Displaying items by tag: HeidelbergCement

Second quarter results have been released for many of the European-based cement producers, so we’ll take a look at how they are doing so far in 2022. The general trend for the companies sampled here is that revenue is up, cement sales volumes are down and earnings are varied. Added to this, ready-mixed concrete (RMC) and aggregate sales volumes have risen for most of these organisations. Each producer did well in the US, less well in Europe and differently elsewhere. Concurrently, input costs for raw materials, energy and logistics have been rising and this has been passed on to consumers fairly consistently as price rises.

Graph 1: Sales revenue for selected European-based multinational cement producers in the first half of 2022. Source: Company financial reports.

Graph 2: Cement sales volumes for selected European-based multinational cement producers in the first half of 2022. Source: Company financial reports.

Graph 3: Ready-mixed concrete sales volumes for selected European-based multinational cement producers in the first half of 2022. Source: Company financial reports.

Holcim is currently in a state of transition with responses from regulators on big divestments in India and Brazil expected in the second half of 2022 alongside its diversification into light building materials. Both North America and Europe did well for the group in the first half of 2022, particularly the former, where cement sales volumes rose, unlike the other regions. Asia Pacific was more problematic with inflation and pricing issues reported. Cement demand was also said to be ‘softer’ in China and the Philippines compared to the first half of 2021. The region’s recurring earnings before interest and taxation (EBIT) also fell.

HeidelbergCement’s half-year results were less upbeat with cement sales volumes down by 2.6% on a like-for-like basis, RMC sales volumes stable and aggregates sales volumes up by 1.7%. One point to note here is that HeidelbergCement divested its business in the western US in late 2021 and the graphs above do not show like-for-like changes. However, one reason for the dour tone was that higher input costs had led to a 11.4% drop in the group’s result from current operations before depreciation and amortisation (RCOBD) to Euro€1.53bn. It blamed this on its inability to raise prices sufficiently to counter ‘significantly’ higher costs of energy and transport.

Cemex benefitted from its strong presence in the Americas but even this wasn’t enough to shield it from the negative effect upon earnings of higher energy costs and supply chain disruptions. So, net sales increased in Mexico and the US but operating earnings before interest, taxation, depreciation and amortisation (EBITDA) fell. In Mexico this was blamed on a higher base for comparison in 2021. In the US a declining EBITDA margin was attributed to higher energy costs and supply chain headwinds from maintenance, imports and logistics. Interestingly though, Cemex managed to raise both sales and earnings in its Europe, Middle East, Africa and Asia despite cement sales volumes slipping. It said it was able to do this due to well executed price rises.

Buzzi Unicem reported growth in sales revenue and earnings despite falling cement sales volumes. It attributed this to a ‘strong’ increase in prices. However, it noted that the mounting energy costs had contributed to a decline in its EBITDA margin. Deliveries for the half-year grew in the US, Central Europe, Poland and the Czech Republic. They fell in Italy and, unsurprisingly, Ukraine. Also, despite the growth in deliveries in Poland and the Czech Republic in the reporting period, Buzzi Unicem said that a slowdown in Europe had become evident in the second quarter of 2022 and was particularly evident in Italy, Poland and the Czech Republic. In Ukraine the group reported that activity had resumed at its Volyn plant in the north-west of the country following the Russian invasion in February 2022. The Nikolayev plant, in the south, though continued to remain idle. Sales volumes halved in the country year-on-year. Given the circumstances it seems amazing that they didn’t fall by more frankly.

Finally, Vicat had a tougher time of it than some of the other companies featured here. Its sales revenue grew significantly, as a result of higher prices, but earnings tumbled. The latter was blamed on a high base for comparison in the first half of 2021 and the energy situation. A few non-recurring capital intensive projects at various plants, including the start-up of the Ragland plant’s new kiln in the US, didn’t help either.

Much of the above leaves an uncertain outlook for the second half of 2022. All of the cement producers here expect to increase their sales revenue and raise their prices. Most of them though are rather more circumspect or downright pessimistic about what the state of their earnings will be. The companies covered here are multinational but with a focus on Europe and the US. We have omitted plenty of regional producers elsewhere around the world in this roundup that have already published their results, such as India-based UltraTech Cement or Nigeria-based Dangote Cement. The other big market that is missing is China, where the producers are mostly yet to publish their half-year results. We will return to cover these topics in future weeks.

Germany: HeidelbergCement’s sales revenue rose by 11% year-on-year to Euro9.95bn in the first half of 2022 from Euro8.94bn in the same period in 2021. Its cement and clinker sales volumes dropped by 4.8% to 58.8Mt from 61.8Mt, while its profit for the period attributable to shareholders dropped by 28% to Euro542m from Euro755m. During the reporting period, the producer reduced its net debt by 8.9% to Euro6.79bn from Euro7.45bn.

Chair Dominik von Achten said "The first half of 2022 was characterised by the strong increase in energy and raw material prices. In this persistently difficult market environment we were again able to significantly increase our revenue.” He continued, “In view of the unprecedented increase in energy prices in recent weeks, the second half of the year remains challenging. For the full year, we continue to expect a significant increase in revenue, while for the result from current operations we now anticipate a slight decline on a comparable basis compared to the strong previous year.”

Congratulations are due to the National Cement Company of Alabama and Vicat for the inauguration of the new production line at the Ragland cement plant in Alabama. The event took place on 21 July 2022.

The US$300m project was originally announced in late 2019. It then took two years to build with construction starting in January 2020. Key features include a raw vertical grinding mill, a new roller mill, a five stage preheater tower, an automatic clay storage system, a 78m tall homogenisation silo, an alternative fuels storage area for tyre-derived fuel, sawdust and wood chips, a laboratory and a new control room. The new kiln was previously reported to have a clinker production capacity of 5000t/day and it will add up to 2Mt/yr of cement production capacity to the plant. ThyssenKrupp signed up as the principal equipment supplier in 2019 and H&M was the main contractor. The production line is expected to reduce energy consumption by one third. Further change is scheduled with a switch to production of Portland limestone cement (PLC) from Ordinary Portland cement (OPC) by the start of 2023.

Vicat has repeatedly noted its affection for the plant as it was the first cement plant the group purchased outside of France, back in 1974. Indeed, Vicat’s group chair and chief executive officer Guy Sidos personally managed the Ragland plant in 2001. However, rather more prosaic reasons may also have been behind the decision to expand Ragland. According to United States Geological Survey (USGS) data, Alabama, Kentucky and Tennessee’s cement shipments grew by nearly 5% year-on-year to 7.1Mt in 2019 from 6.8Mt in 2018. Shipments are up by 3% year-on-year to 2.5Mt in the first four months of 2022 and the three states were the fifth largest region in the US for cement shipments in April 2022. A shortage of cement was also reported in Alabama in April 2022.

The other big US-based cement plant expansion is Lehigh Hanson’s US$600m upgrade to its Mitchell plant in Indiana. It also celebrated a milestone this week with a ‘topping out’ ceremony to mark the placement of the final section of steel for the stack. Another recent achievement here was the completion of a 169,000t storage dome supplied by Dome Technologies. The supplier says that the 67m diameter and 48m tall dome is the second largest clinker storage facility in Europe and North America, after one it previous built in Romania in 2008.

The Mitchell K4 project was announced in mid-2018 and then ground breaking began in late 2019. However, the start of the coronavirus pandemic delayed construction in early 2020 before it restarted in September 2020. The revised commissioning date was then moved back about half a year to early 2023. The key part of this project is that it will replace the plant’s three current kilns with just one. The new production line will increase the site’s production capacity, reduce energy usage and decrease CO₂ emissions per tonne of cement. It was reported by local press back in 2018 that the project would increase the plant’s cement production capacity to 2.8Mt/yr. The project has been linked to supplier KHD with CCC Group as the contractor.

It’s fascinating to see two major new upgrades to cement plants emerging in a mature market like the US and during an unprecedented event like the emergence of coronavirus. No doubt compelling tales will emerge of how both teams coped with managing nine-figure capital expansion projects as a global public health emergency unfolded. The US market has been on a roll in recent years, despite all the uncertainty in the world, and so far it doesn’t seem to be slowing down. With luck both of the projects feature above have timed their opening right.

It’s been a good week for carbon capture projects in Europe with the announcement of who the European Union (EU) has selected for a grant from its Innovation Fund. 17 large-scale projects have been pre-selected for the Euro1.8bn being doled out in the second round of awards. On the cement and lime sector side there are four projects. These include projects at Holcim’s Lägerdorf cement plant in Germany, HeidelbergCement’s Devnya Cement plant in Bulgaria, Holcim’s Kujawy plant in Poland and Lhoist’s Chaux et Dolomites du Boulonnais lime plant in France. Large-scale in this instance means projects with capital costs over Euro7.5m. To give readers some sense of the scale of the projects that the EU has agreed to pay for, if the funding was shared out equally between the current bunch, it would be a little over Euro100m per project. This is serious money.

Devnya Cement’s ANRAV carbon capture, utilisation and storage (CCUS) project in Bulgaria has received little public attention so far so we’ll look a little more closely at this one first. No obvious information is available on what capture technology might be in consideration at the plant. HeidelbergCement’s leading experience in carbon capture technology at cement plants gives it a variety of methods it could use from a solvent scrubbing route to something less common. What the company has said is that, subject to regulatory approval and permitting, the project could start to capture 0.8Mt/yr of CO₂ from 2028.

What has also been revealed is that the project is linking up via pipelines to a depleted part of the Galata gas field site in the Black Sea. Oil and gas company Petroceltic Bulgaria is a partner and the aim of the project is to start a CCUS cluster in Eastern Europe. with the potential for other capture sites in Romania and Egypt to join in. This is noteworthy because much of the focus for the burgeoning cement sector CCUS in Europe so far has been on usage on local industrial clusters or storage in the North Sea.

The other new one is the Go4ECOPlanet project at Holcim’s Kujawy plant in Poland. Lafarge Cement is working with Air Liquide on the project. The latter will be providing its Cryocap FG adsorption and cryogenics technology for direct capture of flue gas at the plant. The transportation of the CO₂ is also interesting here as it will be by train not pipeline. Liquid CO₂ will be despatched to a terminal in Gdańsk, then transferred to ships before being pumped down into a storage field under the North Sea.

Turning to the other two grant recipients, the Carbon2Business project plans to capture over 1Mt/yr of CO₂ using a second generation oxyfuel process at Holcim Deutschland’s Lägerdorf cement plant. This project is part of a larger regional hydrogen usage cluster so the captured CO₂ will be used to manufacture methanol in combination with the hydrogen. Finally, Lhoist’s project at a lime plant in France is another team-up with Air Liquide, again using the latter’s Cryocap technology. The capture CO₂ will be transported by shared pipeline to a hub near Dunkirk and then stored beneath the North Sea as part of the D'Artagnan initiative. Around 0.61Mt/yr of CO₂ is expected to be sequestered.

The key point to consider from all of the above is that all of these projects are clear about what is happening to the CO₂ after capture. The days of ‘carbon capture and something’ have thankfully been left behind. CO₂ transportation infrastructure is either being used or built and these cement plants will be feeding into it. This will inevitably lead to questions about whether all these new CO₂ networks can support themselves with or without EU funding but that is an argument for another day.

Finally, in other news, four residents from the Indonesian island of Pulau Pari started legal proceedings against Holcim last week for alleged damages caused by climate change. Industrial CO₂ emissions are unquestionably a cause of this along with other sources but what a court might think about this remains to be seen. Yet, it is intriguing that the plantiffs have decided to go after the 47th largest corporate emitter rather than, say, one of the top 10. Regardless of how far the islanders get this is likely not to be last such similar attempt. If the case does make it to court though it seems likely that Holcim will mention its work on CCUS such as the two projects above. Only another 200-odd cement plants in Europe to go.

US: Dome Technology has commissioned a 169,000t dome at Lehigh Cement's Mitchell cement plant in Indiana. The dome is equipped with three reclaim tunnels, enabling 83% live reclaim.

Dome Technology sales manager Lane Robertssaid “It’s a colossal project. It’s one of our bigger domes as far as storage capacity goes."

Bulgaria/Poland: The EU Innovation Fund has awarded funding to Devnya Cement’s ANRAV carbon capture, utilisation and storage (CCUS) project in Bulgaria and Lafarge Polska’s Go4ECOPlanet CCUS project in Poland.

ANRAV is a full-chain CCUS project connecting Devnya Cement’s Devnya cement plant in Varna Province over 30km to the Black Sea for storage. Go4ECOPlanet applies a similar model to the capture and storage of CO₂ from Lafarge Polska’s Kujawy cement plant offshore in the North Sea. The Kujawy cement plant is situated 200km inland in Kuyavian-Pomeranian Voivodeship. The plan is part of Lafarge Polska’s strategy to realise carbon neutrality at the Kujawy cement plant by 2027.

Regarding the ANRAV project, Mihail Polendakov, Bulgaria, Greece and Albania managing director at Devnya Cement’s parent company HeidelbergCement said “Our vision in the ANRAV consortium is to realise an economically viable CCUS cluster for Bulgaria and the neighbouring regions.” He continued “Subject to regulatory and permissions aspects, it could start operation as early as 2028, with a capture capacity of 800,000t/yr of CO₂.

CalPortland completed its acquisition of the Redding cement plant from Martin Marietta this week. As previously announced the transaction involved the integrated cement plant in northern California, related cement terminals and 14 ready mixed concrete (RMC) plants also in the state. However, CalPortland’s parent company Japan-based Taiheiyo Cement revealed this time round that it is considering buying the Tehachapi cement plant from Martin Marietta too. It says it has some sort of preferential purchase agreement in place, although a final decision is yet to be made.

If CalPortland and Taiheiyo Cement do end up buying the Tehachapi plant as well as Redding then it will mark a fairly quick turnaround of owners. HeidelbergCement subsidiary Lehigh Hanson announced that it was selling up assets in its US West region to Martin Marietta for US$2.3bn in May 2021. The deal was completed by October 2021. Then, CalPortland said it was buying the Redding plant in March 2022. From an outside perspective it was not clear what Martin Marietta might have had planned for its new assets. Over three quarters of Martin Marietta’s revenue in 2021 came from its Aggregates and RMC products. However, it is also a prominent regional US cement producer with two plants in Texas and two plants in California, along with associated terminals. So, building up its cement business in California didn’t seem unfeasible. Now, as can be seen, it is likely to be sticking to its primary focus of aggregates and RMC. It is also worth noting that California has some of the stricter CO₂ reduction policies in the US with a 40% reduction target for 2030 (compared to 1990 levels) and a local emissions trading scheme that started in 2013.

Looking at the local cement production base in California, the latest development with the former Lehigh Hanson plants shows the changing situation since the subsidiary of HeidelbergCement left the region. Beforehand, Cemex, Lehigh Hanson and CalPortland each had a similar clinker production capacity. Then, Martin Marietta took the lead and now CalPortland looks set to become the frontrunner if it buys Tehachapi. With the Redding deal completed it now operates three integrated cement plants in California and one in Arizona. Alongside this it runs 15 terminals in Alaska, Arizona, California, Nevada, Oregon and Washington – and – two terminals in Alberta and British Colombia in Canada. The Redding plant is also a distinctive addition to its portfolio as it is further north than the other clinker units.

United States Geological Survey (USGS) data shows that cement shipments to California grew by 5% from 10.05Mt in 2019 to 10.57Mt in 2021. So far in 2022, shipments to the state rose by 3.4% year-on-year to 3.56Mt for January to April 2022 compared to 3.44Mt in the same period in 2021. However, clinker production fell by 5% to 8.94Mt in 2021 from 9.45Mt in 2019. This trend seems to have continued into 2022 with a 9% fall to 2.54Mt for January to April 2022 compared to 2.81Mt in the same period in 2021. Despite this, California remained the second largest OPC and blended cement producer in the US in April 2022. In its Western US Regional Outlook in May 2022, the Portland Cement Association (PCA) forecast that the Pacific region of the US (including California) will experience flat growth in cement consumption in 2023 due to a slowdown in residential consumption. However, consumption is then expected to bounce back sharply in 2024 as the effects of the infrastructure bill take effect.

This suggests that CalPortland has picked an uncertain time to start buying cement plants in California. Yet only last year, in 2021, Cemex began restarting production at a previously mothballed cement plant in Mexico to supply the south-west US. Alongside all of this, environmental regulations are tightening. However, the key difference between Martin Marietta and CalPortland is that the latter is owned by Japan-based Taiheiyo Cement, which is more cement-focused than the aggregate and concrete oriented Martin Marietta. No doubt Taiheiyo Cement’s intention to become more international also played a part in its decision making. If CalPortland does decide to buy Tehachapi then this may give observers an idea of how much further its ambitions go.

Egypt: Korra Energi has been awarded a contract to build a 20MW waste heat recovery (WHR) unit at Suez Cement’s Helwan plant. The WHR unit will serve both of the plant’s two production lines. Korra Energi says it will be the first WHR project for a cement company in the country. Korra Energi is an Egypt-based engineering company and a subsidiary of conglomerate Korra.

Germany: HeidelbergCement has joined EPEA’s Heidelberg Circular City Building Material Registry pilot project. The initiative uses EMEA’s Urban Mining Screening digital registry, which is able to estimate the composition of buildings based on building data. HeidelbergCement says that it will enable it to source construction and demolition waste for circular economic use in building materials production. This will support its ReConcrete 360° recycled concrete CO₂ reincorporation project, among other projects. The initiative will turn Heidelberg into Europe’s first Circular City.

“Full circular economy and sustainable construction are central elements of our climate strategy,” said HeidelbergCement chair Dominik von Achten. “We are focusing on the life cycle assessment of our product concrete, including the processing of demolished concrete, and returning it to the construction cycle. By 2030, we want to offer circular alternatives for half of our concrete products.” Von Achten concluded “Together with the city of Heidelberg, also a pioneer in the area of climate protection, we want to use the Circular City project to demonstrate the enormous potential of concrete recycling for future urban construction.” 


Coolbrook has been in the news recently with collaboration deals struck with Cemex and UltraTech Cement. First the Finland-based company officially launched its Roto Dynamic Heater (RDH) technology with a memorandum of understanding signed with Cemex in May 2022. Then, this week, it signed a similar agreement with UltraTech Cement.

The specifics of either agreement are unknown but the target is clearly to build an industrial pilot of an electric kiln – or something like it - at a cement plant. Coolbrook says it has run a pilot of its RDH technology in Finland. Further tests are now scheduled to continue for two years starting from September 2022 at the Brightlands Chemelot Campus at Geleen in the Netherlands. Commercial scale demonstrations are scheduled from 2022 with the hope of commercial use from 2024. Links with Cemex and UltraTech Cement seem to suggest progress. At the same time Coolbrook will be testing its RotoDynamic Reactor (RDR) technology, which promises to electrify the steam cracking process used in plastic manufacturing.

Publically available details on the RDH technology are light. In its promotional material Coolbrook says that it can achieve process temperatures of up to around 1700°C. This is crucial to achieve full clinker formation in a cement kiln. Reaching this temperature with non-combustion style kilns, such as solar reactors, has previously been a problem. Notably, Synhelion and Cemex said in February 2022 that they had managed to produce clinker using concentrated solar radiation. Retrofit possibilities and compact equipment size are also mentioned in the promotional material for the RDH. The former is an obvious attraction but size of equipment footprint is increasingly emerging as a potential issue for cement plants looking to reduce their CO₂ emissions. Rick Bohan from the Portland Cement Association (PCA) presented a summary of the potential and problems of emerging carbon capture and utilisation/storage (CCUS) technologies for cement plants in the US at the Virtual Global CemCCUS Seminar that took place on 14 June 2022. He noted that installing CCUS equipment makes cement plants start to look different (more like petrochemical plants in the view of Global Cement Weekly) and that they may require more space to install it all.

Coolbrook hasn’t been the only organisation looking at kiln electrification. The installation with the most available information on kiln electrification has been the Decarbonate project, led by the VTT, formerly known as the Technical Research Centre of Finland. The project has built a pilot rotary kiln with a length of 8m inside a shipping container. It has a production capacity of around 25kg/hr. The system reportedly uses fixed radiant heating coils around the kiln, surrounded by insulation materials. Early results presented to the 1st Virtual Global CemPower Seminar in late 2021 were that the kiln started up, sufficient calcination was occurring and the system was operated continuously for three days at a temperature of 1000°C with no problems reported. Further research was scheduled to carry on into 2022 with longer trials planned for three different materials.

HeidelbergCement’s subsidiary in Sweden, Cementa, completed a feasibility study on implementing electrified cement production at its Slite plant in 2019. It then said that it was conducting further study with electricity producer Vattenfall as part of CemZero project. This consists of three projects running to 2025. Namely: heat transfer with plasma in rotary kilns; direct separation of carbon dioxide from calcination of carbonate-based raw materials in the production of cement clinker and burnt lime; and carbon dioxide-free products with electrified production - reactivity of cement clinker with secondary additives. HeidelbergCement has since announced plans to build a full scale 1.8Mt/yr carbon capture and storage (CCS) plant at the Slite cement plant by 2030.

How this would fit with any kiln electrification plans is unknown. However, one attraction of moving to an electrical kiln, for all of the projects above, is to cut out the 40 – 50% of a cement plant’s CO₂ emissions that arise from the fuel that is burnt. Taking a kiln electric also makes CO₂ capture easier. Much of the remainder of the CO₂ released comes from the decomposition of limestone during calcination when clinker is created. Substitute out fossil or alternative fuels and the flue gas becomes much purer CO₂.

It is early days for cement kiln electrification but progress is happening both commercially and scientifically. The next step to watch out for will be the first pilot installation at a cement plant. One point to finish with is a comment that Rick Bohan made at the IEEE-IAS/PCA Cement Industry Technical Conference that took place in May 2022: carbon capture is expected to double a cement plant’s energy consumption. Kiln electrification is one potential route for cement production to reach net zero. CCUS is another. If one or both occur then a low carbon future could be a high energy one also.

Watch out for Global Cement’s forthcoming interview with Coolbrook in the September 2022 issue of Global Cement Magazine

For more on CCUS, download the proceedings pack for the Virtual Global CemCCUS Seminar 2022

For more on Synhelion and Cemex read the interview in the December 2020 issue of Global Cement Magazine interview