Displaying items by tag: Lafarge

Moldova: Nicolas Valdinoci has become the new director of Lafarge Moldova. He replaces Louis de Sambucy who has moved to Lafarge Algeria. Valdinoci worked for three years in Lafarge's department of strategy and in 2010 he became the financial director of the concrete and aggregates division in Lafarge Algeria. In 2012, he was appointed as deputy director of sales at Lafarge Algeria.

Algeria has been steadily building up cement industry interest over the past few months. In late 2013 Lafarge opened its fourth world research laboratory in Algiers. Then this week South African producer PPC confirmed its intention to enter the local market with a new plant and German construction firm ThyssenKrupp announced an order to build a cement plant for Groupe Industriel des Ciments d'Algérie.

According to United States Geological Survey (USGS) data, Algeria saw its cement production more than double from 9Mt/yr in 2002 to 20Mt/yr in 2011. At present Global Cement Directory 2014 figures places the country's cement production capacity from 21Mt/yr with 30Mt/yr a reasonable estimate for 2017. Throw in similarly rising gross domestic product per capita, US$7500 in 2013, with infrastructure investments of US$286bn planned and Algeria appears to be a promising investment for the cement market.

Lafarge, which holds minority stakes in two cement plants in the country, reported that market demand was high in 2012. Its cement sales rose by 9% year-on-year in 2013. The other major foreign player, ASEC Cement, reported in its 2012 financial report that Algeria consumed 21Mt of cement in 2012 but that it had to import 3Mt that year. ASEC was planning to build a 3.16Mt/yr plant at Djelfa to plug that market gap. Yet news reports in early 2013 reveal that the project was paused due to financial issues at ASEC with the suggestion of a possible downgrade to a 1.5Mt/yr production capacity instead.

The decision by PPC to build in Algeria is the first big project by one of Africa's international sub-Saharan cement producers north of the Sahara. It steps away from PPC's expansion strategy so far of building projects out from South Africa. Hodna in Algeria is a long way from Johannesburg! It will also cause tension between PPC and whoever is supplying imported cement to Algeria, most likely indebted southern European producers. Both PPC and its Nigerian competitor Dangote are used to fighting foreign imports to their core markets. Data from the Algerian customs office show that the value of cement imports to Algeria in 2013 rose by 26% year-on-year to US$395m. That's a market worth fighting for.

Suez Cement and Italcementi's first waste treatment plant in Egypt was inaugurated this week. The project uses 45,000t of household waste to produce 35,000t of alternative fuel annually. Given Egypt's on-going fuel concerns the project will be watched closely.

Italcementi has much riding on the success of the project. It has five integrated cement plants in the country. As reported in early February 2014, the cement producer suffered reduced production capacity in Egypt despite 'potential' domestic demand due to limited energy availability. Cement sales volumes in Egypt for Italcementi have continually fallen since 2011, accelerating from a 5.4% year-on-year reduction in 2011 to a 17.6% year-on-year reduction in 2013. Yet, despite this, rebounding domestic demand was reported in 2012 and 2013.

It must be extremely frustrating for Italcementi. It has the production capacity, it has demand but it doesn't have the fuel to power its lines. Any additional fuel will be welcome. At a rough and conservative rate of 200kg of fuel per tonne of cement produced, Italcementi and Suez Cement's new alternative fuel stream could help to produce 175,000t of cement or about 1.5% of the cement producer's clinker production capacity of 12Mt/yr.

Lafarge, with its mega 10.6Mt/yr cement plant outside of Cairo, hadn't suffered (publicly) as much as Italcementi from fuel shortages until the publication of its financial results for 2013. Although sales had decreased year-on-year since 2009, this has been blamed on competition. Now it has been announced that cement volumes decreased by 30% in the first half of 2013 due to shortages of gas. This was mitigated through fuel substitution to a 19% drop in the third quarter and a 7% drop in the fourth quarter.

However, Lafarge's strategy for fuel security may be threatened as the Ministry of State for Environmental Affairs ordered the producer to stop preparations to build storage units for petcoke in February 2014 citing environmental and economic reasons. What happening here is unclear given that the Egyptian government has been encouraging cement producers to move away from using natural gas.

The examples above show the reactions two multinational cement producers, Italcementi and Lafarge, have made to secure their fuel supplies. The outcomes remain uncertain.

In other news, Shijiazhuang in Hebei province in China has started the demolition of 17 (!) more cement plants. This follows 18 plants that were demolished in December 2013. In total, 18.5Mt/yr of cement production capacity has been torn down.

This is more than the cement production output of most European countries or any single US state! Where was this cement going previously? What were the effects on the price of cement in China? Who is taking the loss for the destruction of this industrial production capacity? BBC News Business Editor Robert Peston has some ideas.

The 8th Global CemFuels Conference & Exhibition on alternative fuels for cement and lime takes place in Vienna, Austria on 24 - 25 February 2014

On 31 January 2014, the Québec government announced that it would invest US$350m in a new US$1bn, 2.2Mt/yr cement plant and port facility, to be operated by McInnis Cement at Port-Daniel. To say that this has prompted outrage in the industry is an understatement. Rival cement producers, including Lafarge and Ciments Québec have been unanimous in condemning the funding, which they see as an unjustified affront to fair competition in the province's cement industry. There was an angry response on the Global Cement LinkedIn Group, with dissatisfaction on a number of levels.

Firstly, established manufacturers highlight that the Québec cement market is in a slump, with 100-150 members of Métallos, the United Steelworkers union, currently on rolling temporary furloughs at any one time. There is over-capacity as it is. How will another cement plant help this situation? One contributor to the Global Cement LinkedIn Group said that the funding was like, "Taking the money I pay as taxes to break my legs." Another said, "Imagine our tax dollars heavily subsidising our direct competitor - totally unacceptable!"

Secondly, the government will have a direct interest in the cement industry, diverting public funds to a sector that (in the West) is traditionally left to its own devices. What does the government have to gain from this move? Well, there are suggestions that the awarding of future government cement and concrete contracts can no longer be fair due to the rather obvious conflict of interest. Could the government effectively award contracts to itself? Arguments from the government and McInnis that its distribution will be outside the areas served by the other plants don't seem to wash with the established producers.

Thirdly, there are fingers pointed at the Gaspasia paper mill project, a failed government-funded installation that was not established in the 1990s at a cost to the taxpayer of US$300m. It is unlikely that any of the parties involved would like to see a repeat at Port-Daniel.

Finally, the Canadian government appears to have turned its back on its own 'Wood First' policy, signed in April 2013, which stated that wood should be preferred in construction over cement and steel due to environmental concerns over embodied CO2. At the time Canadian cement manufacturers were at pains to point out that cement and concrete constructions were actually sustainable in comparison to many other building materials, especially with repect to long-term use and minimisation of energy consumed during a building's lifespan. At worst this seems to be a government U-turn but it could yet get more ugly. Now, with funding for new cement capacity, Québec appears to have 'listened' to the cement producers. How long before some cynics point to this change as evidence that the government wanted McInnis Cement to happen all along?

Whether a gross miscalculation or a deliberate ploy by the government, the McInnis Cement saga will not be going away. Ciments Québec and Lafarge will line up to fight the decision and, in litigation-heavy North America, this story could run and run.

Water conservation is on the agenda this week with two water-related news stories from the multinational cement producers.

First came a story that Lafarge Canada is preparing to run a trial using waste water from hydraulic fracking at its Brookfield cement plant in Nova Scotia. Currently the plant uses 35ML/yr of fresh water from a nearby lake to control temperatures of its rotary cement kiln. Potentially some of this water could be replaced with water produced during the fracking process. This water would then evaporate and be emitted from the stack.

The background to this pilot project is that the Nova Scotia regional government introduced a two-year moratorium on fracking in 2012 while it reviews the situation. Given the high level of public debate on fracking, any process using waste products from it is going to receive a high level of attention. One of the major arguments against fracking concerns the toxicity of the fluids used. Hence Lafarge stressed in their statement how safe the waste water would be before it would even be used in the plant. Safe enough to drink apparently.

Focusing on the industrial aspects of the pilot for cement production, it will be fascinating to see what effects the fracking waste water might have even just as a coolant on plant equipment. Among other contaminants, fracking waste water often contains high levels of salt. Managing a transition from a fresh water coolant source to a saltier more corrosive one may pose the first of many challenges.

Later in the week Cemex announced the latest stage in its work on water conservation with the implementation of a corporate water policy. The policy aims to focus on resource availability, resource quality, and ecosystem integrity. It continues Cemex's Water Project, developed in partnership with the International Union for Conservation of Nature.

Notably Cemex's water policy aims to maximise efficiency by managing water consumption with increased captured recycled or captured water usage given as an example. How Cemex might use recycled water from a contentious industrial process such as hydraulic fracking is not specified. However, the policy does aim to actively reduce pollution and limit the effects of discharge upon water ecosystems from its operations.

Water policies such as a Cemex's are great for an industry that often has an image problem in the eyes of environmentalists. Linking cement production to fracking runoff will not improve this image. Yet placing science before lobbying is the way to go. Bring on the results of the pilot.

The third quarter results are in and signs of a recovery in the construction industry are present. Generally for the European producers, volumes of cement sold in the third quarter of 2013 have improved year-on-year compared to the figures for the first nine months of 2013. Although many of these third quarter sales changes are still negative it seems like the industry has turned a corner.

Lafarge reported that cement sales fell by 4% year-on-year to 102Mt for the first nine months in 2013. In the third quarter of 2013 sales remained stable year–on-year at 36.7Mt. Holcim saw its nine month sales fall by 3% to 104Mt while its third quarter sales remained stable at 36Mt. HeidelbergCement saw its nine month sales rise by 1% to 67.7Mt while its third quarter sales rose by 4% to 25.3Mt. Italcementi saw its nine month sales fall by 6% to 32.6Mt while its third quarter sales fell by 2% to 10.8Mt.

By region some of the differences between the European-based multinational cement producers have been telling. Lafarge, for example, is still down year-on-year on cement volumes sold in North America, denting the perceived wisdom of a strong North American recovery. However, profit indicators such as earnings before interest, taxes, depreciation and amortisation (EBITDA) have risen in that region, increasingly in the third quarter. Cemex and Holcim have done better in this region.

Notably, the unstable political situation in Egypt has also impacted the balance sheets for Lafarge and Italcementi. Lafarge reported that cement sales volumes fell by 27% for the first nine months of 2013, principally due to gas shortages, and 19% for the third quarter as the company started to substitute other fuels. Similarly, Italcementi saw overall cement and clinker sales drop by 11.2% in the nine months and 14% in the third quarter.

Meanwhile in China, Anhui Conch produced 86.2Mt for the nine months, a year-on-year increase of 12.1%. Overall revenues in China seem to have risen after decreases in 2012. Anhui Conch reported that its operating revenue rose by 15% to US$6.08bn for the first nine months and US$2.20bn for the third quarter of 2013. Analysts have pinned the return to profit to building in the country's eastern and southern provinces and the effects of government-led industry consolidation. Bucking this trend though, China National Building Materials (CNBM) saw its revenue rise by 37% to US$13.5bn for the first nine months of 2013 but its profit fell by 8.1% to US$542m.

Anhui Conch, Lafarge, Holcim, CNBM, Italcementi and HeidelbergCement all feature at the top of Global Cement's list of the 'Top 75 global cement companies' to be published in the December 2013 issue of Global Cement Magazine. Ahead of final publication we want to know whether readers agree with the rankings. Download our list (registration required) and let us know your comments by 1 December 2013.

Nigeria: Lafarge has announced the appointment of Guillaume Roux as the Country Chief Executive Officer for Nigeria and Benin Republic effective from September 2013. He succeeds Jean-Christophe Barbant.

Roux, a joint French and US national, is a graduate of the Institut d'Etudes Politiques in Paris. He joined the Lafarge Group in 1980 as an Internal Auditor.

After holding several key positions in the Finance Department in France and the United States, he was appointed as Vice President, Strategy and Marketing for North America in 1996 and later as Chief Executive of Lafarge operations in Turkey in 1999.

In 2002 he was given responsibility for Lafarge's cement operations in South-East Asia, a position he held until he joined the Executive Committee of Lafarge Group as Executive Vice President and Co President of the Cement Division, with the responsibility for the cement business in Eastern Europe, the Middle East and Africa in 2006.

Roux is a member of the Executive Committee for Lafarge Group and combines this role with his current responsibility for Lafarge's operations in Nigeria and Benin Republic. This is the first time a member of the Group Executive Committee will also be a Country CEO.

Russia: André Martin has been appointed as Chief Executive Officer of Lafarge Russia effective from 16 September 2013. He had been the Senior VP, Industrial Customer Segment at Lafarge corporate head office in Paris since 2012. Martin replaces Alex de Valukhoff.

A graduate of French management school ESSEC, Martin joined Lafarge in 1995 as cement M&A in Central and Eastern Europe manager. Highlights in his career include becoming president of Lafarge-Agregate-Betoane in Romania in 1999 and joining Lafarge-Beton de Paris as President in 2002. In 2005 André Martin moved to North America as VP Marketing Aggregates and Asphalt & Paving at Lafarge and he became President at Lafarge East US Aggregates & Asphalt in 2008.

Russia: France's Lafarge, the world's largest cement producer, has announced that it has appointed André Martin to the position of chief executive in its Russian division. He replaces Alex de Valukhoff.

"To come to Russia and serve as the CEO of Lafarge Russia is an honour I find humbling and motivating," said Martin to the Moscow Times. "Together with the team of professionals we are committed to contributing to the building of better cities."

Martin joined Lafarge in 1995, initially working in cement mergers and acquisitions before rising to the post of president of Lafarge-Agregate-Betoane in Romania in 1999. He has also worked for Lafarge in North America. Most recently Martin was the senior vice president for Lafarge's industrial customer segment in Paris.

US cement consumption may have disappointed some in the first quarter of 2013 but solid growth lies ahead, according to the Portland Cement Association (PCA). Just how solid that growth will be remains open to interpretation.

PCA chief economist Ed Sullivan forecast 8% growth in cement consumption at the start of 2013. Now's its been halved to just 4%. Yet he's standing by the hint of good news ahead, upping the growth from 2014 to 9.7%.

Figures from the major US cement producers present a mixed picture. The major multinational cement producers mostly suffered from the weather in early 2013. Lafarge saw its cement sales in North America drop by 23% year-on-year for the first half of 2013 to 4.4Mt from 5.7Mt in the same period of 2012. Cemex's cement sales in the US rose by 3% but no specific figures were released. Holcim's cement sales in North America fell by 7% to 5Mt from 5.4Mt. HeidelbergCement's cement sales in the North America grew by 5% to 5.7Mt from 5.4Mt.

Of the rest, Texas Industries reported a rise in cement shipments of 29% to 2.23Mt from 1.73Mt for the six months to the 31 May 2013. Titan saw sales in the US rise by 10% to US$258m.

Preliminary United States Geological Survey data for June 2013 suggests that the increase in portland and blended cement shipments in the US slowed in the first half of 2013. In 2011 32.1Mt were shipped, in 2012 37.0Mt were shipped and in 2013 37.2Mt were shipped.

Meanwhile the construction figures US Department of Commerce mostly suggested growth but not without the odd jitter. Construction spending fell slightly in June 2013. Total construction spending adjusted seasonally fell by 0.4% to US$869bn due to a fall in non-residential construction. Since then though the July 2013 figure hit US$901bn, the highest since June 2009.

Accordingly, in his forecast Sullivan pins his hopes on the residential sector in the near term. It has seen consistent growth since October 2012. However other industry commentators, like the American Institue of Architects, have focused on poor growth in non-residential construction.

Let's hope Sullivan's got it right.