Displaying items by tag: Lafarge Poland
Exporting Chinese cement overcapacity
06 January 2021One of the last news stories we covered before the Christmas break was that Lafarge Poland had selected China-based Nanjing Kisen International Engineering as the general contractor for a Euro100m-plus upgrade to its Małogoszcz cement plant. This appears to be the first major European cement plant upgrade project to be publicly run by a Chinese contractor. There may be other European projects in the sector run by Chinese companies ‘on the down-low.’
If it is the first then this is a significant milestone for the growth of the Chinese industry. It is a noteworthy first for Nanjing Kisen in the European Union. Europe is the home, after all, of a number of locally-based contractors and companies that can build or upgrade cement plants including FLSmidth, Fives, ThyssenKrupp, IKN and others. Indeed, all of the work on this project might actually be conducted by local companies, selected by the general contractor. For example, Lafarge Poland says that the general contractor will select a subcontractor on the Polish market.
It’s easy to fall into jingoistic nostalgia but should we really be surprised that China can competitively build cement plants given the ferocious growth of its own industry over the last few decades? Arguments by Western critics against growing Chinese dominance in industry have tended to home in on excuses why they might be ‘cheating’ such as intellectual property theft, unfair state aid or the use of low-cost infrastructure loans to countries along its Belt and Road Initiative. That last one carries some irony given that not so long ago discussions about developing world debt were framed in the context of the Cold War and the oil crisis in the 1970s. Western countries were seen as the bogeymen depending on one’s political outlook. With this in mind, the Financial Times recently reported on data released in December 2020 that suggested that China might be heading into its own overseas debt crisis. The takeaway message here is that attempting to apply China’s whopping infrastructure boom elsewhere might not work so well without the same level of control. Exporting production overcapacity abroad may simply turn out to be something like a giant Ponzi scheme! For the cement industry this may mean a pause or wind-down in the number of new plants backed by Chinese money, often with Chinese contractors tied in, and that the rise of Chinese engineering firms might not seem as unassailable as all that after all.
This leads into another noteworthy story that we also published before Christmas on China’s latest proposal to further reduce production capacity at home. The Ministry of Industry and Information Technology (MIIT) wants to tighten the ratio of production capacity that has to be closed before new capacity can be built from 1.25:1 to 1.5:1. The kicker is that the new rules also include a clause intended to restrict the use of so-called ‘zombie’ capacity in the swapping process by limiting eligibility to productions lines that have been operated for two or more consecutive years since 2013. These rules seem targeted at the present day but they could potentially push Chinese cement production capacity per capita to rates more similar to those found in developed economies elsewhere (i.e. halve existing Chinese production capacity). Many of the country’s kilns were built in the early 2000s and the average lifespan of a clinker kiln is 50 years. This suggests that the ministry is thinking seriously about culling capacity by the administration’s carbon neutrality target of 2060.
Chinese penetration in the European cement plant market is more of an after-thought given the pace of projects in Asia and Africa over the last decade and the maturity of the sector. It can also be misleading given that some very-European-sounding engineering companies are actually owned by Chinese concerns. Yet no doubt local contractors and suppliers would like to keep any business they can. On the other hand, more market share may be found in Europe over the coming decades from retrofitting CO2 mitigating equipment or building the anticipated hydrogen revolution once the regulatory and financial framework starts to favour it. Or maybe shifts to service and/or machine intelligence-style packages are the way forward. Nanjing Kisen may be the first Chinese company to upgrade a European cement plant but the market focus may quickly move on. Time will tell.
Happy New Year from Global Cement
Lafarge Poland awards upgrade project at Małogoszcz cement plant to Nanjing Kisen International Engineering
23 December 2020Poland: Lafarge Poland has chosen China-based Nanjing Kisen International Engineering as the general contractor for a Euro100m-plus upgrade to its Małogoszcz cement plant. The subsidiary of China Triumph International Engineering will deliver an engineering, procurement and construction (EPC) contract and it intends to select a local Polish subcontractor. This is the first project by the Chinese engineering company in Poland and the European Union.
The first works related to project started in October 2020. First clinker production from the upgrade is scheduled for December 2022 with overall commissioning planned for spring 2023. Part of the investment will be implemented in cooperation with the Krakow Technology Park as part of the Polish Investment Zone. LafargeHolcim says the upgrade project is part of its scheme to reduce its CO2 emissions by 55% by 2025 compared to 1990 levels.
Lafarge Poland to upgrade Małogoszcz cement plant
27 October 2020Poland: Lafarge Poland has shared plans to modernise its 2Mt/yr Małogoszcz cement plant in Świętokrzyskie Voivodeship. The company says its planned investment of Euro100m will, “increase technical efficiency and minimise environmental impacts by reducing CO2 emissions by 20% and energy consumption by 33%.” The project, which will partly be carried out in partnership with Krakow Technology Park, is scheduled for completion in 2023.
Lafarge Poland president Xavier Guesnu said that the modernisation is part of the company’s effort to meet its commitment of 55% emissions reduction to 300kg/t of cement in 2030 from 667kg/t in 1990.
Poland: Lafarge Poland delivered over 0.2Mm3 of ready-mix concrete (RMX) in 2018 for use in various infrastructure initiatives including road expansion projects. In 2019 the company plans to produce 0.32Mm2 of concrete surfacing for a motorway extension. The subsidiary of LafargeHolcim set up its LH Engineering business in 2017 to help implement infrastructure projects. It offers engineering services and the delivery of building materials, including RMX, aggregates and other products.
Lafarge Poland opens ash separation plant in Siekierki
03 August 2018Poland: Lafarge Poland officially opened the Siekierki ash separation plant in July 2018. The unit was developed with local power generation company PGNiG Termika. The plant uses technology from the US’ Separation Technologies, using its proprietry electrostatic process.
The unit converts fly ash into two products: ProAsh containing less than 5% flammable parts and HiCarbon fuel containing about 30 - 50% flammable parts. ProAsh ash is used as a construction product used in cement production, ready-mix concrete and prefabricated construction. HiCarbon is used as a fuel because it contains significant amounts of unburnt carbon and so it can be reused in furnaces.
The National Fund for Environmental Protection and Water Management (NFEP&WM) awarded the project a loan of around Euro9m. PGNiG Termika operates a 2078MW coal-power plant at Siekierki.
Poland: Lafarge Poland has appointed Xavier Guesnu as the president of its management board. He succeeded Federico Tonettiego in March 2018. Tonettiego had held the role since 2014.
Guesnu has worked for LafargeHolcim for eight years. In 2010 he was responsible for Lafarge's strategy and development in global markets, acting as the Vice President for Strategy, Development, Acquisitions & Mergers. From 2013 he was the General Director of the aggregate business in eastern Canada. Previously he worked as a business consultant for Bain & Company. He is a graduate of Mines ParisTech engineering school in Paris, France.