Displaying items by tag: Heidelberg Materials

US: Germany-based Heidelberg Materials has entered into a definitive purchase agreement to acquire The SEFA Group Inc., the largest fly ash recycling company in the US. Based in Lexington, South Carolina, the operations of The SEFA Group include five business units, five utility partners, 20 locations and more than 500 employees. The group currently supplies quality fly ash to more than 800 concrete plants in 13 states.

Heidelberg Materials said that the reuse of fly ash from energy generation in alternative products such as composite cements enhances its circularity efforts within its value chain by reducing the CO₂ emissions of its cement and concrete. The transaction is anticipated to close in June 2023.

“Fostering circularity by increasing the use of by-products and recycled materials from other industrial sectors is an essential part of our strategy,” said Dr Dominik von Achten, Chairman of the Managing Board at Heidelberg Materials. “Our focus is on rapidly and significantly reducing our CO₂ emissions and The SEFA Group will make an outstanding contribution in this regard to our US business.”

Georgia: Heidelberg Materials has completed the divestment of its joint venture in Georgia. It previously held a 45% state in CaucasusCement Holding BV (CCH), the parent company of HeidelbergCement Georgia Ltd and Terjola Quarry Ltd, Tbilisi.

Heidelberg Materials sold its share to its long-term joint venture partner Cement Invest BV, an investment company that is jointly managed and owned by the Georgian Co-Investment Fund and Hunnewell Partners. The joint venture’s scope included two integrated cement plants, 14 ready-mixed concrete plants and two aggregates plants. The partners agreed to not disclose the financial terms of the transaction.

Heidelberg Materials said that these latest steps reflect its continued simplification of its country portfolio and would help to position the company as front runner on the path to Net Zero and circularity in the building materials industry.

France: Ciments Calcia has announced an investment of Euro86m to further decarbonise cement production at its integrated Beaucaire plant. The subsidiary of Germany-based Heidelberg Materials has allocated a total of Euro600m towards reducing CO₂ emissions from all of its operations in the country in response to a government initiative, according to The Tribune newspaper.

The current funding follows a spend of just under Euro7m on upgrades at the site, including installing a new clinker cooler that will allow for greater recovery of waste heat, and the addition of a new computer control system. Following this work, the single production line plant was restarted in early April 2023.

The next stage of investment has started with a feasibility study. If successful, a tendering process could start in the second half of 2023 with work planned to start in 2025. The company intends to renovate the plant’s electricity network, modernise the production line with a preheater and a pre-crusher and make further changes to target an alternative fuels thermal substitution rate of 75%. A third stage, involving carbon capture and utilisation and/or storage, is tentatively planned to start in 2030.

Holcim launched its formal take on construction and demolition waste (CDW) this week with the unveiling of its ECOCycle technology platform at the BAU architecture fair in Munich. This amounts to managing the distribution, processing, grinding and recycling of CDW back into new building material products. It claims that its concrete, cement and aggregate products can contain 10 - 100% of CDW with no drop in performance.

It is hard to gauge whether this is marketing for existing operations or the start of something new. Yet, in its 2022 Sustainability Report, Holcim said that it recycled 6.8Mt of CDW back into building products and that it is on track to meet its target of 10Mt by 2025. This target was neatly put into words as wanting “to build more new buildings from old ones.” Ahead of the announcement of the launch of ECOCycle, it added that it was going to roll out its Susteno product around Europe. This product, made from 20% CDW, was originally released in Switzerland in the late 2010s. Notably, recent acquisitions by Holcim that connect to its growing focus on CDW include Poland-based Ol-Trans in July 2022, UK-based Wiltshire Heavy Building Materials in October 2022 and UK-based Sivyer Logistics in April 2023.

As covered by Global Cement Weekly in February 2023, Holcim is not the only heavy building materials company pivoting to CDW. The European Union (EU) set a 70% recovery target for it in 2020 and various cement company sustainability reports have described the region as being receptive to moves into this sector. Cemex set up a global waste management subsidiary called Regenera at the end of January 2023. This division covers both alternative fuels, CDW and industrial by-products, so it is more general than Holcim’s current effort, but it shows intent in the same direction. Cemex previously set a target of recycling 14Mt/yr CDW by 2030.

Heidelberg Materials has been working on developing recycled concrete paste and its ReConcrete-360° concrete recycling process. As of its last sustainability report, this process had been tested at the pilot scale and is now being developed and scaled for industrial application. In addition to acquiring UK-based Mick George Group in December 2022 Heidelberg Materials has also purchased Germany-based RWG Holding in January 2023 and Germany-based SER Group in February 2023. All three companies operate in the CDW sector.

The other notable contribution that Heidelberg Materials has been making is as a partner of the ‘Circular City - Building Material Registry for the City of Heidelberg’ project. When Heidelberg Materials announced its involvement in the initiative in mid-2022 it said it was the first city in Europe to apply the principles of urban mining. The goal of the project is to take an inventory of the city’s buildings and then compile it in a digital material registry. The basis for the registry is the Urban Mining Screener developed by EPEA (Environmental Protection Encouragement Agency). This programme can estimate the composition of buildings based on building data such as location, year of construction, building volume or building type. Circular economy supply chains can then act accordingly when a building is retrofitted, demolished or deconstructed. So, for example, at the start of the project it worked out that a former US Army housing estate conversion site was calculated to contain approximately 466,000t of material, with about half in the form of concrete, a fifth in the form of bricks and 5% as metal.

That last example compares to a European Commission estimate that, as a whole, Europe generates around 450 - 500Mt/yr of CDW. A third of this is concrete. As with alternative fuels and slag previously, this may be money going into the ground. Recycling building materials is not new but any significant increase in reusing CDW that can reduce the clinker factor of cement (and the cement factor of concrete) offers a potentially cheaper route to building materials decarbonisation than carbon capture and utilisation/storage at current costs. Hence the continued interest.

Germany: Heidelberg Materials has appointed industrial gases and engineering company Linde to install a carbon capture and liquefaction plant at its 1Mt/yr Lengfurt, Bavaria, cement plant. The project is scheduled for delivery in 2025. When commissioned, the system will capture and liquefy 70,000t/yr of CO₂. Heidelberg Materials plans to use a small part of the liquefied CO₂ in its development of recarbonation technologies for cement and concrete, with the remainder to be marketed by Linde to industries, including chemicals and food. The German government granted Euro15m in funding for the project under its Decarbonisation of Industry programme.

Heidelberg Materials’ chief executive officer Dominik von Achten said "We are pleased to be able to implement the world's first carbon capture and utilisation (CCU) project in the cement industry on an industrial scale.”

Linde’s executive vice president Jürgen Nowicki said “With this joint venture, two companies that are world leaders in their field are combining their skills with the aim of finding a solution that is as sustainable as it is economical. After successful pilot applications, this large-scale plant paves the way for sustainable cement production.”

Image credit: Cement plant Lengfurt, Germany. Copyright: Heidelberg Materials. Photographer: Steffen Fuchs.

Canada: Heidelberg Materials and the Canadian government have signed a memorandum of understanding (MoU) to collaborate on the installation of a carbon capture system at the company’s Edmonton cement plant in Alberta. The project is scheduled for completion in 2026, at a total cost of US$1.01bn. When operational, the system will capture 100% of the Edmonton cement plant’s CO₂ emissions - 1Mt/yr – for transportation and storage in nearby Wabamun. Canada Newswire has reported that construction of the system will create 2000 jobs.

The government said that it would be a ‘significant partner’ for the project. The size of funding will depend on other provisions under its Investment Tax Credit for Carbon Capture, Utilisation and Storage scheme, which is currently being finalised.

Heidelberg Materials’ reaction to changes in the law in Hungary received attention this week in the German press. The government introduced its Act on Hungarian Architecture in March 2023 that will enable it to set production levels and prices upon foreign-owned cement producers when the new legislation takes force in July 2023. An unnamed executive at the Germany-based Heidelberg Materials told Der Spiegel that, "These regulations represent a complete violation of all rules of the European single market.” They added that the Hungarian government appeared to be trying to force the producer to sell up. The report further alleges that the owners of Duna-Dráva Cement, Heidelberg Materials and Schwenk Zement, also received an offer to buy them out in mid-2022 from an individual with links to Prime Minister Victor Orbán.

This latest move to corral the cement sector in Hungary follows a number of recent changes in legislation. Notably, Decree 404 was introduced in July 2021. This set a 90% tax on the ‘excess’ profits of cement, plaster, chalk, gravel, sand, clay, lime and gypsum producers with the stated intention of wanting to prevent rising prices. The government set a threshold price for cement of Euro56/t at the time. At the same time it also blocked exports of cement and other raw materials of declared strategic importance unless affected companies had registered with the Ministry of the Interior. The European Commission (EC) responded to a parliamentary question on the matter in November 2021 saying that it had sent a formal letter to Hungary informing it that it was breaching some parts of the Treaty on the Functioning of the European Union (EU) on the free movement of goods. Although it noted that the new law also affected exports outside the EU, which was beyond the EC's remit. It added that the so-called ‘mining royalties’ did not seem to breach EU tax law.

Concerns over these issues between Hungary and Germany also surfaced in October 2022 when Orbán met with the German Chancellor Olaf Scholz. At this time Thomas Spannagl, the head of Schwenk Zement, said that the windfall profit tax in Hungary had a "serious negative" impact on business and that importers were not affected in the same way.

Heidelberg Materials’ subsidiary Duna-Dráva Cement is the largest cement producer by production capacity in Hungary with two integrated plants at Beremend and Vác. Together they have a production capacity of 2.8Mt/yr, according to the Global Cement Directory 2023, or about 70% of the country’s active national capacity. Heidelberg Materials reported that its result from equity accounted investments fell by 27% year-on-year to Euro262m in 2022 from Euro356m in 2023 due to a decline in earnings particularly in China and Hungary. This compares to a 4% drop to Euro3.74bn in its result from current operations before depreciation and amortisation across the whole business. Despite this it also noted that Hungary’s overall economic output had grown by 5% in 2022.

Just before the new laws affecting cement companies starting arriving in mid-July 2021, the Hungarian Competition Authority started an investigation into a “drastic” increase in raw material prices. This followed a warning a year earlier in 2020 that it had started competition supervision proceedings against the three main market participants: Duna-Dráva Cement, Lafarge Cement and CRH. All three are foreign-owned companies.

Lafarge Cement Hungary operates the Kiralyegyháza plant and it is due to change its name to Holcim in May 2023. Its predecessor companies, Holcim and Lafarge, also used to run plants at Hejocsaba and Lábatlan before the merger in 2015. However, the Hejocsaba plant ran into legal problems between Holcim and another investor, shut in 2011 and was later forcibly taken over by the other party in 2014. Today the plant operates as Hejőcsabai Cement- és Mészipari (HCM) but cement production is reportedly yet to restart nearly a decade later and Holcim says that legal proceedings are still ongoing. The Lábatlan plant, meanwhile, closed for good in the early 2010s. CRH took over some of Holcim’s other operations in Hungary in 2015 at the same time as the formation of LafargeHolcim but does not run any cement plants in the country at present. It does own cement plants in nearby countries that are able to supply the Hungarian market as well as running 19 concrete units. It describes itself as the “number two player” in the local market. It wasn’t specific on Hungary in its financial results for 2022 but it did describe sales in its Europe East region as being ahead of 2021, “due to a strong focus on commercial actions to offset significant cost inflation.”

Construction costs in Hungary do appear to have grown faster than other European countries in the second half of 2021 as the country came out of the coronavirus pandemic. However, the country's anti-immigrant labour stance may have also contributed to the situation, in addition to the high-energy prices and supply chain bottlenecks experienced elsewhere. In addition, cement companies are also capable of monopolistic behaviour. For example, Duna-Dráva Cement’s proposed acquisition of Cemex Croatia was blocked by the EC back in 2017 on competition grounds. However, given how international the cement industry has become, it is surprising to see this kind of treatment from a government within the European Union.

Hungary: The government has enacted an 'architecture law' which will increase its role in decision making within the Hungarian cement industry. When it enters force in July 2023, the law will let the government set producers' cement volumes and prices. It will also require the companies to sell their products to the market-leading retail network, and will give the government a right of first refusal over future divestments.

Der Spiegel News has reported that the government previously enacted decrees that further regulated limestone production, imposed 90% 'additional mining levies' and required producers to obtain special permits to export their cement abroad. Duna-Dráva Cement, a subsidiary of Heidelberg Materials and Schwenk Zement, reportedly began making losses on its bagged cement sales due to the new rules. Both Germany-based owners separately received letters inviting them to sell a stake in Duna-Dráva Cement, and thanking them for their cooperation, in 2022. The sender identified themself as the owner of an 'intensively expanding group of companies' with a 'dominant position in the Hungarian building materials industry.' Anti-corruption organisation Transparency International identified the correspondent as a friend of Hungarian President Viktor Orbán.

Regarding the incoming change to the law, a representative of Heidelberg Materials said "These regulations are a total violation of all the rules of the European internal market. It is obvious that the government wants to pressure foreign cement manufacturers to sell.”

UK: Hanson UK says that its planned installation of a carbon capture system at its Padeswood cement plant in Flintshire has proceeded to the due diligence and negotiations stage. The project aims to achieve net zero CO₂ cement production by capturing 800,000t/yr of CO₂. It is part of the HyNet North West array of projects, which combines green hydrogen and carbon capture to build a first-of-its-kind industrial decarbonisation cluster.

Hanson UK CEO Simon Willis said “I would like to thank the government and all of those that supported us in our bid to receive funding which will enable us to help decarbonise the construction industry and meet our overall ambition to become a net zero business. This global exemplar project will provide net zero construction materials for major projects across the country, from new offshore wind farms and nuclear power stations to clean transport infrastructure.”

UK: Hanson says it has become one of the first companies in the UK to be certified to the new ISO 19443 standard, for companies supplying products and services that are important to nuclear safety. The subsidiary of Germany-based Heidelberg Materials is a supplier to the nuclear sector and is currently working with three of the delivery teams on the Hinkley Point C (HPC) project.

Stewart Cameron, head of nuclear at Hanson UK said “It has taken our HPC team a year to complete the ISO 19443 process.” He added, “Although it is not a requirement for our supplies to the project, it recognises the efforts we make – and helps others understand – why nuclear needs to be different.”