Displaying items by tag: Holcim

France: Switzerland-based Holcim has taken control of Carbocia, a producer of limestone fillers based at the Marquise quarry basin in Hauts-de-France, via the acquisition of a 90% stake in the company. The acquisition provides the group with greater access to raw materials used in the manufacture of low and / or zero-CO₂ cements and concretes.

"Micronised calcium carbonates make it possible to give compactness and resistance, in addition to reducing the share of the components of the cement most loaded with CO₂," explained the president of Holcim France, François Petry. Holcim also hopes to maximise its new subsidiary’s expertise to take advantage ‘compatible deposits in France’ that it already owns. It plans to grow Carbocia’s output from 0.4Mt/yr at present to 0.6Mt/yr in 2024.

New Zealand: Holcim New Zealand says that it has received a mill for use in its upcoming Auckland cement replacement products import and distribution facility. The company opted for a Christian Pfeiffer ball mill for the project.

Holcim New Zealand says that alternative materials imported via the Auckland facility will eliminate 100,000t/yr of cement from New Zealand's 1.6Mt/yr consumption. The company expects that this will cut 78,000t/yr of CO₂ emissions.

In Australia and New Zealand, four producers operate a total of six integrated cement plants, with another 13 grinding plants situated in Australia. This relatively small regional cement industry has been on a decades-long trajectory towards ever-greater sustainability – hastened by some notable developments in recent weeks.

Oceania is among the regions most exposed to the impacts of climate change. In Australia, which ranked 16th on the GermanWatch Global Climate Risk Index 2021, destructive changes are already playing out in diverse ways.¹ Boral reported 'significant disruption' to its operations in New South Wales and southeast Queensland due to wet weather earlier in 2022. This time, the operational impact was US$17.1m; in future, such events are expected to come more often and at a higher cost.

Both the Australian cement industry and the sole New Zealand cement producer, Golden Bay Cement, have strategies aimed at restricting climate change to below the 2° scenario. Golden Bay Cement, which reduced its total CO₂ emissions by 12% over the four-year period between its 2018 and 2022 financial years, aims to achieve a 30% reduction by 2030 from the same baseline. The Australian Cement Industry Federation (CIF)'s 2050 net zero cement and concrete production roadmap consists of the following pathways: alternative cements – 7%; green hydrogen and alternative fuels substitution – 6%; carbon capture – 33%; renewable energy, transport and construction innovations – 35% and alternative concretes – 13%, with the remaining 6% accounted for by the recarbonation of set concrete.

Australia produces 5.2Mt/yr of clinker, with specific CO₂ emissions of 791kg/t of clinker, 4% below the global average of 824kg/t.² Calcination generates 55% of cement’s CO₂ emissions in the country, and fuel combustion 26%. Of the remainder, electricity (comprising 21% renewables) accounted for 12%, and distribution 7%. Australian cement production has a clinker factor of 84%, which the industry aims to reduce to 70% by 2030 and 60% by 2050. In New Zealand, Golden Bay Cement's main cement, EverSure general-purpose cement, generates CO₂ at 732kg/t of product.³ It has a clinker factor of 91%, and also contains 4% gypsum and 5% added limestone.

Alternative raw materials

Currently, Australian cement grinding mills process 3.3Mt/yr of fly ash and ground granulated blast furnace slag (GGBFS). In Southern Australia, Hallett Group plans to commission its upcoming US$13.4m Port Augusta slag cement grinding plant in 2023. The plant will use local GGBFS from refineries in nearby Port Pirie and Whyalla, and fly ash from the site of the former Port Augusta power plant, as well as being 100% renewably powered. Upon commissioning, the facility will eliminate regional CO₂ emissions of 300,000t/yr, subsequently rising to 1Mt/yr following planned expansions. Elsewhere, an Australian importer holds an exclusive licencing agreement for UK-based Innovative Ash Solutions' novel air pollution control residue (APCR)-based supplementary cementitious material, an alternative to pulverised fly ash (PFA), while Australian Graphene producer First Graphene is involved in a UK project to develop reduced-CO₂ graphene-enhanced cement.

Golden Bay Cement is investigating the introduction of New Zealand's abundant volcanic ash in its cement production.

Fuels and more

Alternative fuel (AF) substitution in Australian cement production surpassed 18% in 2020, and is set to rise to 30% by 2030 and 50% by 2050, or 60% including 10% green hydrogen. In its recent report on Australian cement industry decarbonisation, the German Cement Works Association (VDZ) noted the difficulty that Australia's cement plants face in competing against landfill sites for waste streams. It described current policy as inadequate to incentivise AF use.

Cement producer Adbri is among eight members of an all-Australian consortium currently building a green hydrogen plant at AGL Energy’s Torrens Island gas-fired power plant in South Australia.

Across the Tasman Sea, Golden Bay Cement expects to attain a 60% AF substitution rate through on-going developments in its use of waste tyres and construction wood waste at its Portland cement plant in Northland. The producer will launch its new EcoSure reduced-CO₂ (699kg/t) general-purpose cement in November 2022. In developing EcoSure cement, it co-processed 80,000t of waste, including 3m waste tyres. The company says that this has helped in its efforts to manage its costs amid high coal prices.

Carbon capture

As the largest single contributor in Australia's cement decarbonisation pathway, carbon capture is now beginning to realise its potential. Boral and carbon capture specialist Calix are due to complete a feasibility study for a commercial-scale carbon capture pilot at the Berrima, New South Wales, cement plant in June 2023.

At Cement Australia's Gladstone, Queensland, cement plant, carbon capture is set to combine with green hydrocarbon production in a US$150m circular carbon methanol production facility supplied by Mitsubishi Gas Chemical Company. From its commissioning in mid-2028, the installation will use the Gladstone plant's captured CO₂ emissions and locally sourced green hydrogen to produce 100,000t/yr of methanol.

More Australian cement plant carbon capture installations may be in the offing. Heidelberg Materials, joint parent company of Cement Australia, obtained an indefinite global licence to Calix's LEILAC technology on 28 October 2022. The Germany-based group said that the method offers effective capture with minimal operational impact.

Cement Australia said “The Gladstone region is the ideal location for growing a diverse green hydrogen sector, with abundant renewable energy sources, existing infrastructure, including port facilities, and a highly skilled workforce." It added "The green hydrogen economy is a priority for the Queensland government under the Queensland Hydrogen Industry Strategy.”

Logistics

Australian and New Zealand cement facilities' remoteness makes logistics an important area of CO₂ emissions reduction. In Australia, cement production uses a 60:40 mix of Australian and imported clinker, while imported cement accounts for 5 – 10% of local cement sales of 11.7Mt/yr.

Fremantle Ports recently broke ground on construction of its US$35.1m Kwinana, Western Australia, clinker terminal. It will supply clinker to grinding plants in the state from its commissioning in 2024. Besides increasing the speed and safety of cement production, the state government said that the facility presents 'very significant environmental benefits.'

Conclusion

Antipodean cement production is undergoing a sustainability transformation, characterised by international collaboration and alliances across industries. The current structure of industrial and energy policy makes it an uphill journey, but for Australia and New Zealand's innovating cement industries, clear goals are in sight and ever nearer within reach.

References

1. Eckstein, Künzel and Schäfer, 'Global Climate Risk Index 2021,' 25 January 2021, https://www.germanwatch.org/en/19777

2. VDZ, 'Decarbonisation Pathways for the Australian Cement and Concrete Sector,' November 2021, https://cement.org.au/wp-content/uploads/2021/11/Full_Report_Decarbonisation_Pathways_web_single_page.pdf

3. Golden Bay Cement, 'Environmental Product Declaration,' 12 May 2019, https://www.goldenbay.co.nz/assets/Uploads/d310c4f72a/GoldenBayCement_EPD_2019_HighRes.pdf

Zimbabwe: A court has ordered Lafarge Cement Zimbabwe to pay US$321,000 to supplier Rubtech Machinery and Spares, in addition to costs. The Standard newspaper has reported that the producer incurred a debt to Rubtech Machinery and Spares for its services in November 2020. Fossil Mines since acquired Lafarge Cement Zimbabwe from Switzerland-based Holcim in June 2022.

Switzerland: Holcim increased its consolidated sales by 14% year-on-year during the first nine months of 2022 on a like-for-like basis, to US$22.8bn from US$19.9bn. Its recurring earnings before interest and taxation (EBIT) rose by 6.5% to US$3.74bn from US$3.53m. The group’s cement segment’s sales volumes were 139Mt, down by 1%. The segment contributed US$13bn in sales, up by 14%. Concrete sales volumes were 36.6Mm² , up by 4.1%. During the reporting period the group completed its divestment of its operations in India and Brazil and derived cash proceeds of US$7.3bn. Overall net sales grew in all five of the group’s business regions on a like-for-like basis with particular growth noted in the Americas. Cement sales volumes fell in Asia Pacific, Europe and Middle East Africa.

Doing deals with terrorists has a price: US$778m. The US Department of Justice (DOJ) revealed this week that it had fined Lafarge for its conduct in Syria between 2013 and 2014. In addition Lafarge and its subsidiary Lafarge Cement Syria (LCS) have pleaded guilty to one count of conspiring to provide material support to designated foreign terrorist organisations in Syria. It is uncertain how exactly the fine will be paid but it is worth noting that successor company Holcim reported net sales of nearly US$27bn in 2021. The fine represents nearly 2% of this.

A reasonable amount of new detail can be found on the DOJ website. LCS was essentially dealing with the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF) as they would a local government in relation to the running of the Jalabiyeh cement plant. As a reminder, both of these groups were defined as terrorist organisations by the US government at the time. The relationship apparently started as monthly payments to local armed groups, including ISIS and ANF, to allow movement through checkpoints. This later progressed to a de-facto tax based on cement sales. However, it became worse when LCS started asking ISIS to block or tax imports of cement from Turkey-based competitors into northern Syria as part of a revenue-sharing agreement. Effectively LCS was fixing the price of cement in a war zone by collaborating with terrorists. In the end LCS, the intermediaries and the terrorist groups made around US$80m whilst they were working together.

Holcim’s interpretation of the ruling was keen to point out that the conduct in Syria was recognised by the DOJ as not involving Holcim in any way. The DOJ did agree that Lafarge’s executives didn't disclose their activities in Syria to its successor company Holcim either before or after the merger in 2015. However, it pointed out that Holcim had not carried out due diligence of LCS’s operations in Syria. It added that, “Lafarge, LCS and the successor company also did not self-report the conduct or fully cooperate in the investigation.”

Despite this, other information that Holcim also highlighted was that the US authorities were now happy that effective compliance and risk management controls were in place to prevent anything similar happening again. Crucially, it said that the DOJ didn’t think that an independent compliance monitor was required. It pointed out that none of the conduct involved Lafarge’s operations or employees in the US and that none of the Lafarge executives were working for Holcim or any associated company. Finally, the group wanted to report that the DOJ found that none of the former Lafarge executives involved shared any of the “methods, goals or ideologies” of the terrorist groups operating in area at the time.

The immediate reaction from all of this is what happens to the ongoing legal case in France, also about Lafarge’s conduct in Syria? In mid-May 2022 the Court of Appeals confirmed a charge of complicity in crimes against humanity against Lafarge. The company then reportedly started the appeal process at the Supreme Court. Other charges, including financing terrorism, endangering life and violating an embargo, were lodged earlier in the legal process. The US is generally seen as being the leading prosecutor of international corporate crime but if the French legal system also issued a fine to Lafarge on the same scale things could become difficult for Holcim. The other complication for the French legal case is that the national intelligence services allegedly used Lafarge’s links with the Syrian terror groups to acquire information but they did not warn the company that it was committing a crime.

Holcim is a different company from what it was when LafargeHolcim formed in 2015. It is being run by a new chief executive officer who came in from another company well after the merger and is diversifying away from the trio of cement, concrete and aggregates with the addition of a fourth business area of light building materials. Alongside this the group has been selling off businesses in the developing world and focusing on Europe and North America. Yet it is still being defined by the criminal actions of a company it absorbed seven years ago and the behaviour of staff long gone. Those actions have been investigated and punishment delivered. More may be coming.

India: Shree Cement has appointed Neeraj Akhoury as its designated managing director. Hari Mohan Bangur has also been appointed as chair and Prashant Bangur as Vice Chair. All these personnel changes are subject to approval by the members of the company. In addition, Gopal Bangur has resigned as chair and will become Chairman Emeritus.

Akhoury holds nearly 30 years of professional experience in the cement and steel sectors. He began his career in 1993 at Tata Steel, working for both the cement and steel divisions. He joined Lafarge India in 1999 and worked as member of the Executive Committee responsible for corporate affairs followed by sales. In 2011, he moved to Nigeria as the head of Lafarge AshakaCem. Later, he was appointed as Strategy & Business Development Director for the Middle East & Africa at Lafarge’s headquarters in Paris. He became the head of LafargeHolcim Bangladesh in 2015 and then was appointed as the head of ACC in 2017 and Ambuja Cement in 2020.

Akhoury is a graduate in economics from Allahabad University and holds a Master of Business Administration (MBA) from the University of Liverpool. He has also studied one-year General Management Program at XLRI Jamshedpur and is an alumunus of Harvard Business School.

Syria/US: A US court has found Lafarge Cement Syria guilty of conspiring to provide material support to the terrorist organisations al-Nusrah Front (ANF) and ISIS in Northern Syria during 2013 and 2014. Lafarge Cement Syria and its parent company, France-based Lafarge, agreed in 2011 to pay the terrorists for Lafarge Cement Syria employees' 'protection' and the continuation of the Jalabiyeh cement plant's operations, as well as to gain an economic advantage over other Syrian competitors. During the duration of the agreement, Lafarge Cement Syria recorded US$70.3m in sales. Coalition forces fighting against ANF and ISIS damaged the plant in an airstrike 'to reduce the facility's military usefulness' on 16 October 2019.

The court ordered Lafarge Cement Syria to pay criminal fines and forfeiture totaling US$778m.

Cement imports are back on the agenda this week in the Philippines with the news that the Tariff Commission has backed repealing the duties currently being implemented. If it’s anything like what happened last time, back in 2019, the commission’s opinion will once again be passed back to the Department of Trade and Industry (DTI) for the final decision. The safeguard measure the commission wants to cut covers Ordinary Portland Cement (OPC) and Blended Cement. It summarised the situation as follows, “There is no existence of an imminent threat of serious injury and significant overall impairment to the position of the domestic cement industry in the near future.”

The commission reviewed the sector between 2019 and 2021 and concluded that the domestic cement industry maintained its market position, increased its mill capacities, stabilised its manufacturing costs and improved its profitability. It found that local producers recovered their profits in 2021, following the coronavirus pandemic. It also noted that imports continued to rise whilst the safeguard measure was in force. Volumes of imported OPC and blended cements increased at levels above 10% year-on-year in both the 2019 – 2020 and 2020 – 2021 periods. They also rose by 7% year-on-year to 3.51Mt in the first half of 2022 compared to the half-year average from 2019 - 2021. In the commission’s view, relaxing the duties on imported cement would slow price rises for both locally produced and imported cement leading to an overall national economic benefit.

Local cement producers in the Philippines are likely to be unhappy with the Tariff Commission’s recommendation. The Cement Manufacturers Association of the Philippines (CEMAP) spent the summer of 2022 lobbying for the safeguard measure to be extended past October 2022. It too pointed out that imports of cement had continued to grow even whilst the increased duties had been levied from 2019. A few days before the commission’s decision was published, APO Cement said that it had temporarily suspended operations at its Davao terminal. The subsidiary of Cemex Philippines blamed imports of cement, particularly from Vietnam, for the decision.

Yet, the local sector has been active over the last year with a number of capacity upgrades being launched or underway. In January 2022 the government gave tax breaks to San Miguel Equity Investments for the construction of a 2Mt/yr cement plant in Mindanao. In February 2022 San Miguel subsidiary Southern Concrete Industries said it was doubling the capacity of an upgrade to its grinding plant at Davao del Sur, with initial commissioning planned in mid-2022. Meanwhile, Solid Cement’s upgrade of a new production line at its integrated plant in Antipolo, Rizal, has been ongoing since it officially started in 2019. The current commissioning date for the subsidiary of Cemex is now expected in early 2024. In August 2022 Taiheiyo Cement Philippines held a groundbreaking ceremony for the start of construction of a new production line at its integrated San Fernando plant in Cebu. The US$85m project is due to be commissioned in mid-2024. Finally, importer Philcement revealed in late September 2022 that it had taken out a US$1.73m loan for an expansion and upgrades to its Mariveles cement terminal in Bataan.

Holcim Philippines’ president and chief executive officer Horia Adrain told local press in July 2022 that the cement sector was continuing to recover in 2022, following the coronavirus pandemic in 2020, but that the pace would be slower. And so it proved, with reduced revenue, earnings and profits reported by Holcim for the first half of 2022. Costs rose due to higher fuel and energy prices like elsewhere in the world but a construction ban in connection with the presidential election in May 2022 didn’t help either. Both CRH and Cemex Philippines reported a similar situation in their financial results. However, Eagle Cement did manage to raise its revenue in the same period.

The Tariff Commission has been explicit with its opinion about the impact of imports upon the local cement sector. Investment by the local producers has been forthcoming with a number of new plants and upgrades on the way. Finally, despite the market recovering since 2020, there has been less growth in the first half of 2022 due to global energy prices and the country’s elections. This last point has handed a gift to the cement producers as any further reductions in growth can be blamed on imports, whether it is connected or not. One thing is certain, if or when the safeguard measures are lifted, then the regular calls to restrict imports will resume just like they did prior to 2019.

El Salvador: Holcim El Salvador plans to invest up to US$50m over the next three years to help it generate 70% of the energy it uses. It plans to build a 17MW solar plant and a wind farm to enable this, according to La Prensa Gráfica newspaper. The investment will also help the subsidiary of Switzerland-based Holcim to progress towards its net-zero sustainability goals. The solar project has a budget of US$19m and will be built in agreement with AES Corporation. It will be located at Holcim’s integrated El Ronco cement plant. It will supply 21% of the energy used at both the El Ronco and Maya cement plants.

The investment has also included the installation of a solid waste shredder earlier in 2022. Its official inauguration is planned for mid-November 2022. Holcim El Salvador reached a 30% alternative fuels substitution rate in October 2022.