Displaying items by tag: Government
Norway: The Norwegian Parliament has voted in favour of the government’s proposed grant of funding for industrial scale implementation of full-scale carbon capture and storage (CCS) at HeidelbergCement subsidiary Norcem’s Brevik cement plant. Work on the project is expected to start immediately, with the goal of starting CO2 separation from the cement production process by 2024. The end result will be a 50% cut of emissions from the cement produced at the plant. The group said that the installation will contribute to its CO2 emissions reduction target of 30% between 1990 and 2025.
Norcem chair and HeidelbergCement Northern Europe regional general manager Giv Brantenberg said, “HeidelbergCement highly appreciates the successful cooperation with the Norwegian authorities. The Brevik CCS project clearly shows the importance of industry and public sector to find common solutions in the fight against climate change.”
HeidelbergCement chair Dominik von Achten said, “We are delighted about the final approval of the Norwegian parliament for our breakthrough CCS project in Norway.” He added, “To meet national and international climate targets, CO2 separation is an important cornerstone. Our CCS project in Brevik will pave the way for our industry and other sectors.”
Pakistan: The Ministry of Commerce has advised the government that a concessionary rate for cement companies for the supply of electricity would reduce costs and increase international competitiveness. The Business Recorder newspaper has reported that the ministry proposed the measure due to the industry’s ‘immense’ potential for exports. In the 2020 financial year, the country exported US$266m-worth of cement. The ministry said that the current government’s policies would cause this to ‘substantially’ increase.
India starts to build cement capacity again
09 December 2020Manoj Kumar Rustagi was on hand yesterday to discuss JSW Cement’s operations in the UAE at the Virtual Middle Eastern Cement Conference. At the event, jointly organised by Global Cement Magazine and the Arab Union for Cement and Building Materials (AUCBM), Rustagi mainly stuck to the development of the producer’s new integrated plant in the Fujairah Free Zone but he also gave an overview of JSW Cement’s presence in India. For example, as part of an industrial conglomerate, JSW Group, the cement producer benefits from links to steel production by JSW Steel that enables it to use blast furnace slag. Notably, JSW Cement’s Shiva Cement subsidiary announced plans at the end of November 2020 to spend around US$200m on a new 1.4Mt/yr integrated cement plant in Sundergarh district, Odisha with the clinker production line supplied by ThyssenKrupp Industries India.
JSW Cement is not alone in ordering new production capacity. This week, UltraTech Cement approved a planned increase of 12.87Mt/yr for around US$740m. This is in addition to new capacity projects of 6.7Mt/yr that are currently underway. All of these new projects are scheduled to be commissioned in a phased manner by the end of the 2023 Indian financial year (by March 2023). It is unclear at present how exactly these projects are distributed but they are centred in the Northern, Central and Western Zones of the country, and the new tranche includes the previously announced Pali plant in Rajasthan. At this price the inference is that the much of the new capacity will be in the form of grinding plants and/or upgrades to existing clinker lines. Around the same time as this, LafargeHolcim said it wants to spend US$112m on waste heat recovery (WHR) plants for six of its cement plants in India by the end of 2022.
Graph 1: Change in Indian cement production year-on-year (%). Source: Office of the Economic Adviser.
These three projects by major producers suggest that the Indian cement sector is recovering from the effects of the coronavirus lockdown in late March 2020. Graph 1 above shows the sector finally recovering in October 2020, with growth of 3% year-on-year to 26.9Mt. Kumar Mangalam Birla, the chairman of Aditya Birla Group, credited the economic situation with the Indian government’s Atmanirbhar Bharat stimulus program for his decision to commit to UltraTech Cement’s spending spree. This outlook gels with that of Fitch Ratings. The credit ratings agency has forecast in a recent report that ‘strong’ margins during the first half of the 2021 financial year (April – September 2020) are going to limit the financial risks to the larger Indian cement companies despite the lower cement sales volumes due to coronavirus. Pent-up demand helped the industry recover after the lockdown and this was further aided by lower energy/fuel costs and general cost cutting.
Needless to say all of the above is good news for the Indian cement industry after the year it has had. One thought to consider from all of this is who might UltraTech Cement order its mills and clinker lines from? Atmanirbhar, the name of the Indian stimulus plan, has been described as ‘self-reliance’ or ‘self-sufficiency’ in the local press. Unfortunately, relations have been poor between India and China in 2020 due to armed skirmishes along the Line of Actual Control on the border, amongst other issues. Ordering a new clinker production line from, say China-based Sinoma, may not look especially ‘self-sufficient’ in the current climate.
Punjab government approves five cement plant plans
09 December 2020Pakistan: The government of Punjab Province has approved five cement plant plans worth a total of US$1.25bn. The Frontier Post newspaper has reported that Chief Minister Usman Buzdar chaired a cabinet meeting in which No Objection Certificates (NOCs) were issued to five planned cement plant projects.
Philippines cement import duty rises
09 December 2020Philippines: The Department of Trade and Industry (DTI) has raised the import duty per 40kg bag of cement to US$0.20 from US$0.19. The Manila Bulletin newspaper has reported that the department issued the administrative order following a petition from the Cement Manufacturers Association of the Philippines (CeMAP). The petition suggested a US$0.25/bag levy as an effective means to maintain domestic cement production. The association has blamed growing imports on a surplus in countries such as Vietnam.
The DTI previously imposed tariffs on imported cement for three year from October 2019 with a staggered reduction in the duty. However, the DTI said it would review the safeguard measure in order to modify the rate as it deemed necessary.
LafargeHolcim Bangladesh donates US$117,000 to Bangladesh Labour Welfare Foundation fund
07 December 2020Bangladesh: LafargeHolcim subsidiary LafargeHolcim Bangladesh has donated US$117,000 to the Bangladesh Labour Welfare Foundation (BLWF) fund. The New Nation newspaper has reported that State Minister for Labour and Employment Monnujan Sufian received the cheque on behalf of the BLWF, which in 2020 supported 10,500 workers with US$5.2m-worth of financial support.
Update on Tanzania
02 December 2020Cement scalpers in Tanzania have been threatened with jail time for hoarding cement! The country faced a shortage of cement and other building materials in October 2020 and Prime Minister Kassim Majawali ordered an investigation into the issue following the conclusion of the presidential election earlier that month. Both regional commissioners and the National Prosecution Service have been dragged into the initiative. Director of Public Prosecutions Biswalo Mganga promised to local press that wrongdoers could face up to 30 years in prison for daring to hoard products or distort the market.
Rhetoric aside, the situation is curious given that HeidelbergCement’s local subsidiary, Tanzania Portland Cement, seemed to think in its 2019 annual report, that the country faced a 5Mt/yr overcapacity from integrated and grinding plants compared to a total production base of 10.6Mt/yr. However, the East African newspaper reported that despatches fell to 150,000t in October 2020 from 450,000t in September and August 2020, with a 30% surge in the price in some parts of the country.
In the wake of this, Dangote Cement apologised publicly for failing to communicate a planned stoppage at its Mtwara plant to the wider public. Tanga Cement then denied that its production was down. It said instead that production was at the highest level and that large chunks of its output was servicing government-backed infrastructure projects like the Standard Gauge Railway (SGR) and the Kigongo-Busisi Bridge, which will span the southern end of Lake Victoria. It also blamed a lack of trains on the Tanga-Moshi, which was reopened in mid-2019. It seems reasonable that cement prices might vary quite markedly, even before the profiteers got involved, due to the reasons above. Other issues locally include poor transport links, long distances in a country like Tanzania, the recent election and lingering hiccups from the blockage of imports from Kenya in 2018 that may not have helped either. The investigation continues.
A wider issue here is how much cement production capacity the country and the region can support given a propensity for spikes in prices. As Global Cement has covered previously (GCW456 and prior issues) Chinese producers have been heading into Sub-Saharan Africa over the last decade. Huaxin Cement bought ARM Cement’s assets in Tanzania in May 2020. It renamed the company African Tanzanian Maweni Limestone and then started trial production of clinker at the newly upgraded 0.75Mt/yr Maweni Limestone clinker plant in July 2020. Depending on how long ARM Cement’s former subsidiary was out of action, this one seems unlikely to rock the market too much. Tanga Cement also took the opportunity in November 2020 to say that talks with the government about a new 0.5 – 0.75Mt/yr grinding plant in Arusha were progressing
The proposed 7Mt/yr CNBM/Sinoma ‘mega’ plant is another matter entirely. Most of its output is intended for export but any disruption to local transport links, current or future, could swamp the local market. The export of Chinese infrastructure development around the world through its loan system could offer (occasionally literal) bridging solutions here as cement from a Chinese-backed factory is used to build the transport networks backed by Chinese loans that allow exports to proliferate. Tanzanian President John Magufuli’s comments that the poor terms for a US$10bn Chinese loan supporting a port project could “…only be accepted by a drunken man,” may not have helped international diplomacy. Still, Chinese money is actively getting things built here and elsewhere around the world at a rate previously unheard of.
Returning to the present, it makes a change to highlight a market where cement is truly demanded. A coronavirus-related lockdown may have slowed sales in the first half of 2020 but Dangote Cement estimated that the total market for cement in Tanzania was about 4.2Mt in the first nine months of 2020 and it reported its highest ever orders and dispatches in September 2020. That the country’s prime minister decided to discuss cement prices is a reminder of how important the commodity remains in parts of the world.
Japan: Sumitomo Osaka Cement has formulated a set of medium-term goals and long-term policies in order to enable it to achieve carbon neutrality, in line with the Japanese government’s target, by 2050. These consist of a 30% reduction in energy-derived carbon dioxide (CO2) emissions intensity between 2005 and 2030 and efforts toward carbon neutrality in energy and process-derived emissions by 2050. These efforts include: “reduction to the limit of fossil energy, development and introduction of process-derived CO2 emission reduction technology, carbon-free electric power, technology development and supply expansion related to low-carbon cement and concrete products, development and supply of innovative bonding materials and development and introduction of innovative technology related to carbon capture, utilization and storage (CCUS).”
Uzbekistan: The Ministry of Energy says that it has not shut off the electricity supply to various cement plants, as alleged within private messaging channels. It stated the example of the Okhangaran cement plant, which, during the alleged shutdown, was received a recorded 605,000kWh of power on 24 November 2020, up by 12% from its average supply of 540,000kWh/day.
The ministry said, “Anyone who disseminates any information to a specific audience needs to clearly understand their responsibility.”
Thang Long and Ha Long cement plants named for closure in 2030
23 November 2020Vietnam: The government of Quang Ninh Province has ordered the closure of two cement plants in Ha Long, the 2.0Mt/yr Ha Long cement plant and 2.3Mt/yr Thang Long cement plant, to close in 2030. The Viet Nam News newspaper has reported that the closures aim to protect the local environment and nature as part of the city’s move towards becoming a tourism and service hub centred on Cua Luc Bay. In 2014 the provincial government advised the cement plants to stop expanding and relocate before 2030.