Displaying items by tag: Infrastructure

Ivory Coast: LafargeHolcim Côte d'Ivoire says that it is proud to have contributed 60,000t of its Bélier Extra cement to the construction of the Ebimpé Olympic Stadium. Chief executive officer (CEO) Serge Gbotta said, “It is a real honour for all our teams to see their products accomplish international wonders. This is what we are working hard for. We are satisfied to see that, for its quality, Bélier Extra cement remains undeniably the first choice of construction and public works players.”

Nicknamed the ‘Arc de Triomphe,’ the Olympic Stadium will be the official home of the Ivory Coast national football team.

The one thing that the Egyptian cement industry really didn’t need this year was any more jolts. Since the gargantuan 13Mt/yr government/army-run El-Arish Cement plant at Beni Suef opened in 2018, the sector has been stuck in production overcapacity and struggling to catch up. Yet, like the rest of us, they got one nasty surprise in the shape of the coronavirus pandemic. This has added stress to the whole situation and we can see some of this in various news stories that Global Cement has covered recently.

HeidelbergCement’s local subsidiary Suez Cement has been busy in recent days making changes to its corporate structure in the form of a tender offer to buy a 100% stake in Egyptian Tourah Portland Cement. Production stopped at Tourah Cement in June 2019 due to market conditions. This follows yet more lacklustre financial results earlier in September 2020 that show the pain that it and other cement producers have been enduring. Suez Cement’s loss nearly doubled year-on-year to Euro38m for the first half of 2020 and its sales fell by 18% to Euro145m. This was blamed on production overcapacity and a coronavirus-related lockdown. Other producers, both multinational and local, have experienced a similar situation.

Suez Cement also announced in mid-September 2020 that its Ready Mix Beton subsidiary had secured a contract for the supply of concrete for the construction of two new monorail lines connecting the country’s new city projects. Unfortunately, as Suez Cement’s chief executive officer (CEO) Jose Maria Magrina explained in an interview to Daily Egypt News in July 2020, “the New Administrative Capital (NAC) is a very big project, but in the end it has not offset the decrease in informal buildings that have been stopped.” Despite Suez Cement being a major supplier and the proximity of its plants to the site, overall sales have gone down.

Graph 1: Cement consumption in Egypt. Source: Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries.

Magrina’s gloom is shared by other industry figures with a general assumption that perhaps up to a quarter of the country’s 20-something cement plants may have to close in the next year or so. Coronavirus has only deepened this view as the government’s response was to cease issuing construction licences for private buildings in Greater Cairo, governorate capitals and major cities from late May 2020 for six months. Solomon Baumgartner Aviles, the CEO of Lafarge Egypt, said in July 2020 that local cement demand fell by 6.5% year-on-year in the first half of 2020. He added that coronavirus had ‘strongly’ impacted the building materials sector with a big effect on the individual market, and with the licence halting exacerbating the situation further. As data from the Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries shows above in Graph 1 demand peaked at 56.5Mt in 2016 and has since declined to a low of 48Mt in 2019. By month the sector recovered in January and February 2020 respectively with growing cement sales on a year-on-year basis but this has since declined with losses in most months subsequently. This is set against a production capacity of 81.2Mt/yr in 2018, giving an excess of 30Mt/yr and a utilisation rate of 59%.

One story that was mentioned in the local press this week is that Arabian Cement Company (ACC) had started negotiations with the European Bank for Reconstruction and Development and the Commercial International Bank – Egypt to secure new loans worth over US$20m. The ACC has denied this publicly in a statement to the Egyptian Exchange but it’s a sign of the trouble that is expected in the sector given the current circumstances.

All of this leaves cement producers scrabbling to hold on until the market picks up again, takes action in other ways or the government intervenes. Some analysts expect the market to stabilise in the medium to longer term as work on large infrastructure projects like the NAC mounts. Suez Cement’s Jose Maria Magrina has said that, “the government must, within the law, dictate norms that will rationalise the market, while making sure that companies survive since current prices do not cover the costs of production.” Local press has since reported that the Ministry of Trade and Industry has started trying to help cement companies, including measures such as limiting production to balance supply and demand, and decrease the surplus in the market. Another option is a coordinated export subsidy programme in coordination with the government but nothing appears to have happened yet after several years of discussion. Unhelpfully for any export aspirations, Egypt finds itself in a very cement export-heavy part of the world, wedged as it is between North Africa, Turkey and Southern Europe.

Hope springs eternal though as, almost unbelievably, Egyptian Cement Group’s CEO Ahmed Abou Hashima surfaced last week to remind everyone that his company still plans to inaugurate its new integrated cement plant in 2021. The project to build a new 2Mt/yr unit in Sohag has been brewing since 2017 when it was announced with China-based Sinoma on board as the engineering partner. It was originally scheduled to open in the first half of 2020 but it was delayed by coronavirus. Let’s hope the picture looks better when it finally opens.

Egypt: Suez Cement subsidiary Ready Mix Beton says that it has secured a contract for the supply of concrete for the construction of two new monorail lines projects. Due to begin in late-2020, the contract covers the construction of a monorail line between Cairo and the New Administrative Capital and another between 6 October City and Giza. The company says that it will use Suez Cement’s CEM III/A ground granulated blast furnace slag (GGBFS) cement to produce concrete for the 96km monorail network.

Suez Cement said, “CEM III/A cement is highly recommended when building thick concrete supports and massive structures because its hydration temperature of less than 210kJ/kg reduces cracking compared with Ordinary Portland Cement (OPC) when the applied concrete is subjected to dual exposure to sulphates and chloride ions, as happens in coastal areas.”

Uzbekistan: The Ministry of Transport has secured a US$274m loan from the Asian Development Bank for investment in the construction of a 240km road in Karakalpakstan. Asian Development Bank senior transport specialist Pavan Karki said, “As a landlocked country, Uzbekistan has made regional connectivity a central element of its transport policy. This project will help develop the country's potential as a regional transport and logistics hub between Europe and Southeast Asia, contributing to economic growth.” The road will be part of the Central Asia Regional Economic Cooperation Programme Corridor 2. Uzbekistan Newsline has reported that the project will generate ‘significant demand’ for the country’s cement producers.

Colombia: Argos has supplied 220,000t of cement and 765,000m³ of ready-mixed concrete to the site of the 8500m-long Túnel de La Línea road tunnel in Quindío and Tolima Departments.

Colombia regional vice president Tomás Restrepo said, “We are proud to have participated as allies in the construction of this mega-work that represents a great milestone for the infrastructure of our country and Latin America. This was a project that represented great logistical and technical challenges that Argos has faced with commitment. We are sure that this strategic work of interconnection will contribute enormously to the progress of Colombia and its people. This reflects our high purpose to continue contributing to the construction of dreams that drive development and transform lives"

Australia: Adelaide Brighton has extended its lease over its Sellicks Hill quarry in South Australia until 2090. The Advertiser newspaper has reported that the signing of the lease, which secures the company’s local supply of limestone, “coincides with a rise in local cement consumption due to the government’s South Australia HomeBuilder building and renovation subsidy scheme,” according to the company. In August 2020 Adelaide Brighton signed supply contracts with BHP and OZ Minerals for infrastructure projects in the state.

Australia: Adelaide Brighton has recorded a net profit of US$21.1m in the first half of 2020, compared to a US$13.0m loss in the first half of 2019. Revenues fell by 7.3% to US$508m from US$548m due to a 12% construction decline over the period, according to the company. Residential construction fell by 16%, however mining and infrastructure activity remained consistent with levels in the first half of 2019. Adelaide Brighton said, “Cement demand is likely to continue to benefit from a strong production outlook for gold, nickel, and iron ore in particular, and stable demand from the alumina sector.”

Peru: Cementos Pacasmayo subsidiary Cementos Selva has begun shipping 2550t/yr of cement produced at its 0.4Mt/yr integrated Rioja, San Matrín plant to the city of Iquitos via the Huallaga, Marañon and Amazon rivers following refurbishment of its Port of Yurimaguas cement terminal. The company said, “The facilities provided by the Port of Yurimaguas with its modern infrastructure and equipment, together with a coordinated logistical operation with the Rioja plant, has made it possible to considerably reduce reception and shipment times, demonstrating that good practices in the jungle are possible,” according to the Diario Gestión newspaper.

Colombia: The National Association of Entrepreneurs and Dinero Magazine have named Cementos Argos fourth among 242 of Colombia’s most innovative companies. Chief executive officer (CEO) Juan Esteban Calle said, “This recognition fills us with pride and motivates us to continue to advance. We are convinced that it is possible to help materialise more dreams of housing and a better infrastructure for millions of people.”

US: Mexico-based Cemex supplied 15,000t of cement to the Hartsfield-Jackson Airport in Atlanta, Georgia, for the construction of a 3770m runway and taxiway by McCarthy Improvement Company. Replacing an existing runway, the new runway is the longest at Hartsfield-Jackson, the world’s busiest airport.

Cemex USA president Jaime Muguiro said, “Infrastructure in the US needs improvements and updates so that Americans can remain connected and get where they need to go quickly, safely and efficiently. At Cemex, we are proud to securely support essential infrastructure projects that help achieve those goals and provide products that will enhance the experiences of travellers for years to come.”