Displaying items by tag: Hanil Cement

South Korea: Hanil Cement and LK Investment Partners have been chosen as the preferred bidders for the acquisition of Hyundai Cement. They won out against rival bidders as their offer was higher than expected at US$567m, according to the Maeil Business Newspaper. They were bidding to buy a 85% stake in Hyundai Cement. If the purchase completes then Hanil Cement could increase it market share to 30% from 20% at present.

South Korea: South Korea's antitrust watchdog has fined six local cement makers a combined US$168m for fixing the prices of cement products and divvying up the market, according to Dow Jones.

According to the Fair Trade Commission (FTC), cement companies have allegedly colluded to rig the prices of cement products by controlling output and market share in 2011. The suspected companies are Ssangyong Cement Industry Co., Tongyang Cement & Energy Corp., Hanil Cement Co., Sungshin Cement Co., Hyundai Cement Co. and Asia Cement Co. Ssangyong was set to take 22.9% of the total market share, while Tongyang and Hanil were in charge of 15.1% and 14.9%, respectively.

"Managers of the six companies had regular monthly meetings to oversee whether or not the members had complied with the arranged shipments," said the FTC. The prices of cements surged by 43% year-on-year in April 2012.

Industry leader Ssangyong was slapped with US$73.6m of fines, followed by Hanil with US$34.5m and Sungshin with US$36.7m. Tongyang was exempted from the penalty, as the cement maker has been under court receivership since October 2013.

The FTC said that it will strictly crack down on price-rigging practices in backbone industries to build sound market order and fair competition.

South Korea: The Korea Fair Trade Commission (FTC) has continued its investigation into whether cement producers colluded to raise cement prices. The antitrust watchdog conducted an on-site probe into cement producers including Tongyang Cement & Energy and Hanil Cement in mid July according to industry sources cited by the Maeil Business Newspaper and the FTC. If a fine is levied a legal battle may follow regarding whether the Sampyo consortium, chosen as the preferred bidder to acquire Tongyang Cement & Energy, should pay the fine imposed by the FTC on Tongyang.

Upon the request from the ready-mixed concrete industry, the regulator started an investigation into alleged price-fixing in the South Korean cement industry in April 2013, but it has yet to reach a conclusion. The latest site visit is believed to have been organised to obtain further evidence on suspicions of price-fixing.

The combined sales of the seven cement makers that account for about 88% of South Korea's cement market are estimated at be up to US$855m/yr. Suspicions of cartel-like activity date back to 2011 and this may be reflected in potential fines if any price-fixing is proved.

The 'revelation' this week that South Korean cement producers have been paid US$127m to use/dispose of Japanese coal that is thought to be radioactive certainly sounds scary. If it is true that cement made with contaminated coal has led to the construction of radioactive buildings and roads, this may have prised open a 'can of worms' for coal producers, exporters and cement players alike. According to local media, four South Korean firms - Ssangyong Cement, Tongyang Cement, Lafarge Halla Cement and Hanil Cement - received the money to use the coal between March 2011, when the Fukashima nuclear power plant started to leak radiation, until 2013. A total of 3.7Mt of cement is 'under suspicion.'

Caesium-137 is formed by fission reactions that start with uranium-235 in nuclear reactors. The Fukushima reactor that started leaking in 2011 used this type of fuel. Once it leaked, caesium-137 was deposited into the sea and onto the land, presumably also making its way into nearby coal deposits.

As it is a metal with a melting point of just 28.5°C and a boiling point of 671°C, the caesium-137 would vaporise if it were to enter a cement production line operating at 1450°C as a metal. However, caesium will not enter the cement-making process as a metal due to its rapid and explosive reaction with water. An interesting slow-motion of this reaction can be seen here.

Instead, caesium will enter the cement-making process either as its oxide or a simple salt (e.g.: caesium chloride) in the coal. The salt will be ionized in the heat of the flame, sending caesium ions into the kiln and thus direct contact with the clinker as it is being formed. Here it will become part of the matrix of the clinker and hence the final cement product. All the time the caesium-137 is radioactive.

And it stays radioactive once it is in the finished product, for example in a building or road surface. Its half-life, the time that it takes for half of the caesium-137 to decay to meta-stable barium-137 (emitting radiation as it decays), is unfortunately very well matched to the life-span of concrete buildings at 30.7 years. This means that after about 100 years of building life the building would still be around 10% as radioactive as it was when it was built.

This would certainly be a problem if the coal was highly contaminated. However, a few questions come to mind. Firstly, if the coal contains 20-73 becquerels per kilogramme (Bq/kg) of caesium-137, as has been claimed by Lee In-young, an opposition spokesman for the New Politics Alliance for Democracy party and member of the National Assembly's Environment Labour Committee, why is this a problem when the Japanese legal limit for eating caesium-137 in contaminated vegetables is all the way up at 500Bq/kg? When the most dangerous mechanisms of caesium-137 poisoning relate to accumulation in soft tissue, how can driving along a caesium-137-containing highway constitute a health risk?

Also, the coal may well start the cement making process with 25-73Bq/kg of caesium-137 but the clinker will have a lower level. This is because for every 1t of clinker the plant will typically consume just 100-200kg of coal. The caseium-137 and hence the radiation will therefore be spread out over a larger mass. A level of 50Bq/kg in the coal would translate to a clinker level of 5-10Bq/kg. This is around 100 times lower than the Japanese vegetable limit. After this, the clinker is extended with additives to make cement. This is then added to aggregates and / or sand when concrete or mortars are made, further diluting the caesium-137, perhaps to as low as 1-5Bq/kg. It is arguable that South Korea has received a higher caesium-137 dose from Japan via air and sea than via coal imports.

In light of all this, it appears that those calling for investigations on scientific grounds, like Lee, may be misguided. However, there may be political gain. The histories of Japan and South Korea are long, violent and distrustful. Indeed, according to a BBC World Service poll conducted earlier in 2014, South Korea and China jointly have the most negative perceptions of Japan of all world nations. In this environment stories about radioactive coal become much easier to believe in.

In reality the Japanese vegetable limit is well above the likely levels that might be found in any cement products resulting from the use of this coal. It is consistent with EU limits set more than 20 years earlier (600Bq/kg). A search on the US Environmental Protection Agency's website fails to bring up any formal limit. Instead it states that everyone is exposed to caesium-137 from atmospheric fallout to a low level and that the most dangerous cases are where waste metal processors unwittingly come across sources.

So on the surface then, the South Korean reaction seems like a storm in a teacup. One question remains though. If the caesium-137 levels in the coal are so much lower than the Japanese vegetable limit, why are Korean firms being paid to take it out of Japan?

South Korea: Leading cement producers in South Korea, including Tongyang Cement, Hanil Cement and Sungshin, have notified ready-mixed concrete companies and construction contractors that they will freeze cement prices for 2013. The move follows an investigation on suspected price collusion by the Fair Trade Commission.

The official notices from the cement producers attributed the decision to the financial difficulties experienced by most cement-consuming industries. Accordingly, the cement makers will soon cancel the invoices sent out to the consumer firms.

Since February 2013, cement producers have said they would raise cement prices by 9 – 10% in 2013 due to a rise in the prices of bituminous coal and other raw materials. The cumulative losses of Korea's six major cement producers since 2007 have been in excess of US$867m.

South Korea: The South Korean Fair Trade Commission has started an investigation into major cement companies including Ssangyong Cement Industrial and Hanil Cement for suspected price fixing. The companies had notified ready-mixed concrete operators that they would raise their cement prices by 9-10% in 2012.

On 9 April 2013 the commission sent investigators on a two day probe to seven cement producers: Ssangyong Cement Industrial, Hanil Cement, Tongyang Cement, Sungshin Cement, Lafarge Halla, Asia Cement and Hyundai Cement.

An industry source said, "Lately cement producers and ready-mixed concrete operators are at loggerheads over cement prices. It appears that the Fair Trade Commission is looking closely into the matter. In 2003, the commission had imposed penalties of US$22.5m for restricting the supply of cement to ready-mixed concrete makers in order to prevent them to use slag powder in place of cement."