shop and warehouse uncovered the counterfeit cement, some falsely labelled as UltraTech and others with different brand labels.