Displaying items by tag: Heidelberg Materials

Bangladesh: Heidelberg Materials Bangladesh has appointed Saikat Khan as its secretary with effect from 1 November 2024. Khan also serves as the director of the company's legal division, according to the New Nation newspaper. He succeeds Emdadul Haque in the post, who has resigned.

Other recent personnel changes include the appointment of Terence Ong Kian Hock as managing director. He assumed the role from 1 September 2024 and succeeded Jose Marcelino Ugarte. Emdadul Haque has also been appointed as chief financial officer from 1 January 2025. He will follow Jashim Uddin Chowdhury in the role.

Canada: Sustainable materials startup EnviCore has raised US$3m in its seed funding round led by CSN Inova Ventures (the corporate venture capital arm of Brazil’s Companhia Siderúrgica Nacional), Heidelberg Materials and others. The funding will scale up Envicore’s production of low-carbon supplementary cementitious materials (SCMs), like mining tailings, slag, shale and glass. The company’s technology reportedly reduces the carbon footprint of cement production by up to 30%, using recycled mineral feedstock, with the SCMs replacing up to 35% of Portland cement in concrete. Proceeds will expand EnviCore's production capacity and support new business development, operations and research and development efforts. Heidelberg Materials, together with EnviCore, will conduct a feasibility study for a pilot SCM production facility close to one of Heidelberg Materials’ recycling hubs.

CEO and co-founder Shahrukh Shamim said "This investment marks a pivotal moment in our journey to commercialise a game-changing technology in the cement industry. The support from CSN, Heidelberg Materials and other investors will allow us to scale up quickly and meet the growing demand for greener building solutions."

Canada: Heidelberg Materials has invested in EnviCore, a Canada-based startup that is developing low-carbon solutions. Together, the companies will focus on increasing the use of recycled construction and demolition materials as supplementary cementitious materials (SCM). This collaboration includes planning a pilot SCM production facility near one of Heidelberg Materials' recycling hubs, pending an upcoming feasibility study. Heidelberg Materials has also acquired a minority stake in EnviCore.

Katharina Beumelbur, chief sustainability and new technologies officer and member of the managing board of Heidelberg Materials, said “EnviCore’s novel approach has the potential to unlock new possibilities of increasing the amount of recycled materials we use in our products. This could pave the way to further reduce our need for virgin materials, contributing towards preserving valuable natural resources and protecting our environment.”

India: Adani Group is negotiating the purchase of Heidelberg Materials' cement business in India, potentially valued at US$1.2bn, according to Reuters. Heidelberg Materials has been present in India since 2006, and owns four plants with a total capacity of 12.6Mt/yr. The acquisition discussions come amidst increased consolidation in the Indian cement sector, driven by heightened demand due to government investment in housing and infrastructure.

Brunei: Heidelberg Materials Butra Sdn Bhd has become the first cement producer to receive a ‘green’ label certification for its Portland composite cement. The Singapore Environment Council awarded the certification, which recognises products meeting stringent environmental standards such as lower carbon emissions and sustainable material use.

Managing director of Heidelberg Materials Butra, Terence Ong, said “By offering environmentally responsible products, we aim to contribute to the nation’s infrastructure development while minimising our ecological footprint.”

Italy: Heidelberg Materials has launched a feasibility study at its Rezzato-Mazzano cement plant to explore a source-to-sink carbon capture and storage (CCS) solution, potentially making it the first in Italy to produce carbon-captured net-zero cement, according to the company’s press release. The aim of the study is to evaluate the feasibility of capturing CO₂ from cement production and transporting it via pipeline to the Ravenna CCS storage hub under the Adriatic Sea. Phase 1 of the Ravenna CCS project will be carried out with the help of a joint venture between Italy-based integrated energy company Eni and energy infrastructure subsidiary Snamprogetti, involving discussions between the three companies for a technical evaluation. The project aims to leverage Eni’s depleted gas fields in the Adriatic Sea, which would be converted for use as permanent CO₂ storage sites. The total storage capacity of these fields is estimated at more than 500Mt. Snam is committed to developing a pipeline network to transport CO₂ from emitters to the Ravenna CCS hub.  

Chair of the managing board of Heidelberg Materials, Dominik von Achten, said "We are excited to explore the economic feasibility of a carbon capture initiative in the Mediterranean. Our ambition at Heidelberg Materials is not only to implement a decarbonisation initiative that is highly efficient in terms of resources and energy, but also to provide an important impetus for the development of a regional CCS cluster."

Member of the managing board of Heidelberg Materials and responsible for Europe, Jon Morrish, said "With an aspired capture rate of more than 95% of our plant’s emissions, this initiative aims to explore options for industrial-scale CCS in Italy. This would enable us to supply locally produced, carbon captured net-zero cement under our evoZero brand to customers in the region."

Morocco: Heidelberg Materials has signed a strategic agreement to acquire Votorantim Cimentos' assets in Morocco, including a 63% share in cement and ready-mix concrete producer Asment de Témara and the entire stake in aggregates supplier Grabemaro through its subsidiary Ciments du Maroc. This acquisition positions Ciments du Maroc to expand its operations in Northern Morocco, adding a cement plant with a production capacity of 1.4Mt/yr, two aggregates sites and eight ready-mix concrete plants. The acquisition includes access to an alternative fuels platform enhancing the fuel rate at the newly acquired cement plant to 70% by 2027, reportedly contributing to reduced environmental impact and optimised production-related energy costs. The completion of the transaction awaits regulatory approval from Moroccan competition authorities, and financial details remain undisclosed.

Chair of the managing board of Heidelberg Materials Dominik von Achten said "Our latest investment marks an important step as part of our ongoing portfolio optimisation to strengthen our core markets. Expanding our presence in the attractive Moroccan market while increasing our use of alternative fuels will generate substantial financial synergies and thus help us accelerate our ambitious decarbonisation efforts throughout our sites in the country and grow our local offering of sustainable solutions."

Egypt: A new waste heat recovery system has been inaugurated at Heidelberg Materials Egypt's Helwan Cement plant. The US$30m system is expected to produce 18MW of energy, equating to a saving of 40,000t/yr of CO₂ emissions.

Sweden: Heidelberg Materials' Slite CCS project in Gotland has received new funding. The Just Transition Fund has provided approximately €6.1m to support project preparation from 2024 to 2026, aiming for operational readiness by 2030. The project targets the creation of a fully decarbonised plant with the capacity to capture 1.8Mt/yr of CO₂, potentially reducing Sweden's total emissions by 4%.

The mountainous eastern shore of the Adriatic Sea and its hinterlands in Europe’s Balkan Peninsula have one of the world’s highest densities of countries: six, across a broad equilateral triangle of 212,000km². All six states – Albania, Bosnia & Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – are historically characterised by political non-alignment, carrying over from the Cold War period, and all the more notable for the presence of the EU to the north (Croatia, Hungary and Romania) and east (Bulgaria and Greece).

A nine-plant, 9Mt/yr local cement sector serves the 16.8m-strong population of the unconsolidated ‘bloc.’ Albania has 2.8Mt/yr (31%), Serbia 2.7Mt/yr (30%), Bosnia & Herzegovina 1.6Mt/yr (18%), North Macedonia 1.4Mt/yr (15%) and Kosovo 500,000t/yr (6%), while Montenegro has no cement capacity – for now. Altogether, this gives this quarter of South East Europe a capacity per capita of 539kg/yr. The industry consists entirely of companies based outside of the region. Albania’s two plants are Lebanese and Greek-owned (by Seament Holding and Titan Cement Group respectively). Titan Cement Group also controls single-plant Kosovo and North Macedonia, and competes in the Serbian cement industry alongside larger and smaller plants belonging to Switzerland-based Holcim and Ireland-based CRH, respectively. Lastly, Bosnia & Herzegovina’s capacity is shared evenly between Germany-based Heidelberg Materials and Hungary-based Talentis International Construction, with one plant each.

Lafarge Srbija, Holcim's subsidiary in Serbia, announced plans for its second plant in the country, at Ratari in Belgrade, last week. No capacity has yet emerged, but the plant will cost €110m, making something in the region of the country’s existing 0.6 – 1.2Mt/yr plants seem likely. This would give Serbia over a third of total capacity in the Central Balkans and twice the number of plants of any other country there, expanding its per-capita capacity by 22 – 44%, from a regionally low 408kg/yr to 500 – 590kg/yr.

In announcing the upcoming Ratari cement plant, Lafarge Srbija laid emphasis on its sustainability. The plant will use 1Mt/yr of ash from the adjacent Nikola Tesla B thermal power plant as a raw material in its cement production. In this way, it will help to clear the Nikola Tesla B plant’s 1600 hectare ash dumps, from which only 180,000t of ash was harvested in 2023. Circularity has been front and centre of Holcim’s discussions of its growth in Serbia for some time. When Lafarge Srbija acquired aggregates producer Teko Mining Serbia in 2022, the group indicated that the business would play a part in its development of construction and demolition materials (CDM)-based cement and concrete.

Holcim’s Strategy 2025 growth plan entails bolt-on acquisitions in ‘mature markets,’ backed by strategic divestments elsewhere. Other companies have been more explicit about a realignment towards metropolitan markets, above all in North America, at a time when they are also diversifying away from cement and into other materials. Just why a leading producer should look to build cement capacity in Serbia warrants investigation.

Serbia is the only Central Balkan member of Cembureau, the European cement association. In a European market report for 2022, the association attributed to it the continent’s fastest declining cement consumption (jointly with Slovakia), down by 11% year-on-year. Like the rest of Europe, Serbia is also gradually shrinking, its population dwindling by 0.7% year-on-year to 6.62m in 2023, which limits hopes for a longer-term recovery. Serbia remains the largest country in the Central Balkans, with 39% of the total regional population.

Several factors have compounded Serbia’s difficulties as a cement-producing country. Firstly, like the Nikola Tesla B thermal power plant, its kilns run on coal. 50% of this coal originated in Russia and Ukraine in 2021, causing the entire operation to become ‘imperilled’ after the former’s brutal invasion of the latter in February 2022, according to the Serbian Cement Industry Association. In planning terms, this was a case of putting half one’s eggs in two baskets – and dropping them both.

Secondly, Serbia’s choice of export markets is mainly confined to either the EU or global markets via the River Danube, Black Sea and Mediterranean. Either way, it is in competition with a cement exporting giant: Türkiye. Serbia sold €19.7m-worth of cement in the EU in 2023, up by 63% over the three-year period since 2020 – 31% behind Türkiye’s €28.8m (more than double its 2020 figure).¹ One other Central Balkan country had a greater reliance on the EU market: Bosnia & Herzegovina. It exported €48.4m-worth of cement there, quadruple its 2020 figure and behind only China (€133m) and the UK (€54.7) in cement exports to the bloc by value.

Bosnia & Herzegovina’s cement industry underwent a different permutation at the start of 2024: an acquisition, replacing one EU-based player with another. Lukavac Cement, which operates the 800,000t/yr Lukavac cement plant in Tuzla, changed hands from Austria-based building materials producer Asamer Baustoffe to Hungary-based property developer Talentis International Construction. Talentis International Construction belongs to one of Hungary’s major family-owned conglomerates, Mészáros Csoport.

Besides Central Europe, Balkan countries have found a ready source of investments in the past decade in China. In construction alone, Chinese investments total €13.2bn in Serbia, €2.4bn in Bosnia & Herzegovina, €915m in Montenegro and €650m in North Macedonia.² This can be a booster shot to all-important domestic cement markets, but has some risks. Montenegro previously faced bankruptcy after Export-Import Bank of China began to call in an €847m loan for construction of the still upcoming A1 motorway in the country’s Northern Region. This did not put off the Montenegrin government from signing a new memorandum of understanding (MoU) with China-based Shandong Foreign Economic and Technical Cooperation and Shandong Luqiao Group for construction of a new €54m coast road in the Coastal Region in mid-2023.

In Montenegro, UK-based private equity firm Chayton Capital is currently funding a feasibility study for a partly state-owned cement plant and building materials complex at the Pljevlja energy hub in the Northern Region. Along with an upgrade to the existing Pljevlja coal-fired power plant, the project will cost €700m.

In 2026, EU member states will begin to partly tax third-country imports of cement and other products against their specific CO₂ emissions, progressing to the implementation of a 100% Carbon Border Adjustment Mechanism (CBAM) by 2034. Montenegro led the Central Balkans’ preparations for the EU’s CBAM roll-out with the introduction of its own emissions trading system in early 2021. Bosnia & Herzegovina will follow its example by 2026, but other countries in the region have struggled to conceive of the arrangement except as part of future EU accession agreements.

Based on the average specific CO₂ emissions of cement produced in the EU, the World Bank has forecast that exporters to the bloc will be disadvantaged if their own specific emissions exceed 5.52kg CO₂eq/€.³ By contrast, any figure below this ought to offer an increased competitive edge. Albanian cement has average emissions of 4.71kg CO₂eq/€, 15% below ‘biting point’ and 13% below Türkiye’s 5.39CO₂eq/€. Albania’s government consolidated its anticipated gains by quintupling the coal tax for 2024 to €0.15/kg. The figure is based on the International Monetary Fund’s recommended minimum CO₂ emissions tax of €55.80/t, 21% shy of the current EU Emissions Trading Scheme (ETS) credit price of €70.49/t.⁴

The Central Balkans is a region of apparently slow markets and industry growth regardless – to 11 cement plants, following the completion of current and upcoming projects. A recurrent theme of capital expenditure investments and the way investors talk about them may help to explain this: sustainability. Looking at the mix of technologies in the current nine plants, these include wet kilns and fuels lines built for conventional fossil fuels. This is not to presume that any given plant might not be happy with its existing equipment as is. Nonetheless, the overall picture is of a set of veteran plants with scope to benefit from the kind of investments which all four global cement producers active in the region are already carrying out elsewhere in Europe. Such plans may already be in motion. In late 2023, Titan Cement Group’s North Macedonian subsidiary Cementarnica Usje secured shareholder approval to take two new loans of up to €27m combined.

As the latest news from Serbia showed, taking care of existing plants does not preclude also building new ones. The cement industry of the Central Balkans is finding its position in the new reduced-CO₂ global cement trade – one in which old and new work together.

References

1. Trend Economy, ‘European Union – Imports and Exports – Articles of cement,’ 28 January 2024, https://trendeconomy.com/data/h2/EuropeanUnion/6810#

2. American Enterprise Institute, 'China Global Investment Tracker,' 3 February 2024 https://www.aei.org/china-global-investment-tracker/

3. World Bank Group, ‘Relative CBAM Exposure Index,’ 15 June 2023, https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index

4. Ember, 'Carbon Price Tracker,' 26 August 2024, https://ember-climate.org/data/data-tools/carbon-price-viewer/