Displaying items by tag: Industry 40

China: The China Building Materials Federation and the China Silicate Society have named Hauxin Cement as the winner of the Science and Technology Award 2019 for its digitisation project. The project, entitled ‘Development and Innovation of a Cement Enterprise Operation Digital System,’ aims to modernise management at a pan-business level by using monitoring and analysis, intelligent logistics and a service centre system across 11 different software platforms. 39 Huaxin-affiliated companies currently use the product.

Germany: Currax and Siemens have announced their collaboration on a mill operations digitisation pilot project involving the Simotics Connect 400 motor data collector and transmitter. They hope that analysis of data processed via the Simotics 400 will better enable the remote operating of mills ‘to increase efficiency and component life’ and speeding the shift towards automation and production that is resilient to crises such as the coronavirus outbreak.

Austria: Refractory manufacturer RHI Magnesita has launched a digital hub in Vienna to support the development of so-called ‘Industry 4.0’ initiatives. Projects the new hub will explore include automated process optimisation in data analysis and quick (QCK) and broadband spectral thermometer (BST) in measurement.

It’s the end of the year so it’s time to look at trends in the sector news over the last 12 months. It’s also the end of a decade, so for a wider perspective check out the feature in the December 2019 issue of Global Cement Magazine. The map of shifting production capacity and the table of falling CO₂ emissions per tonne are awesome and inspiring in their own way. They also point towards the successes and dangers facing the industry in the next decade.

Back on 2019 here are some of the main themes of the year in the industry news. This is a selective list but if we missed anything crucial let us know.

European multinationals retreat

LafargeHolcim left the Philippines, Malaysia and Indonesia, HeidelbergCement sold up in Ukraine and reduced its stake in Morocco and CRH is reportedly making plans to leave the Philippines and India, if local media speculation can be believed. To be fair to HeidelbergCement it has also instigated some key acquisitions here and there, but there definitely has been a feel of the multinationals cutting their losses in certain places and retreating that bit closer to their heartlands.

CRH’s chief executive officer Albert Manifold summed it up an earnings meeting when he said, “…you're faced with a capital allocation decision of investing in Europe or North America where you've got stability, certainty, overlap, capability, versus going for something a bit more exotic. The returns you need to generate to justify that higher level of risk are extraordinary and we just don't see it.”

The battle for the European Green Deal

One battle that’s happening right now is the lobbying behind the scenes for so-called energy-intensive industries in Europe as part of the forthcoming European Green Deal. The cement industry is very aware that it is walking a tightrope on this one. The European Union (EU) Emissions Trading Scheme (ETS) CO₂ price started to bite in 2019, hitting a high of Euro28/t in August 2019 and plant closures have been blamed on it. The rhetoric from Ursula von der Leyen, the new president of the European Commission, has been bullish on climate legislation and the agitation of Greta Thunberg internationally and groups like Extinction Rebellion has kept the issue in the press. Cembureau, the European Cement Association, is keen to promote the industry’s sustainability credentials but it is concerned that aspects of the proposed deal will create ‘uncertainty and risks.’ Get it wrong and problems like the incoming ban on refuse-derived fuel (RDF) imports into the Netherlands may proliferate. What the Green Deal ends up as could influence the European cement industry for decades.

The managed march of China

Last’s week article on a price spike in Henan province illustrated the tension in China between markets and government intervention. It looks like this was driven by an increase in infrastructure spending with cement sales starting to rise. Cement production growth has also picked up in most provinces in the first three quarters of 2019. This follows a slow fall in cement sales over the last five years as state measures such as consolidation and peak shifting have been implemented. The government dominates the Chinese market and this extends west, as waste importers have previously found out to their cost.

Meanwhile, the Chinese industry has continued to grow internationally. Rather than buying existing assets it has tended to build its own plants, often in joint ventures with junior local partners. LafargeHolcim may have left Indonesia in 2018 but perhaps the real story was Anhui Conch's becoming the country's third biggest producer by local capacity. Coupled with the Chinese dominance in the supplier market this has meant that most new plant projects around the world are either being built by a Chinese company or supplied by one.

India consolidates but watches dust levels

Consolidation has been the continued theme in the world's second largest cement industry, with the auction for Emami Cement and UltraTech Cement’s acquisition of Century Textiles and Industries. Notably, UltraTech Cement has decided to focus its attention on only India despite the overseas assets it acquired previously. Growth in cement sales in the second half of 2019 has slowed and capacity utilisation rates remain low. Indian press reports that CRH is considering selling up. Together with the country's low per capita cement consumption this suggests a continued trend for consolidation for the time being.

Environmental regulations may also play a part in rationalising the local industry, as has already happened in China. The Indian government considered banning petcoke imports in 2018 in an attempt to decrease air pollution. Later, in mid-2019, a pilot emissions trading scheme (ETS) for particulate matter (PM) was launched in Surat, Gujarat. At the same time the state pollution boards have been getting tough with producers for breaching their limits.

Steady growth in the US

The US market has been a dependable one over the last year, generally propping up the balance sheets of the multinational producers. Cement shipments grew in the first eight months of the year with increases reported in the North-Eastern and Southern regions. Imports also mounted as the US-China trade war benefitted Turkey and Mexico at the expense of China. Alongside this a modest trade in cement plants has been going on with upgrades also underway. Ed Sullivan at the Portland Cement Association forecasts slowing growth in the early 2020s but he doesn’t think a recession is coming anytime soon.

Mixed picture in Latin America

There have been winners and losers south of the Rio Grande in 2019. Mexico was struggling with lower government infrastructure spending hitting cement sales volumes in the first half of the year although US threats to block exports haven’t come to pass so far. Far to the south Argentina’s economy has been holding the cement industry back leading to a 7% fall in cement sales in the first 11 months of the year. Both of these countries’ travails pale in comparison to Venezuela’s estimated capacity utilisation of just 12.5%. There have been bright spots in the region though with Brazil’s gradual return to growth in 2019. The November 2019 figures suggest sales growth of just under 4% for the year. Peru, meanwhile, continues to shine with continued production and sales growth.

North and south divide in Africa and the Middle East

The divide between the Middle East and North African (MENA) and Sub-Saharan regions has grown starker as more MENA countries have become cement exporters, particularly in North Africa. The economy in Turkey has held back the industry there and the sector has pivoted to exports, Egypt remains beset by overcapacity and Saudi Arabian producers have continued to renew their clinker export licences.

South of the Sahara key countries, including Nigeria, Kenya and South Africa, have suffered from poor sales due to a variety of reasons, including competition and the local economies. Other countries with smaller cement industries have continued to propose and build new plants as the race to reduce the price of cement in the interior drives change.

Changes in shipping regulations

One of the warning signs that flashed up at the CemProspects conference this year was the uncertainty surrounding the new International Maritime Organistaion (IMO) 2020 environmental regulations for shipping. A meeting of commodity traders for fuels for the cement industry would be expected to be wary of this kind of thing. Their job is to minimise the risk of fluctuating fuel prices for their employers after all. Yet, given that the global cement industry produces too much cement, this has implications for the clinker and cement traders too. This could potentially affect the price of fuels, input materials and clinker if shipping patterns change. Ultimately, IMO 2020 comes down to enforcement but already ship operators have to decide whether and when to act.

Do androids dream of working in cement plants?

There’s a been a steady drip of digitisation stories in the sector news this year, from LafargeHolcim’s Industry 4.0 plan to Cemex’s various initiatives and more. At present the question appears to be: how far can Industry 4.0 / internet of things style developments go in a heavy industrial setting like cement? Will it just manage discrete parts of the process such as logistics and mills or could it end up controlling larger parts of the process? Work by companies like Petuum show that autonomous plant operation is happening but it’s still very uncertain whether the machines will replace us all in the 2020s.

On that cheery note - enjoy the winter break if you have one.

Global Cement Weekly will return on 8 January 2020

The big announcement from LafargeHolcim this week was the launch of its Industry 4.0 plan known as ‘Plants of Tomorrow.’ The scheme hopes to use automation technologies and robotics, artificial intelligence, predictive maintenance and digital twin technologies across the company’s entire production process. Operational efficiency gains of 15 - 20% are promised.

There wasn’t much detail beyond the use of the Siggenthal integrated cement plant in Switzerland as the ‘lighthouse’ of the scheme, where around 30 proof-of-concept technology ideas will be tested. One technology it did flesh out a little was its long-running Technical Information System (TIS). This follows the work between Holcim and the power and automation product supplier ABB. LafargeHolcim says that over 80% of its plants around the world use the TIS to provide data transparency at plant, country, regional and global level. It added that some country operations have more than a decade of historic technical data available. This last point is pertinent as the data could potentially be used to support the training of any machine learning algorithms the company might want to invest in. The building materials company also mentioned its LH Maqer subsidiary. This startup incubator was launched at the end of 2018.

LafargeHolcim appears to be playing catch up here with Cemex, which has steadily been promoting its own Industry 4.0 developments in recent years. Emphasis on ‘promotion’ here as only yesterday, the day LafargeHolcim made its big reveal, Cemex happened to release information about a recent roundtable in France that it participated in on digitisation and productivity in the construction sector.

Notably in March 2019, the Mexican multinational struck a deal with Petuum to implement its Industrial AI Autopilot software products for autonomous cement plant operations at its plants around the world in March 2019. Readers can find out more about Petuum’s work with Cemex in the June 2019 issue of Global Cement Magazine. In late 2017 Cemex too set up a division, Cemex Ventures, to engage with startups, universities and other organisations. Cemex has also been building its digital customer integration platform Cemex Go since around the same time.

One interpretation of Industry 4.0 is as a German-industrial approach to the so-called fourth or digital revolution pushed by Anglophone software companies. The idea of taking as much data from a production process, such as making cement, is enticing but the prospect of actually doing something useful with this tsunami of information is daunting. Typically algorithm techniques or predictive maintenance seem so far to focus on discrete parts of a process such as a finish grinding mill or final product logistics networks. Companies like Germany’s Inform focus on the latter for example and, incidentally, it celebrated its 50th anniversary this week.

If automated systems start making apparently nonsensical yet useful decisions across the whole raw materials, production and supply chains, then Industry 4.0 will reach its full potential. This moment, if it comes, will be analogous to the time IBM’s computer Deep Blue managed to beat chess grandmaster Garry Kasparov in the late 1990s. What’s more likely are automated systems that can perform consistently outside the human operator comfort zone edging up against hard physical process constraints.

Meanwhile, what will be interesting to watch here is whether LafargeHolcim will be able to leverage any advantage over Cemex by having more cement plants to pull data from. Before LafargeHolcim started selling off its south-east Asian subsidiaries it had more than three times as many cement plants as Cemex. If data really is more valuable than oil these days then starting late in the industrial digital arms race may not be as deleterious as one might first think.

Switzerland: LafargeHolcim has launched a four-year industrial automation plan called ‘Plants of Tomorrow.’ It includes Industry 4.0 concepts such as automation technologies and robotics, artificial intelligence, predictive maintenance and digital twin technologies for its entire production process. The plan is expected to show 15 – 20% operational efficiency gains. It also claims that the initiative is, “one of the largest roll-outs of Industry 4.0 technologies in the building materials industry.”

“Transforming the way we produce cement is one of the focus areas of our digitalisation strategy and the ‘Plants of Tomorrow’ initiative will turn Industry 4.0 into reality at our plants. These innovative solutions make cement production safer, more efficient and environmentally fit,” said Solomon Baumgartner Aviles, Global Head Cement Manufacturing.

The building materials company is presently working on more than 30 pilot projects covering all regions where the company is active. The company’s integrated cement plant at Siggenthal in Switzerland will be a trial site where the integration of all relevant modules will be tested.

One examples of where LafargeHolcim has started the plan include a partnership with Swiss start-up Flyability to use drones to increase the frequency of inspections at plants while simultaneously reducing cost and increasing safety for employees by inspecting confined spaces. The concept is being rolled out to several markets, including Switzerland, France, Germany, the UK, the US, Canada, India and Russia. It is also using a subsidiary, Maqer, to identify technology startups with promising technology. It aims to harness the potential of this through new partnership models with both manufacturing and software companies.

LafargeHolcim has already launched technology to track performance centrally and allocated resources to support the plant network in real time. More than 80% of LafargeHolcim’s cement plants are already connected to its Technical Information System that provides data transparency at plant, country, regional and global level. Some country operations have more than a decade of historic technical data available. Other systems allow the remote control of certain parts of the operations through online condition monitoring systems. Since its implementation in 2006, this system has saved over Euro70m and an additional 3Mt of cement sold through fewer breakdowns.