Displaying items by tag: Ivory Coast

Energy has been the theme for a couple of cement news stories of note from Egypt this week. The first concerns the government’s impending plan to centralise distribution of mazut (heavy fuel oil) to cement plants to help them cope with ongoing power shortages. Earlier in the week Cemex signed a deal with the Assiut Governorate to operate a second municipal solid refuse processing unit in the country. The company’s first Regenera facility, in Mahala, started operations in May 2024. Another story from mid-September 2024, along the same theme, covered the inauguration of an 18MW waste heat recovery (WHR) unit at Heidelberg Materials Egypt's Helwan Cement plant.

The wider story is that the country has faced so-called load shedding, or power rationing, since mid-2023 due to falling gas production, rising energy demand and negative currency exchange effects making it harder to buy fuel imports. The power cuts were extended in duration in July 2024 due to a heat wave. The government then said in late September 2024 that it is making investments to prevent domestic power cuts in 2025.

The cement stories mentioned above show some of the ways cement companies cut their energy costs. Two potential ways of doing this are to increase the use of alternative fuels (AF), such as municipal solid waste, or to install a WHR unit. Titan Cement, for example, reported AF thermal substitution rates of above 40% in Alexandria and above 30% in Beni Suef in the first half of 2024. The local press hasn’t reported power shortages amongst the country’s cement producers, but the plans to control the distribution of mazut suggest that either ‘something’ has happened or the government is trying to avoid ‘something.’ Readers may recall that producers have periodically faced step changes in power supplies over the years. In the mid-2010s, for example, lots of plants switched from heavy fuel oil and gas to coal. The energy price fluctuations following the start of the Russia - Ukraine war in 2022 then saw the price of coal rise.

However, what the foreign-owned producers have complained about in the first half of 2024 is the declining exchange rate of the Egyptian Pound. Cementir, Cemex and Titan Cement all noted this. However, Titan reckoned that International Monetary Fund and European Union investment had actually eased the economic situation in the first half of the year leading to an increase in the number of large construction projects.

One effect of the currency problems upon the cement market has been a focus on exports. At the start of September 2024 the Federation of Egyptian Industries said that national cement consumption in 2024 was expected to drop by 4% year-on-year to 45Mt. However, exports were projected to rise to 15Mt. The first and second most popular destinations so far in 2024 have been the Ivory Coast and Ghana. Yet, exports to Libya, the third biggest external market, may have had the biggest effect. These have been blamed for creating a shortage of trucks that was causing delays to the local construction sector. The round-journey from Egypt to Libya can take up to 12 days. This has left building sites bereft of raw material deliveries because all the trucks are elsewhere! Vicat acknowledged the growing importance of imports for its business in Egypt in its half-year report for 2024. It said that ‘sluggish’ domestic market conditions “were more than offset by growth in cement and clinker volumes for export to the Mediterranean and Africa regions.”

The wider picture of the cement sector in Egypt remains one of overcapacity with integrated capacity estimated above 70Mt/yr. The government introduced cement production quotas in mid-2021 and this stabilised prices (and profits). The recent state of the local economy may have strained this, but the latest round of external investment appears to have buoyed things for now. Although the effects of the Israeli military action in Lebanon may have unforeseen consequences upon neighbouring markets. In the meantime, cutting energy costs and growing exports offer two ways for producers to raise their profits.

Ivory Coast: LafargeHolcim Côte d'Ivoire has invested a total US$677,000 in sustainability-enhancing upgrades to its 2Mt/yr Abidjan grinding plant since 2020. Agence Ivoirienne de Presse has reported that the producer has now implemented 80% of recommendations made by sustainability auditor Centre Ivoirien Antipollution (CIAPOL). Recommendations included the installation of dust capture systems.

General manager Rachis Yousry said "In 2022, LafargeHolcim received zero complaints from local residents for environmental degradation.” He added the producer was on track to realise net zero CO₂ emissions by 2050.

Ivory Coast: The Council of Ministers has approved cement producers to use dolomite in place of limestone to reduce imports from Europe and Asia. The government said that it had conducted the necessary tests supporting the change in the local cement standard, according to the Agence Ivoirienne de Presse. The Ministry of Industry and other related government departments have been instructed to take action to support the change.

Ivory Coast: The local cement sector is preparing to reach a production capacity of 20Mt/yr by the end of 2022. Albert Kouatelay, director of deputy cabinet of the Ivorian Minister of Trade, Industry and Promotion of SMEs, made the comment at the launch event for LafargeHolcim Côte d'Ivoire's new white cement product, according to the Agence de Presse Africaine. The country has 13 cement plants and the latest boost is expected once a new cement unit starts operation. Domestic production capacity was reportedly 2.4Mt/yr in 2011, 12.5Mt/yr in 2019 and 17Mt/yr in 2022.

Algeria: Groupe des Ciments d'Algérie (GICA) has obtained a certificate of conformity with European standards (CE) for three types of cement. The certification should allow the company to export more products to Europe, according to the Expression newspaper. It applies to its Gica Moudhad and Gica Béton products. The move follows similar certification of products with the Association Française de Normalisation (AFNOR) from the company’s Aïn El Kebira plant in July 2021. At the same time the Minister of Industry said it was helping the group with its export strategy.

In 2021 GICA exported 2.25Mt of cement to countries including the Ivory Coast, Gambia, Ghana, Mauritania, Senegal , Cameroon, Benin,  Guinea, Brazil, Peru, the Dominican Republic, Haiti and a number of European countries.

Vicat’s plans to buy another 42% stake in Sinai Cement became public this week. Once completed, the France-based company should own 98% of the Egyptian company, based on previously published ownership figures. The announcement heralds a rapprochement in the relationship between the cement producer and the Egyptian government.

Last year Vicat raised a case against the government with the International Centre for Settlement of Investment Disputes (ICSID) over an argument about how it could invest in Sinai Cement as a foreign company. All seems forgiven and forgotten now with a settlement agreement signed in March 2022 between Rania el Mashat, the Minister of International Cooperation on behalf of the Egyptian government, and Guy Sidos, the chairman and chief executive officer of Vicat Group. Local press reported that the government is trying to attract more direct foreign investment. Sinai Cement reported a loss attributable to its parent company of around US$19.1m in 2021, down from a loss of US$30.3m in 2020. However, its sales rose by 63% year-on-year to US$78m.

Sinai Cement has some specific operating issues related to its geographic position in the Sinai Peninsula and ongoing security concerns. Yet its mixed fortunes also sum up some of the continuing challenges the Egyptian cement industry is facing. After years of overcapacity, the government introduced reduced cement production quotas in July 2021 and this is mostly perceived to have improved prices in the second half of the year. Vicat described the arrangement as having capped the local market at 65% of its production capacity and it said that prices recovered ‘significantly’ as a result in the second half of 2021. Cemex’s regional chief Carlos Gonzalez told local press that the move had given plants “A glimmer of hope for the return of balance to the cement market.” The company has also announced a US$20m local investment backing up this view. Not all the foreign multinational companies entirely agreed, with HeidelbergCement reporting a ‘sharp’ decline in sales volumes although chief executive officer Dominik von Achten did describe the country as ‘coming back’ in an earnings call about his company’s financial results in 2021. Solomon Baumgartner Aviles, the chief executive officer of Lafarge Egypt, was also cooler about the production cap in a press interview in October 2021, describing it as too early to assess how well the cap was working and noting that the gap between supply and demand was still large.

Vicat said in its annual report for 2021 that, “Provided no further adverse geopolitical, health or security developments occur, the current climate is unlikely to jeopardise the prospects of an improvement in the subsidiary’s profitability, which should begin to gradually occur.” The geopolitical bit was timely given that Russia’s war in Ukraine started on 24 February 2022. It also targets the latest problem hitting Egyptian cement producers: energy costs. The head of Arabian Cement told Enterprise Press that initially some producers had opted to temporarily stop production and use stocks instead to attempt to try and wait until the energy price volatility ended. However, it stayed high so the cost of cement has gone up generally. Producers are now trying to switch to using a high ratio of natural gas, such as 10%, but this is dependent on the government letting them.

The Egyptian government, for its part, is facing a decision whether to supply subsidised gas for domestic industry or to export to Europe. The backstory here is that Egyptian cement producers are facing yet another step change in fuel supply. In the mid-2010s lots of plants switched from heavy fuel oil and gas to coal. High international coal prices could be heralding another change.

Alongside this the value of Egypt’s cement exports rose by 151% year-on-year to US$456m in 2021 from US$182m in 2020. The Cement Division of the Federation of Egyptian Industries has attributed this to growth mainly on the African market. This trend continued in January and February 2022 with cement exports up by 141% year-on-year to US$104m from US$43m. The main destinations were Ghana, Cameroon, Ivory Coast and Libya.

HeidelbergCement summed up the current state of the Egyptian cement market in its 2021 annual report as follows “The development of the Egyptian cement market continues to be determined by government intervention.” What happens next is very much in the hands of the state as it decides whether to extend the production cap, which fuels to subsidise, whether to allow exports and where to invest in infrastructure projects. One variation on this theme may be local decarbonisation targets. At the end of March 2022 the Global Cement and Concrete Association (GCCA) launched a series of Net Zero Accelerator initiatives, including one in Egypt. How a country that produces more cement than it needs reduces its CO₂ emissions presents another challenge for manufacturers and the government to grapple with.

African cement producers have confirmed their interest in calcined clay over the last month with two new projects. The big one was announced last week when FLSmidth revealed that it had received an order from CBI Ghana. This follows the launch of a Limestone Calcined Clay (LC3) project in Malawi in mid-March 2022 in conjunction with Lafarge Cement Malawi.

FLSmidth says that its order includes the world’s largest gas suspension calciner system and a complete grinding station. The kit will be installed at CBI Ghana’s plant near Accra in the south of the country. The new clay calciner system is expected to substitute 30 - 40% of the clinker in the final product, resulting in a reduction of up to 40% CO₂/t of blended cement compared to Ordinary Portland Cement (OPC). Overall the equipment manufacturers reckon that the grinding plant will reduce its CO₂ emissions by 20% compared to its current output. There has been no indication of how much the order costs but CBI Ghana expects energy and fuel savings, as well as lower overheads from clinker imports.

The public announcement of the Ghana project was also foreshadowed by the visit of Professor Karen Scrivener to the Ghana Standards Authority in February 2022. This was significant because Scrivener is the head of the Laboratory of Construction Materials at the Ecole Polytechnique Fédérale de Lausanne (EPFL) and has been one of the key instigators of the LC3 initiative since the early 2000s. Other calcined clay cements are available such as Futurecem or polysius activated clay (see below) but LC3 is arguably the most famous given its promotion in developing countries.

The Malawi project is at a much earlier stage. The government launched the public private partnership LC3 project in mid-March 2022 in conjunction with Lafarge Cement Malawi and Terrastone, a brick manufacturer. The Ministry of Mining is currently developing a memorandum of understanding with the Gesellschaft für Internationale Zusammenarbeit (GIZ), a Germany-based development agency. India-based Tara Engineering has also been linked to the scheme.

One thing to note about the Malawi project is that it is the first calcined clay project in the cement industry based in East Africa. All the other African ones are based in West Africa. The other two projects in this region are run by Turkey-based Oyak Çimento and its subsidiary Cimpor. The first of these is a 0.3Mt/yr calcined clay and a 2400t/day cement grinding production line that was commissioned in mid-2020. This plant is based at Abidjan in Ivory Coast. The second is a new plant that Germany-based ThyssenKrupp Industrial Solutions is building for Oyak Çimento at Kribi in Cameroon. This unit has a 720t/day calcined clay and a 2400t/day cement production capacity and it will use the supplier’s ‘polysius activated clay’ technology. ThyssenKrupp’s involvement came to light in early 2020 and commissioning was scheduled for late 2021. However, no update on the state of the project has been issued so far in 2022.

As the above examples show, Sub-Saharan Africa has at least one live calcined clay plant, two plants are being built and there’s one more at the development stage. This puts the region neck-and-neck with Europe, which has a similar mixture of current and developing projects. This column has been covering the wider trend of the growing usage of various types of blended cements recently, particularly in Europe and the US, with slag cements, Portland Limestone Cement (PLC) and more. With PLC, for example, note the transition of another two North American cement plants to PLC this week alone. As for calcined clay cement, it is fascinating to see the focus move to a different part of the world. Several commentators have predicted that the future looks set to be dominated by blended cements using whichever supplementary cementitious material (SCM) is most available for each plant. The growth in calcined clay confirms this view.

Global Cement is researching clay calcination use in the cement industry for the next edition of the Global Cement Directory. Email This email address is being protected from spambots. You need JavaScript enabled to view it. with any information on new industrial and research installations.

Türkçimento’s Volkan Bozay took to the airwaves last week to raise the issues that the war in Ukraine is causing for Turkey-based cement producers. The head of the Turkish Cement Manufacturers’ Association explained, to the local Bloomberg HT channel, that the dramatic jump in the price of Newcastle Coal posed a serious threat to the sector. The price jumped nearly US$100/t in a single day in early March 2022. Bozay said that the cost of cement from a plant using imported coal would consequently rise by around US$15/t. He added that the association’s members had an average of 15 – 20 days of coal stocks.

Graph 1: Price of coal, March 2020 – March 2021. Source: Trading Economics.

In a separate press release Türkçimento revealed that Turkey, as a whole, imported approximately US$1.5bn of coal from Russia in 2021. The cement industry imported about 5Mt of coal in 2021, from all sources, although the majority of this came from Russia. Coal shipments from Russia since the start of the war were reported as ‘very limited or even not possible.’ It was further explained that each US$10/t increase in the price of coal put up plant production costs by US$1.5/t of cement.

Naturally Bozay’s appearance on a television news show carried a lobbying aspect. He called for government import standards – such as the sulphur ratio, lower heating values and volatile matter limits - to be relaxed to allow coal to be imported more freely from sources such as Colombia, Indonesia and South Africa. There was also a push to let in more alternative fuels such as tyres and waste-derived fuels. The bit that Bozay didn’t mention though was how many of his members had long term coal supply contracts in place to cushion them, from short term price inflation at least. Yet, if coal shipments from Russia have simply stopped, then the price is irrelevant. A cement kiln configured to run on coal stops when it uses up its stocks.

Turkey was the world’s fifth largest cement producer in 2021 according to the United States Geological Survey (USGS). Türkçimento data shows that in 2020 it exported 145,000t of cement to Russia by sea. Overall it exported 16.3Mt of cement and 13.5Mt of clinker. The US, Israel, Syria, Haiti and Libya were the top destinations for cement. Notably, Ukraine was the sixth largest recipients of cement, with 752,000t imported, although anti-dumping legislation introduced in mid-2021 looked set to reduce it until the war started. Ghana, Ivory Coast, Guinea, Cameroon and Belgium were the principal recipients of clinker. Cumulative cement exports for the year to October 2021 were up by 3% year-on-year compared to the first 10 months of 2020. Clinker exports were down by 27% though. Overall domestic production and sales in Turkey rose by 9.5%, suggested an estimated production figure of 79Mt for 2021.

Other fallout in the cement sector from the war in Ukraine this week included Ireland-based CRH’s decision to quit the Russian market. It entered the region in 1998 through a subsidiary based in Finland and was operating seven ready-mixed concrete plants via its LujaBetomix joint venture. CRH says that all operations in Russia have now stopped. In 2021 it sold its lime business in Russia, Fels Izvest, to Russia-based Bonolit. Although selling concrete plants is not trivial, these are far cheaper assets than clinker production lines. Germany-based HeidelbergCement, Italy-based Buzzi Unicem and Switzerland-based Holcim each operate at least one integrated cement plant in Russia. So far these companies have publicly expressed dismay at the humanitarian crisis unfolding in Ukraine and made donations to the Red Cross.

Graph 2: European Union Emission Trading Scheme price, 2020 – March 2022. Source: Sandbag.

Finally, one more surprise this week has been a crash in the European Union (EU) Emission Trading Scheme (ETS) carbon price from a high of Euro96/t in early February 2022 to Euro58/t on 7 March 2022. As other commentators have stated, normally the carbon price would be expected to follow the energy market, but this hasn’t happened. Instead investors have pulled out, possibly to maintain liquidity for other markets.

With the US set to ban Russian oil, gas and coal imports and phase-outs to varying degrees promised by the UK and the EU in 2022, we can expect more turbulence from energy markets in the coming days. As the Turkish example above shows, all of this can... and will... have effects on cement production.

Nigeria: Dangote Cement’s revenue grew by 33.8% year-on-year to US$3.33bn in 2021 from US$2.49bn in 2020. Its sales volumes rose by 13.8% to 29.3Mt from 25.7Mt driven by a strong domestic market, although international volume growth was strong. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 43.2% to US$1.65bn from US$1.15bn.

“Over the last two years, we have finalised the deployment of 6Mt new capacity in Nigeria. Looking ahead, we are now focused on a less capital-intensive expansion cycle, which includes building grinding plants across West and Central Africa to leverage and strengthen Dangote Cement’s regional integration. We are on track to deploy grinding capacity in Cote d’Ivoire and Ghana. In addition, our Alternative Fuel Project is at an advanced stage which aims to leverage waste management solutions, reduce CO₂ emissions, and source material locally. This year, we co-processed 89,000t of waste representing a 60% increase over 2020,” said chief executive officer Michel Puchercos.

The group noted that Cement demand in Nigeria was sustained by increasing housing infrastructure, commercial construction, and government projects including major highways, roads, and railways. In May 2021 it re-started exporting clinker from its Onne and Apapa terminals and delivered seven clinker shipments with a total volume of 197,000t in 2021. It also exported 706,000t in 2021 by road to Togo and Niger. Internationally, the group said that it performed well but it also faced challenges in Cameroon, Ghana and Sierra Leone, where freight costs had increased substantially, causing volatility in the landing cost of cement and clinker.

Ivory Coast: Société de Ciment de Côte d’Ivoire has inaugurated its second grinding plant in Abidjan. The producer says that the new facility doubles its installed cement production capacity to 3Mt/yr. The Afrique Sur 7 newspaper has reported that it will create 3000 new direct and indirect jobs.